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 with the increase in health care costs, aging population and world financial crisis, more and more people are worrying about their current and future health situation. All this, combined with the increasing awareness behind preventive medicine, has made people seek out alternative forms of medicine and therapy.
Now, although they’ve been around forever, there’s been a recent boom in what are referred to as nutraceuticals.
Nutraceuticals are pills, powders or liquid supplements that fall somewhere between prescription drugs and dietary supplements. Nutraceuticals are supplements that claim to fix some sort of health issue (like 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
Nutraceuticals are made up of proprietary blends of vitamins, minerals and herbs that can be bought by just about anyone.
You don’t need to be a licensed doctor or a researcher at Pfizer to create one.
In fact, there are many “non scientific” marketers who are taking advantage of this booming industry.
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 manufacture 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 a nutraceutical.
We’re not going to get into the nitty gritty details of 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 will go into detail on how one nutraceutical company effectively uses display to sell millions in product per year, plus insights you can take from their marketing strategy and implement them your own business, even if you have no interest in creating a nutraceutical.
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, many marketers have found that the potential profits more than make up for extra work.
Nutraceuticals have many advantages over digital products.
For example…
They’re Consumable
Unlike an eBook or online course, your customers are eventually going to use up and need more. You’re much more likely to have repeat customers and are not going to pitch as hard to make the second sale since they’ve already used the product.
The Lifetime Value of One Customer Can Be Huge
It’s a huge advantage if 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 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.
Let’s do a bit of math. 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 another 15 years, then I’ll have spent ~$5,400 over the course of those 15 years.
Easy To Sell in Bulk
Again, when you have a good product that people use month after month, it’s going to be 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. If your customer knows they’re going to take your supplement every day for the next 12 months and you’re offering a 12 month supply at a deep discount… it’s a no brainer.
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, when most people subscribe to something, the convenience of having it shipped to their door 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 product.
Why Do Nutraceuticals Work So Well on Display?
There are a few unique characteristics that make display advertising a very good traffic source for nutraceuticals.
Display Feeds the Mass Market
The best nutraceuticals are those that solve an issue that everyone will deal with at some point in their life.
Almost everyone at some point in their life 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 dampen the effects of 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
It makes it pretty easy to target on a broad scale and see success…. there are a lot of sites where it’s easy to target an older demographic, without having to get into all these fancy 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, no matter his age.
Now, most men are aware your testosterone drops when you get older. 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 go to Google and search for it.
However, if someone sees an intriguing display ad tied to a good sales page, they’re going to be reminded 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 is a testosterone booster” sold by Force Factor, LLC. Force Factor is a large company that sells a bunch of different supplements geared at the muscle building crowd. They spend a lot on display across all their product lines, but they’re doing some really interesting stuff with their testosterone booster, Test x180 Ignite. Let’s take a look at how they buy their traffic.
Direct Buys and Issues With Google Adwords
Force Factor relies almost exclusively on direct buys. There’s probably a few reasons why they do this. Direct buys can be a great way to get guaranteed traffic at a lower prices from site proven to work for your offer. However, there’s another reason why Force Factor and other nutraceutical companies rely on direct buys and it’s related to the terms & conditions on popular ad networks. See, selling anything related to health and wellness on ad networks with high-quality traffic (like Google Adwords) is difficult.
Networks like Google are very strict with what type of claims, images and copy they let you use in your ads and landing pages. Nine times out of ten you’ll have to work with a network rep and figure out how to make your pages compliant with their terms and conditions. There are a few nutraceutical companies that do very well on the Google Display Network — you’ll see one in just a second — but just be aware that it can be a long, confusing and frustrating process to meet the terms & conditions on some of these ad networks. On that note, let’s take a look at what their ads and landing pages look like.
Sex Appeal + This South American Vegetable = High Converting Ads
There are a few elements to notice here:
“Boston researchers…” — This is a great use of specific social proof. Many companies just say “researchers” but by just adding the word “Boston” it immediately incites a higher level of trust.
“Weird ingredient…” — You’ve undoubtedly seen this before because it’s been used at one point or another by most successful marketers in health and fitness niches (“1 weird trick to lose a bit of belly fat every day” is one of the most common ones). One thing I want to point out here is that most people hate this because it is unbelievably hackneyed. Yet, if so many people are STILL using it, even years later… then it must still be working.
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 drink so you can get a younger woman like the one shown in the photo.
Using a strange picture — The image used on 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 places like northern Argentina, Brazil and Bolivia.)
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. 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 — not a sales page. They get what they expect.
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 and Google and Facebook harp constantly on ensuring a great user experience.
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 elements that savvy marketers use to sell their products. Stuff like… A compelling headline/value proposition… Authority… Social proof… And of course the REAL reason why men buy these supplements: 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. It’s not “Get a free sample”… it’s “See if you qualify for a free sample.” A slight difference but one they’ve probably tested and seen a lift with conversions. Why? People don’t value “free” things that are given to everyone who wants one. People always want what they can’t have. When you need to “work” for something instead of just being given it you’re going to want it more. It makes it feel like it’s not some commodity that they offer to anyone — only those that qualify. T
his 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 is using to buy traffic to Get Test X.
Where Do They Find Customers? Conservative News Publishers.
A HUGE portion of their spend goes to Newsmax, a news site that slants 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 think about it… who reads the news? Everyone. And everyone wants to be healthier, more attractive, make more money and attract more sexual partners. And the best way to target these markets and publishers is through display advertising.
Pros & Cons
Pros
Easy to create — Nutraceuticals are pretty easy to create as far as physical products go. A few powders in bulk, a few capsules, and a jar to put them in. You can literally do this in your own house if you want to (most do when they’re first starting)
High potential profits — When you solve an actual problem that a lot of people suffer from, your product is going to be high in demand.
High lifetime customer value – If people are seeing results from your nutraceutical they are going to want to keep buying it. All you have to do is provide a high-quality product and great customer service for them to remain a customer.
Cons
It’s a physical product — While it’s easier to create than say, an electronic device like an iPad, it’s still going to take some upfront investment and figuring out, especially if you’ve never sold a physical product before. You’re going to have a whole bunch of different issues to deal with then when you sell digital products or software. Stuff like… shipping, returns, packaging, holding stock, making deals with wholesalers, fulfilling orders, etc.
Compliance Issues — There are a lot of ad networks/exchanges that are might want nothing to do with your product. This is very tricky ground, because there are a lot of expensive nutraceuticals that make huge claims but actually do nothing. This leads lots of pissed off consumers.
FTC Issues — Even if you’re completely honest about your product and it’s benefits, there are certain things that the FTC will still not allow you to say. You’ll need to be aware what sources you need to cite, what you an 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 a higher advertising cost. Any product that a lot of people are going to be interested in and that can make a lot of money is going to have higher advertising costs due to heavy competition. It might be harder to find sources of cheap traffic when you’re advertising your nutraceutical.