Let's get nostalgic for a minute and go old-school.
Back in the day, in the traditional world of advertising, large companies would spend their marketing budget on stuff like billboards, TV and radio ads, magazines or sponsorships.
If you didn’t have that kind of money, you were stuck with ads in local newspapers or specialized magazines. Or simply word-of-mouth.
Today, you can see stuff like this:
The playing field has leveled.
And it’s better for everyone:
This is possible because the advertising model has changed from being reach-based to pay-per-click-based (or PPC-based).
In the traditional, reach-based model, advertisers paid to place ads that would be seen by a relatively large group of people, a fraction of which was part of their target audience—that was their campaign’s reach.
Here’s how that works:
Let’s say a manufacturer of high-end women’s shoes placed an ad in a newspaper that’s read by an estimated 10,000 people per day.
The newspaper would tell the manufacturer that about 20% of the people who read that newspaper were women who earned enough money to be able to afford the shoes being advertised.
That particular ad would reach 2,500 people somewhat within its intended target audience (with no idea whether or not they are actually interested in high-end shoes at the moment).
The newspaper, however, would usually charge for ad placements based on the total of 10,000 people.
Of course, this is an extreme and simplified example, but you can already tell how inefficient this model is.
Especially if you compare it with how the PPC model works.
In the PPC model, advertisers choose to show their ads to only a segment of people mostly belonging to their target audience and pay only for how many of those people click on their ads.
Here’s how it works:
Let’s say that same high-end shoe manufacturer wants to place some search ads using Google Ads.
They could show their ad to people searching for “designer shoes” on Google.
If the ad was seen by 100,000 people and 2.5% of those people click on the ad, that’s 2,500 people within their target audience.
In this case, the shoe manufacturer would only pay for those 2,500 clicks from people who are very likely to be part of their target audience—people interested in designer shoes.
Simply put, digital advertising is using digital platforms to attract people within your target audience at a lower cost than the revenue generated by that same people.
I’ve got bad news for you.
There’s really only one way to become good at digital advertising.
And that’s to do it yourself. To run campaigns on your own. To mess up. And to learn from your mistakes.
Sorry! You can’t sloth around on this one.
Like with any digital marketing channel, experience trumps theory.
The challenge is that, to get experience, you need money to spend on campaigns—but companies with the budget for paid campaigns, want people with experience to run them.
This is something that I know all too well.
Mistakes can be expensive.
I once spent $22,362 of my clients’ money in just 18 hours because of a small mistake that got out of control.
(But that’s a story for another time.)
The thing is, digital advertising is about trial and error.
No way around that.
Even the most experienced digital advertisers will usually lose some money on their first try and adjust until they get to profitability.
The difference between someone with and without experience is how quickly they can make their campaigns profitable.
Beginners usually get discouraged or panic before they get to that point (and make mistakes like the one I did.)
If you’re a beginner, the best thing you can do is to start small and follow a repeatable, proven framework to launch profitable campaigns.
Let’s go over that next:
While you can place ads on Twitter, LinkedIn, Quora, Snapchat, Amazon, Tinder, and a ton of other platforms…
…most digital advertisers focus on just two: Google and Facebook.
That’s why they accumulate 58% of the total digital ad market.
There are good reasons for that:
However, they work in ways that are fundamentally different from one another.
Google offers advertisers many different ways to target and display their advertising, but its main one is still search ads.
Those are the ones that appear on the top of the search results.
In this case, advertisers “bid” on certain keywords (a.k.a. the phrases people search for) to show their ads on the search results.
This a very simple but powerful concept.
People who search for a certain term are interested in that term at that specific moment in time.
This presents you, the advertiser, with the perfect opportunity to put your product or message in front of those people.
Think of how different that is from TV advertising, where you get interrupted by an ad during pauses of your favorite show.
Traditional ads use interruptions, while search ads use intent.
Facebook, on the other hand, uses a different approach.
They have gathered tons of data on each of their users: what they like, who they know, where they’ve been, what they are interested in, and even what they do in websites other than Facebook.
They may not know what you’re looking for now. But they can triangulate your demographic and psychographic data, and make a good guess about what you might be interested in…
… yeah, let’s be honest. It’s a little creepy. But it’s insanely powerful as an advertiser. Facebook uses that data to show highly relevant ads to its users.
This is also drastically different from traditional ads.
With TV ads, you launch ads to a massive audience hoping a portion of them might be interested in your product.
With Facebook Ads, you are carefully choosing to show your ads to people who, based on a ton of data, are very likely to be interested in your product.
That’s why Facebook ads are based on interests.
Now, I’ll teach you how to use Google Ads and Facebook Ads strategically to generate results for your business.
A mistake I made when I was starting with digital advertising was thinking I could just create an ad pointing to a sales page and expecting that to generate sales.
I’ve seen a lot of people make the same mistake.
If you do this, you’ll miss 90% of the potential growth that lies within digital advertising.
A better method is to structure your digital advertising strategy in a way that it boosts your entire funnel.
(To learn more about sales funnels, check out our Sales Funnels Strategy Guide.)
Your job as a digital advertiser will be to design campaigns to hit the goals for each stage of the funnel:
By launching campaigns that have these simple and clear goals, you can easily optimize things like your targeting, messaging, budget spend, and even the platforms you use for each stage of the funnel.
Let’s dig into each of these:
These are campaigns aimed at attracting relevant traffic to your top-of-funnel assets.
This is your digital equivalent of a “billboard on the side of the highway.”
For example, this could mean driving traffic to a blog post, a YouTube video, a Podcast, or even a social media post.
With these campaigns, you just want to create awareness for your company by sharing a helpful, interesting, or entertaining piece of content.
To know if these campaigns are profitable, you’ll need to do some math.
Here’s a simple example:
Let’s say you’re driving traffic to a blog post.
Using that, you can estimate how much each blog post visitor is worth to you.
$45 * 5% * 10% = $0.225
If you were the one running the campaigns for this example, you should aim to pay less than 22 cents per click (known as cost per click or CPC) on your ad—anything below that will be a profitable top-of-funnel campaign.
These campaigns are designed to acquire leads—this means finding a way to contact your users. In digital marketing, this usually means getting people to give you their email address, but it can vary based on your business.
For example, middle-of-the-funnel campaigns can drive traffic to lead magnets, mini-courses, free trials, demos, low-priced products (a.k.a. tripwires), or giveaways.
For these campaigns, you’re actually tracking an action beyond just clicking on the ad and going to a page: You want people to become leads.
In this case, you’ll typically be optimizing your cost per lead (CPL).
The math is similar to the one we already did:
Your maximum CPL will be: $25 * 25% = $6.25.
If you were running this campaign, you should keep your CPL below $6.25 to stay profitable.
Bottom-of-the-funnel campaigns are designed to generate sales for the business. Full stop.
For example, you could run a campaign for a flash sale, holiday sale, or just remind people that they left something in their shopping cart.
For these campaigns, you’ll be optimizing your customer acquisition cost (CAC).
This is more straightforward than previous campaigns.
If your customers spend an average of $45 per purchase, then you need to spend less than that to be profitable.
This stage of the funnel is all about increasing your customers’ lifetime value, reducing churn, and getting your customers to refer their friends.
Some of the campaigns you could run include upsell/cross-sell offers, loyalty programs, or referral programs.
For these types of campaigns, you’ll have to determine a valuable action (e.g. repeat purchase, referral, etc.) and optimize for that.
For example, if you know that a customer who joins a loyalty program spends an average of $100 more on your business, you’ll know what the max you can pay for this conversion is.
As long as you stay below that number, your campaign will be profitable.
Depending on the goal of your campaigns, Google Ads and Facebook Ads provide a wide variety of goals and objectives to choose from. Check out these resources to learn more about those:
Next, let’s go over the different methods to get your campaigns in front of your audience.
Targeting is perhaps the most important step in launching an advertising campaign— even more so than creating your ads.
The only way you’ll see results from your campaigns is to put it in front of the right people.
Once you’ve mapped campaigns for each stage of the funnel, it’s time to work on targeting.
At a super high level, you can target your campaigns in two ways:
Each has its own strengths.
Prospecting allows you to reach people who would have otherwise never heard of you.
Remarketing is a great way to convert people who are already part of your funnel.
As a general rule, prospecting is a better fit for top- or middle-of-the-funnel campaigns, while remarketing works great for middle, bottom, and monetization stages of the funnel.
Like we already mentioned, targeting works differently on different platforms. Let’s dig in a bit more.
In this case, we’ll only go over targeting for search ads. (Google Ads also includes other formats like YouTube and Display Network.)
The basic way targeting works in Google Search is:
In general, to target your Google search ads, you’ll use three layers:
Let’s go over each of these.
For example, let’s say you run Google Search Ads for a flower delivery business and want to know what people are searching for that’s related to “flower delivery.”
By using Google’s Keyword Planner, you’ll find something like this:
Note: Unless you are already spending a certain amount of money on Google Ads, you’ll see a range—e.g. 10K-100K—under search volume instead of the actual average value.
The first step is to classify these keywords by searcher intent.
To do this, you’ll map those keywords against the stages of the funnel.
At the top-of-the-funnel, people are not necessarily aware of your business and might not even be looking into making a commercial transaction. They are usually just looking for general information about a topic.
At the middle-of-the-funnel, people already know what they want and are comparing the options available in the market.
At the bottom-of-the-funnel, people have made up their mind and are ready to make a purchase.
Finally, at the monetization, retention, and love stage of the funnel, people who are already customers will look to get information to continue their relationship with your business (e.g. their purchase status, purchasing again, or getting customer support).
For the flower delivery business and the set of keywords in the example above, that might look like:
To learn more about mapping your keywords to the stages of the funnel, check out this post:
Next, you need to select your keyword matching type.
Keyword matching allows you to decide how strict or loose you want Google Ads to be when deciding which searches to include your ads on.
Google Ads offers four match types that are best explained by this simple summary:
With broad match, your ads will show on searches for keywords you didn’t necessarily select (misspellings, related searches, etc.)
For example, if you target “mother’s day flowers” with broad match, you might show up for searches for “mother’s day gift baskets” even though you might not offer that product.
The trade-off in going with this is:
On the other end of the spectrum, with exact match, your ads will only show when the exact keyword you selected or a close variation with the same meaning is searched for.
For example, if you target “mother’s day flowers” with exact match, your ads will show for that query alone and not others like “best mother’s day flowers”.
The trade-off in going with this is:
Broad match modified and phrase match are somewhere in between these two extremes.
I recommend you check out this post to learn how to select your keyword match type:
Finally, you can choose whether to show your ads to people who have already been on your site (remarketing) or not (prospecting).
By doing this, you can narrow down even further and achieve things like only show certain campaigns to existing users or increase your bid for people who have visited your site (to try and get your ads to show higher on the page).
Check out this guide to learn more about retargeting for Google Search ads:
Plus, install the Google Ads Global Site tag on your site, to easily set up remarketing audiences for Google Ads. To learn how to do that check out this tutorial:
You can target your Facebook ads using three methods:
Each of those leverages all the data Facebook has gathered about their users in a different way.
With core audiences, you’ll use Facebook’s data to manually build a targeting profile for your ads.
This includes location, demographics, interests, behavior, or connections.
To learn more about how to use core audiences, check out this post:
You’ll typically use core audiences when you’re just getting started and you don’t have any user data recorded on the Facebook Pixel to use for remarketing or lookalike audiences. Instead, you can rely on Facebook’s massive data sets to find audiences that match a certain profile.
If you’re planning to use core audiences, you should have done some research on your ideal target customer and ideally built a customer persona.
(To learn how to create customer personas, check out our persona creation mini-course.)
With custom audiences, you can target subscribers you already know—a.k.a. run remarketing campaigns.
This includes people who have visited your website, people on your email list, or users of your mobile app.
This is a really powerful way to convert people who are already in different stages of your funnel.
For example, you could use custom audiences to launch a campaign that targets people who visited a checkout page but didn’t complete their purchase (known as abandoned-cart campaigns).
To learn more about using custom audiences, check out this guide:
If you want to run campaigns targeting website visitors, you’ll also need to install the Facebook Pixel on your site. Check out this tutorial to learn how to do that:
Finally, lookalike audiences is a targeting method to that allows you to find people who are similar to your existing customers or users.
There’s a joke in Silicon Valley that says that instead of working on self-driving cars or colonizing Mars, some of the world’s best engineers are working on Facebook’s lookalike audiences functionality.
Instead of picking which attributes you believe match your ideal customers (like you would to create a core audience), with lookalike audiences you’ll give Facebook a list or segment of actual customers, and their software will find a segment of similar people for you among all their users—based on hundreds or thousands of data points that would be impossible for a human to analyze.
For example, you could upload a list of emails containing your most valuable customers and create a 1% lookalike audience.
This means that Facebook will pick the 1% of people within a certain population who are the most like the segment you selected.
You can use lookalike audiences to launch powerful prospecting campaigns.
To learn how to create lookalike audiences with this tutorial:
Once you created a target audience, it’s time to create your ads.
In the Mad Men era, you had to pay tens of hundreds of thousands of dollars to major advertising agencies to create great ads.
With digital advertising, anyone can launch world-class ad campaigns.
The main reason behind this is that digital ads have a lot more constraints than a traditional TV or magazine ad—everyone has to play within the same limitations.
By following a few best practices, you’ll have a great baseline to improve upon.
The first step in creating great ads is to understand how to use the real estate provided by the advertising platforms.
Here’s the anatomy of a Google Text ad:
And here’s a basic Facebook Feed image ad:
You should learn what the components of each type of ad are and use ALL of them when creating your ads.
Writing conversion-focused copy is one of the most important optimizations you can make. You only have a small space to send your message, so you have to make every word count.
These are some tips to write copy that converts:
I was surprised how much difference a call-to-action makes in an ad campaign.
A lot of beginner advertisers are too vague when they create their first ads because they’re afraid of coming off as too aggressive or salesy.
The single most powerful thing you can do in digital advertising to get people to do something is simply to tell them to take that action.
If the ad is designed to get people to buy, include a “buy now” call to action. If the objective is to get them to download a guide, include “download the guide” in your ads.
Some Facebook ad formats and placements allow you to include visuals in your ads—they call these “ad creatives.”
The best practice here can vary depending on the industry.
In some cases, you’ll want to have super high-quality photography—for example, if you belong to industries like travel, fashion, or food.
These images help highlight the quality of the product or inspire the audience.
However, in some industries it’s better to include creatives that have a more homemade or authentic look—this seems to work for industries like info products or fitness.
The “real” aspect of these images help audiences relate to the message in the ads.
Regardless of the type of ad creative you choose, you should aim for it to be eye-catching enough to get someone to stop scrolling to check out your ad—cliché stock photos will just get ignored by most audiences.
Before you start working on your ad creatives, you should check out what your competitors are doing:
Finally, it’s important that the page your audience lands on after clicking on your ads (known as landing page), actually match what was promised on the ads.
If you create an ad targeting the keyword “men’s leather jackets”, don’t send your people to a landing page for men’s clothing—instead, take them to the specific section of your site dedicated to men’s leather jackets.
If your landing pages don’t match the intent of copy of the ad, you’ll end up with a high bounce rate (percentage of people who close your page without performing any action on your site)—this can negatively affect the performance of your ads and even increase your cost-per-click.
To learn more about creating great Google Text Ads and Facebook Ads, check out these resources:
You’re almost ready to launch your campaigns. Now, let’s go over:
If digital advertising worked the same way traditional ads work, there would be no place for the little guys.
Small companies would have no way to compete against massive companies and their multi-billion dollar budgets.
Fortunately, that’s not how digital advertising works!
Digital advertising platforms use an auction model and have developed a way to level the playing field.
They did this by introducing quality and relevance into the auction.
The name of this metric varies depending on the platform but it’s pretty much the same principle. For Google Ads, this is called Quality Score. For Facebook Ads, this is called Relevance Score.
In essence, it works like this:
This means that you don’t necessarily need to be the biggest bidder—if you create relevant and engaging ads, you can beat even the biggest companies in the world.
Here’s how you can get started with budgeting for your campaigns:
The best way to do this is to work backward from the data you already have (or should have) from your business.
For example, let’s assume you’re trying to get sales of a $50 ebook which you’re promoting through a webinar and you create a campaign to drive registrations to that webinar:
You can use these initial estimations to launch your campaigns and adjust when your campaigns are actually live.
Let’s talk numbers.
Digital advertising metrics are pretty standard across platforms and while some of them may have slightly different names or definitions, the core ones remain the same.
If you’re a beginner advertiser, these are the most important ones you need to know right now:
Cost-per-click is the most fundamental digital advertising metric.
As its name suggests, it represents the amount to be paid by you, the advertiser, for each time an ad is clicked.
You can use the CPC value to estimate your campaign budgets or to determine whether your campaigns are profitable or not. Plus, you can analyze variations of your CPC to know whether there’s something in your campaigns that requires optimization (or if a previous optimization worked).
Click-through rate is the percentage of people who click on your ads relative to everyone who saw them.
This is an indicator of the relevance of your ads:
If you are testing different variations of an ad, you can use CTR to determine which is the one that performs the best at generating clicks.
Google and Facebook’s business models depend on them showing only the most relevant content to their users—it’s their competitive advantage.
The reason why ads haven’t (completely) ruined the Google and Facebook user experience is that both companies have implemented rules and guidelines that force advertisers to present relevant content to their users.
Google created the Quality Score (QS) and Facebook created the Relevance Score.
No one outside of Google and Facebook know exactly how these metrics are calculated, but the principles are essentially the same:
Advertising platforms use these scores to determine how often your ads are shown, how many people receive them, and even how much you’ll pay for each click.
As you already figured out, digital advertising is a game of profitability.
You need to acquire traffic, leads, and customers at a lower cost than the revenue you get from them.
As long as you can do that, you can increase your ad spend to scale your profits.
That’s why cost is such an important metric for digital advertising.
Aside from CPC, the two most important cost-related metrics are cost per lead (CPL) and cost per acquired customer (CAC)
As the name suggests, CPL is the average amount an advertiser needs to spend to get a single lead.
CAC, on the other hand, is the average amount an advertiser needs to spend to get a single customer.
You can use these metrics to make calculations of profitability or budget.
There are many advertising tools that promise to take the load off setting up, optimizing, or tracking performance of your ads.
Our best advice for you, as a beginner, is to ignore most of these tools and just stick to the basics.
This is our recommended digital advertising stack for you:
You need to get familiar with the platforms you’ll use to run your campaigns.
Each of these is massive and has a lot of features to play with, but don’t feel overwhelmed—you don’t need to master everything at once.
Just stick to the basic features and you’ll be fine. As you get better, you’ll start getting familiar and taking advantage of more advanced stuff.
Advertising platforms offer solid analytics features that allow you to optimize your campaigns.
However, the challenge is to link clicks on an ad to behavior on your site or business results (e.g. revenue).
That’s where these tools come in:
Creating assets for dozens of ads can be hard. These tools will make it much easier:
If you need the flexibility to easily create custom landing pages that are optimized for your paid campaigns, a landing page editor can help.
Digital advertising has, unfortunately, a number of shady people, questionable tools and “get-rich-quick” products and schemes.
Plus, advertising platforms are constantly changing, adding, and removing features—it’s hard to keep up.
These are our favorite people and blogs to help you make sense of it all:
Practice is the best way to learn digital advertising quickly.
There are a few ways to get hands-on experience when you’re just getting started:
Once you have this figured out, use the following framework to get started:
Outcome: You will understand how digital advertising fundamentally works—plus, the final section of this guide will help you avoid some common pitfalls for beginner advertisers.
Outcome: You will be able to start building remarketing lists and set up conversion tracking on your site.
Outcome: With a single goal in mind, it’s important to focus relentlessly and do everything you can to reach profitability.
Outcome: Once you’ve identified the audience, it will be easier to craft messaging for them. A narrow audience also helps you stay in control of your budget.
Outcome: You will get clues for the kind of messaging that work for your competitors, which you can use to craft your own ads.
Outcome: You’ll have a baseline of performance to beat and start building knowledge of what does and doesn’t work.
Outcome: Running paid campaigns is an iterative process of launching and optimizing. This is what you will do most of the time as a digital advertiser.
If you’re just getting started, it’s pretty normal to get owned.
But, when running digital ads, some mistakes can cost you a lot of money or have long-term implications.
We made a quick guide so you can avoid these like a boss.
Ever since the Cambridge Analytica scandal, advertising platforms have tightened their rules and policies for advertisers.
What you need to know before diving into these, is that they are intentionally vague to allow platforms to make judgment calls about what is and isn’t allowed.
Still, you should familiarize yourself with them and definitely try not to do anything that goes against them (this could end up with your ad accounts being permanently banned).
Each advertising platform offers several ad formats that we didn’t include in this guide.
That was intentional.
It’s easy to get excited about creating a cool looking ad format thinking that it will be drastically more successful than a basic ad format (text or image + text).
More often than not, this isn’t the case.
When you’re getting started it’s better to just stick to a simple ad format and work on mastering more important aspects like targeting or optimization.
Mistakes can be costly, but budget limits are your safety net against these mistakes.
When I was starting, I forgot to set budget limits and ended up spending $22,362 of my clients’ money in just 18 hours.
Don’t be a dummy like me. Set a budget limit.
The prospect of creating and seeing your own ads out in the real world is super exciting.
A lot of people get so pumped up they end up biting off more than they can chew: Launching several campaigns, dozens of ad variations, and using large budgets.
What started as an exciting project quickly becomes unwieldy and overwhelming.
When it comes to digital advertising, unless you have a lot of experience, it’s better to start small: Launch a single campaign, target a single audience, focus on a single goal, and stick to a small budget.
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