Welcome! Today I want to touch on a topic that often gets overlooked due to short term thinking. It’s a little off brand for what I normally write about but hopefully you enjoy it.
A lot of users on Twitter have messaged me that their ad spend isn’t immediately turning into ROI positive sales. Like you can build a site in a week, turn on ads and just start printing money.
When you’re building a site/Substack/anything, you’re building a business. You’re building a brand. You’re building awareness. You’re building trust and familiarity. You’re building Share Of Voice.
Everyone jumps in immediately and looks at the ROI of their initial efforts not realizing that there’s a residual effect. Yes, you should optimize your media to be ROI positive but that’s not the whole story. There is a residual effect of awareness and following that isn’t being captured in your initial analysis.
This residual effect makes your efforts get better results over time. Let’s look at a very rudimentary example. Let’s assume you’re a local pastry chef selling highly customized birthday cakes for kids birthdays. Your target market is upper middle class parents that spend way too much money on their kids.
You’re completely unknown in your local area so you decide to run ads. Even if your landing page and work is impeccable, you’re not going to convert as well as you should and your ROI may be negative. Let’s look at a few buying scenarios for this business at different points in time.
A person lands on your landing page and says to themselves “This looks great! Let’s look at their social media, etc. before I purchase”.
3 like on Facebook.
1 follower on Instagram. (Thanks mom!)
1 comment on every Instagram post. All from mom…
0 reviews on your local business map pack that they can’t even find anyways.
“Maybe I’ll go to this more well known bakery.”
You lost the sale because you had 0 SOV and reputation. That’s why so many websites have the “Sharon from Virginia just bought X” popup. They’re trying to manufacture reputation and social proof that just doesn’t exist.
If this imaginary stay at home mom from above would have found raving reviews and a following, she would have converted. Your ad would have a higher ROI.
Let’s assume a different path for the SAHM from above. Instead of looking at FB, Insta, etc, she asks her local friend group in a chat or on FB if they’ve had any experience with said business.
Crickets from everyone. You just lost the sale again.
In an alternative universe, Sarah speaks up and says her friend Emily had no problems when she bought a cake 6 months ago. Your ad just converted.
Your return on effort and marketing spend isn’t going to look like the orange line above. It’s going to be grey or yellow.
Let’s look at a different scenario here to prove the point in a different way. Growing your Twitter account.
You have a measly 10 followers on a month old account. You drop some dope information on your 10 followers. By some magic, it get’s picked up and goes viral. You gain 150 followers in the first day. Then 70 on the next. Then 30 and so on.
You have 1,000 followers on a year old account. Same tweet, same virality. This account gains 1,000 followers on the first day, 400 on the second and so on.
Call it the network effect, brand equity, social proof, or whatever but it exists. As your brand builds, you will naturally grow quicker and gain efficiencies in every aspect of your marketing.
Brand Equity Over Time
So let’s look at how this looks graphically. In the first example above, your brand equity is the people that remember you over time, your IG comments, etc. The social proof that people can look at to decide to purchase.
In the second example, it’s your followers, engagement, and tweets. Is this person worth following?
The below image is what happens with a one off viral tweet or ad campaign. Big build and lasting brand equity that diminishes over time.
Building a Brand
So what does this look like over time? While it may not be ideal to surge your ads like the below, this does give a good graphical representation.
There is some real world data behind the above post that I unfortunately can’t share. The most I can say is that companies across the world are running tests just like this to figure out how to increase brand equity and capture Share Of Voice from their competition.
If you’re in the Wi-Fi money game for the long haul, remember that your growth isn’t going to be linear. If you’re just trying to make a quick buck by not putting in the work. NGMI.
If you want to get smarter about all things digital, upgrade today from free to paid for only $10 a month. The paid posts are where I dive even further into the weeds to help you truly understand and capitalize on the digital landscape.