Paid ads are the lifeblood of many eCommerce stores… but they can be tricky to set up and maintain. So, should you outsource them?
Anton answers that question plus more in today’s episode of the eCommerce Lifestyle Podcast.
Links From This Episode:
Hello, everybody. Anton Kraly here, and welcome back to the eCommerce Lifestyle Podcast. If you're a new listener, you should know this show comes out twice a week. We have a brand new episode food every single Monday and Thursday morning, and they are all designed to help eCommerce store owners to increase their revenue, automate their operations, and become the authority in their niche. So if you have a store already be sure to click the Subscribe button. That way, you'll get notified every time a new episode goes live. And if you're listening because you're interested, but you're not there yet, you haven't built a store, I would still highly recommend subscribing. That way, you always know the best practices and that way you can be that much more ready when you do decide to take that leap and build your first store.
Now, in today's episode, we're going to be talking about whether or not you should outsource paid traffic. First, I should talk about what paid traffic is. Basically, it is paying somebody else, typically a company, for them to send their traffic, meaning their website visitors, to your business, to your store. Now, this could be Google. You pay Google to run Google ads, they send you their traffic. This could be Facebook. You pay Facebook for their traffic. They send you their website site visitors. Or this can even be a blog. This could be Snapchat. This could be Pinterest. It could be any traffic source that you could pay in order to have them really divert or redirect their customers to visit you. Now, paid ads, you probably know this if you do follow the podcast, I am a huge fan of.
But a lot of people when they're first building, they're first getting up and running, they ask me, "Anton, should I just hire an agency to run my ads for me? Should I just pay some company and my store is set up? Maybe I have some suppliers on board. Maybe I designed my store in Shopify, but I don't even want to think about how to use Google or Facebook ads. Should I just pay a company?" And the answer is different depending on the situation. So what I wanted to do for this episode is put together basically a flow chart that takes you through the decision tree and the questions you should ask yourself. And by going through this, you'll see my answer to you. Now, what I'm going to do in this episode is actually walk you through it. But if you want to see a visual representation of this, be sure to go to ecommercelifestyle.com. Click on Episodes. Look for this episode, which is titled, Should You Outsource Paid Traffic?
And on that page on the site, you'll see this full diagram. You could print it out, download it to your computer, whatever, and you could follow through that way. Again, that'll be at ecommercelifestyle.com/episodes. And if you're listening to it the day it comes out, we'll be right at the top of that list. If it's not there, just search on our blog, "Should I Outsource Paid Traffic?" So let's just say hypothetically, you came to me because you were looking for help with your paid ads. And you said to me, "Anton, should I outsource my paid traffic? Should I hire a freelancer or an ad agency to run my ads for me?" Well, the first question I would ask you is, is your store profitable? Is it currently making money? And let's just get the first no out of the way. If your response was, "No, not yet. I don't even have it finished yet," or, "No, it's not. We're losing money," or, "No, it's not. We haven't got any website visitors yet," then my response to you would be, "Do not outsource your paid ads. Instead, run them yourself."
You never want to hire an agency or a freelancer, anybody, to run your paid ads for you until you have a profitable store. If you have something that is not yet working, even if it has full potential to work, I don't believe there is anybody out there that you're going to basically hand the keys to, to your business, which is your paid traffic, have them turn it on, and have money start spitting out at you. That's not how it works. You need to have your store profitable first, and then in the future, you can consider outsourcing your paid traffic. But if your store was not profitable yet, my response to you would be, "Do not outsource your paid ads. Instead, run them yourself." Now, let's say you said, "Okay, Anton, you know what? I'm going to do that. Good advice," and you spent the next month or two or three going through training programs like my Drop Ship Blueprint learning how to make paid traffic work, and now you built a store that is profitable.
And then you asked me again, "Anton, I don't really like this paid traffic thing. Should I outsource my paid ads?" I would ask you, "Is your store profitable yet?" You would say, "Yes." I would say, "Okay, awesome. My follow-up question to you then would be, do you know what it costs to acquire a customer?" Now, what I mean by that is, what does it cost you to get a sale? Let's just say you follow what I teach over at dropshiplifestyle.com, and what I've been doing since 2007, you sell expensive products, and let's just say your average order value is $1,000. My question to you is, "What does it currently cost you to get a $1,000 sale in ad costs?" And if you say to me, "You know what, Anton, I don't know the answer to that question. I don't know my numbers," then my response to you is going to be, "Do not outsource paid ads. Run them yourself."
You need to know your numbers before you hire a freelancer or an agency or an employee to run your ads for you, or else you have no baseline, you have nothing to judge their results on, and you have no way of knowing if they're doing a good job or not. So let's say you say, "Okay, Anton, that makes sense. You know what, I'm going to spend the next month really focusing on my numbers and figuring out exactly what it costs me to acquire a customer." A month goes by, you get your data. You know that costs. I say, "Okay, awesome. Follow up question now. Are you or is someone on your team an effective manager?" Why am I asking that question? Because when you're working with anybody, whether that is a virtual assistant or a full-time employee sitting next to you in a physical office, or a freelancer that's running your ads or an agency, you need to have good managerial skills to be able to oversee them to make sure you don't blow through money faster than you can bring it in.
So when I ask you that question, "Are you or is someone on your team an effective manager?" if you say to me, "No," then my response to you again is going to be, "Do not outsource paid ads. Instead, run them yourself." Now, if this is the case where you know your numbers, your paid traffic's working, you want to outsource, but you're just not good at overseeing people's work, then my advice to you would be either hire somebody that is, or, this really is an and or, start brushing up on your managerial skills. Maybe you have to read some boring books on management, but you want to be in a place where once you bring somebody into your world, into your business that's controlling one of the most important parts, your paid ads, you need to be able to effectively oversee what they're doing. So let's just say we go back to this question, are you or is someone on your team and effective manager, you say to me, "Yes, actually, I am," or my project manager is amazing at that."
I would say, "Okay, cool. Let's keep moving forward with the questions. The next one I have for you is, can you afford to hire a full-time ad manager?" What do I mean by this? I don't mean a freelancer. I don't mean an agency. I mean, can you bring somebody onto your team full-time that's working eight hours a day, five days a week that is only focused on your ads, somebody that works for your company only that only focuses on your paid ads? Now, if you are in that position where you can't afford to hire somebody full-time that only does ads for your company, then my advice to you is, do not outsource paid ads. And you want to be thinking, "Anton, that's a lot of no's," especially if you're watching this or listening to this and you currently run an ad agency. You're probably like, "What, does he hate ad agencies or something"
No, but if you have the budget as a store owner to bring somebody on full-time that only focuses on your business and you or someone on your team is a good manager and you already know what it costs to acquire a customer and your store is profitable, then bringing that person on that's internal and only working on your store's traffic is going to generate you much better results than outsourcing paid ads ever will. So if you have the budget for somebody full-time, bring them on. Now, let's just say, I ask you that question, "Can you afford it to hire a full-time ad manager?" and you say, "You know what, not yet. I just don't have it in the budget and our revenues still aren't that great. I want to have somebody help with my ads, but I don't have the budget to hire somebody full-time," I would say, "Okay, nothing wrong with that. My advice to you and you only would be to outsource your paid ads to a freelancer or to an agency that works with multiple clients. But be sure you are actively and closely monitoring your KPIs, your key performance indicators."
By the time you bring somebody on as an outside source and outside entity, again, the agency or the freelancer, you need to know everything that's currently happening with your paid ads and you need to be on top of those managerial skills so that you can stay on top of what's happening when they take over so you can know if you're making more money, so you can know if now you're just paying agency fees for no reason while you're making the same amount of money, or you're losing money. The only way to know is to know your numbers before somebody comes on and then to closely monitor, again, your KPIs, your key performance indicators, once you have them. Now, the reason I wanted to even talk about this and bring it up today is because I have seen this time and time again. New eCommerce store owners that either aren't profitable yet because they haven't even tried ads themselves, or they've got some results and just went out and hired an agency right away, maybe one that private messaged them on Facebook. They just find somebody random and say, "Yeah, I'll give you a try."
What will happen is a month will go by, then two months, then three months, then six months, sometimes 12 months where they're actually making less money. They're spending more money on ads. Their return on ad spend is going down and it's because they hired somebody they didn't need and they didn't know their numbers and they didn't know how to effectively manage that person or that agency. So should you outsource paid ads? We just went through a lot of different decisions that should factor into this. What I would advise you to do is to download the PDF of the flow chart I put together here. Probably much easier to follow than just listening to me. That'll be available at ecommercelifestyle.com/episodes. I will also link it up below this podcast so you can go straight to it.
But the point, as I hope I made clear in this podcast, is that for most people, you should not outsource paid ads. You should not work with an agency. There is a time and place for it, but the real goal is to get your store profitable by yourself, to get your ads profitable by yourself, to know your numbers, and then bring in the full-time person that's going to only accelerate your results because they're only focused on your business and your paid traffic, not 20 different clients spread out amongst 10 different verticals that check your ads every few days. So as always, guys, I hope you got value from this episode. If you did, be sure to leave a like and a review over on Apple Podcasts.
And if you're listening and you're brand new, you don't even have a story yet, you just want to know where to start, be sure to go to dropshipwebinar.com where you can get a free training from me and a special offer on the Drop Ship Blueprint. So that'll be linked up below as well. Thank you everybody. I appreciate you. And I will talk to you on Monday for the next episode of the eCommerce Lifestyle Podcast. See you, everybody.