Four major advertising channels and budget planning in 2019!

It is estimated that digital media advertising spending will account for 55% of total media advertising spending in 2019. This means that for all cross-border e-commerce companies, investing in online advertising is imperative if they want to grow and develop. However, even the most experienced advertisers are often confused when it comes to choosing an advertising platform and setting an advertising budget. As long as you are not careful, you may go in the wrong direction and cause huge losses to your costs.

In the past, most companies would set their minimum and maximum marketing budgets as a percentage of their overall budget (as shown in the following 3 steps):

Step 1: 10% of expected annual income*average trading profit;

Step 2: 11% of expected annual income * average trading profit.

Step 3: Deduct the company's annual rent, storage fees, office expenses, etc. from the amounts obtained in the above two steps. The remaining amount is the company's maximum advertising budget and minimum advertising budget.

However, this is only a very rough and general approach. E-commerce companies need to choose appropriate channels and make reasonable budgets based on market trends and their own business realities. To help e-commerce companies do these two things, this article introduces four major mainstream marketing channels that are worth paying attention to: Google Ads, Facebook Ads, Instagram Ads, and Email Marketing, as well as the appropriate advertising types and cost estimates for each channel, to help sellers increase e-commerce business traffic and sales without exceeding their budgets. The details are as follows:

1. Google Ads

“How much should I spend on Google Ads?”

There is no absolute answer to this question; it depends on your business positioning, brand, your available budget, your business structure, the industry you are in, and the advertising campaign you are running. However, although there is no fixed amount of investment in Google ads, it is recommended that sellers set their Google ad budget to more than US$1,000 per month. If you are a novice, then US$120 is the minimum.

After setting a budget range, how should e-commerce sellers effectively invest it in Google’s various advertising products? The following three advertising projects should be paid attention to:

1. Google Search Ads

This type of pay-per-click advertising (PPC) will be displayed on Google's search results page and is an advertising project that e-commerce sellers need to pay special attention to. The cost per click (CPC) for this type of ad is determined by the seller during the ad auction. If you have no idea about your own ad bidding, perhaps the following data can give you an idea: Data shows that the average CPC of Google search ads in the United States in 2018 was US$1.16 (as shown below). In 2019, the average monthly advertising expenditure of each internet user in the search advertising field was US$106.38.

In addition to the investment in the advertisement itself, you also need to consider whether to use e-commerce traffic tools such as Traffic Booster, or hire a PPC advertising management agency, marketing agency, etc., which will bring you additional costs.

2. Google Shopping Ads

Clicks on Google Shopping ads grew 34% in the fourth quarter of 2018, largely due to its negative keyword feature that gives sellers more control over their Google Ads campaigns. But from a cost perspective, this also means that sellers may need to increase their bids to ensure their competitiveness. You may see your CPC on Google Shopping ads rise to between $1 and $2.

3. Google Display Ads

Data shows that the average cost per click for Google e-commerce sellers’ display ads in 2018 was $0.45. This figure is based only on the ad itself and does not include other ad management, hosting, and design fees. Generally speaking, the cost per click of display ads is lower than that of search ads, but it is more suitable for sellers who already have brand awareness to enhance brand awareness or remarketing.

Tips for beginners: If your budget is very tight, it is recommended that you first focus your marketing spending on Google search ads, and then expand to display ads when your brand or design reaches a certain level of popularity and funds allow. "Google Online Marketing Free Course" will teach you step by step how to play with various Google marketing advertisements.

2. Facebook Advertising

Although Facebook has encountered many problems and negative news in the past two years, this has not affected the company's continued surge in advertising revenue (as shown in the figure below).

Considering that the cost per click of Facebook ads is lower than other marketing platforms, e-commerce sellers can cleverly combine Facebook ads with Google ads to generate revenue for themselves. After all, the conversion rate of Facebook ads is still quite high. So what is the specific conversion cost?

The average cost per click on Facebook ads is about $1.86. But the exact amount depends on many factors, including competition and market location. The following figure is a screenshot of the cost per click of Facebook ads in various countries and regions on the website of Facebook's global partner Adespresso:

In general, when it comes to Facebook advertising, you should spend more of your budget on the types of ads that are successful, including Facebook remarketing and dynamic product ads.

3. Instagram Advertising

In 2018, global companies spent $6.8 billion on Instagram advertising, an increase of more than 50% from $3.64 billion in 2017 (see figure below).

As Instagram’s popularity grows, competition is also intensifying, which means e-commerce sellers investing in Instagram ads will need to increase their marketing costs to reach the average level in 2019. According to Influencer Marketing Hub, a resource for influencer marketing, the average cost per click on Instagram ads ranges from 20 cents to $2, based solely on actual ad spend on the platform and not including other marketing costs.

When calculating advertising costs, sellers need to note that when you set a lower bid, although the advertising costs will be reduced accordingly, your advertising performance and conversion will also be greatly reduced accordingly. On the contrary, a higher bid may bring you a higher return.

(The cost per click for Instagram ads will vary depending on where your ads are placed)

You can also click to view "How to Use Instagram, the Most Popular Overseas Photo Social Networking Site, for Marketing" to learn more about Instagram marketing methods other than advertising.

4. Email Marketing

Email marketing may be the last channel mentioned, but it’s also the most important one. Your e-commerce marketing strategy is incomplete without a solid e-marketing strategy. This is a cliché, but e-commerce sellers often forget that email marketing campaigns have the highest ROI of all online marketing channels . GearBunch, a well-known online clothing retail brand, once achieved a gross profit of $50,000 through a single email marketing campaign.

So how much should eCommerce sellers spend on email marketing?

In fact, there is no upper limit to the marketing costs of this channel. Because many times, sellers have already spent money on email marketing unconsciously, such as the pop-up windows set up on your store homepage, the user email address collection set up on the payment page, and all Facebook ads, Google ads and Instagram ads all contribute to the success of your email marketing. Of course, you also need to invest in a practical email marketing platform.

So what factors do e-commerce sellers need to consider when considering email marketing costs? There are several points to consider:

1. Email platform e-commerce marketing costs

A good email platform can cost anywhere between $0 and $1,550 per month, depending on how many subscribers you have. The following are the rates of some of the top email platforms:

ActiveCampaign: costs between $17 and $229 per month.

Klaviyo: From $0 to $1550+ per month

MailChimp: costs from $0 to $199 per month (with additional features)

Constant Contact: Starting at $20 per month.

These platforms not only charge different fees, but also have different advantages, disadvantages and functions. Sellers need to consider many aspects when making a decision.

2. Copywriting costs

Excellent copywriting will make your marketing emails stand out from the crowd and is a guarantee of the seller’s email conversion rate. To get excellent copywriting, sellers can hire freelance writers. The fees vary depending on the type of email, the location of the writer, the charging model, etc. Currently, the average cost per email is $100.

3. Email design costs

In most cases, e-commerce sellers can simply design their own marketing hardware through email marketing platforms without having to hire a designer. Tools like MailChimp, Knowtify, or Stampready also have built-in responsive email templates.

However, it should be noted that as the business develops, sellers may need to design some email templates with relatively unique formats, which may require the assistance of corresponding designers. Currently, a good freelance designer can cost anywhere from $20 to $150 per hour.

4. Cost of using email apps

The last expense item to consider is apps. The purpose of using an email app is to simplify or improve your email marketing. Tools like Kickbox and NeverBounce, for example, will help you identify and remove bad email addresses and inactive subscribers (ensuring you don’t waste more money on unnecessary subscribers). Coupon Pop is also a great tool for converting e-commerce traffic into email contacts and social media followers.

Summarize

When considering advertising costs, in addition to considering their own business needs, the most important thing sellers should pay attention to is that they should not just focus on saving costs while ignoring the return on investment. Sometimes excessive cost control may not be worth the cost.

The average marketing cost in the article is just for reference and sellers can make comparisons. But in fact, when sellers are really making a marketing plan, the most important thing is not how much budget you have, but how much you can invest in high-return marketing activities and how you will optimize your ads to ensure that you don’t waste money on ads that don’t bring you conversions at all.

Author: Wu Xiaohua from Hugo.com

Source: Hugo.com Wu Xiaohua