6 Must-Know Principles to Conquer Digital Direct Response

by Peter Nguyen on Feb 3, 2016 12:00:00 AM Digital Marketing, DRTV, e-Commerce

6_Must-Know_Principles_to_Conquer_Digital_DirectResponse-320307-edited.jpgThe world of digital direct response—otherwise known as the online equivalent to direct response advertising on TV—is still a puzzle to many mainstream or brick-and-mortar companies, but digitally versed companies are finding their Internet sales groove and making a killing in sales.

Sometimes luck and timing factor into the equation for a bona-fide hit. But for any newcomers hungry to make their fortunes selling a product or service online, the odds of success increase significantly with a disciplined, thoughtful approach. As a long time advertiser with my fair share of wins and losses—fortunately with more of the former—I’ve learned that there should be a solid method practiced in all the madness.

There are six all-important principles that all advertisers must remember by heart and consistently apply.

1. Find the Right Product

Focus on compelling products – Items that solve a common or particularly frustrating problem, are convenient, and offer some kind of perk or utility that isn’t offered by the competition. Generally, the product should have inherent mass-market appeal, but that’s not to say niche products don’t have a place in the world. It is the Internet, after all, which is one endlessly fascinating archive of niches.

But like direct response television (DRTV), the most important thing for a business to keep in mind when selling a product are the margins. Want to see your coffers fill quickly? Carry a compelling product with high margins, which typically should sell for eight to 10 times its cost.

2. Find the Right Business Model

Not every business model is created equally. Some models work better for some products or some industries. Should you do a straight sale or a trial offer? That depends on the product. Large equipment would make much more sense as a straight sale. Diet and beauty products work well as trial offers so skeptical consumers can rest assured. If you’re targeting a specific demo with distinct tastes, straight continuity models like JustFab, which specializes in showcasing and sending new shoe styles to its VIP customers every month, just might work for you. For your indecisive buyers, or buyers who are serial testers of anything and everything under the sun, the sample box model a la Birchbox could be the golden ticket for your company. Then there’s the “buy one, get one free” model, which attracts customers with the promise of a good deal. But beware—it could have the adverse effect of cheapening or lowering the perceived value.

3. Measure Everything

Be data-driven and track everything, even down to the exact banner and placement of said banner. With digital direct response, practically anything can be tracked in real time that can give you a much clearer idea of the health of your advertising campaign and the areas that could use improvement.

Every digital direct response advertiser should intimately understand the following terms and stalking them like prey:

  • Cost Per Acquisition
  • Conversion Rate
  • Click-Through Rate
  • Spend
  • Customer Lifetime Value
  • Earnings Per Click (EPC)

Each concept warrants its own discussion, but if you take away one thing, it should be this: In the world of digital direct response, EPC is key. As a mathematical equation:

EPC = Cost Per Acquisition x Conversion Rate

Affiliates look at EPC to find out how much money they will make for every click they send to an advertiser, the product-owner. Advertisers must understand that affiliates are on a quest to find the highest EPC possible. If one advertiser is offering a $0.30 EPC, and another advertiser is offering a $0.50 EPC for the same sort of product, why wouldn’t the affiliate send all of their clicks to the second one?

Many advertisers rely heavily on affiliates for a large amount of traffic to their site. This amount has a direct correlation to our ability to have the best EPC within their industry or niche. A winning advertiser’s life-long obsession should be these two main things:

  1. Getting the highest CPA possible.

  2. Getting the highest CR possible.

Think of your CPA as your backend—it’s how much it costs to run your business. And think of your CR as your front-end—this is the customer’s experience on your website that should induce them to want to purchase.

4. All Traffic is Not Created Equal

When it comes to the media buying side, advertisers need to be interested in the source of their traffic. The Internet has a vast pool of traffic sources, which could include international sources for advertisers open to international customers. E-mail, display, social media, influencer marketing, mobile advertising, SEO—all back out to different degrees of success for a given product, largely depending on the demographic being targeted. It may take trial and error, but always be in tune with the sources and quality of the traffic.

5. Be a Master Tester

Studies have shown that the smallest things on a landing page or a website—the gaze of the model, the color of the font, the placement of guarantees, etc.—can have a noticeable impact on a customer’s willingness to buy. Though it’s not an exact science, split test data continues to back up this notion.

Is the copy smart and persuasive, or is it too aggressive? Is it not aggressive enough? Test all stages in your sales funnel, because one weak link can derail your entire campaign and drive conversion rates down considerably. On the bright side, testing online is much more affordable than changing elements in a TV campaign, where creative cannot be tweaked easily without pulling an expensive ad off the air entirely for a period of time.

6. Scale What Works

After you’ve tested everything, like finding out which traffic sources will work and what changes in the funnels made wonders, then all that’s left to do is scale, scale, scale. You’ve done the hard work and have tried your patience with countless questions and theories, so rejoice and invest more of your time and resources in what has proven tried and true. No need to hesitate when the campaign has hit its stride. Scale what’s backing out and what can be scaled, and then you’re off to the races.

Photo by Chaiwat/FreeDigitalPhotos.net

Peter Nguyen is one of the foremost authorities in Internet marketing and specializes in performance-based direct response using the Internet. He has created several multimillion-dollar Internet campaigns and is the creator of Advertiser360, which is now being taught at the 2nd ranked entrepreneurship university in the U.S.

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