I’ve been thinking a lot lately about performance advertising. This is in contrast to brand advertising. When I think about brand advertising I think of television ads, radio ads, and print ads. You get your ads in front of a lot of people and more people know about your brand and your business, and over the long-term, sales increase. Old school. There’s nothing wrong with that, and there are ways to do great brand advertising on Google Ads (but of course Google Ads offers powerful tools for layering on different audience and placement targeting options to make those brand ads even more effective). I like brand advertising and believe in it, but it is performance advertising that energizes me and helps me create incredible value for my clients.
When I think of performance advertising, I think of advertising budget that leads to direct results that bring in direct revenue that is a multiple of the advertising cost. To put it simply, “ads that work.” Again, this is not to say that brand ads don’t work, they do. But with performance advertising, you get to see things work more quickly and more directly. For example, consider a situation where you spent $100 on clicks from a keyword, those clicks brought in five leads, one of leads became a customer, that customer’s lifetime value will be $500, and this means you got a five to one return on your ad spend. That is performance advertising. And of course the most powerful results are when you excel at both brand advertising and performance advertising.
Performance advertising matters now more than ever because of two reasons. The first reason this matters so much now is because we actually can do performance advertising these days, we have the tools to do it. No more guessing, no more games. What did I spend, what did it get me, and how can we improve? The answers to all of those questions are now knowable thanks to the data and conversion tracking that Google Ads offers. And this is true not only for ecommerce but also for lead generation. Service companies, like the ones I work for, are able to track all three sources of leads: calls from ads, calls from website, and lead form completions. When done correctly, Google Ads offers a closed loop of information, and you’re able to know exactly how many leads you are getting from Google Ads and what keywords and ads are driving those leads. Performance advertising matters because it’s the gold standard of advertising and with today’s data and tools, we are able to do it.
The other reason performance advertising matters is because it can help you continue to thrive during a recession. Performance advertising is recession proof, and actually gets easier to do during a recession when your competitors pull back their ad spend. Performance advertising is the best use of money for your business to spend when it comes to advertising and probably when it comes to any kind of spending in general. Why? Because performance advertising produces direct and immediate revenue. When done correctly, it’s a license to print money. Put $1 in, get $5 back. The ability to generate profits from your advertising is always important, but it’s crucial during recessions. When business slows down from other sources, you want to put yourself in a position to get more business from sources you have more control of, and one of the ways to do that is to masterfully run performance advertising campaigns on Google Ads.
Preparation and knowledge are key. Your Google Ads account does not become a money printing press overnight. It takes time to figure out what strategies are going to work best for your unique situation, and it takes time to develop those strategies into a fully controllable, scalable, and high-return advertising system. You don’t want to find yourself during a recession saying “I need my brand new Google Ads account to produce lots of business at a five to one return today!” It’s more nuanced than that and takes some time. Rather, you want to always be running a strong Google Ads account, figure out what works for your business, continually produces profits, continually run experiments and make things better, and then when the recessions comes, the results will get even better for you on Google Ads when your competitors go broke or pull back their ad spend. A fine-tuned, magical Google Ads account can help you dominate your market during good times and save your butt during bad times. Invest in your account, find out what’s going to work well for your business, compound that knowledge, and start printing money. It’s possible, I see it happen every day, and your performance advertising campaigns will continually be there to help your business do well despite whatever is going on at the macro level.