A common problem faced by many small businesses in Australia is how much to spend on digital advertising. The actual amount, of course, will vary from business to business. So, the real question is how to get more bang for your digital advertising bucks? Using our client Mastercut Concrete as an example, we try and answer this question with some actual evidence.
Too busy? In a nutshell…
- We cut ongoing advertising costs by 60% with the same business return.
- The Cost Per Click (CPC) in Google was reduced by 50%.
- The Return on Ad Spend (ROAS) increased by 300%
- Organic (free) search traffic went from 0 – 15% of overall traffic in 4 months.
Call us on 0416 782 009 if you want to chat about how we can help your small business too.
Who is Mastercut Concrete?
Mastercut Concrete is a leading concrete cutting business in Sydney which cuts, drills and grinds concrete for both commercial, government and domestic applications. We were brought in to determine if they were paying too much for digital advertising and if so what could be done about it.
How much is too much to spend on digital advertising?
Unfortunately, this is like asking for the price of a piece of string! Each business is different. What is important is to measure how much you are spending compared with how much return you get for each advertising dollar. This is known as Return On Ad Spend (ROAS). It looks at each dollar spent on advertising to see how much it adds to your bottom line. It sounds simple but it’s often hard to obtain.
The ideal ROAS will differ for each business but getting this figure allows an easier decision to be made if the advertising is effective and continues to be effective. As a guide, a ROAS of over 4:1 is considered effective. Meaning for every $1 spent on advertising you are adding $4 to your bank balance. But the higher the better of course!
Getting Familiar with your Return On Ad Spend (ROAS) is essential
How to get more bang for your digital advertising buck?
Our approach for Mastercut Concrete was to begin with a digital audit. A digital audit allowed us to get beneath what was happening with all aspects of their digital presence. Digital presence simply means anything related to Mastercut Concrete that appears on the internet. This includes their website, digital ads, position in search engine results, social media accounts and online listings on sites like TrueLocal and YellowPages directories and how they compared against their competitors.
The second part of the digital audit included how sales and leads were generated from their website and how these were tracked and measured. This would help to calculate their ROAS and be confident we could continue tracking this into the future.
A digital audit will ensure you see the whole picture
Digital Audit Outcomes for Mastercut Concrete
From our digital audit activities, we were able to play back what was happening for our client. Our main findings were:
- The wrong allocation of ad spend – The bulk of the advertising spend was directed towards the lowest performing advertising networks (aka Yellow Pages, Bing, Yahoo). Yet Google Ads was only getting 30% of the ad spend but delivering 70% of the revenue.
- The advertising message did not properly match the website – Meaning customers quickly left without turning into a sale. The digital advertising world is much like a car. You can pour fuel (money) in the tank but if the engine (website) isn’t firing or the drive train (conversion funnel) is geared poorly you will not get much out of the rear wheels (sales). All things need to work together.
- The Mastercut Concrete website was also not ranking very well in organic search results. (aka. the search results that aren’t ads). An overall ranking of 41 for the website meant they appeared on page 5 (on average) and at number 37 (page 4) for the industry’s most popular search term. It’s not surprising that the first page of search results gets 95% of the flow on traffic meaning not much is left over for the following pages.
Our recommendations were:
- Focus advertising dollars on only the Google Ads network. This will cut the ad spend by 70% immediately and even if we did nothing else would only impact sales by 30%.
- Optimise the website to attract and convert ad traffic and search traffic. This should, at a minimum, add the 30% lost from the other ad networks without any additional ongoing spend.
Turning Digital Theory into Practice
Having a digital consultant audit your digital presence is great. But can they deliver on the recommendations? Rarely the people who can write a digital strategy are the same people that deliver on it. Even if they work for the same company!
For Mastercut Concrete we rebuilt the website and geared it around an ongoing digital advertising campaign. It was also designed to have the ability to rank higher in search ‘organically’. In parallel, the digital advertising campaign in Google Ads was created to launch as an integrated part of the new website.
We appreciated the trust given to us from Mastercut Concrete to allow us to go about our work. While they wanted a quality result in terms of how the website looked, there was more interest in the results. We think this is a smart approach. The design is subjective, results are not.
Rarely the people who can write a digital strategy are the same people that need to deliver on it. Even if they work for the same company!
The Outcome for Mastercut Concrete
We have been very pleased with the immediate and ongoing results for Mastercut Concrete.
- Overall, the advertising costs to acquire the same amount of business was reduced by 60% overnight. By cutting poorly performing ad spend and optimising Google Ads.
- There was a 50% reduction in Cost per Click (CPC) on Google Ads by simply matching the website with the advertising better. This allowed twice as many people to arrive on the website for the same cost.
- The Return On Ad Spend (ROAS) increased by 300%. Meaning every $1 dollar of advertising went from $3 to $9 of revenue.
- After 4 months, the traffic from organic search has increased to equal 15% of total traffic. The average ranking is up to 31 with many of the top industry keywords ranking consistently in the top 5 results.
A monthly focus on optimisation, maintenance and tracking performance will now continue which is critical for continued success. Unlike concrete, any digital optimisation effort is never a set and forget exercise!
Choosing the Right Digital Partner for Small Businesses
Proper digital support for small business is lacking in Australia. From what we’ve seen there is currently a choice of two broad options.
- Incumbent giants – An incumbent giant, for example, Yellow Pages/Sensis, who have previously had the monopoly on small business advertising and their websites, even in 2018. For a small business, you are a small fish in a big pond. Getting help when you need it is always going to be a challenge. We believe so many small businesses stay with large companies like Sensis due to fear of the unknown which is fair enough when you consider the main alternatives.
- Hard selling cold callers – On the other end of the scale is smaller, hard-sell cold callers who promise far-fetched expectations such as ‘ranking number 1 on Google’. They seem to only sell one service and then sign up as many people as possible. Rarely do they provide a sustainable, quality product or service that delivers on expected or measurable results for the promoted price.
Other agencies in Australia that are able to truly partner with a business to combine the digital consultancy expertise with a quality delivery, are often out of reach of smaller businesses due to their cost.
When it comes to digital support, Australian small businesses have a unenviable choice between incumbent giants and hard-selling cold callers
Sling Digital Difference
Sling Digital offers Australian small businesses a ‘tier 1’ digital service at a reasonable cost. We will never work with your competitors. Our goal is to build great relationships with a few trusted clients, working with them as an extension of their business, helping their business to grow.
If you are a small business needing help with anything digital related, we can help get you on a clear path to ongoing measurable success.