When you’re trying to keep an eCommerce business profitable, there will be no end to marketers claiming their unique plugin or service is worth the investment. In reality, many eCommerce “solutions” are guaranteed to just put another hole in your bucket.
Here are 6 of the most common budget busters eCommerce businesses fall prey to with a few tips on how to avoid them and turn a much better profit.
Inaccurate Reporting Tools
The most common thing that can cost eCommerce businesses big is inaccurate reporting tools. Not that the tools themselves cost much, but they can lead a business to make some pretty poor decisions.
Most marketing teams make their decisions about where to spend based on reporting, and it can be surprising to find out how rarely those reporting tools are evaluated for accuracy.
You should always make sure that you understand how revenue and other key metrics are being reported. Many reporting software try to skew the appearance of profits by including unnecessary costs, like taxes or shipping.
If you want to test your reporting tools, there is a quick and easy opportunity to execute:
- First, run a few test transactions. Start with a clean browser session, trigger an ad, or navigate using another marketing channel, navigate through the landing page and website, interact with specific goals or events, and complete an order.
- Try to do more than one test transaction at a time: for example, try one as a recurring visitor, one with a discount, and one with different order totals. Test as many variables as possible.
- Keep a good record of what you’re doing and what your expectations for your reporting are so you can match the two up afterward.
Having a clear record of what you did and comparing it to whatever reporting tools you’re using will give you excellent insight into whether you’re getting accurate tracking or not.
Also, look for these three common errors:
- Incorrectly set up or configured tracking that skews metrics in a positive or negative direction.
- Incorrect attribution because of settings that have been configured previously and tagging or because other tracking has not been updated.
- Problems with more complex navigation pathways (cross-domain tracking, payment providers, etc).
Inconsistent Attribution Modeling
Inconsistent attribution is not an easy problem to solve, but it’s an area where most brands can do a lot more. Many brands make budget cuts oriented around the performance of a particular channel at the bottom of their funnel without really understanding how that cut is impacting the top of their funnel. Attribution exists to help you understand that story more clearly.
Attribution marketing is essentially determining where your leads are coming from when you have multiple pathways that can influence a potential customer. It’s critical to have accurate attribution so you can analyze the exact factors that make or break leads.
Conflicting attribution reporting from social media, SEO and SEM firms, and affiliate programs can often lead to budget waste. Usually, social channels are the worst offenders, as they tend to emphasize any kind of interaction with ad content by default.
Inaccurate attribution reporting from social media doesn’t mean that social media isn’t contributing to your leads, but it does mean that you need a clearer understanding of that customer’s journey to really assess their value to your organization.
Underutilized Landing Pages
After your tracking is under control, look at your use of landing pages. Most brands underutilize the increasing availability of page builder tools within their eCommerce software or independent services like Unbounce. Based on a sampling of Coalition Technologies’ current and prospective customers, they found that less than 25% were regularly using unique landing pages for their advertising efforts.
Two years ago, landing pages were a more complicated process, and doing them at scale without external resources was a challenging proposition. We’re beyond that now.
It’s much easier to spin up specific landing pages for specific marketing campaigns or advertising than ever before. Shopify, BigCommerce, Magento, WordPress, and others are making large development commitments to making page layout and functionality updates a lot more approachable for non-technical teams.
However, be careful not to rely on common landing pages and navigation experiences without taking your channel into regard. Given how easy it is, setting up unique landing pages with more targeted content and navigation is a helpful way to improve the customer experience while also providing more accurate tracking experiences.
As we move to a post-cookie world, targeted landing pages are also a great way to reduce your dependence on cookie-driven tracking.
Ineffective Branded Advertising Campaigns
The most egregious areas of eCommerce advertising misspending are usually in relation to unnecessary branded advertising campaigns.
A branded ad campaign is essentially a kind of advertising campaign that focuses on a brand’s exclusive products, IP, services, or audiences—for example, a company’s name.
Many brands push a lot of dollars into ad groups simply because they seem high-performing. This can be a huge waste of money if you don’t take the time and effort to determine if that branded spend is necessary.
Here are some questions to ask to determine if a branded ad campaign is necessary:
- Are your ads suppressing competitor advertising?
- Are they optimized well enough that they outperform an organic or earned engagement?
- Is there a reputation management concern that necessitates ads?
- Do you really get better LTV from people who know your brand and see one of these ads?
- Do they help drive traffic to a more profitable channel?
If you answered yes to any of those questions, then you may have a legitimate reason to run that particular branded ad campaign.
Additionally, evaluate the opportunities to narrow your branded audience further. A lot of branded campaigns have a majority spend on customer service related engagements. Usually, that’s something marketers are going to want to avoid. If your reporting and attribution model is clear, it gets a lot easier to identify the why behind someone engaging or triggering this type of ad.
Finally, make sure you really understand what you should be paying on a per acquisition basis. A lot of brands neglect to test different bid amounts for different branded audiences. If you’re using a machine learning or AI type ad management tool, you’ll also need to be very careful to avoid cross populating branded audiences or keywords with other campaigns. This will often set off negative bidding behavior.
Influencer Campaigns
Influencer campaigns just don’t seem to work. Even if you’ve managed to get a Kardashian to wear your product on Instagram, the returns on this investment are rarely worth the effort.
After influencer marketing really took off in the last decade, influencers became so flooded with endorsement requests and free products that their followers, especially in younger generations, are virtually immune to product placement. The market is diluted, and you’re not likely to gain consumer trust by paying an influencer anymore.
This isn’t to say that you should turn down an easy opportunity for an influencer plug—just don’t turn to influencer campaigns as a primary method of digital marketing.
Reputation Management
Unfortunately, reputation management is often a real budget pitfall.
The primary function of reputation management is to monitor your online mentions and mitigate negative mentions. If your eCommerce business is already spending time and money monitoring social media mentions and reviews in other channels, adding reputation management to this is often an unnecessary spend.
It makes little sense to allocate a large portion of your budget to reputation management when your SEO company or digital marketing agency is already doing the bulk of their work—and often in a more in-depth manner.
There are a few situations in which an approach to reputation management may be necessary—for example, when your company is a victim of personal targeting or revenge online, when you’re having a social media catastrophe, or when you’re experiencing a storm of negative reviews. But in these cases, it’s rarely the reporting you need from the reputation management agency—it’s just PR work.
You have a tremendous number of options to manage and market an eCommerce brand. It’s far more likely that you’ll drain your resources rather than stumble on success if you carry on without a plan backed by experienced support. Watch out for these budget busters as you grow your brand.
