Types of Paid Traffic, Cold vs. Warm
Delay is the death of the sale. – Gary Halbert
Two thumbs up to Gary’s quote.
In business your biggest asset is your time, and the money comes second. Paid traffic saves you time and reveals if your offer is a converting offer or not. But before you jump into paid traffic you must know some basics otherwise you can burn your budgets very quickly with little or no results.
Types of Paid Traffic
There’re two types of paid traffic.
- Cold Traffic
- Warm Traffic
What is a Cold Traffic?
Facebook ads are a great example of Cold Traffic. On Facebook people are not actively looking for a solution. Your ad starts to show in the right navigation of Facebook ads or in the news feed; your prospect clicks on them and lands on your offer.
Chances are, they will see your offer, keep it in mind and hopefully come back later to take action. In most cases it can take two to three visits before the prospect become serious about your product or service.
Retargeting is a Must
If you’re not retargeting your prospects you’re leaving a lot of money on the table. If you don’t know what is retargeting let me explain:
If a consumer visits a website, but does not make a purchase or convert in another way, retargeting is a “reminder” of that website that they visited. Using retargeting methods, advertisers show ads to people more frequently once they have visited the website.
Retargeting is an essential part of paid advertising for both cold and warm traffic.
When to drive Cold Traffic to your offer?
When you’re offering a low-ticket item, which is a no-brainer for prospects to take action on. You collect leads and later convert them for high-ticket items.
Good examples are:
Sending them to a Free Report e.g.
- How to reduce your heating cost in three easy steps
- Three deadly mistakes that can bring your business down overnight
- Case study reveals Nine Ordinary Businesses that were just surviving, now thriving.
- Nine marketing experts reveal their ultimate secrets for getting rich with Internet auctions!
- And the list goes on and on…
This strategy can fit into any business type. They get the report in return of their name and email. Your report and email auto-responders will take over things from there and convert them to paid customers.
Cold Traffic Landing Page – Example 1
Cold Traffic Landing Page – Example 2
Sending cold traffic to your product or service which is a low-ticket item.
- This could be a report again, but this time you’re actually charging for the report e.g. £7
- If you are a software company this could be free sign-up for a 30-day trial.
- A calculator to resolve their financial problems, then ask for their details to get the result.
- A short, engaging personality survey and you ask them their details to get to final result.
This could go on and on…
The target is to engage cold traffic and later convert them into loyal customers.
Can work with both Cold and Warm Traffic – Example 3
Cold Traffic Landing Page – Example 4
Cold Traffic Landing Page – Example 5
Can work with both Cold and Warm Traffic – Example 6
What is a Warm Traffic?
Warm traffic is the traffic where your prospects are actively searching for a solution. Google search is the best example of warm traffic. When someone goes on Google they actually take one step further and type in exactly what they are looking for e.g.
They land on your offer landing page, and if they like what they see, they actually contact you or buy your product.
Warm Traffic Landing Page – Example 1
Warm Traffic Landing Page – Example 2
Warm Traffic Landing Page – Example 3
Again Retargeting is a Must
Even its a warm traffic chances are they would leave your website to checkout your competitors. At this stage if your ad is not following them chances are high they would not come back again. So make sure you use retargeting ads to bring them back to you offer. Give them some incentive on the banner e.g.
When to drive warm traffic to your offer?
There are no exact scenarios to warm traffic. Check your offer or service and decide if it’s worth promoting for paid search traffic. Warm traffic costs more due to its very nature. If you are low on budgets and your industry is in huge demand, the chances are, the click cost will be high too.
Here are some examples anyway:
- When your product is extremely high in demand and there are a good amount of searches on them.
- When your product or service is of peak importance or imperative.
- When your brand name is already established and people are actually typing your company or product name on search engines.
- When your product brings a healthy ROI on each sale.
- When you have a very good sales team in place to call and convert those leads into sales.
- This could go on and on…
Cold vs. Warm Traffic
Important Note: All the above statements about cold and warm traffic can overlap each other depending on your product or service.
Start with cold and warm traffic both, to see which works better for you.
When you offer one flat service/product and do not have any back-end products or service (up-sells) to increase profits. Up-sells actually bring your cost per acquisition down either you’re selling them online or offline.
Even the companies who sell a luxury boats or a Jets have an up-sell where they sell high end insurance to their clients.
Why Up-sell is so important in Paid Advertising
Let say your current cost per acquisition is £50 and you up-sell a service or a product that cost £20 to add in their existing order, this brings your cost per acquisition straight down to £30 a significant drop.
But if your product or service is more like a subscription base, off course your CPA will come down during the course of time. The more they stay with you the more it brings down the CPA.
1 Click Up-sell Example
Up-selling better deal to increase order value.
Average Customer Lifetime Value
A very important metric but seldom used by businesses. Majority of times when businesses see money going out quickly obviously the panic mode kicks in. They think they’re losing money because their cost per acquisition (CPA) is too high.
I ask them this,
Me: What is your customer lifetime value?
Client: What did you mean Rehan?
Me: On average how long your customer’s/client’s stays with you.
Client: Amm…. around 3 years
Me: Good! And how much they spend with you during the three years time?
Client: Calculator out tick, tick, tick… approx £2,300
Me: Your current cost per acquisition is £80 and on average your customer is spending with you £2,300 in three years? Reality check please…
We all need to see ROI from the front-end sale I understand that but when it comes down to paid traffic you must know your numbers. Try not to rush things and make an informed decision.
If you’re not sure how to calculate customer lifetime value, check the Harvard Business School customer lifetime value calculator.
Paid marketing campaigns can take few days to few weeks to pick up, especially with Google AdWords where there’re many factors in place.
In order to make informed decision you need data. This data is priceless if you know what you’re doing. The data can provide you good insight about your target audience including their age, gender, preferred devices (mobile, desktop, tablet), timings they are mostly likely to buy your product and more… When you got this priceless data in hand you simply promote your product or service only to them. Result, you will get targeted traffic and your conversion rate will go up.
So in the beginning you’re throwing some budget to gather priceless data and for that you need some test budget.
Paid advertising is not for the faint-hearted!”
– Rehan Khan
Your paid marketing success is also dependent upon the quality of your landing page copy. Without shadow of a doubt good persuasive copy leads to higher conversions. Get a good sales copywriter they’re usually pricey but well worth the investment.
Your website/landing page design can also seriously affect your conversion rate. So make sure you have a rocking website/landing page in place.
Make sure you test a multiple variations of your offer headline, opening and closing paragraphs, call to action buttons etc… And watch your KPI’s closely.
Now you know how cold and warm traffic works, how would you use this information in your business to get more sales/leads?