What You Need to Know about the Difference between ROI and ROAS

When you’re running an e-commerce business, there are many metrics to consider to keep your business running, making revenues, and profits.

Among these metrics are two often mixed up terms. They are: return on investment (ROI) and return on ad spend (ROAS).

Let’s focus on the difference between ROI and ROAS and how e-commerce businesses can use each of them and when they should.

What is ROI?

Return on investment (ROI) is metric that measures the performance of an investment.

Investopedia explains ROI as a metric used to “evaluate the efficiency or profitability of an investment or compare the efficiency of a number of different investments.”

Businesses who use ROI try to see whether the investment they made was a good one or not.

ROI is calculated by dividing the investment’s net profit (or loss) by the initial cost. The result is a percentage.

This is what the equation looks like:

ROI formula

It also looks like this:

ROI = profits-costs / costs x 100 = %

Here’s an example of ROI:

Kelly invested $1,000 in a business venture and sold it for $1,300 a year later. To calculate the ROI, we’d have to divide the net profit (the $1,300 – $1,000 = $300) by the investment ($1,000). This would result in an ROI of $300/$1,000, or 30%.

ROI can be used for a variety of things, although most businesses use it as a profitability measure. ROI was an investment measure before everything turned digital. Online businesses use it too.

However, there are some downsides to ROI. “While ROI is a simple and straightforward measure, it does not take into account the holding period or passage of time, and so it can miss opportunity costs of investing elsewhere,” notes Investopedia.

What is ROAS?

Return on ad spend (ROAS) is a metric that measures the impact of your marketing and advertising. Every dollar you spend on ads needs to translate into a return, a result.

ROAS is the metric that measures that result.

Whether you’re trying to track clicks or conversions, ROAS is what tells you if the dollars you’re spending are resulting in high value or not.

ROAS is how your business benefits from every dollar you spend on advertising messages and ads. The higher your revenue from dollars spent on ads, the better your ROAS.

The important thing about calculating ROAS is to know how much you are spending on ads and how much are you earning in return.

How to calculate ROAS

To calculate return on ad spend, you’ll need to divide your conversion value by the total amount of your advertising (or your advertising costs).

How to calculate ROAS – Image via Segment

But what is a conversion value?

The conversion value measures the revenue your business can generate from a single conversion.

This means that the ROAS formula can also look like this:

ROAS = revenue from ad campaign (divided by) cost of ad campaign = Ratio x100 = %

Let’s explain this better with an example:

If John spends $20 on advertising to sell a $100 product, then his ROAS is 5:1 or $5. That’s $5 in ROAS for every dollar spent to sell John’s product.

If your ROAS is less than one, it means you’re not making money; you’re losing money.

If your ROAS is $1, that is $1 earned for every $1 spent, it means you’re breaking even, which again isn’t a good indicator. But you’re not losing money.

But if your ROAS is above $3 for example, then for every $1 you spend, you’re getting $3 back and you’re making a profit. (That’s a 200% return on ad spend).

If your e-commerce strategy is to achieve profit, then your goal would be to achieve the highest ROAS possible for your business. You’ll need to know what the average ROAS is for your industry so you can see how you average accordingly.

However, the target ROAS benchmarks are usually between 3.0 and 4.0. Again, these can differ based on the industry and the stage where the business is at. Larger businesses can enjoy good profits at a ROAS of 3.0, while smaller businesses might need to achieve a ROAS of 5.0 or more.

The difference between ROI and ROAS

You now have a brief idea of the difference between ROI and ROAS.

Do they sound similar?

Yes.

Are they similar?

Yes. And No.

The main difference between ROI and ROAS is that ROI measures the value of an entire investment. Yes, that investment can be ads as well. But it can also be an investment in a new business, a factory expansion, a new department, and so on.

ROI is profitability measure. It takes into account other types of spending, like new software for your business.

ROAS, on the other hand, is specifically about your ad spend and its performance. It won’t tell you if your ad spend translated into profit for your business.

Here’s another example that shows the difference between ROI and ROAS on application.

XYZ company spends $25,000 in ads and generates $100,000 in revenue from its ad campaign. However, it has other expenses such as software and personnel amounting to $90,000.

To calculate the ROAS: Revenue of ad campaign – cost = ratio x 100 = %

($100,000/$25,000) x100 = 400%

To calculate the ROI: profits-costs / costs x 100 = %

Profits (loss) = $100,000 – $25,000 – $90,000 = -$15,000

Costs = $25,000 + $90,000 = $115,000

-$15,000 – $115,000 x 100 = – 13%

As you can see, the ROAS is showing stellar performance. But once it’s included alongside other expenses to calculate the ROI, we see negative performance or negative ROI.

By calculating ROI, we can see that XYZ Company is making a loss.

Another major difference between ROI and ROAS is that ROI is about the money you make after deducting all your expenses, whereas ROAS compares between how much you’re spending and how much you’re making on ads only.

The sole purpose of ROI is to determine whether the campaign is worth the investment or not. By taking the margin into account, you can quickly determine your overall profits and determine what your actual ROI is.

The bigger picture of ROAS and ROI

ROAS focuses on advertising and its results. It helps businesses determine if their advertising efforts are paying off or not.

By focusing on ROAS, e-commerce businesses can make better future decisions, see where they need to invest their dollars, and how to better invest them.

That said, relying on ROAS only can be misleading for a business. Why? Because ROAS is about advertising results only. Your ad campaigns may be resulting in a high conversion rate, but the cost of each conversion is quite high resulting in an overall loss for the company.

An example of this is a business selling a product for $30 but generating leads at $50 per lead. Each translates into a $20 loss for the company.

The loss doesn’t necessarily have to be in the cost of the lead in the ad campaign. The loss may come from additional aspects such as production and shipping.

This is where ROI comes in. It factors in the other expenses that aren’t just related to the ad spend.

“When you consider ROI vs. ROAS, it’s important to remember that it isn’t an either/or situation. Whereas ROI can help you understand long-term profitability, ROAS may be more suited to optimizing short-term strategy,” notes GoCardless.

Next steps

There are many differences between ROI and ROAS. As a business you can’t rely on just one metric.

We recommend using both. Using ROAS to see how your ad campaigns are performing and then using ROI to see how your overall marketing budget and other expenses fit in the equation.

This means that an effective digital marketing campaign would rely on both ROI and ROAS.

Another metric you should include in your digital marketing efforts is customer lifetime value (CLV). CLV combined with ROI can offer great results for your business.

Want to know more about the metrics and means to help your e-commerce business? Tell us what you’re struggling with in the comments and we’ll share our tips with you.

Want to read more? Discover the 9 E-Commerce Trends for 2021 You Need to Know

Understanding How and When to Use Dynamic and Static Ads

As a store owner or e-commerce business, ads are an essential part of your marketing strategy. There are two main ad types you need to be aware of. Those are dynamic and static ads.

These two ad formats are in constant comparison. Which means you need to know as much as you can about them.

For the purpose of this article, we are focusing on e-commerce businesses and their use of dynamic and static ads.

We’ll explain each ad type, compare them, then see which is more suitable for your store.

So what are the differences between dynamic and static ads?

Let’s find out.

Dynamic and static ads

Before we begin, there are a few points we’d like to highlight.

When you’re about which ad type to use, you’ll need to consider your budget and audience.

You’ll also need to consider your ad frequency so not to spam current and potential customers with your ads.

In addition, the dynamic and static ads mentioned in this article primarily relate to Facebook.

Last but not least, Facebook reported that the number of people advertisers can reach on its platform stood at 2.14 billion in Q4 2020. That’s a 2.2% growth from Q3 2020.

What are static ads?

Static ads are ads that involve a static image. The earliest forms of ads were static ads.

Many businesses rely on static ads because they are less costly to make.

It’s cheaper to create a visual or even several visuals to A/B test than create a video for example.

In a dynamic vs static ads comparison, static ads can be easily used across multiple social media platforms without having to go through technical requirements – just image resizing.

Static ads are usually used to ask for something like asking for

  • Page likes
  • Page posts
  • Mobile app installs
  • Clicking a link
  • Redirecting to an external page (blog post, product…etc)

Depending on your ad placement, static ads can appear in a user’s News Feed on desktop or mobile or on the right hand side rail on desktop.

Static ads are a good option for businesses with limited ad budget.

Let’s see what their counterpart, dynamic ads have to offer.

What are dynamic ads?

Dynamic ads are ads that offer a rich experience to users. They can include video and multiple products or images.

Dynamic ads also offer a personalized and engaging experience and result in higher conversion rates for businesses.

When businesses create dynamic ads, they tend to create multiple versions to ensure that personalization. And because dynamic ads are more personalized than static ads, they tend to change based on consumer behavior.

Dynamic vs static ads

Comparing dynamic and static ads, there’s no winner. Simply, there’s no one-ad-type-fits-all-businesses.

Sad but true. You see what works for one business may not work for another.

This shouldn’t come as a surprise. However, there are 3 major determining factors for what to consider when you’re creating your ads.

what-to-consider-for-your-dynamic-and-static-ads

If your site doesn’t offer a multitude of products, then a static ad would be a better option for you. On the other hand, if you’re selling hundreds of products, then dynamic ads will offer better options for you.

You can use dynamic ads to create a carousel of products whether as suggestions for customers on social media, especially Facebook, or for retargeting purposes.

Getting started with dynamic ads

To create a dynamic ad, you need to have a dynamic audience. This in turn means you should have a Facebook Product Catalog in place.

As an online business, you have a store with multiple products. We’re talking tens and hundreds of products not 5 or even 10 pieces.

You’ll need to upload those products to your Facebook Product Catalog. From there, you can begin creating a dynamic audience and dynamic ads.

Final words

Both dynamic and static ads work well with e-commerce businesses.

However, the size of the business and the marketing budget dictate what type of ads you can run.

If you have a small business with 10 or so products, static ads would be better for you. Of course, you can test dynamic ads to see how they work out for you.

But remember they’re more expensive to make.

If you have a larger business with a variety of products, dynamic offer personalization which translates into a higher conversion rate for your brand.

At Convertedin, we offer both ad types. In fact, we offer a step further into creating those ads and getting them running. That is: ads automation.

The Convertedin ads automation system helps store owners and businesses like you run ads on autopilot. This means you don’t have to worry about creating multiple ads for various product categories.

Find out what Convertedin can do for your e-commerce store with dynamic ads automation.

[Guide] The Complete Guide to Ads Automation Using Convertedin

Ads Automation is the newest thing in ads. It’s what many online businesses are doing and what many e-commerce stores and shops want and need.

That’s why we have created your complete and go-to guide on Ads Automation and how Convertedin makes the process a piece of cake for businesses.

Introduction

  1. What Is Ads Automation?
  2. What Is Convertedin?
  3. What Is Automating Data Collection and Customer Unification?
  4. What Is Automation Segmentation?
  5. What Is Audience Automation and Lookalike Audience Creation?
  6. What Is Automating Ads Creation?
  7. What Types of Campaigns Are Supported by Convertedin?
  8. What Is Facebook and Google Pixel?
  9. What Is Catalog Automation?
  10. What Is the Onboarding Process?

Introduction

Store owners, e-commerce business, and media buyers often struggle with customer data and how to use that data to create audiences, ads and campaigns, and reach their ideal customers.

It’s true, despite the upgrades provided by social and digital marketing channels like Facebook, Twitter, and Google, it’s still no easy feat to have everything in one place.

The targeting and ads creation process is still time-and-cash-consuming and involves many errors.

But what if you could zoom in on a customer and target them directly?

What if, instead of creating audiences and individual ad campaigns, everything could be done for you, easily and effectively with no human error?

Business would be a lot easier, right?

If the hassle of creating audiences, targeting and segmenting them, and then selling to customers is something that has ailed you for some time, then the solution to your problem is: Automation.

And we have just the tool.

Read on to find out what ads automation is, how you can collect customer data, segment customers, create ads, and lots more, automatically.

What Is Ads Automation?

Ads Automation is the process of creating ads automatically based on data you provide or those generated for you.

Automated ads remove the guesswork involved in advertising and reaching audiences.

In other words, if you have an audience ready, Convertedin can easily target them and generate lookalike audiences and then target and retarget them for you.

What does Convertedin do in Ads Automation?

If you don’t have an audience, Convertedin will generate the most suitable and compatible audience for your business and then generate lookalike audiences, and launch campaigns and retargeting options without you having to lift a finger.

What Is Convertedin?

What does Convertedin do in Ads Automation?
What does Convertedin do in Ads Automation?

Convertedin is an ads automation platform that helps e-commerce businesses, marketers, and media buyers manage data, audiences and ads campaigns seamlessly and effectively.

You no longer have to go through each campaign or ad set manually.

If you already have some customer data ready, you can upload it to the Convertedin CRM, which will convert this data into segments and then audiences to be targeted.

The Convertedin CRM will also create unlimited segments for your customers, based on either initial data you provide or data provided by Pixels installed on your website.

Convertedin’s segmentation system will manage segments and create new ones based on your visitors and their behavior.

From these segments, you will be able to target potential customers, reach out to people who browse but never purchase, and understand your customers and how they react to your store much better.

Convertedin offers you multiple digital channels for your ads campaigns, including but not limited to Facebook, Google Ads, and Twitter.

What Is Automating Data Collection and Customer Unification?

Any business needs to collect data about its customers so it can sell to them and reach more customers and expand its footprint.

However, the process of collecting customer data is strenuous to say the least.

Not to mention, you not only have to collect data, but also ensure that it’s not scattered, duplicated or lost.

automate data collection
automate data collection

At Convertedin, everything is about automation. This includes tools to make even the most annoying tasks simple and manageable.

What does this mean?

The Convertedin platform goes through all the data on your website or e-commerce business, including new and old customer data, creates customer profiles, and combines it in one place. In other words, Convertedin unifies all the data.

Any interaction between your business and your customer, such as website visits, adding to cart,…etc, the Convertedin platform will log that event and add it to your Convertedin account.

In other words, you no longer have to worry about scattered data and wasted ad spend.

In fact, having unified customer data means you can tailor ads based on your knowledge of your customer’s purchasing history and accordingly recommend relevant products to them.

This increases customer loyalty and can generate more sales.

And the best part?

All this is done on autopilot. Which means you save time and effort, cut costs, and save money while advertising.

What Is Automation Segmentation?

Segmentation is the process of dividing customers, users, buyers, or any type of people into groups or segments.

Segmentation is looking at customers from an analysis and analytics perspective.

This segmentation process helps you learn more about your customers and divide them into groups so you can target them with ads.

If you want to sell men’s shaving cream, your target segments should therefore be men in several age groups.

It would be pointless to have women in that category. That’s what a segment is for.

Customer segmentations
Customer segmentations

Once you connect Convertedin to your data source, the tool begins the segmentation process, giving you an unlimited number of segments to use based on the size of your business.

You can literally have 1,000+ segments for your business, allowing you to reach specific customers and generate more sales.

There are two main types of segments available on Convertedin. These are:

1) Pre-defined Segment: This includes 27 user segments such as high-spending customers, low-spending customers, idle customers, one-time shoppers, loyal customers…etc.

2)    Dynamic/Generated Segment: These segments are generated based on data available from your business’s website.

Each product in your store will have the following three main segments:

–          Customers who bought the product

–          People who added the product to their cart but didn’t buy

–    Customers who are likely to buy from you based on Convertedin’s AI recommendation engine.

So, for example if your business sells shampoos for colored hair, each shampoo product will have the above-mentioned three segments.

Once you have created your segments, it’s time to take them to the next level which is transforming them into an audience that can be used in ad.

With Convertedin, this process is automated as well. 

What Is Audience Automation and Lookalike Audience Creation?

So far we have covered data collection and segmentation. Now we move on to the next part, which is creating audiences and lookalike audiences.

What is an audience?

An audience is your target customers. It’s those people you have segmented into groups that are now going to be targeted with your ad campaign.

Creating an audience may not be a difficult task, but how about creating hundreds and thousands of audiences?

Not so easy anymore, right?

audiences
audiences

That’s what Convertedin does. It segments your customers, turns them into hundreds and thousands of audiences and targets them on social media and Google through several ads.

There are three types of audiences Convertedin works with. These are: Custom audiences, lookalike audiences, and dynamic audiences.

Let’s go into detail about each type of audience.

Custom Audience:

A custom audience is an ad targeting option that lets you, as a business, find your current customers on platforms like Facebook.

In this case, you will need to upload resources like customer emails, customer lists, web and mobile app traffic, or customer engagement on the platform to create a custom audience.

You don’t need to upload all of these, just one of them will do.

In other words, these are your current customers. They know you and may have previously shopped from you before.

Join Convertedin’s private Facebook Group The Ads Automation Family for more tips, insights, and conversations on ads automation.

Lookalike Audience:

A lookalike audience is an audience that has similar qualities to your custom audience. They are people who act like your customers and are therefore potential customers for you.

Facebook explains it best. It describes the lookalike audience as “a way to reach new people who are likely to be interested in your business because they’re similar to your best existing customers.”

In addition, Facebook says that when it’s time to grow your business, that’s when you use your custom audience to create a Lookalike Audience.

For example, Convertedin creates a segment called “high-spending customers.” It then turns them into an audience (called “high-spending customer audience”) to use in an ad campaign. After that, Convertedin will create five lookalike audiences based on that audience.

Dynamic Audience:

A dynamic audience is for companies and e-commerce businesses who have a product catalog, particularly a Facebook Product Catalog.

If you don’t have a catalog, you won’t be using this type of audience.

Now that you’re familiar with the audiences, let’s see how this lines up in the ads creation process.

Imagine the number of audiences and lookalike audiences and the time, effort, and money needed… what if this can be automated to save all 3?

Convertedin is all about optimization and automation. So the process of creating the above mentioned audiences and creating ads campaigns is a piece of cake.

Everything is done via the Convertedin account. You won’t have to do a thing, except save a ton of time and lots of precious dollars.

Next step?

Automating Ads Creation

Now that you have your audiences ready, it’s time to move on to ad creation or rather the automation of the ads creation process.

Normally, Automated Ads is a feature offered by platforms such as Facebook and Google. The process involves machine learning and artificial intelligence to build and run ads with minimal content during setup.

But how many ads can you run at the same time?

Or better how many ads can you keep up with at the same time?

Not a hundred, we can guess.

That’s what Convertedin does. We take the hassle out of the process and ads are created based on the audiences and everything is run automatically from your Convertedin account.

ads
ads

And yes, you can run hundreds of ads at the same time.

Let’s say one of your customers was targeted with an ad campaign. They clicked the product or added it to their cart, but never purchased it.

In a retargeting campaign, this customer is at the top of the list. They are interested but need to see your ad a couple more times to make the purchase.

Using the hundreds and thousands of audiences the Convertedin tool has created, Convertedin takes on the targeting and ads creation.

No manual work or need to hire a team, which means saving time and money, not to mention sparing yourself a massive headache.

Convertedin generates all the data and enables you to run as many as 1,000 ad campaigns as you like.

What Types of Campaigns Are Supported by Convertedin?

Like everything to do with advertising, there are various types of campaigns your business can work with.

Here is a laydown of the campaigns, Convertedin works with:

1)   Prospecting: This is a kind of cold reach. Basically, these are customers your business has never interacted with before.

This campaign is created based on a lookalike audience of people who previously purchased from your business.

In other words, you have an audience of buyers, these are new people but who are similar to your buyers.

2)  Retargeting: Once people from lookalike audiences take action (such as clicking on a product), they become part of a retargeted audience.

In addition, customers from your current audiences are retargeted as an upsell.

They have previously purchased a product, so Convertedin shows them similar or related products that they are more likely to need and buy.

Moreover, any person who comes to your website, as long as you have included the Facebook Pixel, will be added to your audiences and retargeted automatically.

3)     Dynamic Prospecting: This applies to Facebook. The social media platform checks who has entered your website or online store and creates an audience of people similar to them. It’s like a dynamic lookalike audience but no one uses this term.

4)     Dynamic Retargeting: Whenever a customer accesses an item on your product catalog, the moment they log in on Facebook, they will see an ad with the item they viewed in the catalog.

Once a customer enters your website or online store, they are automatically included in your audience lists and can easily be retargeted as a potential buyer.

What Is Facebook and Google Pixel?

When you’re advertising a product or business, it’s important to track where your customers are coming from, where they are going (on your site or store), and what they are doing there.

The way to do this through the Facebook Pixel and Google Pixel.

A pixel is a piece of tracking software that you embed in your website or online store to track customer movement and engagements.

The pixel shows how your customers are moving about, acting, and reacting within your website.

It not only gives you more information about customer behavior, but also gives you insights on your customers.

Once you embed the pixel, Convertedin uses the data available on your website and creates audiences, lookalike audiences. It then retargets potential customers who are more likely to buy from you.

Depending on your business needs you can include the Facebook Pixel, the Google Pixel or both, and we recommend having both if you plan to use Google Ads.

What Is Catalog Automation?

A catalog is a list of your products with pictures and details for each product.

Creating a catalog for your business is a time-consuming task. Not to mention, it involves a significant amount of donkey work.

There’s also the time and effort wasted when you need to update your catalog or worse edit parts of it.

If you’ve created a catalog before or uploaded one to Facebook, you probably know what we’re talking about.

One of the top problems businesses struggle with when it comes to the catalog is syncing the product list on their website with Facebook.

Also, have you struggled with un-updated inventory? A customer adding a product to their cart but on checkout, they can’t buy it because it’s not there?

Have you had to review and make changes to your product catalog to ensure everything is where it should be?

By understanding all of these problems, Convertedin allows businesses to automate the entire catalog upload process.

How?

By connecting Convertedin with your website and inventory, the tool delivers data directly to Facebook and maintains inventory-related data.

You no longer have to worry about your inventory not syncing with Facebook or items missing.

This is Catalog Automation. It helps your business focus on more important things like pricing and driving sales.

You can call it magic!

What Is the Onboarding Process?

Last but certainly not least, Convertedin provides customers with an easy-to-follow-and-use guide. Also known as the onboarding process.

The onboarding process will take you step-by-step through all the information you need to fill in order to start generating audiences, segments, lookalike audiences, and create campaigns and ads.

It may sound complex but the truth is: it isn’t.

Why create a complex process when the aim is to facilitate things for businesses?

The onboarding process shows you how to find the data you need, how to compare segments, results, campaigns,…etc.

Are you ready to get started with ads automation?

Sign up today and let Convertedin take away the headache and drive customers to your store.

Don’t forget you can join Convertedin’s Facebook Group The Ads Automation Family for more tips, insights, and conversations.

What Is Marketing Automation? How Does It Work?

When you’re running a large business or managing marketing campaigns across multiple audience segments, creating individual campaigns becomes a bore, not to mention terribly tiring. That’s why marketing automation was born.

What Is Marketing Automation?

Marketing automation is a software or technology that allows marketers to conduct their marketing processes and campaigns across various channels automatically, or as we say in Convertedin, on autopilot.

Using marketing automation, or automated marketing, marketers and businesses can target and reach customers using automated messages via email, websites, social media, or even text.

Marketers and salespeople can also use automation to create online marketing and sales campaigns automatically so they can drive more business, revenue, and enhance overall efficiency of their ads.

Used effectively, marketing automation can easily reduce the load for repetitive tasks, such as social media posting, email marketing, and ad campaigns, allowing marketers and employees to focus on other problems and processes within the business.

Moreover, automation reduces the risk of human error and is not only efficient but also allows businesses to create “a more personalized experience for their customers” and facilitates the overall process, according to HubSpot.

“Marketing automation helps with lead generation, nurturing, and scoring, as well as with measuring overall [return on investment (ROI)] on campaigns,” notes SalesForce.

It adds that the benefits of automated marketing such as time-saving and cost-cutting become clearer as an organization or company “grows in size and complexity.”

“Good marketing automation systems are designed to scale alongside your business,” SalesForce says. 

At Convertedin, we not only offer marketing automation and automated ads, but we help businesses create customer segments on autopilot.

According to data by The Annuitas Group, businesses that use marketing automation to nurture prospect enjoy a stellar 451% growth in qualified leads.

How Does Marketing Automation Work?

Put simply, this form of marketing allows business to collect customer data through a variety of sources and customer interactions.

These include, but are not limited to, website visits (including actions taken on the site), email marketing, social media, and mobile app usage (if available).

In other words, these actions form data which help a business form a 360-degree customer view, offering businesses better customer insights.

After that, the marketing automation software takes charge of creating customer segments and targeting to reach the right audiences on a large scale.

Which Platforms Allow Automated Ads?

As you can expect, the top social media platforms offer marketers the chance to automate their ads. You can find these options on Facebook, Twitter, and Google.

Still, there are downsides to using the platforms’ automated ads. For one, you still have to do a lot of legwork to get the ads done right.

At Convertedin, we take out the hassle of that legwork and allow you to automate across both platforms with the same customer segments you have created.

As your business grows and adds more customer segments, Convertedin automatically adds them in your segments and targets them across several platforms.

Understanding the 360-degree View of Your Customer

When working in marketing, there are many aspects that come to light that need to be addressed. On top of this list is anything to do with your customers, particularly their data. Hence, the 360-Degree Customer View was born.

Having customer data is of utmost importance to businesses nowadays. But the problem is that most of this data is scattered as customers interact with brands and with each other across multiple platforms: social media, mobile apps, in-store, on-ground, via websites, and more.

So how do you combine all of this and reach your customer? That’s the focus of today’s topic: the 360-Degree Customer View.

What Is a 360-Degree Customer View?

A 360-Degree Customer View is being able to collect all of your customers’ data in a single place. This data can include, but is not limited to, basic information such as names, telephone numbers, email…etc.

It also includes past and present billing information, purchasing activity, their interactions with your customer service representatives, and last but certainly not least, their social media behavior.

With the never-ending increase in online apps, people are getting drawn to personalized experiences that tailor to their needs. That’s why integrated approaches like the 360-degree customer view have become a hot topic now.

What does a 360-Degree View of a Customer Do?

It helps you, as a business, not only collect data but get a better understanding of your customers. Once you do, you can serve them better and reach them better.

In other words, a 360-Degree Customer View helps you build long-term relationships with customers and supports your business growth.

A 360-degree customer view can also be described as the foundation that makes an organization’s relationship with customers an experience-based relationship rather than a transaction-based one.

In other words, it’s a view that acts as a melting pot that syncs all customer data together.

With this unified knowledge, your business can acquire more precise customer insights and build unique customer experiences.

360 degrees is a relationship cycle that consists of many touchpoints where a customer meets the brand. Be it through purchases or marketing communications, via customer service or on social media,” explains SuperOffice.

A great product isn’t enough to drive customers, but having a great customer service experience can help.

If your customer service representatives have all the info they need on customers, they can easily respond to them, answer their complaints and queries – without having to request background information – and support their needs.

“If you, as a company, are present at and collect information on each stop in this 360-degrees relationship cycle, then you truly know your customers. It helps you better understand your customers’ priorities and preferences. Which, in turn, means you can position yourself to better predict their current and future needs,” adds SuperOffice.

Everything under one roof

Imagine an unmotivated salesman going to work and having to call around four or five people to get customer data.

Now, imagine another person having the same information all on their desk.

Who is more likely to take relevant quick action?

Having strategies that shorten the chain and give us a multifaceted view of our customers is exactly what businesses should be looking for. Or maybe they are but don’t know what this strategy or tactic is called.

The 360-degree customer view provides this single yet comprehensive view of your customer even if that customer’s data is scattered across different applications and platforms.

Conclusion

Data shows that under 10% of companies use a 360-degree view of their customers, while only 5% use the 360-degree view to support and grow their businesses, says research firm Gartner.

So it’s no wonder companies are struggling. They are missing out on a major source of help when it comes to customer data.

What You Need to Know About Facebook’s Dynamic Ads and Static Ads

In the world of advertising, there many forms an ad can take. Each social media platform comes with its various ad options.

In this article, we will be talking about Dynamic ads and Static ads.

Main Criteria for Any Ad

When conducting ads, whether on Facebook or any other platform, there are a few basic rules you need to remember. Think of them as a 3-point checklist.

  1. Your branding needs to be the same across all ad formats, even if you’re targeting different audiences. Experiment with different text, images, and calls-to-action (CTAs).
  2. Run campaigns for at least two weeks, with minor changes if needed, so you can find out what works and what doesn’t.
  3. Refresh your ads regularly to avoid being repetitive, since many Facebook users log in daily.

Ad Formats

Depending on your choice of platform and where your audience are, you’ll notice that different platforms have similar ad options.

For today, we’ll be focusing on Facebook ads, particularly the differences between the Dynamic Ad and the Static Ad.

Each of these Facebook ad types offers “a different set of risks and rewards,” explains Adquadrant.

Let’s go into detail and see what each is about.

But First Some Data

On average, Facebook enjoys roughly 1.79 billion active daily users, according to June 2020 data by Zephoria.

Moreover, like any ad format, it’s important to segment your users carefully to ensure your ads are well-targeted and avoid wasting ad spend.

The amount of content a Facebook user can see in their News Feed could reach or exceed 1,500 updates. This includes likes, shares, stories, and page updates.

Facebook’s algorithms then attempt to reduce that number to 300 updates. This is based on a user’s likes, hides, and their scrolling activity, explains Nanigans.com.

Static Ads

Static Ads involve page posts, page likes, mobile app installs, and directing users to a landing page.

This ad type normally appears either in a user’s News Feed or on the right hand-side of the page if they are using desktop, or on a mobile’s News Feed.

Static ads work best with seasonal and regional topics, as well as major local or international events.

This makes your ads less intrusive because your target audience and their friends and family may be talking about these topics.

If you’re using a video ad, then “the goal is to raise brand awareness and word of mouth. In contrast, static ads are aimed at directing consumers somewhere else, so make sure your landing page or app is ready to receive visitors,” says Nanigans.com.

Dynamic Ads

Dynamic ads are used to promote your business’s inventory “to people who have expressed interest on your website, in your app or elsewhere on the Internet,” explains Facebook.

These ads “look exactly like other single image ads, carousel ads or collection ads on Facebook, Instagram and Audience Network.”

The difference is, instead of having to create an individual ad for each product or item in your inventory, dynamic ads allow you to create “an ad template that automatically uses images and details from your catalogue for items you’d like to advertise,” Facebook says.

You can use dynamic audience and dynamic ads to retarget customers who took an action on your website or app.

You can even use broad audience targeting and reach people who “may not have visited your website or app before.”

If you’re using a broad Facebook audience, you’ll need to install the Facebook Pixel on your website and create a Facebook Product Catalogue to create dynamic ads.

The dynamic ads show relevant products from your Facebook Product Catalog to people when they visit Facebook, Instagram, the Audience Network or Messenger, offering product recommendations.

If there’s a type of ad you’d like to learn about, leave us a comment below.

A Quick Guide to Online User Segmentation

When conducting your marketing efforts, the first thing you need to focus on is customer or user segmentation.

Why? Because it defines all of your future efforts and helps you determine if you are achieving a return on your investment (ROI) and indicates the success of your campaigns.

But first let’s explain what user segmentation is.

What Is User Segmentation?

Segmentation is a kind of division. You divide or categorize your users, customers, buyers, readers…etc into groups. These groups are called segments.

By understanding the different categories of your users, you can then take the next step which is to target them.

How to Use User Segmentation?

People are naturally different, even people in the same age range can act differently or have varying interests.

In other words, it won’t be fair to you or your marketing budget if you target people aged 15 to 60 at the same time.

This also applies if you try targeting males aged 18 to 25 from the Middle East and North America. Yes, their ages are close but their interests are far and wide.

Types of Segmentation

To divide your target audience, you need to understand the types of segmentation you can use.

You can segment your audience based on:

  • Demographics: This involves dividing users based on their language, age, and gender.
  • Geographic: This is where you segment customers based on location, whether it’s continent, country, city, or even a specific neighborhood.
  • Psychographics: The division is based on habits; this is the ‘why’ behind your users’ buying decisions.
  • Behavior: Here you segment customers based on their behaviors such as how they act and what they do. It’s the ‘what’ behind their decisions. This is section is also known as interests.

Lesser Known Types of User Segmentation

There are three more types of segmentation that are often forgotten or not focused on. They primarily rely on what you as a business offer and to whom.

These are:

  • Firmographic segmentation: This is used in B2B marketing; that’s when your target customers are other businesses.
  • Cultural segmentation:  Understanding your customers’ culture can also help you in your targeting. It offers some insight on how customers of a certain culture make their decisions.
  • Occasional segmentation: This is a form of seasonal segmentation where certain words, terms, or products appear at certain times of the year versus others.

“This [occasional] segmentation focuses on specific events that are completely independent of the customer. It divides the market into categories based on the various occasions when the customer plans to buy the product, actually buys the product or uses the product,” explains marketing strategist Paul Shepherd.

He goes on to say that occasional segmentation can be further sub-divided into:

  • Universal occasions
  • Regular personal occasions
  • Rare personal occasions

Understanding Your Users via Segmentation

By segmenting your customers into groups, whether through one or more of the above options, you can begin to create a clear picture of who you are talking to.

According to data compiled by Accenture, around 81% of consumers wish brands understood them better, knew when to approach them and when not to.

Moreover, roughly 66% of marketers “struggle to personalize content in real time,” says Adobe, which adds that 77% of marketers “believe real-time personalization is crucial.”

This means that the better you segment your customers or users, the better you can target them through ads and content.

Creating a Segmentation Strategy

Last but not least, when you’ve understood the various types of segmentation, it’s time to move on to creating your customer segmentation strategy and use it to drive better sales.

What You Need to Know About the Facebook Product Catalog

One of the best ways online sellers and shops can advertise their products and generate sales is through Facebook. Specifically, through the Facebook Product Catalog.

Whether you are an e-commerce business, ticketing agent, or even a hotel offering rooms and suites, the Facebook Catalog can help your business.

Here’s what you need to know about this sales option from Facebook.

What is the Facebook Product Catalog?

As its name suggests, it’s a catalog where businesses can showcase their products and services.

Remember when customers bought catalogs for their favorite brands and went through them to pick out what they wanted to buy?

IKEA is still one of those brands who publishes product catalogs with price tags for each their products.

That said, most customers and businesses are now online, specifically on Facebook, which has garnered over 2.6 billion daily active users.

With figures like that, it’s no wonder businesses are taking unprecedented steps to be on the social platform.

How Does the Facebook Product Catalog Work?

Like the published catalogs, the Facebook Catalog allows companies and sellers to display their products on its platform. Customers can then access these products and purchase them via the company’s catalog on Facebook and Instagram.

“You can create catalogs for different types of inventory, such as products (e-commerce), hotels, flights, destinations, home listings or vehicles,” Facebook explains.

The tool used to manage a brand’s catalogs is called the Catalog Manager. You will need to upload your products one by one to the product catalog.

What Can I Do with Facebook Catalog?

Once your Facebook Product Catalog is ready, which can be used both for Facebook and Instagram, you can:

  1. Add and manage information for your inventory. This includes titles, images, product descriptions, prices, and other options.
  2. Share access to your catalog, which allows your team to work on it collectively on your catalog.
  3. Create one catalog or multiple catalogs for your products and services.

Facebook also notes that you can “set up a localized catalog for multiple languages and countries.”

Can I Use Ads for the Product Catalog?

The obvious answer is yes. It’s no secret that Facebook would like to create ads for anything and everything on its platform.

These are the types of ads you can create once you’ve created your company’s Facebook Product Catalog.

Instagram Shopping

This option is only available for products. In other words, non-tangible services don’t qualify.

Using Instagram Shopping, you can include your products in both Instagram posts and stories.

In the United States, Facebook allows customers to purchase products directly from Instagram and check out from the platform.

Facebook Page Shop

Like its predecessor, this ad type is only applicable to products.

In this case, the shop on your business page acts like a storefront, while the catalog acts as a warehouse that stores your shop’s inventory.

“If you already have a Page shop with at least one product in it, [then Facebook has] automatically created a catalog for you in Catalog Manager that’s connected to your shop,” the social media platform explains.

The Facebook Page Shop allows you to manage your inventory either in your shop or in the Catalog Manager.

You can create the Facebook Page Shop from your catalog.

Dynamic Ads

Available for all types of inventory, Dynamic ads display products or items from your catalog to people who have looked for them online.

According to Facebook, Dynamic ads “match items from your catalog with events from a Facebook Pixel or SDK, a piece of code installed on your website or app.”

To create a dynamic ad, you need to know and have a dynamic audience.

Collection ads

Applicable to all types of inventory, this ad format shows customers a collection of four items from your catalog. Customers can then tap the items to learn more or browse similar products.

What Is Facebook Dynamic Audience?

As part of this series on Facebook audiences and ads, we’ve tackled different types of audience. Today, we’re taking on Facebook’s Dynamic Audience.

If you’re wondering how you’ve never heard of this audience type or why it doesn’t appear often, you’re not alone.

Here’s what you need to know.

What is Facebook Dynamic Audience?

Unlike Facebook’s Custom Audiences and Lookalike Audiences, the Dynamic Audience is for companies, who have and use a Facebook Product Catalog to sell their products and services.

In other words, if your Facebook page doesn’t have a catalog you won’t be using dynamics audiences or dynamic ads in the near future.

It’s an audience that relies on engagement and interactions between customers and your products.

How Do Dynamic Audiences Work?

Put simply, if you have a product catalog on Facebook, once customers engage with it, then you have a dynamic audience.

Whether these users or customers have clicked on one or more of your products, bought an item from you, or simply added a product to their cart, this counts as an interaction with your shop and catalog and goes into to generate  a Facebook Dynamic Audience.

That said, there’s an important aspect to remember before you can start searching for your dynamic audience.

Your store needs to have the Facebook tracking pixel integrated in order to track your customers’ actions, says Nicolas Vibet, chief product officer at MakeMeReach.com.

How Is this Audience Dynamic?

The answer is since this audience type relies on interactions, it’s ever-growing.

Today you can have 10 users engage with your products, tomorrow that number can be 100.

Regardless of the number, whether it increases or decreases, the audience keeps forming and growing, making it a dynamic audience.

“Any interaction from users with your products, website or content will be tracked, and will design the Dynamic Audience further, reaching more people in the future,” says Vibet.

How Do I Use Facebook Dynamic Audiences?

Facebook doesn’t leave anything to chance. For the dynamic audience, Facebook has created an ad type called Dynamic Ads.

In brief, dynamic ads use items from your product catalog and display them to people who have “looked at or searched for” your products online.

Dynamic ads “match items from your catalog with events from a Facebook Pixel or [software development kit (SDK)], a piece of code installed on your website or app,” Facebook explains.

More on Facebook’s Dynamic Ads in our next blog post!

Here’s What You Need to Know about the Facebook Pixel

One of the most important options provided by Facebook for businesses is the Facebook Pixel. Companies, small and large, use it for tracking purposes.

But what is the Facebook Pixel and how does it work?

That’s what we will be talking about today.

Facebook Pixel Basics

Facebook introduces its Pixel as “a piece of code for your website that lets you measure, optimize and build audiences for your advertising campaigns.”

Simple yes, but let’s explain it further.

You’re a business and you have a website. There is a lot of data you need, such as: Who are these people visiting your website? Where are they coming from? What pages do they visit? Which pages do they leave?

If these people are coming because you’re creating ads on Facebook, are they converting? Or people landing then leaving?

 

How Does the Facebook Pixel Work?

When you have a Facebook Pixel installed in your website, you can use it to track people’s actions when they visit your webpages. For example, you can track actions like buying a product or service.

Once they take an action, the Pixel is activated and reports the action taken. This means, you will know when a customer clicks your Facebook ad and converts on your website.

The “pixel also tracks user-generated events, such as sites visited, products added to cart, checkouts initiated and purchases made. So much as submitting a lead form on a website with a pixel gets thrown into the mix,” explains Adage.com.

“You’ll also be able to reach this customer again by using a Custom Audience. When more and more conversions happen on your website, Facebook gets better at delivering your ads to people who are more likely to take certain actions. This is called conversion optimization,” Facebook explains.

What can the Facebook Pixel do?

Its primary function is to “track.” But here is a list of tracking options that the Facebook Pixel can perform:

1)     Measure conversions across multiple devices

2)     Optimize delivery to people who are more likely to take action

3)     Create custom audiences from visitors to your website

4)     Give you more data about your website traffic

How to Set Up the Facebook Pixel?

Adding the Pixel to your website isn’t difficult.

You can even do it yourself if you can access your website’s code, you can step-by-step instructions using Facebook’s Help Centre.

Or you can have your developer set it up for you. Most people and businesses prefer the latter option.

Last but not least

If you’re just starting out, it would be a good idea to embed the Facebook Pixel into your website early on so you can track your audiences and their actions across your site. It will collect the data from your visitors and send it back to you.

“By targeting broader ranges of people you think will respond positively on your site, you’ll help feed the hungry pixel much-needed data that will later help you build lookalike audiences,” says Adage.com.