In the fast-paced world of ecommerce, attracting new customers is a perpetual challenge for Shopify merchants. With online sales noted to have grown over 9% in 2023 brands should gear up for a similar growth rate in 2024. The key to success as a DTC brand is not based on one or two things. There are factors like branding, product market fit, competition, customer reviews, and marketing tactics like advertising that can lead to growth. Today we will focus on the last one, advertising.
Crafting effective ad campaigns that not only grab attention but also convert viewers into loyal shoppers is not easy but with today’s advertising, data, and social tools we think the best days are ahead of us. In this blog, we will delve into best practices for creating ad campaigns to reach new customers as an ecommerce brand in 2024. We’ll explore the psychology behind these campaigns and provide data-backed insights into why they work.
Understand your audience
Before launching any ad campaign, it’s essential to understand your target audience. Without a clear understanding of your potential customers, your ad might not resonate with them. Start by creating detailed buyer personas that encompass demographics, interests, and pain points. This step is critical in crafting ad content that speaks directly to your ideal customers. When you understand your audience you are better able to segment and target them with personalized ads and engaging content. Having a proper data layer in place to understand your current traffic in reporting tools like Google Analytics 4 is a best practice for planning out your marketing efforts for paid campaigns.
Leverage social proof
Social proof is a powerful psychological concept that plays a significant role in consumer decision-making. It’s the idea that people tend to follow the actions of others when they are uncertain about what to do. In fact its reported that nearly 92% of people are more likely to trust recommendations from family and friends—social proof—then other avenues of advertising. Incorporating social proof elements into your ad campaigns can establish trust and drive engagement.
When launching new ad campaigns consider using customer testimonials, product reviews, or user-generated content (UGC). Here is an example from our customer Geologie who uses UGC often in their campaigns to be transparent and offer social proof. You can also mention the number of satisfied customers or the positive ratings your products have received. This creates a sense of safety and credibility for potential customers.
Design and brand identity with your visuals
Visual content is known to capture attention more effectively than text. Paired together well with insights on how a product works… its benefits and you could have a powerful ad. When creating ad campaigns, pay attention to the visual and design aspects. Utilize high-quality images and videos that showcase your products in the best possible light. Or if your brand is less polished you many want to focus on user Generated Content for a less produced vibe. Ensure that your visuals are consistent with your brand’s identity. This consistency over-time will help your audience connect with your brand.
Ad campaigns with eye-catching visuals tend to stand out and draw potential customers in. However, make sure that the visuals you use are relevant to your product or service, as misleading imagery can lead to customer dissatisfaction. One trick I always use to see how top brands are running ads already is by visiting ad library on Facebook—check out how DTC wellness brand Ritual incorporates visuals, designs, and text in their ads.
Implement A/B testing
A/B testing is an invaluable tool for optimizing your ad campaigns. It involves creating two or more versions of an ad with slight variations and then testing them to see which performs better. By continually testing and refining your campaigns, you can maximize their effectiveness.
Test different elements such as ad copy, images, headlines, and call-to-action copy. The insights gained from A/B testing can help you make data-driven decisions and improve your ad campaign’s performance. We always advise to build custom UTMs for each ad as well so you can be sure to note in your reporting which ad is driving more traffic along with tracking via a data layer or social connections like Facebook CAPI.
Offer an incentive and tell a story
Psychologically, creating a sense of urgency encourages customers to take immediate action. Use words and phrases like “limited time offer,” “act now,” or “free shipping” to prompt potential customers to make a purchase. Combining urgency with a special deal or discount can be especially effective. Your customers see an average of 4,000-10,000 ads per day—offering something that makes it timely or an incentive to get them to act is key.
Storytelling is a powerful tool in marketing. It helps create an emotional connection between your brand and your audience. When crafting ad campaigns, incorporate storytelling that resonates with your target audience. Share your brand’s journey, your mission, or the story behind a particular product and how it will benefit the customer.
Retargeting and re-marketing
Ad campaigns to reach new customers are crucial, but don’t forget about retargeting and re-marketing. These strategies involve showing ads to people who have previously interacted with your website or products but didn’t make a purchase. Often marketers call this “drop off”— now you can track drop off visually right in Google Analytics 4 with ecommece Purchase Journey Reports.
Re-marketing campaigns can remind potential customers of your offerings and encourage them to come back and convert. Littledata makes it super easy to connect your Shopify store to advertising tools like TikTok, Pinterest, Facebook, Instagram and Google Ads. These connections can supercharge the accuracy of your data for segmentation and audience building as you retarget customers.
One example, would be that you recently launched a campaign that sent 10,000 new customers to your website. According to Shopify around 2.5% of those visitors will convert and purchase. With Littledata, customer behavior data like add to cart, add shipping, product views, and more are tracked so you can segment or retarget folks based on that customer behavior. Allowing you to remarket via ads to the other 9,750 visitors that didn’t convert yet.
Another tip is testing new ad formats like Google Ads recently launched Demand Gen campaigns, which offers advertising across YouTube and Google. Google is promising higher click through rates at nearly 3x that of other social platforms. Only time will tell as they roll out this offering from beta (check in your Google Ad account for banner notification to opt in) to public
Data attribution and metrics for ecommerce
Data is the new oil fueling the engines of ecommerce marketing. To create effective ad campaigns, you need to leverage analytics and data-driven insights from your Shopify store. Here are some key data points and metrics you should be tracking or reviewing if you aren’t already:
Conversion Rate: This metric measures the percentage of users who take a desired action, such as making a purchase, after viewing your ad.
Click-Through Rate (CTR): CTR measures the percentage of users who click on your ad after seeing it. It’s a key indicator of ad relevance and effectiveness.
Cost per Acquisition Cost (CAC): CAC measures how much it costs you to acquire a new customer through your ad campaigns. Lower CAC is a good place to be overtime.
Return on Ad Spend (ROAS): ROAS measures the revenue generated for every dollar spent on advertising. A higher ROAS is an indicator of successful campaigns.
Lifetime Value (LTV): LTV is the estimate of the average revenue that a customer will generate throughout their lifespan as a customer. Understanding the LTV of your customers helps you make informed decisions about how much you can spend to acquire a new customer. Littledata calculates this for you automatically once installed.
Traffic Sources: Identify where your website traffic is coming from, such as organic search, social media, or paid advertising. This information can guide your ad campaign strategies. When you filter by conversions in tools like Google Analytics 4 you can unlock insights on where your converting customers are coming from to narrow focus there.
Customer Behavior: Analyze how customers interact with your site, including which pages they visit, how long they stay, and what actions they take. This will help you optimize their experience.
Cart Abandonment Rate: This metric shows how often customers add products to their cart but leave before completing the purchase. Addressing cart abandonment can significantly impact sales.
Creating ad campaigns to reach new customers on Shopify requires a combination of creativity, data-driven insights, and a deep understanding of your audience. By implementing the best practices outlined in this blog, you can boost your chances of attracting and converting new customers effectively through your channels.
Incorporate social proof, eye-catching visuals, urgency, storytelling, and A/B testing into your campaigns. Additionally, don’t forget the power of retargeting and remarketing to re-engage potential customers who may not convert on their first visit.
Lastly, make data a centerpiece of your ecommerce strategy. By tracking and analyzing key metrics, you can refine your campaigns, optimize your ad spend, and make informed decisions that lead to business growth. If you are interested in learning how Littledata can help your ecommerce business unlock accurate data and attribution get a demo with our team of experts.