In this series, we are giving a broad overview of how shed builders and dealers can get started in advertising online.
In Part 1, we looked at the different types of online ads and the benefit of each ad type. In Part 2, we discussed the various types of ad platforms and which ones you may want to consider.
For this entry in our series, we are looking at the most common question: “How much should I spend on advertising?”
INTRO TO DIGITAL ADVERTISING BUDGETS
Unless you have unlimited money to spend, you will need to create a budget for your digital advertising efforts. You’ll likely want to create an overall budget—here’s how much I plan to spend this year online—as well as budgets for each ad type, platform, or stage in your advertising funnel.
It’s common for shed builders and dealers to divide their overall budget into months. Most choose to spend more money in the busy season when demand is high and then scale their budget back during the offseason.
In other cases, we’ve seen builders ramp up their digital advertising in the offseason to keep orders coming in and keep their production teams busy.
BUDGET SHOULD BE SHAPED BY GOALS
The main driving factor to your digital ad budget is your goals. What are you trying to accomplish with your digital ads?
Here are some of the more common goals we see within the shed industry:
Become Top of Mind. Not everyone is ready to buy an outdoor structure today. That’s why most digital campaigns include a brand awareness component through which you are putting your company in front of potential customers before they are ready to buy.
Increased Foot Traffic. If you are a dealer with a physical location, you may want to get more traffic to your manned or unmanned locations. If you are a manufacturer, you may try a digital campaign for an open house.
Get More Calls/Emails. If you are like most smaller manufacturers or dealers, you see the role of your website is to generate calls or emails from interested parties. That way your sales team can discuss options and give a personalized quote to the customer.
Gain More Quote Requests. If you have invested in a 3D shed builder or quote tool, the goal of your digital campaign is to get people to use the tool and request a quote.
Sell Sheds Online. For some shed companies that offer direct sales through their websites, you will want to direct your digital advertising with the end goal of selling a certain number of products through eCommerce.
Upsell Past Customers. Do you sell complementary products? If so, you may want to reach your past customer base with outdoor decor, Adirondack chairs, or playsets.
Find More Dealers. Manufacturers who are looking to grow their territories may opt for a campaign to find and sign dealers within a certain geographical area.
Hire Staff. Whether you are looking to grow your staff in the office, in the shop, or on the road, digital channels can help you recruit new team members.
OTHER VARIABLES THAT CAN SHAPE YOUR BUDGET
Here are some other things that can affect how much you need to spend on digital advertising:
Target Area. If you are trying to reach a large territory or a heavily populated area, your budget will need to be sufficient to reach that area. Likewise, if you are running ads for 25 dealers or locations, your budget will be larger than a company running ads for a single sales lot.
Competition. If you are in a highly competitive market, you will need to pay more for digital ads than those advertising in a less competitive area. Since they run on an auction format, Google ads can get more expensive if other companies are trying to compete for the same search terms. Also, depending on the keywords you are targeting, you may see your competition includes big box stores or national online retailers, which can lead to a higher cost per click.
Sales Goals. Your budget will also be determined by your sales goals. A company that’s trying to grow 50 percent in a year will need to invest quite a bit more than a company that has a more modest 10 percent growth.
BE FLEXIBLE
Flexibility is crucial for any digital advertising campaign. The beauty of digital ads is that you can make adjustments on the fly. See better ROI on a certain platform? Shift more money over there to generate more leads. One type of product more popular than another? Lean into the ads that target that popular product.
The best example of flexibility happened in 2020. In the midst of a worldwide pandemic, demand for outdoor structures soared. This lead to plummeting ad rates. For some builders, we saw cost per lead drop from $100 to nearly $20.
By being flexible with their budgets, builders could make sure their ads were getting in front of the right audience to meet their goals.
CRAWL BEFORE YOU WALK
One of the most common mistakes I see first-time advertisers make is that they invest heavily into a specific campaign or platform, then pull their money quickly before they see results.
We always recommend starting with a smaller budget first. This gives you a chance to fine-tune your campaign—from ad copy to tracking to targeting. Once you create a campaign that is meeting your goals, then you can increase the budget.
When done this way, with a proven campaign that has a low cost per lead, advertising becomes more like an investment than a cost.
Now that we have talked about platforms, ad types, and budgets, the next step is to measure the performance of your campaigns. In the next article, we will look at how digital ads are measured and how you can evaluate the success and ROI of your campaigns.
Related Articles:
Introduction to Digital Advertising for Shed Builders (Part 1), March 31, 2021
Introduction to Digital Advertising for Shed Builders (Part 2), May 20, 2021
