Episode 33

Shiny New Traffic Sources

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About this Episode

There's no end to new platforms popping up and claiming to be the next great source of traffic to your business. First there was Yahoo. Then Google. Then Facebook. Then Twitter. Then Instagram. Then TikTok. Then… well, the list goes on and it will forever be growing too.

So, how do you decide which one to test and how to gauge the success or failure of these new exciting ways to spend your marketing dollars to generate business? Luckily Ryan is here is to break it all down for us.

TRANSCRIPT:

Jon MacDonald :
Hey Ryan, welcome to another episode of Drive and Convert. Today we're going to talk about shiny new traffic sources. Right. There's no end to the new platforms popping up and they're always claiming to be the next great source of traffic for your business. So, we're going way back first though is with Yahoo, then Google then Facebook then Twitter then Instagram now everyone's on TikTok. I mean I'm not but everybody is supposedly. Definitely feeling old these days based on these stats.

Ryan Garrow:
Yeah. Me neither.

Jon MacDonald :
But look, the list goes on and on. And I'm sure I've left a lot off of that list over the history and it will forever be growing too, right? So, what I'd love to get schooled on today from you is how do you decide which one to test? And how do you gauge the success or failure of each of these new and exciting shiny objects to spend your marketing dollars on to generate revenue? It's a lot, right? But look, with so many social networks and traffic sources popping up seemingly every week, how do you know if it's a good place to spend money?

Ryan Garrow:
The real answer is, always it depends. But that's always the answer we give everybody no matter what we're talking about in the digital marketing world. It's my least favorite answer but it has to be the one you give every time and with context. And when you're looking at all of these wonderful platforms and companies that you can spend money on the ads, I think the first step is to really understand what the platform is. Who's on it? What are they trying to do? What's their goal of being on that platform?
Because we all really understand Google and that was always a pretty easy one. Like I'm on Google to find something either information or a product that's why I'm there. And it makes a lot of sense logically saying, "I get it, if I am selling that product or I provide an answer to that I want to show when they're searching for that." There's a lot of intent there. If you're selling houses you might not necessarily want to spend a lot of time on TikTok, generally. TikTok is skewing. It's getting older, I think, as young people blow platforms open like in Facebook and Instagram did and then older people take them over because I think they're being cool by getting on them.

Jon MacDonald :
I saw a stat today about Facebook that something like 70% of people over 60 are on Facebook, which is the highest user percentage base. It's crazy.

Ryan Garrow:
Oh, [crosstalk 00:02:57].

Jon MacDonald :
We used to tell our customers you want to convert older folks and high income, you would advertise on Microsoft Bing. Because they're using Internet Explorer out of the box and not changing the default search engine, right? So-

Ryan Garrow:
Correct.

Jon MacDonald :
... But now it's definitely Facebook too. Like it's crazy.

Ryan Garrow:
What's sad, well I'm not going to say sad, but you have to advertise through Facebook to really target Instagram. You have to use that Facebook ads platform like Joyful Dirt, which hopefully I'll be able to bring this back later to talk about one of my issues with the Joyful Dirt brand. But Joyful Dirt doesn't have anything going on on Facebook really. Instagram because we're targeting millennial plant moms generally, I mean obviously anybody can buy the product, but we get very little and to no interaction on Facebook and it doesn't work when we market on there.
But at least you're understanding that, right? If you are selling arthritis cream you want to be on Facebook. And we've got a company that sells arthritis cream and does really well on Facebook. So understanding who's on it, where it's going, and then also just how they're interacting. If it's short-form video like TikTok, then if you're not prepared to make short-form video you're probably not going to be tremendously successful in that space. Do you have a personality? Like if you're just a brand throwing ads up randomly on TikTok with no face to the brand, I can't imagine it's going to do well.
And I think in early on you've got these platforms that you have to really get into the platform, I think, and understand how you're interacting. And so if I was going to spend my money on TikTok step one is I would go join TikTok. Like I'm not there, I don't want to be there but that would be understand who's there. And in theory until you get in there you won't even know that, you have to get in there and start watching TikTok. You know I was never a Snapchat person either, I just wait for Instagram to copy their stuff and then I'll see if I like it. But again, understanding where the ads are being put there can really help you figure out does this conceptually make sense for my brand?

Jon MacDonald :
So I'm hearing from you if I could summarize two things, one is know who your target audience is and where they're at and what platform and then that's a good place. And then B is test it, right? You really don't have a choice you just need to test it. Throw some money at it and see what sticks if you think you have a good understanding of your consumers being on those channels.

Ryan Garrow:
Yeah. Like once you can advertise in there and decide that this is based on who's on it, who my demographic is or target market is go spend some money. And it could be that you're trying to open up a new audience, so it's you're testing it for that. Like if you want to sell to teenage kids TikTok may be a great place to start pushing into.

Jon MacDonald :
That's great. Okay.

Ryan Garrow:
I mean it's gradually older, but.

Jon MacDonald :
Yeah. So how do you test the traffic then?

Ryan Garrow:
Well, once you're on the platform and you've seen what it looks like, my lens that I look through is I want a light money on FIRE budget. And I have to be comfortable with it just not working, because we don't know. It's a new traffic source for you, it's a younger platform often, because we're talking about the shiny new ones that haven't matured like a... If you're not advertising on Google and Facebook I probably don't recommend that you start looking at the shiny new ones yet.

Jon MacDonald :
Right. Yeah, start with the basics.

Ryan Garrow:
Yeah, start with the basics. And then, okay great. It makes sense to do this so you need to have a budget in mind that if it goes horribly wrong and you lose it all and you get no results, it's not going to sink your business. If you're doing a hundred thousand a month in revenue you're not going to go onto a brand new channel for the first month probably and spend $50,000. It just doesn't line up, doesn't make sense unless there's some crazy reason that you believe in your core that that's there.

Jon MacDonald :
Maybe you like lighting money on fire.

Ryan Garrow:
True. Maybe you do. And I've got a great thing I can sell you, I'm sure, somewhere that's going to run 50,000 bucks. And so have that budget first.

Jon MacDonald :
Mm-hmm (affirmative).

Ryan Garrow:
Then you need to make sure that you can track the traffic. Just by going off on advertising there you have to be able to tag the ads to make sure that when they go to your website or wherever your call to action is, Google Analytics can see that traffic coming in and then tell you if they took the right action after they came to the site. And that's not always the easiest. If you have a profile, let's pick on Snapchat, and you're driving traffic from Snapchat already, does your ad set allow you to do UTM parameters in the URL when you're sending traffic over?
Because you want to be able to differentiate organic traffic from that platform and the ad stuff or the traffic from that. Even a lot of companies don't even do that with Instagram and Facebook still. And just look at the different, is it coming from the organic Instagram interactions? Or is it actually coming from an ad that I placed? So be able to track it, and then watch it carefully as it's coming through. Either your marketing team or you as the business owner probably has a good gauge of traffic as it's coming from a new source pretty quickly.
And so that's where that light money on fire you have to have some patience to let it do some of the stuff. If there's an algorithm that's helping run your ads for you. Facebook's does some great algorithms in their space, Pinterest has some going. You have to give it enough to do something as far as the budget's concerned. Going out with $5 is probably not going to give you a good test and you also have to give it some time. It's just that data collection to really see it churn and see, is it improving after seven days? Or is it staying the same? Or is it getting much worse? Because maybe you have to make some changes.

Jon MacDonald :
Now that's a great segue to my next question which is, how do you have the right expectations, right? So you're saying give it a week or so at least, but what are the right expectations I should be having? Obviously if I'm setting the money on fire is what you're suggesting here, my expectations are pretty low, right?

Ryan Garrow:
Yeah.

Jon MacDonald :
Maybe I'll stay warm. But other than that, I think it's interesting. I should expect to learn probably, right?

Ryan Garrow:
Mm-hmm (affirmative).

Jon MacDonald :
What else should I be expecting here? How do I set those right expectations?

Ryan Garrow:
Generally, and again I can't give the specifics for every potential business listening to this, but generally newer platforms are not going to generate profitable sales initially. And so what you're often looking for is new users, new sources of traffic, people that you're not reaching in other platforms. Because if you're already reaching everybody on Google and Facebook, why would you go try to target those same people if you're already capturing them at a rate or at a cost that makes sense?
So you're trying to move generally up the funnel, and when you move up funnel or find a different source of traffic don't expect it out of the gate to be profitable. It can happen and nothing is impossible lightning can strike, and you can be profitable out of the gate. And if that happens continue dumping money on it and figuring out what's causing it to work and try to analyze why and how this happened. And so, have low expectations for it. You're trying to see trend lines going in the direction you need marketing budget to get to.
And so if the first week it's you spent, I'm going to just use random numbers, if you spent a thousand dollars in the first week and it drove $200 in sales on your site, great. Week two, did that $2,000 generate more revenue than the previous week? Are we starting to see a trend line in the same direction? Or did that extra thousand dollars a week to generate $50 in sales? What is that conversion rate of the traffic? Be paying attention, do you have to go to the homepage on that? I mean, where are you driving? What's the call out that you have within the ad that you're running?

Jon MacDonald :
So what we're looking at here, Ryan, in reality is not even trying to break even, but you're paying to acquire a new customer that then you're looking for the lifetime value, right? And that's really where you're paying to acquire that new contact, that new customer. And then at that point you can continue to sell to them and continue to market to them and that's where you're going to make your money.

Ryan Garrow:
Yes. I mean often in these, right? It's the expectation is not out of the gate head profit. And if you have that I think your chances of success are higher. Your chances of having the patience necessary, you see a platform out. I think often I talk to business owners or marketing teams that all marketing needs to drive a profit, and if it's not driving profit why are we doing it? And I think that's very shortsighted of a lot of business owners and marketing teams and saying, "Look..." Billboards for the last hundred years have not had direct attribution to what's going on or the sales that are coming, but people still did it. And there was still value there that people knew about or saw.
And so sometimes on these new platforms it may be a branding play. But can you start seeing the impact? Or if you're in the data enough? I have a really good feeling in the businesses I'm involved in when something is working. I might not see the data yet but I can say, "Ooh, this is definitely moving the needle for the brand. I don't necessarily know yet how or why, but I'm going to continue doing it." And then the opposite is true sometimes as well like, "This is just not working."
And the marketing team may be like, "Well, how do you know?" I'm like, "I don't see the data telling me that yet, but my gut's telling me that." So I'll let me be. If the marketing team has faith I'll let them continue on for a little bit and say, "Okay, I'm going to trust your instincts on this and go against mine, but let's see what happens." You can't always run a business, I don't think, on gut you have to have data. And with a new platform that you have no experience in you have nothing to base your gut on to get the data.

Jon MacDonald :
Yeah, you have a gut feeling.

Announcer:
You're listening to Drive and Convert, a podcast focused on e-commerce growth. Your hosts are Jon MacDonald Founder of The Good, a conversion rate optimization agency that works with e-commerce brands to help convert more of their visitors into buyers. And Ryan Garrow of Logical Position, the digital marketing agency offering pay-per-click management, search engine optimization, and website design services to brands of all sizes. If you find this podcast helpful, please help us out by leaving a review on Apple Podcasts and sharing it with a friend or colleague. Thank you.

Jon MacDonald :
Well let me ask you this then, what have you seen work? Looking at these expectations, when has it worked out well for you?

Ryan Garrow:
Well, new platforms like Instagram. I think the Instagram rollout and execution, thankfully it was coming from Facebook that already had a very solid marketing program built out at the time that they started doing ads on Instagram. And they did it at a small level saying, "Hey, we're going to let some people into the beta. We're going to start it here." But at the initially Instagram was not a driver of valuable traffic for marketing initially. I mean, we had some clients that started on Instagram initially and quickly and it was bad. It was pure branding, there was not people on Instagram that were used to seeing ads.
So, I think you have to be aware of where you are on that adoption and on the maturity of a platform as well. Because it took Instagram a while to get people to understand that I'm going to see ads and they're going to be targeted to me and I'm going to take action on them. Innately at the beginning of the platform it was I'm scrolling through a feed, I'm laughing, I'm seeing my friends, and seeing pictures rather than words on Facebook. I mean initially I thought Instagram is stupid. I like reading and nobody's going to like that pictures and then I'm like, "Well, I'm..." Now I don't even get on Facebook and I'm on Instagram because I like images.

Jon MacDonald :
You and the rest of the world as it turns out, right?

Ryan Garrow:
Exactly.

Jon MacDonald :
Look, I buy a lot of stuff that I find in discover via advertising on Instagram. It's just the reality is I hear about products on Instagram and I end up... I mean I just bought one last night that popped up, it was the weirdest thing. It was a hose reel. And I was like-

Ryan Garrow:
Our lives are so exciting.

Jon MacDonald :
... I know. But I'm like, "You know what? I just spent all weekend with one of those crank hose wheels that's without wheels on it and it's really cumbersome to move. And it's just a huge issue and I can never get the hose long enough. And here it's one that attaches to the wall and bolts in and then it pivots and you can pull on the hose and it auto retracts and it's a 90 foot hose. And I'm like, "This is awesome." Like it was a hundred dollars, a hundred and change, and I was like, "That is going to make my life so much better. For that a hundred dollars I am not going to have to mess around with this hoses ever again. I mean, I'm sold."

Ryan Garrow:
Oh, yeah.

Jon MacDonald :
And it was like a 10-second ad of this guy working this hose that's attached to the side of his house and I was like, "That needs to be me." Right? And if I saw a text ad I would have never bought that, never clicked on it. But I saw the video of the guy using it and I'm like, "Yeah, I just had that problem the other day." Now how I knew I had that problem that's a whole nother episode maybe. But I will say-

Ryan Garrow:
It's listening.

Jon MacDonald :
... I know. I will say I was complaining about it quite a bit. But not on Facebook and not on Instagram, so I don't know. But look, I think that it can work well, right? What about what have you seen not work though? Right? You've tried a lot of these things, you've tested a lot how do you know when a test is going poorly?

Ryan Garrow:
Obviously being in the marketing world I want to know and see and experience a lot of things on my own, so I know what the platform is doing. And so the last one I tested personally was Pinterest last year, because Pinterest fits all the buckets for me. For Joyful Dirt there's plant people all over Pinterest. There's some big influencers there, there's a lot of interaction on plant pictures, there's a lot of interest on Pinterest for when to plant certain parts of my garden, what kind of light do I need for this plant?
So all of it lined up I'm like, "Okay. Well, if my target market is women between the ages of 25 and 45, my wife is in that demographic and she loves Pinterest." I go to Pinterest for meals so I was like, "Okay, this is just logically checking all of the boxes for me." And by being an early adopter in a platform I know there can be some pretty significant advantages if you understand the algorithm early enough you can really step on the gas and your competition may never catch up. So I was pretty excited about Pinterest.

Jon MacDonald :
Mm-hmm (affirmative).

Ryan Garrow:
Called Pinterest up, I got a rep I was like, "Okay, I've got my budget. And for me at the size of Joyful Dirt last year my light money on FIRE budget was about $3,000." And then Pinterest was like, "Yeah, you got to go at 5,000." I was like, "No, I'm going to give you 3,000 and you can tell me based on your knowledge of the platform, your Pinterest. And so, you want me to be successful because I can spend more money with you, and I will spend a hundred thousand dollars a month with you if it's working and not a problem."

Jon MacDonald :
Right.

Ryan Garrow:
And they're like, "Okay." So I was like, "How long do you think we should run?" Like, "Well, we like to see a couple hundred dollars a day for 14 days." I'm like, "If you say so." I was like, "Why?". And then we went back and forth and I was like, "Look, I'm going to know pretty quickly if it's working. I see data, we're going to tag ads. I'm confident that if it's working I'm going to know quick. But I'm going to give you the benefit of the doubt and you help me and we'll design." So we went back and forth.
22 days in we had spent $2,700, tested different ads, we'd done some things, we'd seen a lot of impressions, we had a hundred dollars in sales. And I'm like, "This platform is not working for me. I am not seeing the traffic coming to the site that is engaging well with our content on the site." The images were getting clicked, I mean it's just I could tell that their platform... And this was November of 2020. And so people were on Pinterest, it was holiday season, it was impulse purchase can be... I mean we're only $15 so that's not a difficult impulse purchase for our target market. So my expectations were high and the reality was bad.
I still believe Pinterest has a huge potential for a lot of brands. I personally just think it doesn't have the maturity as an ad platform yet. It's got the eyeballs, it's got the people but as people are searching and scrolling Pinterest they're not yet thinking the same way that they are on Instagram. So I don't know how that changes, I don't know how Instagram got us to think that but for whatever reason like you I will click and buy things on Instagram that I think are cool. And that it's easy.

Jon MacDonald :
Well I think it's different, Instagram you're open to discovering new things because you're just scrolling through a feed. Pinterest, do you have the search intent, right? In the sense that you're setting up, you're looking for inspiration around something specific. And I don't know that people are going to be on Pinterest looking for inspiration around fertilizer. Right?

Ryan Garrow:
Mm-hmm (affirmative).

Jon MacDonald :
And I think that might be the difference. Yes, they're related in terms of like, "Hey, I want to know what house plant I should get for this. Oh, the fertilizer that might work well." I could see that perhaps, but I don't think people go there with the buying intent, to buy off of there, right? They're more like, "Hey, I'm putting together a new living room decor and I'm going to pull some Pins and one of them is going to be the plant that I want to use." Right?

Ryan Garrow:
Mm-hmm (affirmative).

Jon MacDonald :
And so I think it's a different mode. And that's where I've heard from folks it doesn't work as well for advertising, but that's interesting. I mean, what I love about talking to about all this stuff is you have the real world examples, right? You've done it, and so for your own brands and for thousands of clients so it helps. So let me ask you this then, generally somebody comes to you at Logical position and they say, "You know I'm looking to get into this shiny new platform or source of traffic." How do you advise them? What do you tell them right upfront? I mean, you've given a lot of good advice already today, but I'm coming to you and I say, "Hey, there's a new platform I really want to do something with it. What do you think I should do?"

Ryan Garrow:
Yeah. 99% of the time? I will say, "No! Do not do that!" And it's not because the platform might not be good for them, it's often they haven't maxed out what they could or should be doing on Google and Facebook SEO. I look at most marketing like most people in a funnel. And so when there is search intent on Google they are trying to find that product to purchase and you're not in front of them. Why would you go off and try to convince somebody that's never heard of you, may not even be considering that product that you sell to come to your site and buy something? It doesn't make any sense.
So for most of these shiny new platforms it's larger brands that are going to pave the way. They have the budget to go light on fire and spend a million dollars figuring it out. And the platform will mature and generally they go downstream. Like the first advertisers on Facebook and Instagram, which is our most recent memories of successful platforms, were large brands. They went on there, we want a brand, we want to be in front of people, the Coca-Colas, the AT&Ts of the world they did it. The platform matured and went downstream and allowed smaller advertisers to take advantage of all that algorithm, that learning that happened early on, and generally make it work for them.
Most business owners at Logical Position that are bringing up Pinterest, for example, because it's still is a very buzzy platform now. Recently I IPOed last year, I bought some of that because I do believe in the platform. Business owners are always trying to find where can I get some new source of traffic that my competitors don't have so I don't have to compete on Google? Because Google maybe is not as profitable as it was five years ago for my brand. So oh, all I need to do is go spend my 5,000 on Pinterest and that's going to get me the cheap traffic because there's less competition. No, probably not. And most business owners have bad goals, and you and I talk to lots of business owners all day every day. And-

Jon MacDonald :
We have a great episode about that, setting bad goals.

Ryan Garrow:
... Yeah. You have bad goals. And so, spend down at the bottom of the funnel until you have maxed out and you are breaking even on new customers. At least get to that point. And you're like, "Okay. From the search intent, let's move up a level and say the audience of my target market on Facebook and Instagram I need to max that out and make sure that I'm capturing all the people in the algorithm that has more history. And we can validate that it works well for a lot of other brands, there's proof there, take care of that piece."
And then, "Hey, have you actually worked on raising your organic rankings on Google and Bing and Yahoo where people have the search intent that you could shoot or could be getting a higher percentage of that traffic at the bottom of the funnel?" For most brands, they should be doing some of that before they go try something way at the top of the funnel, trying to drive Pinterest traffic or TikTok or Snapchat. So most people don't even need to be looking at these, but they do.
And so my message today is stop. Don't go waste your money. I didn't even follow my own advice at Joyful Dirt. And that is I'm not perfect, I will make mistakes but my job is to learn quickly and pivot. I also wanted to a degree understand Pinterest myself so I can be advising people that it's not there yet for most of you.

Jon MacDonald :
Great. Well, this has been really informative and really helpful. So I've learned a lot. If there's a whole new shiny object out there for driving traffic, you generally recommend letting others figure it out a little bit before you jump in. At least figure it out yourself if you were going to test it out and jump in, but always be testing it, right? Start with a small amount and then figure out from there. Set the right expectations. You're going to light money on fire and that's okay.
You're going to try to otherwise go for the branding and get that new-to-file customer that you're looking for the lifetime value not just that initial sale, and then go from there. And generally unless you're a large brand, you might want to just avoid those shiny new platforms and figure it out a little bit. There's always going to be room there a little bit in, doesn't have to be as mature as Google, right?

Ryan Garrow:
Yeah.

Jon MacDonald :
So, this has been informative. I appreciate it as always getting schooled by Professor Garrow over here. And I look forward to learning more next time. Thanks for your time.

Ryan Garrow:
Yeah. Thank you, Jon.

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Thanks for listening to Drive and Convert with Jon MacDonald and Ryan Garrow. To keep up to date with new episodes, you can subscribe at driveandconvert.com