Related Categories
Related Courses
Free Resources

How Got 610% ROI from a “Failed” Paid Traffic Campaign

In 5 years, has generated over $12M with only 5 full time employees and no office space.
They have served lobster to over 100,000 people directly from the docks of Maine.
When Mark from first set out to expand his business — he fell into the trap.  More on this in just a second.
Mark was serving his niche (lobster lovers) with a great product and exceptional customer service. But when they looked to scale with online marketing, growth was not easy to come by.
They came to Wicked Reports (we provide total integration of your marketing and sales data into an easy-to-use dashboard) to see if the answer to their online marketing growth issues was in their data.
Here’s the landing page for Get Maine Lobster’s offer…
Nice offer, right?
Now, let’s look at the paid traffic campaigns…

Traffic Campaign 1:  Interest Targeting on Facebook

At first Mark loved seeing how cheap he was able to buy traffic. He went into Facebook, targeted people that “liked” Maine Lobster, created an offer, and let it fly.
His results….
24 cents a click! He was going to be rich! Or was he? A few days later, his brow increasingly began to furrow. Because in spite of all these clicks, no one had bought.
Notice the big Goose Egg in the Immediate Value column…
Mark is a savvy guy and realized that of all those clicks, he must have got some people to opt-in to his list also. He was right.
$1.22 leads… sweet!
This must have turned into a nice uptick of business, right? Mark looked at all those leads and counted up their sales and order amounts to see the Lifetime Value. Surely these $0.24 clicks and $1.22 leads must have created the marketer’s Holy Grail…
…as best understood by Prop Joe from the Wire:

“I’m just trying to buy for a dollar and sell it for 2.”

Hmmm…not fantastic, but that doesn’t look so bad now, because,
Mark’s Cost per customer = $534.93/4 = $133.75
And his LTV per customer = $818.95/4 = $204.73
ROI = ($818.95-$534.93) / $534.93 = 53.1%
If Mark was an information marketer (think SUPER high margins), I’m telling him to open up his wallet and start spending (using Ralph and Molly’s Jedi Facebook scale tactics of course).
But Mark is flying live lobsters across the country, it turns out his margins aren’t that forgiving. Even with $0.24 clicks, $1.22 leads, and 53.1% ROI, he was STILL complaining about his ad return — turns out we need to get over 100% ROI in order for him to make a few bucks after his costs.
Does that mean he should throw in the towel on these paid ads?
Was it just a bad offer?
Or was his offer great, and he just was showing to an audience that wasn’t quite as receptive as he’d thought?
I would think that “likes maine lobster” is a perfect audience. But perhaps these people get hit up for lobster specials all the time. Or like me, they have a lobster guy down the road that sells them out of his cooler (you just have to text him and hit the docks).
Let’s look at a second traffic campaign…

Traffic Campaign 2: Retargeting Cart Abandoners

Mark knew not to throw all his advertising eggs in one ad set basket. He ran his ads across a number of different audiences. I want to show you one in particular.
“GML-Abandoned-Carts” was a retargeting audience created with the following criteria: “show this ad to people that make it to my cart page, but don’t make it to the checkout success page.
The specific audience isn’t so important, let’s watch the story the numbers tell.
Yikes, $1.37 a click on Facebook.  That’s 470% more expensive than our other campaign!
Let’s hope these cart abandoners realize the error of their ways and decide to buy some succulent lobster after seeing our retargeting ad…
Ok, maybe not, except for one wicked smart individual.
Well, surely this abandoned cart targeting brought home a ton of tasty new leads?
Not so much.  $16.89 leads is anything but tasty.  Right?
Seems like we need to immediately shut down this ugly, ugly gml-abandoned-cart idea! Although…we might want to check lifetime value of these people before we do that…just to be sure.
Whoa! Now that’s what I’m talking about!
Mark’s Cost per customer = $168.91/8 = $21.11
And his LTV per customer = $1199.93/8 = $149.99
(*I’m assuming each order was a unique customer to keep this simple)
ROI = ($1,199.93-$168.91) / $168.91= 610%
It doesn’t take a marketing Einstein or Prop Joe to see that Mark’s “gml-abandoned carts” audience is pure gold.
He’s buying for $1, and selling for $7.

Here’s the takeaway…

Sometimes the best audiences cost a little more, because they are more desirable.
Cost per click is a constant focus of online marketers — it’s the cost of marketing to create one new click. Cost per click is easy to calculate and easy to understand. However…

Focusing on cost per click as the most important stat is the wrong way to judge your marketing.

It’s a trap.
But tracking lifetime customer value back to the original traffic source allows you to know exactly which sources are giving you a positive return. Once you have that figured out, THEN you start getting Jedi on lowering that cost per click.
We’re proud to say that the good folks at DigitalMarketer (and Mark at use our tool — Wicked Reports — to make tracking the important metrics as simple as looking at a dashboard.
Have a question?
Ask the DM Team and 7,856 other members in the DM Engage Facebook Group.
Not a DM Lab Member? Learn more here.

Scott Desgrosseillers

Scott Desgrosseillers

Scott Desgrosseilliers is the founder and CEO at Wicked Reports. He's the guy companies like Infusionsoft, Digital Marketer and Ryan Levesque Associates turn to for help with their data. Before Wicked Reports, he played a key role at Motorola as a data architect and led global programming teams for 10 years. Scott brings a simple, common sense approach to the complex world of data-driven marketing. Scott is teaching a live webinar on How To Track Your Social ROI, which you can register for here.

Subscribe to the DM Insider Newsletter

Subscribe to our weekly newsletter that delivers the most actionable, tactical, and timely marketing tips you actually need in 7 minutes or less. Get an edge over the competition, for free.