For marketing in the online community, we at Degriz, d. o. o., and Onios, d. o. o., chose online marketing, as this method proved to be the most cost-effective.
I will describe the example of selling NanoSilver socks, which are sold on the website https://enadvatri.net/ and advertised in various online sources, including the online community Facebook. Compared to other advertising space providers (Najdi.si, Google ads, Proplus, Httpol, etc.), it proved to be the most effective.
Based on experiences with online sales of such items, the main focus of sales was on Facebook, where targeted advertising reduced the number of potential customers to 480,840 people.
In targeted advertising, several filters were used to narrow down potential customers, from location to age. Given that the product is sold only in the Slovenian market, advertising was narrowed from approximately 500 million to 596,240 people living in Slovenia. We then determined demographic characteristics, namely all persons over the age of 18, which narrowed advertising to 484,160 people. Age was determined based on consumer habits, as people start making online purchases and buying clothes for themselves around the age of eighteen, as they are much more independent than minors.
Other filters (age, interests, connections) were ignored in filtering, as they do not have a significant impact on our advertising circle.
Interpretation of advertising campaign results and conclusions
The conclusions of the advertising campaign are that the average click price is around fifteen cents. The click price is not uniform but changes daily. It depends on the CTR (click through rate), the ratio between ad impressions and clicks. The greater the interest in the ad, the higher the CTR, so we can say that the ad price depends on how interesting it is for the target group.
The conversion of the online store is approximately three percent. This means that for every hundred visitors, we receive an average of three orders.
For successful advertising management, we calculate CPO (cost per order). This data tells us how much money we spent on each order. In this specific case, we pay fifteen euros for a hundred clicks. For these fifteen euros, we get three orders. The average cost of acquiring an order is five euros.
The average order value is around thirty euros (some order one pair of socks, others four pairs, on average they spend thirty euros).
Effectiveness of the advertising campaign
With an average purchase value of thirty euros, spending five euros is a relatively high share, so a one-time purchase is not sufficient for satisfactory profitability. If we want such advertising to be successful in the long term, we need to:
- reduce the click price or get cheaper traffic,
- increase conversion (the ratio between visits and purchases),
- increase the average order value,
- ensure that we do not acquire one-time purchases, but retain the customer long-term.
Conclusions or actions based on the analysis of results
We removed the option to purchase only one pair of socks from the offer. This "forced" those customers who previously bought only one pair to buy at least two pairs, thereby increasing the average order value. We tested the measure on an A/B Split test before making a final decision, and from the results, we could see that there is no significant drop in orders if we remove the option to order only one pair.
By regularly changing the ads, we kept the ads "fresh" and interesting. This also kept click prices lower.
We ensured regular customer notifications via email and other means. We found that customers rarely decide to make a repeat purchase on their own, but if you communicate with them regularly, purchases are more frequent. A customer who would otherwise buy one pair of socks, for which we spent five euros, is not profitable. Since sending emails and communication on social networks with existing customers is free or very cheap, our customer made several purchases over a year and thus became profitable.
By appearing on social networks and writing useful and interesting posts in a blog or journal (linked to Facebook), we managed to gain a steady influx of website visitors, for whom we do not have to pay directly (organic traffic).
