How to use Snapchat Ads to increase your ecommerce revenue with Duane Brown

Anna Shutko:

Welcome to another episode of the Marketing Analytic Show, the podcast that helps you get better at marketing analytics.

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I’m your host Anna Shutko, and today, our guest star is Duane Brown, Founder and Head of Strategy at Take Some Risk Inc. He works with brands such as Birdie’s, WooCommerce, and Walmart, among others.

Today, we’ll talk about Snapchat Ads. And from this episode, you’ll learn what kind of DTC companies are the best fit for advertising in Snapchat, what the pros and cons of Snapchat as a net platform compared to other channels like Facebook ads are, how to set up and optimize campaigns on Snapchat to achieve great results. And which Snapchat ads reports are good to have in place. I hope you’ll enjoy this episode.

Hello, Duane. And welcome to the show.

Duane Brown:

Thank you for having me.

Anna Shutko:

Yay. Thank you for joining us today, and I’m really looking forward to this episode. So to kick things off, let’s start with the first question. What kind of DTC companies Snapchat Ads is best for, and maybe you could elaborate a bit more on why?

Duane Brown:

Over the last couple of years, we’ve found the best ones tend to have a slightly higher average order value because it’s easier to get a better return on ad spend. And there’s a large group of people who are joining the platform that is above the age of 25, above the age of 30. Snap sometimes gets classified as an app for teenagers or young people in college, university, and there’s a broad group beyond that. Will Smith from The Fresh Prince of Bel-Air and all of their movies over the years, you’ve got the Bad Boys franchise. He just dropped his second, maybe even his third season on Snap.

So Snap Originals are all their own TV shows, commercial content. So Snaps over really hard to just get a whole wider breadth of people on the platform. So if you’re a DTC brand and you want to be on there, having a higher average quarter value makes sense. Also, if you go after gamers or tech people, that’s usually a good brand as well, if that’s your core demo, because of the 30 minutes that people spend on Snap on any given day, 20 minutes are spent with games. So if you’re into gamers and entertainment type people, it’s a great platform as well.

Anna Shutko:

Yeah. Awesome. It was really interesting to hear about all these demographics, and yeah, I do definitely agree with you that Snap is, or it could be very useful for gamers especially. And now, if we discuss a bit more about this platform and more specifically about the pros and cons. So what would you say the pros and cons of Snapchat as a platform are compared to other popular pay channels? For example, Facebook ads.

Duane Brown:

One of the cons and this is a con of most platforms, is that they don’t scale. You know, people often say, Google or Facebook, they have four billion people around the world and Snap has 259, 260,000,000, right, versus four billion across either Google or Facebook. And what I always say to that is, even though Google has four billion or Facebook/Instagram has four billion, unless you’re Procter and Gamble, one of those huge conglomerates, four billion people are not your target market. You always want to look at, within an ad platform, how many people on there are the people you do want to target. Everyone thinks they can target everyone, but everyone is never their best customer; they’re going to acquire a customer at. So the biggest con is that it’s harder to get scale on Snap because they only have 260,000,000; they don’t have four billion, a billion.

But when I think about where Instagram was in, let’s say 2012, when Facebook bought them, they were on like half a million or something like that. And they’ve grown a lot to over a billion over the last eight or nine years. And so where Snap is today, I think they could be at half a billion next year. They could be at a billion in three, four years if people continue to use the platform. So even though I think it’s a con, I think it’s great to get in there now while they’re small so you can test out the platform, figure out if it makes sense for your brand, and start to shift some of your money off of Facebook and Google. Because lots of brands will come to us and they’re just on Google, or they’re just on Facebook and relying on just one pay channel to scale your growth, especially when Facebook has been really challenging the last six months for lots of marketers is that a great way to grow your business as a whole?

I think the other challenge, which I mentioned before, is everyone thinks it’s just for young people. And so that’s kind of a con in the sense that people don’t realize there’s a wider demographic on there. So there’s that market perception I think for the platform. Even our mountain bike client was like, “Hey Duane, well no one in our shop uses Snap and there’s eight or nine of them in the shop. So we don’t think it’s really a great platform.” But we made it work for that client. We see a good return on ad spend, all because there are lots of people who mountain bike and do extreme sports on the platform. But again, people don’t think of it because they think it’s just for teenagers. So I think those are the two biggest cons; it’s hard to get scale. And there’s a misconception of who actually uses the platform.

I think one of the huge pros though is because of those cons, it’s not as competitive on Snap. And so your CPM or your cost per thousand impressions or your CPC, your cost per click, generally is lower than what you’d see on Facebook. And so you’re able to have your money go a little bit farther and test out more opportunities. Also, being that places like Snap and even Tik Tok are a lot smaller, people who work there, whether it’s your account rep or the tech team or engineers, they just care a lot more. I’m able to get a lot more help if I have a question. The support team will answer your questions in a timely manner. And so their size may not be huge, but they do definitely put the work in to try to keep you as us as an agency, or if you’re a direct brand and work hard to understand why the platform is or isn’t working for you.

Oftentimes people gripe that while you can get scale on Facebook, but then they can never talk to anybody. That’s just never been an issue we’ve had with Snap over the last two years. So I think a big thing is that it’s not as competitive, and you can actually talk to somebody who’s a human being, and they actually act like they care.

Anna Shutko:

Yeah. That does actually sound like an awesome way to evaluate strengths and weaknesses, in my view. So really good points there. And now, let’s talk about the process a little bit. So, for example, you have a new client. Could you please walk us through the process of how you would set up your first Snapchat ecommerce campaigns?

Duane Brown:

Totally. So Snap is a little bit different than other ad platforms. When you set up ad accounts for Facebook or any platform, you can always optimize towards a purchase right away. But with Snap, you’ve got to unlock the purchase goal. So you start off optimizing towards the swipe up, which effectively is the click, and then you optimize towards the pageviews. And then you can optimize towards a purchase call. And the first goal, obviously for ecommerce, is somebody making a purchase on your website, but a purchase goal could be somebody filling out a form or some other actions on your website that you deem as high value. And so the stage where you’ve got to run campaigns to get people to click on your ad, which will then get them to purchase. And then, when you’ve got enough of those purchases, you can unlock your pageviews, and when you have enough pageview goals, you can unlock your purchases. And so each of those stages, you’ve got to get 50 purchases.

So you have to have enough people swipe up on your ad, come to your site and purchase 50 times in a seven-day rolling average for you to unlock the next stage. And that, I think, is a little bit more tricky for brands who are used to just setting up an ad account on Facebook, optimizing towards a purchase, and then on Facebook do its thing because Facebook is just so large and they have so many users on the platform they’re able to do that. So the first thing we always do with clients, when we bring them on board, is we try to understand if there are interest targetings we can go after. So I was actually talking to an alcohol brand this past week. And so I logged into our account on Snap, and I just looked at, are there interests targeted for people who drink, whether it’s alcohol, beer, what have you in their words.

So I took a screenshot of that, with that they’re targeted because they’re only targeting a few States in America and said, here’s basically what the size of the interest targeting it is. And so we always try to find out, “Is there interest targeting we can go after?” We also usually email my reps, if it’s a product I’m not really familiar with, and ask them, have something similar run on the platform and/or do you have any recommendations of what we might target if I can’t think of anything really great. Once we have that, we put together our plan and let the client know, we set up the ad account, we’ll set up Snap pixel, we’ll set up a catalog, so much like Google Shop it has a catalog or Facebook has the Facebook catalog. Snap has a catalog as well. So you can run dynamic product ads, i.e., somebody comes to your site, they look at a product, they leave, they don’t purchase, you can show them that exact product when they’re on Snap.

And then once the client approves the targeting, and we’re happy with it, and we’ve set up the pixel and a catalog and the ad account and all that sort of technical stuff, we launch your campaign. We usually start with trying to do remarketing towards people who’ve been to the website that haven’t converted. And if that is getting good results, we’ll move up the funnel and start doing some of the interest targetings that we mapped out as well. It obviously depends on our budget, a client that’s spending $5,000 a month is a lot different than a client who’s willing to drop $20,000 a month as the test. And then a goal from that point is getting enough purchases that we unlock the pageview goal, getting enough purchases that we unlock the purchase goals that were in a couple of weeks for a large brand, maybe a month or two for a smaller brand, we can start to optimize towards the purchase.

And then, at that point, just figuring out what’s the right mix of audience targeting versus the creative that we have and figuring that out, similar to Facebook, Snap’s all about your creatives, whether it’s a video or a static image. And so you just always want to be testing your creatives against your different audiences and figuring out what the best combination is.

Anna Shutko:

Great. Yeah. I think you’ve described the process of setting up and also optimization really well. And this is actually a very nice lead to my next question. So now that you have these campaigns up and running, how would you actually analyze the campaign result data, and maybe you could tell us a bit more, what metrics specifically would you pay attention to in each situation?

Duane Brown:

Yeah, totally. So outside of obviously looking to make sure we can have purchases so we can unlock each of the goals when we’re in a client account, we set up our, effectively what is our funnel. A funnel may not be what it used to be, but people still go through different stages of deciding if they’re going to buy a product or not. Some go through the stages faster than others, but we always look at, are we getting enough people to add to cart, are we getting enough people to checkout, and are we getting enough people to purchase? If you don’t get enough people to add to cart or checkout, you’re not going to get enough people to purchase. The other thing we look for is, add to cart divided by how much we spend. If our add-to-cart cost is too high, i.e., you spend $100, but you only got two people that add to cart, well, that’s a $50 add to cart cost.

That’s probably going to be too high for lots of brands that have a $75 average order value or $150 average order value. Versus if you spent $100, but you got 10 add to cart, well, that’s a $10 add to cart cost. And so making sure our add to cart cost isn’t too high versus our average order value. Because no matter what you do, if it’s too high, they’ll never get a good return on ad spend when you get people from add to cart to checkout to purchase. And so once we’re happy with the add to cart, we see that’s leading to purchase, we just look at our return on ad spend, look at our average order value, and we try to find the best ads that are going to lead to consistent purchases on a regular basis, not an ad that just has someone purchase once, once a week, we want an ad that’s going to have people purchase on multiple times in a week.

And then also leads to a high enough average order value that the return on ad spend is acceptable. Whether it’s… some clients want two and a half or three, some clients we have need to have five or six, and then just find that right balance of creative testing and the audience again. Because at the end of the day, your audience that you target and your creativeness is a big factor whether you’re going to be successful. I think what makes Snap also a little bit different is unlike Facebook or even Google, those ads tend to have lots of texts around it, and there’s not a lot of texts with Snap. It’s basically a static image or video. And so you’ve got to work harder to use the visual medium to communicate what your product is or what your product does. And that’s a lot harder for some brands than others.

Anna Shutko:

All right. Yeah, thank you so much. It was really awesome to hear about all these types of how marketers could use Snapchat ads, and now if our listeners want to learn more about you. Could you please tell us where they can find you or maybe share a couple of useful resources your team has created recently?

Duane Brown:

Totally. I probably spend way too much time on Twitter. So I’m just Duane Brown. So that’s one place I spend a lot of time. Obviously, there’s an agency website, so it’s Takesomerisk.com. So you can always reach out if you want to chat about Snap ads. We’ve been running ads there for the past couple of years, so on our website, there’s a Snap Ads guide on the footer of our homepage. That just gets updated every couple of months when new things come up, whether it’s ad formats or changes in technology. And so I’d say, email, Twitter, probably the best places. I do spend a lot of time on Reddit, but not everybody’s on Reddit, and people are more likely, I imagine to be on Twitter, who listen to the podcast.

Anna Shutko:

All right. Awesome. Thank you so much, Duane, for coming to the show today.

Duane Brown:

Thanks for having me.

Anna Shutko:

And that’s the end of today’s episode. Thanks for tuning in. Before we go, make sure to hit the subscribe button and leave us a review or rating on Apple Podcasts, Spotify, or wherever you’re listening. If you’d like to kickstart your marketing analytics, check out the 14-day free trial at Supermetrics.com. See you in the next episode of The Marketing Analytics Show.