full

Google Ads ROAS is Shrinking

Regina discusses a major issue: the shrinking of Google Ads ROAS (Return on Ad Spend). While ROAS was once a reliable measure of ad performance, it has become less dependable. If you still rely on ROAS to gauge your campaign's success, you should think again and listen to this episode now.

Regina Bellows, Executive Director of StarterPPC, explains why Google's user tracking capabilities have weakened. She then presents actual client data to show the ROAS decrease impacting various businesses.


Additionally, she provides tips on how to better evaluate ad performance using the Media Efficiency Ratio (MER). Listen to this episode now to gain insight into the ongoing challenges faced by advertisers and accurately determine if your Google Ads campaigns are effective for your business.


This video is from StarterPPC’s YouTube channel, check it out if you want to maximize ad spend & achieve better results with a smaller budget:   

 / @starterppc  


Related videos on the StarterPPC YouTube channel:

The #1 Mistake Business Owners Make With Paid Ads:   

 • The #1 Mistake Business Owners Make W...  

Why Google Ads Perform "Worse" Than Facebook and Amazon Ads:   

 • Why Google Ads Perform "Worse" Than F...  

Grow the Google Ads Algorithm Like a Muscle:   

 • Grow the Google Ads Algorithm Like a ...  

Unlock Your Business's Full Potential: Increase Your Average Order Value:   

 • Unlock Your Business's Full Potential...  

Google Ads Dashboard Hack to Simplify Lead Tracking:   

 • Google Ads Dashboard Hack to Simplify...  


0:00 Google Ads ROAS is Shrinking

1:20 Google's Privacy Lawsuits and its Effects on ROAS

5:01 Need help scaling Google Ads with a limited budget? Let StarterPPC help you!

6:31 Analyzing ROAS vs. MER



Need help with Google Ads? Get your FREE action plan here: https://sol8.com/ap/


💣 The Ultimate Guide to Google Ads for 2023:   

 • The Ultimate Guide to Google Ads for ...  


🔥 Get your copy of You vs. Google: The (Very) Unauthorized Guide to Google Ads

on Amazon here: https://www.amazon.com/dp/B0BWSNLNRN


This ULTIMATE GUIDE gives you EVERYTHING you need to know about how to set up, build and optimize your Google Ads Performance Max campaigns: https://sol8.com/performance-max/


💰 Have an ad budget that's less than $5,000/month? If so, check out our sister agency, StarterPPC, where you can get Google Ads management for a fraction of the cost!

Visit https://www.starterppc.com for more information. 🚀


We have dozens of free resources, courses, downloads, calculators, and other goodies. You can access all of them on our Free Stuff page!

Visit: https://sol8.com/free-stuff/


💯The Ultimate Guide to Google Ads for Lead Generation:

https://sol8.com/google-ads-lead-gene...

🛒 Everything you need to know about Google Ads for eCommerce:

https://sol8.com/google-ads-for-ecomm...

🧲 The only guide you’ll ever need for Google Ads for YouTube:

https://sol8.com/google-ads-for-youtube/


👉 Do you want to be featured on Daily Google News? Do you have epic value you can offer our audience? You can pitch your idea here: https://sol8.com/pitch/

--------------------------------------------------

👉 Get our latest content every Monday, straight to your inbox. Sign up for our news “Traffic Ahead”: https://sol8.com/newsletter/

--------------------------------------------------

Get the latest updates, expert tips, best practices, and PROVEN Google Ads strategies every single day. Subscribe here:   

 / @solutionseight  

--------------------------------------------------

👉 Want to become a Google Ads expert?

We’ve demystified how Google works, and laid out everything you need to know in Google Ads–from scratch!

Learn how to build, launch and manage high-performing Google Ads campaigns in this Google Ads Course: http://sol8.com/paid-traffic-mastery

--------------------------------------------------

Solutions 8 is a global authority in the Google Ads space and one of the world's leading PPC agencies.

Our YouTube channel is dedicated to sharing our most effective marketing strategies to help you achieve your business goals.

--------------------------------------------------

👉 WOULD LIKE TO SCALE AND GROW YOUR BUSINESS WITH PPC?

Sign up for a FREE Action Plan today: https://bit.ly/sol8-home


Connect with Kasim here: https://smartlink.metricool.com/publi...


⬇️️ You can find us here ⬇️️:

Website: https://sol8.com/

Twitter:  

 / solutions_8  

Instagram:  

 / solutions_8  

Facebook:  

 / solutions8llc  

LinkedIn:  

 / solutions-8  

#googleads #digitalmarketing #googleadsbestpractices #ppc

Transcript
Regina:

Hi everyone, Regina here with Starter PPC.

2

:

Oh my gosh, the ROAS shrink is real,

. I have found all the data for you.

3

:

If you have been following us for the

past year, maybe two years, Or if you've

4

:

worked with us, you know that we talk

and talk about how Google Ads is losing

5

:

its ability to track users very well.

6

:

And that's why we've started

using a different metric from

7

:

ROAS, return on ad spend.

8

:

Instead, we now track

media efficiency ratio.

9

:

Both of these metrics usually just

applies to e commerce companies.

10

:

If you are a lead gen company,

this concept still applies to

11

:

you because Google is losing its

ability to track your users as well.

12

:

But for you, we would be using total

business cost per new customer.

13

:

Whereas in the world of e

commerce, I'm looking right now

14

:

at ROAS and ROAS versus Merck.

15

:

A lot of our clients, they

come to us still wanting, a 300

16

:

percent ROAS or 400 percent ROAS.

17

:

And they say to us a year or two ago

I was getting three or 400 just fine.

18

:

How come you guys can only get me 200?

19

:

This is what's happening.

20

:

Google is being.

21

:

sued for privacy law restrictions.

22

:

Sued for data gathering.

23

:

They're getting put on a leash.

24

:

This is happening progressively over time.

25

:

In addition, they now have things are

coming at them from all angles, right?

26

:

They also have Apple, which

is now stripping URLs whenever

27

:

someone clicks on an ad.

28

:

For privacy reasons, because Apple's

launching their own ad platform and they

29

:

want Google's ads to look less profitable.

30

:

What's happening is a 300 percent

ROAS back in the day is the equivalent

31

:

of a 200 percent ROAS today.

32

:

And I'm just using round

numbers here, these are not.

33

:

Real numbers, right?

34

:

It's an unknown.

35

:

We don't know how much

shrinkage there really is.

36

:

Specific to an industry.

37

:

Some industries get restricted by privacy

laws more than under other industries.

38

:

An example of this is if you are

in the financial planning industry.

39

:

Supplement industry, medical

industry, there's no such

40

:

thing as remarketing for you.

41

:

Whereas back in the day, it

would have been okay, right?

42

:

So that's one major example of a huge

restriction on the ability to track users.

43

:

I have pulled up dozens of accounts data

across a wide variety of industries,

44

:

this is data from our clients.

45

:

I have tabs open.

46

:

Each tab is a separate manager account.

47

:

So we have 5 different manager

accounts with, 100 clients in each.

48

:

Maybe not a full 100, but we had

to split them up because , you

49

:

can only put, a certain amount of

accounts within each manager account.

50

:

So we have 5.

51

:

And, what you're seeing

here is data across.

52

:

21 accounts in our first manager account,

and I'm only showing 21 accounts because

53

:

what I've done is I've put some filters

here that says that the ROAS has to

54

:

be at least 80 and I did that 80%.

55

:

And I did that just to

take all of the lead gen.

56

:

accounts or the accounts that

aren't tracking conversion value

57

:

out of the equation for our graph.

58

:

Here is from January 1st, 2020

hrough now, the end of August:

59

:

Almost four years later, you

see a downward trend and this

60

:

is across 21 accounts, right?

61

:

So this is the average ROAS per month.

62

:

Almost four years, across

21 accounts on average.

63

:

Each of our manager accounts,

this one, I believe has 19 again,

64

:

downward trend manager account.

65

:

Number three, manager account.

66

:

Number four, manager account.

67

:

Number five, downward trend I wish it

wasn't the case, you guys, but it's true.

68

:

Unfortunately, ROAS has just

become an unreliable metric.

69

:

And here is the proof, It's not just you.

70

:

It's everyone.

71

:

It's not just us saying this, it's fact.

72

:

Hi there, quick interruption.

73

:

Do you know the main thing that

prevents small business owners from

74

:

getting their Google ads account into

a position to grow and scale budget?

75

:

A lot of businesses, especially

those that are just starting

76

:

out, have limited budgets.

77

:

And so because of this, they're turned

away by most ad agencies because most ad

78

:

agencies have minimum budget thresholds

that they're willing to work with.

79

:

So what happens is the business owners

end up learning Google ads themselves.

80

:

And the problem with that is

that most of the advice online is

81

:

geared towards larger accounts.

82

:

And the advice doesn't have any of those

strategies or tricks that can kickstart

83

:

the algorithm into giving a small

account a leg up over larger competitors.

84

:

So it often just doesn't work.

85

:

And the business just ends up

losing money month over month.

86

:

If this sounds familiar,

starter PPC can help.

87

:

We offer Google ads management services

that are designed for accounts that

88

:

have between 1000 and 5, 000 budgets.

89

:

And Because all of our clients are

just starting out, we've come up

90

:

with ways to keep our management fees

significantly lower than most agencies,

91

:

because we know that every dollar saved

on management fees just goes towards

92

:

the ad budget, which is going to help

the algorithm gather speed and power.

93

:

So if you're serious about growing your

business and you'd like a team of Google

94

:

ads experts to help you without breaking

the bank, check us out at starterpbc.

95

:

com.

96

:

Okay.

97

:

Back to the video..

98

:

I wish I had a way to tell you guys.

99

:

Here is the exact return on your ad

spend that you got from Google ads.

100

:

I don't have a way to do that anymore.

101

:

All I can do is tell you,

this is the return on ad spend

102

:

we can see in the dashboard.

103

:

And let's look at the return on

your total marketing spend, right?

104

:

Which is MER, Media Efficiency

Ratio, for your business.

105

:

And these two numbers are

going to be different.

106

:

For example, if it's 200 percent

ROAS inside the ad account.

107

:

For example, your media efficiency

ratio, the return on your marketing

108

:

spend for your business will

usually will always be higher.

109

:

For example, 300%.

110

:

And we have to assume that the 200

percent is then good enough, right?

111

:

Good enough to push for growth because

the business is showing profit.

112

:

And the only way that you can

really try to gauge whether Google

113

:

ads is impacting that total 300

percent NER media efficiency ratio.

114

:

Would be to.

115

:

Lower your Google ad spend or raise

your Google ad spend and see how is

116

:

that media efficiency ratio impacted

for your business as a whole.

117

:

Unfortunately, this isn't a clean test.

118

:

Because so many other

factors can affect it, right?

119

:

If the weather shifts or if the economy

shifts during that experiment, it can have

120

:

a huge impact on business the everything.

121

:

And so you don't know for sure whether it

was the budget that affected it or not.

122

:

This is why when you work with starter

PPC or with solutions eight, we usually

123

:

recommend adding 20 percent budget month

over month in the beginning, at least,

124

:

to try to gauge whether that media

efficiency ratio is going down, staying

125

:

the same, can it withstand this growth?

126

:

Is the business going to be profitable?

127

:

Is there room for scale?

128

:

I hope that these giant graphs

that I've pulled up on my screen

129

:

here have managed to convince you

guys that the ROAS shrink is real.

130

:

Thank you for watching.

131

:

If you have any questions, let us know.

132

:

You can check us out at starter ppc.

133

:

com.

134

:

You can also check out our sister

agency solutions soul eight, com

135

:

and we will talk to you soon.

136

:

Thanks.

About the Podcast

Show artwork for The Google Ads Podcast
The Google Ads Podcast
PPC Strategies, Tutorials, Tips, Tricks, Hacks, and Best Practices