When to Expand to New PPC Ad Channels

Road heading off into the distant horizon

This is the first post in a two-part series covering When & How to Expand to New PPC Ad Channels.

Now more than ever, it’s important to diversify your paid advertising channels. With continuing changes in privacy laws, an increase in automation, ongoing pandemic effects, and regular introductions of new ad platforms, it’s important that you continue to be proactive in expanding your reach and working to meet your audience where they are spending their time online.

So how do you know it’s time to test new channels? Well isn’t that the key question. There are tons of important considerations, but here are a few to get you started in the right direction.

Existing Channel Performance

Are you still seeing a strong ROI in your existing channels? If so, is there room to expand within these channels? For instance:

  • If you see great returns from Search campaigns have you also tested DSA campaigns?
  • If you see great returns from Lookalike audiences on Facebook or LinkedIn or Actalike audiences on Pinterest, have you tested beyond 1%?
  • Are any of your existing top-performing campaigns limited by budget?

Diversifying is important, but you also need to consider if you’ve reached a point of diminishing returns within channels you’re already leveraging. If you haven’t, then sticking with your existing channels and looking for ways to expand within might be the best route for now.

Budget Availability

If you’re working with a smaller budget, you might want to hold off on testing new channels. A new test needs enough budget to have a fair shot, plus you want to be able to get enough volume through to get learnings at a decent rate. So, if you’re continuing to see good returns from existing channels and you know there are expansion opportunities within these channels that you haven’t tested due to budget constraints, then keeping your efforts where they are and holding off on testing new channels might be the best use of your resources.

On the flip side, if you’ve reached the point of diminishing returns in existing channels, if you’ve tested expansion opportunities within and you’ve got budget to spare then it’s probably time to try new channels.

So how much of your budget should go toward a test? That depends on many factors, including:

  • Reach of your test channel. For instance, volume on Quora is going to be lower than volume on Facebook.
  • Your tolerance level for CPA. Can you afford a 2x CPA? a 3x CPA? When diving into a new channel, you don’t have performance benchmarks available yet, so start conservatively and then be open to adjusting your budget as performance data accrues.
  • The product or service you’re offering. For example, we have a client who created sample kits of their product and wanted to offer them to their most qualified leads. With this effort, we had two restrictions influencing our budget decision: first of all, the size of the lead pool, which was restricted to only MQLs; secondly, the number of kits available – the client wanted to run just a small test and only had a few hundred kits available so we had to cap our daily budget to ensure they could fulfill the orders.

Due to the number of considerations when determining a test budget, there isn’t really a hard and fast rule. But generally speaking, we’ve seen success when we initially allocate in the 10-15% range of the total monthly budget toward tests and leave the rest for more evergreen, proven strategies.

Yearly Goals

Hopefully by now you’ve done a thorough evaluation of 2020 campaign performance and identified your key problem areas and learnings to influence your 2021 goals. Here are a few goal scenarios that new channel tests could help support:

Increasing Brand Awareness

From platform to platform, your audience pools will change, so expanding to a channel you’ve never advertised on before can certainly help increase brand awareness. Many platforms, like Facebook and LinkedIn, even have campaign objective options specifically for this goal. If you have strong video assets, Google also offers Brand Lift Studies to some advertisers as well.

Increasing Revenue

Of course, good performance in new channels isn’t guaranteed, but you won’t know until you test. After a strange 2020, many businesses are working hard to ramp up this year to help recoup 2020 losses. If you’re working toward hitting aggressive growth goals, I’ve got some additional tips here to help you meet your goals.

Supporting New Product Launches

New channels can be an excellent way to promote new products. In the example I mentioned above of our client’s sample kit, we started advertising on Facebook, where we have the bulk of our other campaigns running. After seeing great results from our initial efforts, we’re looking to expand into Pinterest as well, as long as kit inventory remains high enough.

Since our kit audience pool is more limited to MQLs only, launching in another channel is one of the main tools we have to help expand reach. Once we diversify our effort into multiple channels we’ll be able to compare CPA performance and work with our client to compare close rates as well. Then we can work toward allocating more budget to the better-performing channel.

Diversifying Paid Ad Channels

If diversifying your paid channels is one of your primary goals for this year, then testing new channels can certainly help you accomplish your goal (see what I did here? :))

At the start of my post, I mentioned some key driving factors to help justify diversifying your paid ad channels. In addition to these important factors, we have to consider audience migration as well. For example, even though Facebook user base is still increasing overall, there seems to be a growing trend of users abandoning the bigger, broader networks for more specialized online communities.

For instance, Reddit’s monthly active users increased 30% year-over-year:

Reddit user growth data showing why Reddit is a great option for a new PPC channel

Additionally, platform user base demographics are growing and changing, so it’s crucial to keep up with these trends and let them inform your ad channel decisions.

For example, Pinterest’s Gen Z user base grew 50% year-over-year, a higher growth rate than Millenials at 36%:

Pinterest user growth data showing why Pinterest is a great option for a new PPC channel

Not only are platform user bases changing, but platform growth rates have varied significantly as well. For example, Pinterest’s quarter-on-quarter advertising reach increased 12%:

Pinterest user growth data showing why Pinterest is a great option for a new PPC channel

while Facebook’s increased by only 1%:

Facebook user growth data showing why Facebook is a less optimal option for a PPC channel

Ultimately, your target audience might be moving so you need to start strategizing for new ways to reach them.

Final Thoughts

In this post, I covered some key things you should consider when deciding whether or not to start testing new PPC channels. At a high level, you have to keep in mind your existing channel performance and whether you’ve maxed out the potential there, your budget, and your goals. If you’re able to check all these boxes then it’s probably time to branch out and start testing!

In my next post, I’ll cover strategies for how to go about testing new channels, so be sure to check back here.

What new channels have you tested lately? What results have you seen? Let us know in the comments below!