Understanding Shopify Advertising Costs and How to Allocate Your Budget

A great fact to know, is that understanding how to allocate your Shopify Advertising costs can make you a lot of money.

The only problem? Store owners don’t take the time to understand it.

People don’t have a single source of truth and so they run around making terrible decisions.

They think throwing money at a problem will solve it.

But when that money gets chewed up and spit back out in their face

They realize they need a better strategy.

A smarter strategy.

It’s why it’s important to track your marketing.

All of it.

We want you to be in the business of making smarter data driven decisions.

The business of making money and creating communities.

Unless you want to sink to the bottom of the ocean.

But

If you want to be on the top of the world then start understanding that customers first see your store through a form of advertising. 

Ads, blogs, the list goes on.

So you better get it right.

That’s what this article is going to help you with.

What are Shopify Advertising Costs?

When looking at Shopify advertising costs here’s some that are involved

  Pay-per clicks

  Social Media Ads (Facebook, Tiktok ads)

  Email Marketing

  Influencer Marketing

  Marketing Tools

Many of your costs will be dependant on

  Target market

  Competition

  Goals

  How big your business is

Like stated before, the problem with so many businesses is that they don’t know how to effectively advertise to their customers. They end up running around in a circle with no results and no cash.

They just look at what the biggest companies do, and assume that copying their strategy will make them millions.

You are not that big company so most likely their strategies won’t work for you.

You’re not personalising your company to the customers needs. That means you don’t stand out to the customer.

But what if you did?

Let’s see an example of how an Ecommerce company did exactly that.

The Power Of Effective Advertising in Ecommerce

Many don’t understand the power of knowing how to market properly.

For example, everyone thought the razor industry was impossible to enter.

They believed companies like Gilette had the market in a headlock.

Then came a little ecommerce company in 2012, named Dollar Shave Club.

They created one ad in March 2012. A quick video you can see below

WEBFILM – Our blades are fucking great

It blew their company up.

Within 48 hours, 12,000 orders had been made.

The site crashed because of how many orders were being made.

In 2015, they had 2 million subscriptions to their razors and made $152 million in sales

They were acquired in 2016 for $1 billion dollars.

It wasn’t luck.

They capitalized on knowing a business model where the item was delivered straight to the customer was going to be successful.

They simply knew who their target customer was, and how to effectively advertise to them.

They knew they had to communicate the product in a way that customers can understand it easily and quickly (video format).

They found a smart strategy and used it.

Let’s be real, every store is going to have different strategies that work for them.

But how you get those strategies is by applying principles. Principles that can work for whatever industry you’re in.


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How to Allocate your Advertising Budget

You now know what Shopify advertising costs consists of and why it’s important to know how to advertise properly.

We’ll now show you 3 principles on knowing how to optimize your budget to serve your brand.

Principle 1: Know Where Your Target Customer Lives

To be clear, we’re not saying sneak into their house.

We’re saying go stalk them on the internet.

What websites do they usually visit? What social media platform are they mainly on?

Create your perfect customer and understand their personality. Then run to Google and pick up information on the following

  Their likes

  Their dislikes

  Biggest problems (that relate to your product)

  Why do they buy products like yours

  Pain points

This will all be ammo for your advertising.

You can put this information in your advertising so that it is personalised to your audience.

It will relate to them, and it will interest them in finding out more.

But when you implement it, make sure it is in the right environment.

Let’s take social media ads for example.

We’ve seen many stores use TikTok Ads to target their customers. But, their customers don’t even use TikTok, they all use Facebook!

This is why it’s important to do the research before you start advertising. Don’t waste money when you don’t have to. If you find where your customers live on the internet, you’ll be able to constantly tailor your advertising to see what works.

Principle 2: Get Eyes on the Prize

You might have the best product in the world. But if no one sees it, your business will sink.

So get as many eyes on it as possible.

You need to see if your advertising is generating traffic to your website. If it isn’t you need to try something different.

Getting as many eyes on the products will let you know your weak points so you can fix it fast.

In the beginning, invest a lot into advertising since you need to generate customers. This only happens if people see the product.

The more times your target audience sees your product, the more likely you’ll get more customers.

As your company grows and you create loyal customers, invest less into advertising, and more into other areas that give the customers a better experience. 

At this stage, the product works and you know it can bring in customers, you can focus on making the product better.

But right now, focus on getting more eyes on your product through your advertising.

Principle 3: Data Driven Decisions

How do you know if your advertising is working?

By tracking it.

Even though your advertising looks great, you need to see if it’s converting, and the numbers won’t lie.

But what’s even better, is having all your data on one platform so there’s no bias and no errors. So many businesses have data on different platforms and it always causes errors.

Having a Shopify Analytics app like BytheNumbers has consistently proven to be accurate in scaling companies and giving them data that drives nothing but results.

With an analytics app, not only will you be able to understand your customers, but once you have customers, you can segment them. Customer segmentation will make your campaigns even more personalised and will convert more viewers to your store.

Having an app that can give you insights that would cost hundreds of thousands of dollars, only costs a fraction of this. It’s beneficial to those companies needing to scale.

Using an analytics app to provide you ad reports will show you where your weakest points are and how to scale strategically.

They will also how your customer journeys. You can see what your customer journey looks like who came through your Google Ads. You can then take this information and compare it to those that came from your TikTok ads.

Read More


Logo By the Numbers

By the Numbers

Empower your business with our Shopify Data Driven App

Shopify App Store
★★★★★ 5/5
  • ✔ Know Your Audience Behavior
  • ✔ Deep Customer Segmentation
  • ✔ Retarget With Integrations
  • ✔ All The KPIs & Reports You Need
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