The Business of Display Part 3: Nutraceuticals

It’s hard to turn on the news and not hear any one of these words…

Baby boomers, medical debt, Medicare, Obamacare…

There’s no doubt that the increase in health care costs, aging population and world financial crisis, that more and more people are worrying about their current and future health situation. This, combined with the increasing awareness behind preventive medicine, has made people seek out alternatives.

Now, although they’ve been around forever there’s been a recent boom in what are referred to as nutraceuticals.

Nutraceuticals are pills, powders and liquids that fall somewhere between prescription drugs and dietary supplements.

They normally claim to fix some sort of health issue (high blood pressure) or increase physical performance (physical activity or sexual health).

They’re not regulated by the FDA and you don’t need to see a doctor or have a prescription to buy them.You can get them online or at any health/supplement shop like GNC.

Examples include nutraceuticals for…

  • Athletic performance (weight loss, pre-workout, muscle builders)
  • Sexual health/libido
  • Joint pain relief
  • Cleansers
  • Anxiety
  • Blood pressure
  • Testosterone
  • Skin conditions
  • Fish oil, flax oil, krill oil
  • Pretty much any condition you can possibly think of

Since they’re made up of proprietary blends of vitamins, minerals and herbs,  you don’t need to be a licensed doctor or a work at the research department at Pfizer to create one.

Massive Rise in Popularity

According to Nutraceuticals World magazine, the nutraceuticals product market is expected to reach $204.8 billion dollars by 2017. Many marketers have taken advantage of the boom and began to create their own.

They’ve also found a way to advertise them very effectively on display.

And contrary to popular belief, it’s not difficult for the average person to create their own.

We’re not going to get into the nitty gritty details on how you create the product and fulfill orders, but believe me when I tell you that there are a couple multi-million dollar nutraceutical companies with factories, physical stores and lots of employees that started mixing ingredients on their kitchen table, storing product in their closet and shipping orders out of their local post office.

This post outlines how one nutraceutical company uses display advertising to sell millions in product per year, plus insights you can take from their campaigns and implement them in your own business, even if you have no interest in creating or marketing nutraceuticals.

Why Is This A Good Business Model?

Starting a nutraceutical business is more work then just writing and selling a digital eBook. There is a learning curve and it does require an upfront investment in time and money.

However, most people find that the potential profits more than make up for the extra hassle.

Mainly because nutraceuticals have a few distinct advantages over digital products.

For example…

They’re Consumable

Unlike an eBook or online course, your customers are eventually going to use up their supply and need more. This means lots of repeat customers and purchases.

The Lifetime Value of One Customer Can Be Huge

It’s a huge advantage when you pick the right nutraceutical to sell.

When you have the right product that works well for a large portion of the population, they’re going to keep using it as long as they keep seeing results. This means the lifetime value of one customer can be huge.

Example: I take a premium multi-vitamin and omega 3 fish oil supplement every single day. I’m probably going to take these supplements for the rest of my life. It costs me ~$30/month to take these two supplements. I’ve taken both since I was 25 (I’m 27 right now). If I continue taking these supplements for the next 15 years I’ll have spent ~$5,400 with these companies.

Easy To Sell in Bulk

When you have a good product that people use month after month, it’s easy to sell a larger quantity at any given time, either as an upsell at the point of purchase or as part of some special deal. It’s a no brainer to buy in bulk if your customer knows they’re going to take your supplement every day for the next 12 months and you offer a 12 month supply at a deep discount.

Continuity

Most nutraceuticals have some sort of continuity plan. Recurring revenue of $40 – $100 level per month for one customer is a very nice thing to have. Plus, most people enjoy having the convenience of something being shipped to their door. This combined with the hassle of canceling (even if it’s just hitting a button, sending an quick email or making a short phone call) means they’re less likely to cancel their shipments, even if they find another competitor that’s cheaper, higher quality or has some advantage over your brand.

Why Do Nutraceuticals Work So Well on Display?

Display Feeds the Mass Market

The best nutraceuticals solve an issue that everyone deals with at some point in their life.

Almost everyone will suffer from joint pain, lower testosterone levels, high blood pressure, loss of mental clarity, etc. It’s just part of getting older. However, most people will will want to do something to “slow down” aging.

Any kind of a market where there’s huge demand in a large percentage of the population tends to work well on display.

Easy Targeting

There are a lot of sites where it’s easy to target an older demographic without having to use all these fancy search keywords

Let’s use a testosterone booster as an example. Studies show that your testosterone levels lower by ~1% every year after you turn 30. Lower testosterone is a fact of life. A man who’s 65 years old will never have the same testosterone levels as an 18 year old. However, there’s no man on this Earth who isn’t at least interested in raising his testosterone levels.

Yet, most will not actively think about it unless it gets so bad that it causes some sort obvious health issue. Most guys are not going to suddenly decide they need a testosterone booster RIGHT NOW and head to Google to search for it.

However, if someone sees an interesting display ad tied to a good sales page, they’re going to be aware of their lowering T levels and at least be open to trying it.

The guys that have high-quality products and sales funnels are typically going to be doing at least 5x (if not 10x) the revenue from display compared to search.

Getting Started: Things to Keep in Mind

Starting a nutraceutical business is much different than most other online business models. It has its own set of challenges that will be new to marketers who have never sold a physical product before.

Here’s a quick list of things you’ll need to take into account before you get started.

(Note: This is far and away from a complete list of what you’ll need — just an introduction)

  • An idea/market – What pain/problem do you want to help solve? Is it actual phyiscal pain like joint pain… or do you want to create a supplement that helps with performance (e.g. a pre-workout supplement for bodybuilders). Both can be highly profitable, but I’d recommend you  choose something that interests you. It’s even better if you’re in that niche (you hit the weight room) or if you’ve suffered from that problem in the past and found a solution (you suffered from low testosterone).
  • A wholesaler — You’ll need to find a company that can sell you bulk quantities of whatever herbs or powders you’ll need to create your blend.
  • Some way to assemble the pills — You can do this yourself when you’re first getting started. However,  you’ll eventually need to hire someone or a factory to do it if you want to scale.
  • Some way to ship the product — Again, on day 1 you can pack the boxes and taking them to USPS. However, eventually you’ll need to find a cost-effective way to have someone else pack and ship your product.
  • A good copywriter — Success with cold traffic relies heavily on the copy you use in your sales letter, video sales letter, article lander, or whatever your prospect sees when they hit your landing page. If you’re already a good copywriter — awesome. If not, you’ll have to either learn or hire someone.

Case Study: Force Factor & the Test x180 Ignite Testosterone Booster

test-x180-ignite Test x180 Ignite is a natural testosterone booster sold by Force Factor, LLC. Force Factor is a large distributor that sells a few of different supplements geared towards bodybuilders. They spend a lot on display across all their product lines, but they’re doing some really interesting stuff with this specific product.

Let’s take a look at how they buy their traffic.

Direct Buys and Issues With Google Adwords

get-test-x-ad-spendYou’ll notice that Force Factor relies almost exclusively on direct buys. Direct buys can be a great way to get guaranteed traffic at a lower prices from site proven to work for your offer. However, another reason why Force Factor and other nutraceutical companies rely on direct buys is related to the type of products and claims that some ad networks do and don’t allow. Buying traffic for anything related to health and wellness can sometimes be difficult on high-quality ad networks like Google Adwords.

Google Adwords is very strict with what type of claims, images and copy they’ll let you use on your ads and landing pages. Nine times out of ten you’ll have to work with a network rep to figure out how to make your pages compliant with their terms and conditions if you want to sell a nutraceutical. There are a few nutraceutical companies that do very well on the Google Display Network but be aware that it can be a long and arduous process to keep your pages compliant.

Sex Appeal + This South American Vegetable = High Converting Ads

gettestx.com-476ef42d2553dd60ea0939c15199b5d7gettestx.com-4e9af98a20e92c910537d3e710092d4b There are a few elements to notice here:

  • “Boston researchers…” — This is a great use of specific social proof. Most advertisers will just say “researchers”, yet by just adding the word “Boston” it immediately incites a higher level of trust.
  • “Weird ingredient…” — You’ve undoubtedly seen this type of copy before. Stuff like “1 weird trick to lose a bit of belly fat every day”. A lot of people hate this style of copy because it’s overused. However, if so many people STILL use it year after year then it must still work.
  • Sex appeal — If you’re an older man then there’s no doubt that you want to get higher testosterone levels to feel more energetic, more youthful, and have a higher sex drive so you can get a younger woman like the one shown in the photo.
  • Using a strange picture — The image used in the ad on the right takes advantage of the “weird ingredient”. It’s a picture of some sort of vegetable that’s not commonly sold in western grocery stores (note: That “weird” ingredient appears to be “Cassava“,  a vegetable popular in South America.)

Landing Pages: Pre-selling with an “Article Lander”

Force Factor uses what’s called an “article lander”. An article lander is a landing page disguised as an informative article. gettestx-landin It serves a few purposes:

  • It’s in line with what the user expects when they see the ad. They expect to see what the researchers discovered and what this “weird” trick is. They’re expecting an article — not a sales page.
  • It pre-frames the user for the sale. They’ve already read the article and understood the benefits of the product without being blatantly sold on it.
  • These article landers are more likely to be Google (and Facebook) compliant. The user sees what they expect to see, which is very important for higher quality ad networks.

Once they click the main call-to-action (“Get a Free Sample”), the prospect is led to a more traditional sales page, complete with a lot of different elements to help conversions.

Stuff like… A compelling headline/value proposition… headine-value-prop Authority… social-proof-ff Social proof… testimonials And of course the REAL reason why men buy these supplements: Sex appeal sex-appeal One interesting thing you should take note of is the language they use in the headline and call-to-action button on their order form. sample-formThey don’t say “get a free sample”.

They say, “See if you qualify for a free sample.” The difference is tiny but they’ve probably tested this and seen a lift with conversions.

Why?

People don’t value free stuff. They always want what they can’t have and want to know if they qualify or work. They’re going to value something they’ve been chosen for, not something that’s given to everyone. It makes it feel like less of a commodity. This type of language is great to A/B test for any offer in any niche of any business you’re running — not just nutraceuticals.

Now, let’s take a look at which specific publishers and placements Force Factor buys traffic on.

Where Do They Find Customers? Conservative News Publishers.

get-test-x-publishers A HUGE portion of their spend goes to Newsmax, a news site slanted towards a conservative, older demographic. The copy they use in their ads and landing pages coincides with this demographic (“How Older Men Are Increasing Testosterone”).

As a side note, news sites, in general, tend to work very well for mass market offers in the “Big 3” niches (health, wealth and relationships). Because who reads the news? Everyone. And everyone wants to be healthier, more attractive, make more money and attract more sexual partners.

Pros & Cons

Pros

  • Easy to create — Nutraceuticals are pretty easy to create as far as physical products go. Buy a few powders in bulk, buy a few capsules, assemble them and put them in a jar. You can literally do this in your own house if you want to
  • High potential profits — Your product is going to be easy to sell when you solve an actual problem that a lot of people suffer from.
  • High lifetime customer value — People will keep buying your product as long as they keep seeing results from it.

Cons

  • It’s a physical product — It’s going to take some upfront investment and figuring out how to create, sell and ship a physical product.. You’re going to have a whole net set of issues to deal with. Stuff like… shipping, returns, packaging, holding stock, making deals with wholesalers, fulfilling orders, etc. It’s much easier to sell a digital product.
  • Compliance Issues — There are a lot of ad networks/exchanges that will not allow you to advertise any product that claims to fix/cure any kind of health issue..
  • FTC Issues —  There are certain things that the FTC will still not allow you to say even if you’re completely honest about your product and what it can do. You’ll need to be aware the laws in your jurisdiction, what you can say in your copy, what kind of testimonials and pictures you can use and a whole lot of other stuff that you might have not had to worry about before.
  • Higher advertising costs — Usually (but not always) advertising health & fitness products leads to higher advertising costs due to heavy competition. It might be harder to find sources of cheap traffic for your nutraceutical.

 

4 Comments

  1. Can I use this method with PPC ads? Can’t I direct traffic to a display/sales page? I mean, wouldn’t that basically be the same thing as doing the display? Targeting sites that follow the profile of the visitors and their interests?

    Reply
  2. Another killer case study!

    Very detailed and actionable… keep ’em coming

    Reply
  3. Great to see the End to End Funnel. (Appreciated). Guess an ‘Article Lander’ is a better match for this target audience / age demographic than (say) Video. Any idea as to the Cost Per Lead (or Cost Per Sale) this campaign resulted in? Imagine the inclusion of a Free Sample bumped it up a fare bit. (Nicely put together piece).

    Reply
  4. great stuff !!

    Reply

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