How to use paid ads to launch a digital product and drive sales

Ads and Sponsorships Advertising
14 min read
In this Article

Whether you want to launch an ebook, a course, a community, or a new album, paid advertising helps you drive awareness, clicks, and conversions.

Advertising is an important part of pretty much every digital product launch. The marketing strategy belongs with organic social media, search engine optimization (SEO), and email marketing in the same way that soap goes with water or peanut butter goes with jelly.

This doesn’t mean that advertising is easy or obvious, and getting started can be daunting. But luckily, we’re here to help.

Why advertising is like Tinder

As a creator, you probably have an audience. This might be email newsletter subscribers, TikTok followers, or community members. You have a relationship with your audience. In a sense, you know them and they know you.

If you want to sell a digital product to your audience, you would need to promote it directly via your newsletter, TikTok account, or community. You don’t need anyone or any platform to introduce you.

Dating analogy

Sometimes, marketers use dating as an analogy for customer relationships. If you wanted to date someone in your audience, you could just ask them out (we don’t really recommend this, btw!)

But what if you wanted to date someone you didn’t know?

  • You might meet someone at an event or club. That would be sort of like organic social media marketing.
  • Maybe a common friend recognizes that you have shared interests and introduces you. That might be like an organic Google search that matches a query to content.
  • Or maybe you’d use a dating service like Tinder (or eHarmony if you prefer serious relationships) to connect you with potential partners. This is advertising.

When you pay for an ad, you are paying the ad platform to introduce you to potential buyer—just like how you place an ad for yourself on different dating platforms to land a potential partner.

How advertising fits in your marketing plan

If you carry this dating analogy forward, it becomes easy to understand how advertising works with other forms of marketing promotion to create customer relationships and, ultimately, digital product sales.

Imagine a simple, three-step buyer’s journey.

social media post → retargeting ad → product sale

The first date in this buyer’s journey is a social media post promoting your digital product. Later, a “retargeting ad” reminds your customer about the digital product and provides a link back to the landing page (second date). Eventually, a sale is made.

Here is another example.

ad for newsletter → email sequence → product sale

In this journey, an ad encourages someone to subscribe to your email newsletter. It gets the first date.

Next, an automated email sequence shares the benefits of your digital product —be it an ebook, a course, a community, an album, or just about anything else you could imagine. Here you are strengthening your relationship over the course of one or more subsequent dates (emails).

The merits of your digital product become clear and the customer commits. You’re as happy as Kim Kardashian and Damon Thomas, Kris Humphries, Kanye West, Pete Davidson.

Sales cycle

If the digital product you’re selling is something a customer might buy the first time they learn about it, an ad could be all you need. The buyer’s journey would include an ad (and a landing page of course), nothing more.

awesome ad → product sale

In this case, an ad, an organic social media post, and an email message could have the same jobmake a sale.

awesome ad → product sale
social post → product sale
email message → product sale

We would describe this as a short sales cycle, since there are few steps between product awareness and product purchase.

If the digital product you’re selling will take a little convincing, advertising will likely work with other promotions. This would be a long sales cycle.

The goal here will be to get new email subscribers and let automated email sequences do the work of convincing and converting.

ad for newsletter → email sequence → product sale

ConvertKit enables these automations and we have tons of fantastic resources to help you get started using automations to sell digital products, and don’t forget to check out these examples of email marketing automation in action.

Marketing plan

One way to think about your marketing plan is to imagine the different sorts of buyer’s journeys.

  • How does someone learn about your digital product?
  • What information or factors will help them make the decision to purchase?
  • How will you facilitate the sale?

awareness → consideration → decision

Ads might be part of an awareness campaign or could retarget potential buyers while they are in the consideration stage.

Where should you advertise?

The role advertising plays in your marketing plan, i.e. the buyer’s journey, informs ad placement. To help make this point, let’s consider contextual advertising placements, retargeting, and interest and demographic targeting.

Contextual placement

Contextual placement is simply tried and true advertising. It’s the idea of putting ads where your audience of potential buyers is likely to look.

Every billboard, every magazine ad, and every radio ad you’ve seen or heard is probably a form of contextual advertising placement.

What’s more, when you type a query into Google’s search engine, the ads you see are also contextual placements. Those advertisers paid to be associated with a key phrase, specifically the query you typed into Google.

So if your digital product was a vegan cookbook, you might purchase ads aimed at the phrase “vegan cookbook” on Google. Your ad could appear right next to the New York Times and Amazon.

One of the best examples of contextual advertising placement for creators is in newsletters. In fact, newsletters are contextual advertising gold, particularly if your marketing plan focuses on first getting subscribers for your own email list.

ad for email list → email sequence → product sale

To place your ad in newsletters and grow your list, check out:

Retargeting

If you want ads to remind potential buyers when they’re in the consideration stage, you’ll need to use an ad platform with retargeting capabilities.

Retargeting is a form of behavioral ad targeting. It seeks to show potential customers an ad based on their previous browsing behavior.

You could “retarget” someone who visits a landing page or interacts with your social media feed. In order to do this, the advertising platform must be able to track individuals as they interact with your site and your social media pages.

Here are some of the most popular digital advertising platforms with retargeting capabilities — in no particular order.

Interest and demographic targeting

If you want advertising to help make potential customers aware of your digital products —or aware of your email subscription offer— you might choose interest and demographic targeting.

Ad platforms use tracking code to observe an individual’s behavior on your website, social media platforms, and on mobile devices. This observational information is used to identify interests, affinities, and demographics.

If you wanted to sell a course for first-time home buyers, you might target consumers 34-years-old and younger who currently rent.

Here is an example from Hulu Ad Manager, which lets you place video ads aimed at both demographic and interest targets.

First, select basic gender and age targeting.

Next, aim for individuals who rent versus homeowners.

What about privacy?

Let’s take a short detour in our ad placement discussion to think about privacy.

Targeted advertising is meant to show consumers relevant promotions.

If you were a 34-year-old renter watching The Girl From Plainville or Letterkenny on Hulu, an ad promoting home ownership could really help you. It might lead you to financial well being and a better lifestyle.

If you’re 50 and you already own a primary residence, a cabin, and a couple of Airbnb’s the very same ad is an interruption.

In this sense, targeted advertising is good for the shopper and you, the advertiser.

There is, however; a problem. Over the past couple of years, privacy advocates have (1) pointed out that folks like you and me were not aware of how much personal information ad networks have accumulated about us, and (2) noted that some of that information could be used in unhealthy or unethical ways.

If you like reading, check out Jaron Lanier’s book, Ten Arguments for Deleting Your Social Media Accounts Right Now. It was published in 2019 and it describes how unfettered advertising algorithms can be harmful. The non-profit Electronic Frontier Foundation also has helpful resources about ad tracking, and be sure to read up on how to prepare for the death of third party cookies on the ConvertKit blog.

The key thing to know in our context is that three forces are impacting how tracking works.

  • Users – people just like you and me have raised the alarm, if you will, about ad tracking and privacy. This has brought a lot of attention to the matter and encouraged businesses and government bodies to take action.
  • Businesses – companies like Google and Apple have taken steps to limit individual tracking. One of the most notable actions was when Apple released iOS 14 and gave iPhone users the ability to opt-out of ad tracking.
  • Legislators – the European Union and several U.S. states have passed or are considering legislation to limit ad tracking. If you have seen a cookie notice on a website, you have seen these laws in action.

From the advertising perspective, do-not-track and privacy initiatives result in signal loss. Ad platforms simply have less information about individual users. When compared to the industry’s tracking peak, this means ad networks like Meta and Google are relatively less effective than they were a few years ago.

This reality does not mean you should not use these platforms nor that advertising will no longer work. You will still be able to promote your digital products.

How to make a great ad

Advertising is all about outcome.

If the outcome you want is for someone to buy your digital product, a great ad is one that generates lots of sales. If you want new email subscribers, a great ad delivers new email subscribers.

This should be obvious, but it's not. Advertisers can forget that an ad has a job to do and instead worry too much about colors, graphics, copy, font size, and loads of other secondary stuff.

A Garfield comic from June 10, 2001, makes this point wonderfully.

Garfield, a fat orange cat, strolls past a series of “Beware of Dog” signs with disdain. One is too shabby. Another too high-tech. A third too posh. Finally, Garfield sees another cat’s severed tail nailed to a board. “I believe we have a winner,” he thinks.

The most effective beware of dog sign was the one clearly communicating the danger to Garfield.

In a similar (but hopefully less graphic) way a great ad will communicate a clear message to your audience.

That ad will likely have a value proposition, some supporting evidence, and a call to action (CTA). A detailed description of how to master headlines, communicate value, or even test a CTA is beyond our scope, but here are several excellent articles that can help.

Why you need to measure performance

Even when you have finished reading all of the articles recommended above, how to make a great ad may still feel elusive. This is not to imply great ads are unreachable or impossible, but rather they are often the result of an iterative process.

If you choose to create a Google Search Ad to promote your digital product, you may write dozens of headlines. Google’s optimization algorithm will show these headlines to potential customers, measuring their performance and eventually settling on the most effective.

What Google, Meta, and other ad platforms do programmatically on an individual headline or ad basis, you should do on a macro or overall level.

There are, perhaps, three metrics you could choose to measure for your digital product advertising.

ROAS ratio

Return on advertising spend (ROAS) describes the ratio between what you invest in an advertisement and how much revenue or profit the ad generates. This ratio is helpful for measuring ad performance for single events. So you might use it to measure an ad aimed at selling a single downloadable product or at generating a new email subscriber.

To calculate a ROAS ratio divide the revenue (or profit) generated by the amount invested. The result is stated as a ratio to one, i.e. 1:1.

revenue ÷ ad investment

For example, if you had $10,000 in revenue from a $1,000 advertising investment, you would have a ROAS ratio of 10:1.

10,000 ÷ 1,000 = 10

The higher the ROAS ratio the better your ad campaign is performing. In the case of a 10:1 ROAS ratio, you are earning $10 for every $1 invested.

CLV-to-CAC ratio

If your digital product is something that can be purchased again and again, like a monthly subscription to an online community, you may want to use a customer lifetime value (CLV) to customer acquisition cost (CAC) ratio.

First, calculate CLV. We will need three sub-metrics.

CLV = Average Order Value x Purchase Frequency x Margin

  • Average order value (AOV) – if you’re selling just one product, the AOV will be the product’s price. If you have several digital products a customer could buy, take your total sales for the past 12 months and divide them by the total number of orders placed.

AOV = Total Sales ÷ Order Count

  • Purchase frequency – captures the number of purchases an average customer makes in the given time period, i.e. a year.

Purchase Frequency = Total Orders ÷ Customer Count

  • Margin – is how much profit you make after all of the associated costs, including the cost of advertising.

Margin = AOV – All Cost

Once you have established a CLV, figure out your CAC. Add up everything you have invested in advertising (and other promotions) and divide that figure by the number of new customers acquired for the time period.

CAC = Advertising Costs ÷ Number of Customers Acquired

The CLV-to-CAC ratio will be something like 3:1. A ratio with a very low CAC, i.e. 50:1, means you are under investing in ads, more ads will result in a lot more profit. A ratio with high CAC, like 1:1 or 2:1, indicates that your ads are too expensive.

Revenue Per X

You might also use a simple revenue per X metric to judge ad performance. This metric is as simple as it sounds. You simply identify how much revenue an advertising campaign has created per measurement.

The X might be views on a YouTube ad, clicks on a search ad, or impressions on a podcast promotion.

Remember: you’re never done optimizing

Measuring advertising performance gives you an objective way to optimize. As mentioned above, great ads are often the result of iteration.

You create an ad to get a 3:1 ROAS ratio or a 4:1 CLV:CAC ratio, and you work to improve it. This virtuous cycle almost never ends, but each cycle you should get a little more out of your advertising campaign.

This article sought to help you understand advertising a little better. So that as you launch an ebook, a course, a community, a new album, or whatever, you have an idea of how paid advertising can help you drive awareness, clicks, and conversions.

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Armando Roggio

Armando has worked in advertising and marketing since before Facebook launched and Google knew what ads were. He uses that experience to manage paid marketing here at ConvertKit. When he is not optimizing, you can find him writing, wrestling, and spending time with his amazing family and friends.

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