The Secret to Google Ads Success: Mastering Media Efficiency Ratio (MER)

John: 00:00:11

We're gonna dive right in.

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And the topic for today, the discussion topic is gonna be

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MER Media Efficiency Ratio.

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And what MER is Media efficiency Ratio is thinking like company

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roaz, so all cash spend out on paid media versus all revenue in.

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. The reason why this is important is because you are gonna have

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multiple ways that a person's going to convert post the first click.

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But the first part is where did that first click come from?

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That is scalable, that's trackable, that's measurable, and that can also

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have an initial ads been dumped into it.

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A lot of times Google ads agencies fall too much into brand.

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They say, well, brand's got the best raw as and raw eyes

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must be the great measurement.

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So I'm gonna focus on raw eyes and.

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600% roaz on my, on my campaign.

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So everything must be working fine.

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What they're seeing is only scratching the surface, , of what is actually going on.

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So when you run only brand, you're capturing the last step of the sequence

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or sometimes the re step in the sequence.

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What I mean by that is your existing customers, the existing customers will

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purchase from you by Google your brand name, clicking on the first thing that

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they see, and then going, buying again.

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Now that's not acquiring a new customer, but.

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Mer looks decent.

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However, it's in the wrong audience.

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So we're gonna be talking about the audience selection Mer, the difference

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between K and LTV versus Roaz, and we're gonna do the proper way.

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To identify what's actually working, how you can scale it, and what is

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actually delivering you a solid return.

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Now this works a little bit better when you actually have a campaign, , or when

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you're running Google Ads just by itself.

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It's a lot easier to understand.

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So I have a, , example that I'm gonna share today of just

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a company that has been running only Google Ads for a few years.

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Just with us.

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We're gonna identify the actual cpa, we're gonna identify the

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actual MER and we're gonna identify.

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what Google Ads says versus what happens in reality.

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And we're going to be able to restructure what we believe was our

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target to what our new target can be.

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So hopefully it'll take away, , kind of a different way to think about

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Google ads and your different ways to think about audience.

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Different way to think about automated processes that Google has put in place

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when focusing specifically on conversion value, because that's not a good

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indicator of success, conversion value.

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Roaz is simply an indicator that a purchase took place to

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cost this X, but it, was it new?

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We're not sure.

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Was it repeat?

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Don't know.

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Was it an existing customer?

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, or was it remarketing?

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We, we don't know.

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What do they first find out about you?

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Through a Facebook.

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Not sure we're going to identify top conversion pass and where you should

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put the ad spend and in what channels so that you are not falling into

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the, well, my raw eyes looks good, but my new customers keep declining.

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How is that happening?

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. Here's what we're gonna be starting off with here, is I'm gonna go ahead and

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share screen, and I'm gonna come up, or I'm gonna grab this campaign here.

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Now, this campaign, , is running a performance max, a dynamic search ad,

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another performance Max, and different group products, and a standard shopping

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campaign that was just launched.

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And what we can see is in the last 30 days, oh, and,

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and by the way, we have a 20.

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$30 c p a goal.

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That's what we want to spend in a cost per conversion.

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Now, sometimes we hit it, sometimes we don't.

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This is more of a Black Friday.

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, so we're a little bit above goal right now, but it's okay because here's where

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we can kind of identify what's going on.

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We know that we've spent 18,000 and if we made 180,000 in conversion

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value for a close to a thousand row, And we have 551 sales.

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Now I'm using the Google Ads conversion tracking, which typically Google Ads.

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Conversion tracking is actually fairly accurate.

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It's not coming from the website, , or not conver coming from the

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conversion source of analytics.

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It's coming from the website we're using.

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Tag.

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Tag is supposed to be very, very good at identifying, , post click 90 days.

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But what we found is that with iOS 14, with more privacy issues and more

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kind of, , disruptors in the technic.

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Ecosphere, we find that Google is actually tracking less and

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less and less conversions.

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That's okay.

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But also means that the way you measure must be different.

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So we have to look at this.

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If we're looking at 18,001 80 in the last 30 days, let's just look at all

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of the analytics and what has been attributed , to all the, , revenue.

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So we know that in the last 30 days, we've actually made 335,000.

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Now that's.

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335,000 is much bigger than the 180,000.

John: 00:04:31

Well yeah, it says, you know, organic search made 76,000.

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We have direct to made 78,000.

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We have 138 that's attributed to paid search.

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That looks, you know, a little bit less of a Google Ads track.

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So that's okay.

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But here's the interesting part is Analytics, which is a last click, same

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day attributed network showing 138,000.

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Were showing 180 here.

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That's fine because people that come back, You know, we're gonna see that

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to people that come back organically.

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We're gonna see that.

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But what was really interesting is this may be, , the last click, but there

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also is people coming in organic search.

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There's also people coming back directly.

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But also people come back through email.

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they change devices, they change IP addresses, they change wifi connections.

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They start their laptop, , at Starbucks.

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They go home and they finish on the computer at at their home.

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There's many different ways that we are going to lose a person

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throughout the conversion journey.

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So let's look at MB R then.

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So let's not focus on Roaz.

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Roaz says we have, you know, 9 95.

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However, we already know that there's more transactions coming through

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here and here, and this is what I.

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Look at what they call the model comparison tool.

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This is a simplistic way to kind of prove a situation is actually taking place, the

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first interaction and the last interaction in your model comparison tool in ua.

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Now, GA four is gonna have something similar.

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It's not working right now.

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It's a little bit broken, but it's a good way for us to identify, hey, what

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it may actually be working right now.

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So we can see here now, spend is not actually pulling through.

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That's okay.

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It's for some reason, , UA and, and Google ads are not, they're not speaking

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properly right now for some reason.

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But long story short, what we can see is that just inside of the analytics,

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the first interaction to the site that was coming from paid search

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was responsible for 434 conversions.

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The last interaction is 245.

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Now this is outside of, you know, u t m tracking.

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This is and, and what the Google ADSD tag is showing.

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This is a different method of attribution, but we know we're losing 43.55% of all

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of our conversions that come in through Pacers, through other different channels.

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Some are referral, some are using social.

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Some are coming back organically, some are coming back directly, and the way that you

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can kind of prove this, you're looking at what they call the top conversion path.

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Again, you don't need nor being to identify what's going on.

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You would need NorAm if you want this number to match up pretty well.

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. But what we can see here is that the people that choose one path length are

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376, but the people that choose more than one path length is a thousand.

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So there's almost three times, or actually more than three times,

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the amount of people that take more than one path before they convert.

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That is going to be the first indicator that you're losing some conversions.

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Inside of both your Google ads and Google Analytics, , from the original source.

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The next thing you wanna look at is if you look at all of the conversion

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paths, for example, and you go down here and you type in paid this in

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the last 30 days, is gonna show that there is a lot of conversions here

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that are coming through other sources.

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So people that click on a paid ad and go directly, that's the second most used.

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And that is 34,561 pay search to two directs.

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That's 25.

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, 25 conversions, that's 7,000.

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So you can see that there's a lot of paid search, obviously is the

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first section, and that's what we're trying to drive as much, most

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amount of cold traffic as possible.

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When you see this here and you see the pay search.

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is most often number one.

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Direct is most often number two, and then , you kinda lose 'em between, you know,

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sometimes organic or you know you have another direct or you have another paid.

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But you do see that there's a lot of people that come back directly.

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Now, what this means though is that the direct conversions that

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happened initially, and let's go back to the model comparison tool.

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The direct conversions that happened initially are not

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usually direct conversions that started from a first interaction.

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There's very little.

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and everyone, I believe if you kind of take off , your, potentially

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just Google ads hat and just think of, , just think about normal day-to-day

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life of a person that's shopping.

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Very little time.

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Do you just think of a website, type it in directly into your browser and then go by.

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, that doesn't happen normally if they haven't mentioned that website.

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You type in the name of the company, you come through organic.

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. So why are we having 334 first time transactions in direct?

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Well, those are just the people that we cannot see.

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Google cannot identify them.

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They say we don't know where they originally came from.

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They somehow typed in.

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The URL of the company perfectly and clicked enter in the URL bar, visited from

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the first time ever and then converted.

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Oh, and by the way, those people that have never been to our website

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before that just found us directly by typing at our website perfectly.

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They, , are 15,000 users.

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50,434 are new.

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That's not true.

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This is.

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Just in the window that you're looking at.

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So the last 30 days, these people are quote unquote new, but

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they're also new 30 days ago, and they were also new 60 days ago.

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So these are the, the repeat people, and those people have the best, or one of

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the best conversion rates we're talking about, not email and and referral.

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So , our direct.

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Has a better conversion rate that are paid, has a better conversion rate

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than organic, and they're also new.

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And there's just 272 people that just found us out of,

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you know, just sheer luck.

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And that happens for years.

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So we know that cannot be the case.

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Google Ads misses these, Google Analytics misses these, these are people that

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come back to the site where Google cannot string along a previous visit.

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And I know this is the case because we've only been running Google Ads, even not

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even social traffic for many, many years.

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So that brings us to.

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So how do you calculate mer?

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Now what are we talking about?

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We talking about merr?

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Well, let's go back to the actual aspect here.

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We know there's 18,001 40.

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So let's do this.

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Let's pull in a calculator and we have 18,001 40.

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Okay, now let's pull out another calculator here.

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And that's actually taken the revenue.

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So 3 35 1 62.

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So this is MER is all of your revenue divided by of your spend.

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So 33 5 1 62.

John: 00:10:18

So this is divided by three, , sorry, 18.

John: 00:10:22

Uh, one 40 and we have an 1847 mer.

John: 00:10:26

That's actually the company roaz Google Ads is getting us a thousand,

John: 00:10:30

but everything that it can track, all adds up to an additional 847.

John: 00:10:35

Well, that's a big difference.

John: 00:10:37

That's a, that's a very large difference.

John: 00:10:38

So you say, well, John, some of those, you know, are organic.

John: 00:10:41

Yes, absolutely.

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But there are also those people that are clicking on Google Ads

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and then coming back organically.

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There's also people that visit organically by tapping in the brand name that.

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That Google can't track how they even found out about us.

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So MER is a really good way to identify what the all cash in all cash out model

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is because theoretically, if you were to increase this 18,140 in spend, you

John: 00:11:01

should equal a higher, , , , revenue.

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So just remember the 1840.

John: 00:11:06

Now here's what's interesting is when you kind of go back to April,

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or sorry to January 1st, we've kept everything pretty, pretty safe.

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If we look at January 1st to December 29th compared to the previous period, and

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we hit apply on all the channels here.

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Let's see.

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3% more users.

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, 3% more revenue.

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It's almost identical.

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3.24.

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3.34, and the transactions are up a little bit here.

John: 00:11:31

So what does this mean?

John: 00:11:32

Well, we've been keeping the same ad spend and we've been keeping

John: 00:11:35

the same, not not ad spend.

John: 00:11:37

We actually spent a little bit more just because ad ad spend became a little

John: 00:11:40

bit more traffic, but we switched from standard shopping and search to smart

John: 00:11:44

shopping to Pmax, doesn't matter.

John: 00:11:46

All of it's basically the same thing.

John: 00:11:47

That's why I have a.

John: 00:11:49

that's why one of the next episodes we're talking about is a standard

John: 00:11:51

is, performance Max actually working?

John: 00:11:53

And if it's remarketing too much existing users.

John: 00:11:55

But here's what's really interesting is when you switch campaign types, all you're

John: 00:11:59

seeing is the reallocation of things.

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Why did organic go down 11?

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Why did pay search go up 42 then, you know, why did direct stay

John: 00:12:07

the same but also made 22% more sales, but 22% less sales in

John: 00:12:11

organic was 7% more in paid search.

John: 00:12:13

So that's a big increase for not a big return.

John: 00:12:15

, it doesn't matter.

John: 00:12:16

All of this is just you're, you're identifying the different

John: 00:12:19

path flow of traffic through all of your individual channels.

John: 00:12:21

But the main goal is if your traffic is staying about the same and your

John: 00:12:24

revenue is staying about the same, this really doesn't matter too much.

John: 00:12:27

There's not a whole lot of actual, , , changes in actual user behavior

John: 00:12:32

or ad spend or amount of visitors.

John: 00:12:35

It's just the way that Google decides to reallocate it.

John: 00:12:38

Here's what.

John: 00:12:39

Before last year, we were running a lot of smart shopping.

John: 00:12:41

We also ran dsa, we also ran standard shopping.

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We also ramp brand, et cetera.

John: 00:12:45

This year we're happy Pax.

John: 00:12:47

Well, PAX, what Pax did was take away from your organic search

John: 00:12:50

and give it back to itself.

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So we started robbing from this area and we started giving it back to this area.

John: 00:12:56

But the people, because we were running a brand campaign when they started to,

John: 00:12:59

Google search us again, or when they started to search us again in the browser,

John: 00:13:03

they'd come back here most often and they would actually start to convert.

John: 00:13:06

So this Aspen here is directly tied to these two areas here.

John: 00:13:12

. So a 42% increase equals a 23 plus 11%, and there are some, obviously

John: 00:13:16

other, , referral and that kind of stuff is, , getting more and more revenue.

John: 00:13:20

This is actually just from a different payment sequence on the

John: 00:13:22

website using different pay apps.

John: 00:13:24

Take credit for it as referrals are referring our own traffic

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back to ourself and that's where the actual aspect is going.

John: 00:13:29

So don't really pay attention too much to the singular channel because when

John: 00:13:32

Google says, Hey, you know what, I'm just gonna go up to your brand name

John: 00:13:35

more often and I'm gonna scope of all people try to look for you organically.

John: 00:13:37

Well, that happens here.

John: 00:13:38

And you're like, oh no, my organic, my SEO's going down.

John: 00:13:41

No, your SEO is 25% brand.

John: 00:13:42

And Pvac decided to take it.

John: 00:13:44

MER is important to mer.

John: 00:13:46

If I put a little bit more money in, get a little bit more traffic and

John: 00:13:49

we get a little bit more revenue.

John: 00:13:50

The worst thing that a paid ads person, whether is Facebook, Instagram,

John: 00:13:54

Snapchat, TikTok, doesn't matter.

John: 00:13:55

Worst thing that can happen to a person a uh, an ads person is you add 50%

John: 00:13:59

more ads spend and get very little new traffic, but more repeat traffic and

John: 00:14:04

they make the same amount of sales and you just cut your profitability in half.

John: 00:14:07

So this is a way to calculate Mer and what's interesting about this is when you.

John: 00:14:14

At the all cash in all cash out model, you can start to identify

John: 00:14:19

areas that are actually going to help you move the needle.

John: 00:14:23

You'll know that inside of Performance, max, this one here, for example, we just

John: 00:14:28

started this one a few months ago, but it has worked really well, but we can

John: 00:14:32

look at things like, is there a lot less?

John: 00:14:35

, is there a lot?

John: 00:14:35

You know, I do have, you know, a non-brand here that has conversions.

John: 00:14:38

I do have a non-brand here that conversions.

John: 00:14:40

I have a brand here that's not too bad.

John: 00:14:42

but a lot of this is gonna be nice, good cold traffic.

John: 00:14:44

So would I, would I kill this campaign?

John: 00:14:46

No.

John: 00:14:46

I'm just actually going to try to add more.

John: 00:14:49

of a standard shopping approach to the performance Max and see if

John: 00:14:52

I can start spending on that one.

John: 00:14:53

And it is, it's started to actually spend immediately within the first day.

John: 00:14:55

This one's still in, its its bid strategies.

John: 00:14:58

There's seven days left from running.

John: 00:14:59

I hit my daily budget right off the bat.

John: 00:15:00

I'm just seeing if this will run in conjunction with these two here.

John: 00:15:04

Now, when I say merr, what do I mean about Mer Mer?

John: 00:15:07

Because we go back to that media efficiency ratio, all the money I put

John: 00:15:10

in versus all the money I've been able to take out, what this is going to

John: 00:15:14

do is identify areas that that money actually started to show a return.

John: 00:15:20

So if I put it into pmax, you have to identify what Pmax is going to do with it.

John: 00:15:26

Is it going to go after new cold traffic?

John: 00:15:29

Is it gonna go after repeat traffic?

John: 00:15:32

Is it like your existing customers?

John: 00:15:33

Is it gonna go too much remarket?

John: 00:15:36

And if you're only running Google Ads, it's going to usually perform the best.

John: 00:15:43

If you're running more omnichannel, it's going to look better,

John: 00:15:48

but you're going to lose.

John: 00:15:50

What I mean by that is you are gonna see more users and more revenue

John: 00:15:54

attributed to your paid search, but like I showed you, in that media mix,

John: 00:15:58

you're robbing all of your return traffic or all of your branded organic.

John: 00:16:02

That would've come in through other channels.

John: 00:16:04

So Google ADSD spent more Google ads made more money because

John: 00:16:07

Google ads took more credit.

John: 00:16:08

Then your directory organic went down, but you spent more

John: 00:16:10

but , your gross profit's the same.

John: 00:16:12

Your net profit is now down cuz your ad spend increased.

John: 00:16:16

So mer means if this is actually a cold traffic campaign and I'm using the

John: 00:16:22

majority of my dollars on new users.

John: 00:16:25

That means that mer, which is that media efficiency ratio, let's just

John: 00:16:28

say 18, should stay roughly the same.

John: 00:16:30

If I add 30% more ad spend by MER, should stay the same.

John: 00:16:34

About the same, and I should get 30% more revenue.

John: 00:16:38

Lately, we've actually been seeing that Pmax does not do that.

John: 00:16:41

Pmax, especially when you're running omnichannel MER dips.

John: 00:16:45

Would you add AVE to Pax?

John: 00:16:46

Why?

John: 00:16:47

PAX has a pushing rope.

John: 00:16:51

What I mean by that is you are only about 30 to 40% effective at growing new

John: 00:16:57

customers for every dollar you put in.

John: 00:16:58

So 30 cents to 40 cents of that dollar you put into Pmax is only going to do traffic.

John: 00:17:03

Pmax is designed to find roas.

John: 00:17:07

It's designed to find sales cheap sales that have high value because maximize

John: 00:17:13

conversions or maximize conversion value either way, doesn't matter.

John: 00:17:16

Same.

John: 00:17:17

, just you're measuring two different sides of the same coin.

John: 00:17:20

A sale.

John: 00:17:22

So when you're looking at performance max, performance max uses search shop,

John: 00:17:25

YouTube, gsb, display, discover, and it also does new existing and and repeat

John: 00:17:30

or new existing and remarketing traffic.

John: 00:17:33

Well sounds in theory, like it's gonna be a good thing.

John: 00:17:37

You say, okay, well if I put another dollar.

John: 00:17:39

My mer, my ratios just say the same cause it'll gimme more traffic.

John: 00:17:43

That's already performing good.

John: 00:17:44

No, you put a dollar in and it takes 33 cents of that dollar.

John: 00:17:48

It gets a new person who takes 33 cents and remarks the existing

John: 00:17:52

customer hoping that they buy again and takes 33 cents of a person yesterday

John: 00:17:55

and saying, are you ready to buy?

John: 00:17:57

That is good.

John: 00:17:59

Theoretically, where this gets.

John: 00:18:04

is because that 33 cents that went to new cold traffic is going to start to go to

John: 00:18:10

your website, start to convert over time.

John: 00:18:13

You put a dollar in, get 33% of that dollar more return.

John: 00:18:18

So now your MER dips a hundred dollars in $33 of new customer.

John: 00:18:23

That's a bad.

John: 00:18:25

. The reason why this happens though, is because of Google's algorithm targeting

John: 00:18:28

people that they think are going to buy.

John: 00:18:30

Same thing that happened in smart Shopping was that he put a dollar in and says,

John: 00:18:34

okay, this person's been on the website for a week, so hopefully they buy, so I'm

John: 00:18:37

gonna put another ad, or I'm gonna show up for a branded ad, click for that person,

John: 00:18:40

or I'm gonna start to display your market.

John: 00:18:41

Or, you know what?

John: 00:18:42

Even better, I can spend this money all day long on YouTube.

John: 00:18:45

And it shows it a YouTube ads to them.

John: 00:18:46

But you pay per impression.

John: 00:18:48

F max will find a way to spend.

John: 00:18:49

Doesn't mean it's gonna spend it right, but it will find a way to spend, it has

John: 00:18:51

outbound capabilities so it can show as to people that you'll pay for, even

John: 00:18:55

if they don't like the ad, not even clicking on the ad, like YouTube just

John: 00:18:59

saying there's a fail point in there that it will fall into, which is the

John: 00:19:03

point of diminishing returns to the additional ad spend that you put in.

John: 00:19:07

So when you're talking about will I, will I see an equal return in pm m.

John: 00:19:13

Most often not, and most often, or, or even more often know

John: 00:19:18

if you're running omnichannel.

John: 00:19:19

Now, what I mean by omnichannel is . This problem that I'm talking

John: 00:19:23

about gets exacerbated when you're running third party, not third party.

John: 00:19:28

Other sources of traffic like Facebook or Instagram, . What Pmax can do is

John: 00:19:34

it's going to look at all the traffic that's existing on the site and say, Hmm,

John: 00:19:37

that's my low hanging fruit right there.

John: 00:19:39

Those people have been looking at three or four products.

John: 00:19:41

They've been here for the last 18 minutes and they haven't hire 'em

John: 00:19:43

into their cart, and I'm going to start to show up more often for those,

John: 00:19:48

for tho those people that are there.

John: 00:19:50

Well, you put in money into Pmax saying like, where's all my new traffic?

John: 00:19:54

It says, yeah, we gave you new traffic.

John: 00:19:55

Remember new traffic and analytics, they're new today.

John: 00:19:57

Haha.

John: 00:19:58

And those people are still not buying yet.

John: 00:20:00

So you're hitting a point of diminish of return to put dollar in.

John: 00:20:02

No more sales, but dollar more, more sales.

John: 00:20:04

Put dollar more traffic.

John: 00:20:05

No more sales.

John: 00:20:06

Why?

John: 00:20:06

Because you're simply showing up more.

John: 00:20:09

Often to the people that are in their eight day sales cycle.

John: 00:20:12

And no matter how much more money you add in doesn't mean that those

John: 00:20:14

people are going to buy any sooner.

John: 00:20:16

People don't make their decision quicker because you added in Aspen knowing in the

John: 00:20:21

history of time, it says, you know what?

John: 00:20:22

I bought that motorcycle.

John: 00:20:23

Why?

John: 00:20:23

Well, they doubled their budget . I had to buy it.

John: 00:20:27

I sell the YouTube app three more times today.

John: 00:20:29

Geez, I better buy that cuz a roaz is gonna hurt.

John: 00:20:31

That's not, how things work.

John: 00:20:34

. So when you're looking at the conversion path, like we talked about, we're looking

John: 00:20:38

at mer, you have to forget everything.

John: 00:20:40

Post the first click initially, do they come back directly?

John: 00:20:46

Yes.

John: 00:20:46

They come back organically?

John: 00:20:48

Yep.

John: 00:20:48

They come back through email?

John: 00:20:50

Yeah, they come back.

John: 00:20:51

Referral.

John: 00:20:52

Uhhuh.

John: 00:20:52

. They come back through social?

John: 00:20:53

Yes.

John: 00:20:54

How do I get more of those?

John: 00:20:56

Where do they originally come from?

John: 00:20:58

That's where you put your dollar.

John: 00:21:00

The top conversion path means one point in time that a person converted.

John: 00:21:05

Here is the kicker though.

John: 00:21:08

If we look at, and I'll share a screen here again, if we look at

John: 00:21:11

what actually happens though, here is a top conversion path over a

John: 00:21:16

little bit of a longer time period.

John: 00:21:18

So let's just say October, November, December.

John: 00:21:21

Let's just use all three months here.

John: 00:21:23

There are 565 different path.

John: 00:21:28

For 2,994 conversions.

John: 00:21:31

So 3000 conversions, over 500 different ways that a person got there.

John: 00:21:38

Well, that gets really interesting now because now you're getting into the point

John: 00:21:41

where it's, you know, inorganic search and then nine additional pay search and

John: 00:21:46

then organic search, and then a three additional paid search of one sale.

John: 00:21:50

So what's the roaz What?

John: 00:21:52

Let's do this.

John: 00:21:53

I'm gonna take a paid.

John: 00:21:55

take a paid starting point cuz they kind of lump all these together.

John: 00:22:01

, what's the roaz and what's the attribution model on, you know,

John: 00:22:05

these group, the people here?

John: 00:22:08

Well, you got like a paid search or organic and referral and a pay

John: 00:22:11

shares and three more directs.

John: 00:22:12

No one sale.

John: 00:22:12

Okay.

John: 00:22:13

So that's one path.

John: 00:22:14

All of these paths here are one time in place.

John: 00:22:18

People wanna say, well, what ad worked the best?

John: 00:22:20

12?

John: 00:22:20

Was it that ad?

John: 00:22:21

Was it that ad or was it that?

John: 00:22:24

. Yes.

John: 00:22:25

Well, did they come Google search my brand name?

John: 00:22:27

And did they then come back through a branded campaign or even an R L S A?

John: 00:22:31

Did they look for reviews online?

John: 00:22:33

And then you found us again and you did another paid search and you found us again

John: 00:22:37

probably through the brand name because you've already been here 1, 2, 3, 4,

John: 00:22:39

5, 6 times and then you made one sale.

John: 00:22:42

MER is the only way this really works.

John: 00:22:45

You cannot control 560 different paths for only 3000 sales.

John: 00:22:49

What is that?

John: 00:22:49

The same path, one in six times.

John: 00:22:52

, that's not very, very frequent.

John: 00:22:54

You're trying to scale and, and, go so deep.

John: 00:22:57

You'd be like, well, let's look at the actual, what was the device?

John: 00:23:00

It's like, well, are you talking the 13th visit?

John: 00:23:03

That device click was okay.

John: 00:23:05

Like you're looking, you're we're looking at one snapshot and a huge amount.

John: 00:23:08

We're we're looking at one tree in the forest and be like, well,

John: 00:23:11

why does that treat taller?

John: 00:23:13

Well, it's from the nuclear power plant down the street that grew all the trees.

John: 00:23:17

, we're missing everything that's right in front of our.

John: 00:23:19

. And so here's what's really the part that I wanted to take home with all

John: 00:23:22

this is when you're calculating MER Media efficiency ratio, you should be

John: 00:23:27

able to add in Aspen two a channel that regardless of the return path, you are

John: 00:23:32

going to see a return because you're simply going after more of these people.

John: 00:23:37

More the same type of people.

John: 00:23:40

I wanna share with you a couple other scenarios cause I think that this

John: 00:23:43

starts to, , give you a good indication as to what starts to happen when you

John: 00:23:49

go after really good quality cold traffic, and the scalability of it.

John: 00:23:53

That everyone that's probably, or hopefully still watching it, I

John: 00:23:55

don't even know if anybody's still watching it anymore, , but this

John: 00:23:58

is the important part of this.

John: 00:23:59

Here I'm gonna share with you a campaign type.

John: 00:24:03

Well, I can't paint time.

John: 00:24:03

I'm gonna share with you , a company here, , and I'm going to share with

John: 00:24:07

you something that's actually really interesting is this year, let me

John: 00:24:11

just get pulled up on the screen.

John: 00:24:12

, okay.

John: 00:24:13

So everyone would love to have the time to just say, Hey, I would love

John: 00:24:18

to, how do I just add in more ad spend?

John: 00:24:19

Just get more out.

John: 00:24:20

Like each time I increase my, each time I increase my ad spend, my row has.

John: 00:24:25

I hear it every single day, every single, uh, 50 times a day, which is

John: 00:24:28

why we're switching off of the, q and a type platform, and I'm going

John: 00:24:32

into more education and teaching.

John: 00:24:34

, why when you add in Aspen, does Roaz dip?

John: 00:24:37

That is a, when you're talking about automated targeting, that's where every

John: 00:24:41

person will lose, except for Google.

John: 00:24:43

They'll win.

John: 00:24:43

Google will win.

John: 00:24:44

They'll take your money all day long.

John: 00:24:45

Whether you get interested or not.

John: 00:24:46

It doesn't matter.

John: 00:24:47

You will lose every time unless you focus on non-branded cold traffic.

John: 00:24:53

I have a thousand of these examples, but I'm gonna share with you something

John: 00:24:56

that's in addition to, uh, some pmax campaigns here that I'm running to.

John: 00:24:59

What about this one here?

John: 00:25:01

Standard shopping we put on 8,800, got 13,000.

John: 00:25:04

Cost for conversion is 1 0 9.

John: 00:25:06

Okay, fine.

John: 00:25:06

But what if I took this $300 on up to 900?

John: 00:25:09

Well, yeah, , . , your cost per conversion will go two bucks.

John: 00:25:13

Well, that's interesting.

John: 00:25:14

Cause you mean my roaz isn't really gonna dip?

John: 00:25:15

Nope.

John: 00:25:16

All right.

John: 00:25:16

Well what about, you know my furniture one?

John: 00:25:18

This one?

John: 00:25:19

Yeah.

John: 00:25:19

You can go from 50 to 150.

John: 00:25:20

Your cost per click will decrease a little bit and have an increase of clicks.

John: 00:25:24

Was too soon to find out what the convers rate is.

John: 00:25:26

Okay, fair, fine, fair.

John: 00:25:28

Let's talk about some other accounts here that I'm starting this with.

John: 00:25:31

and actually I'll, I might be able to give you an example.

John: 00:25:33

, no, I can't.

John: 00:25:33

That's a publicly traded company, so we'll be able to do that one.

John: 00:25:35

But this one here I think is also really important when we're talking

John: 00:25:39

about, , The effect that a standard shopping campaign went run alongside

John: 00:25:44

of even a Performance Max campaign.

John: 00:25:46

You're affiliate in gaps that Performance Max is missing and what you can control

John: 00:25:50

and what performance Max can pick up.

John: 00:25:52

So let's do this one here.

John: 00:25:53

, I'll give you a small example here.

John: 00:25:55

So this one, again, we're, we're crushing with this account.

John: 00:25:58

We spent, you know, 76 grand a make a half million in the last 30 days.

John: 00:26:02

Awesome.

John: 00:26:02

Well, how about this standard shopping campaign?

John: 00:26:05

This one, Hey, if I go from a hundred dollars a day to $300 a day, my cost per

John: 00:26:08

conversion is gonna go $0 more or $0 less.

John: 00:26:13

Well, that's interesting because what is this campaign doing?

John: 00:26:15

Oh, that campaign?

John: 00:26:16

Yeah.

John: 00:26:16

You're getting a 3 48 roaz.

John: 00:26:18

Okay, so a 348% roas, as long as I have this campaign in this, in

John: 00:26:23

a good situation, if I can just add in triple the amount of money,

John: 00:26:27

what is my C P A gonna go to?

John: 00:26:28

Nothing.

John: 00:26:29

Your CPA's gonna stay the same as long as they buy roughly the same type of

John: 00:26:32

products in that one campaign that's serving only that group of products.

John: 00:26:35

You will see a scale.

John: 00:26:36

Now I have a very specific structure way that I do that, , very specific T Row

John: 00:26:40

as goals that are a little bit, ah, in the way that we actually start to set up

John: 00:26:43

the night of keywords instead of that.

John: 00:26:44

But my, point is, and I can't just, , give away our client secrets cuz they

John: 00:26:47

pay, handsomely for these secrets.

John: 00:26:49

But what I'm trying to say is when you hit a point of diminishing returns,

John: 00:26:52

the, the key factor is you're letting automated targeting find who it's going

John: 00:26:57

to show automated targeting will go to the people that it knows and wants to.

John: 00:27:02

Yes.

John: 00:27:03

Good.

John: 00:27:03

That works.

John: 00:27:04

It's going to go to the people that they know are going to buy.

John: 00:27:08

Okay.

John: 00:27:08

If you spend more, will they buy sooner?

John: 00:27:10

No.

John: 00:27:11

So when you increase your ad spend, do they buy more?

John: 00:27:13

No.

John: 00:27:13

Do they buy it later?

John: 00:27:14

Yes.

John: 00:27:14

But did you pay more for the same sale?

John: 00:27:16

Yes.

John: 00:27:16

Did any sales increase?

John: 00:27:17

No.

John: 00:27:18

Okay.

John: 00:27:18

So that's why your row ads dips 10 people are gonna buy in seven days.

John: 00:27:23

Let's just use that as a fact.

John: 00:27:24

10 people will buy in seven days.

John: 00:27:26

Good.

John: 00:27:27

What if you doubled your Aspen on those 10?

John: 00:27:30

Still gonna buy in seven days.

John: 00:27:31

What did you spend two times more?

John: 00:27:33

How many more sailors make?

John: 00:27:33

Zero.

John: 00:27:34

Same, seven.

John: 00:27:35

That's why you add an ad, spend your ROAS dips.

John: 00:27:40

That's because it's trying to go after the people it knows are gonna convert fine.

John: 00:27:44

So what this means is that when you're using automated targeting, you just simply

John: 00:27:47

go to the level that the market dictates.

John: 00:27:49

The market's going to dictate how much it's going to spend with you.

John: 00:27:52

You're not going to.

John: 00:27:54

, you know, Susie, who's dropping her kids off at soccer, has to pick up a dry

John: 00:27:57

cleaning and then go pick up her husband at the airport that, hey, you know, those,

John: 00:28:01

, the leggings you want ice spent double.

John: 00:28:03

Where are you at Susie Buy now doesn't work like that.

John: 00:28:06

Everyone, for some reason, believes that you could just, , program a person

John: 00:28:10

driving their car and pull over and buy because you increase your ad spend.

John: 00:28:13

Doesn't work like that.

John: 00:28:14

. That's what people miss.

John: 00:28:15

They miss the fact that you're letting Google choose the same five

John: 00:28:17

people to show more and more and more, and more, more, more ads too.

John: 00:28:20

And you're like, why aren't they buying faster?

John: 00:28:22

And for some reason, this is lost on everybody.

John: 00:28:24

That's why I'm trying to take to Google Ads live and do

John: 00:28:26

this for free by saying, stop.

John: 00:28:28

Stop letting Google dictate where it wants to go.

John: 00:28:31

If you want to scale, medium Mix is your friend.

John: 00:28:35

What is Pmax good at doing?

John: 00:28:37

Pmax is really good at remarketing.

John: 00:28:39

Pmax is really good.

John: 00:28:41

Getting the right person at the right time and when they're ready to buy, good.

John: 00:28:45

Well, PMAX, find whole new people.

John: 00:28:47

Yes.

John: 00:28:48

If you're grossly underspent, know if you are at a good

John: 00:28:51

enough spend without a t rows.

John: 00:28:52

Without a T cpa.

John: 00:28:53

And , your row as is good.

John: 00:28:54

So this means that if I put a hundred dollars to make it $300 in sales, good.

John: 00:28:57

If I put $200 to make 320, what happens?

John: 00:28:59

You overspent.

John: 00:29:00

Pullback.

John: 00:29:00

Okay.

John: 00:29:01

Because this is what the market is going to dictate, that Google

John: 00:29:03

has found a market that will buy.

John: 00:29:05

Are you gonna force more people?

John: 00:29:06

No.

John: 00:29:06

How do you get more people in there that Google loves to remarket?

John: 00:29:09

Grab 'em from some other source.

John: 00:29:10

YouTube standard shopping search, DSA discovery display.

John: 00:29:13

You run those channels, you run those placements, and you dictate that this

John: 00:29:17

person has not been in my website.

John: 00:29:18

They have not seen an ad on my YouTube channel.

John: 00:29:20

They have not Google searched my brand name.

John: 00:29:22

They're not one of my customers.

John: 00:29:23

Those are excluded.

John: 00:29:24

And then you start to slowly crank it up.

John: 00:29:27

Think about your time lag as a seven day time lag.

John: 00:29:30

. But if that seven day time lag, you start to increase cold traffic, wait

John: 00:29:33

a week, do they start to convert?

John: 00:29:34

Aha.

John: 00:29:34

Or is Pmax stealing those conversions?

John: 00:29:36

Who cares?

John: 00:29:37

MER is the same.

John: 00:29:39

You bring in a new person from YouTube and Pmax remarks them.

John: 00:29:43

What is your mer?

John: 00:29:44

The same, you made more cold traffic and more sales, so they come back directly.

John: 00:29:48

Who cares?

John: 00:29:49

MER is the same media efficiency ratio, Rachel says, but increase,

John: 00:29:53

but isn't increasing the budget, letting Google find more people.

John: 00:29:56

It depends on if you are choosing the target.

John: 00:29:58

If you said, Hey, I'd really like the people that on Tuesday search this keyword

John: 00:30:02

between two o'clock in the morning at three o'clock in morning because that's

John: 00:30:04

what I want, you get to choose it.

John: 00:30:06

If you said, Hey, performance Max, go and look at this signal.

John: 00:30:08

Yes, because they're gonna say, ah, I'm ignored that you have a lot of

John: 00:30:11

Facebook Travis, that looks pretty good.

John: 00:30:12

I'm gonna go.

John: 00:30:14

Why?

John: 00:30:14

It's a signal that I get to ignore if you are choosing the keywords, the placements,

John: 00:30:20

standard shopping, it's the non-brand, all of the areas that you can control,

John: 00:30:24

which all of us here that are good.

John: 00:30:25

Google ads managers built our whole education and systems on.

John: 00:30:29

When Pmax came in, it was good.

John: 00:30:31

It was very good.

John: 00:30:32

It found new traffic.

John: 00:30:33

I launched a company for free for a client and it's a t infuser and we've

John: 00:30:38

five x that company in six months just on YouTube, because I ignore.

John: 00:30:42

C p a and I ignored Roaz and I just focused on mer.

John: 00:30:46

We approved it with the post-purchase conversion surveys.

John: 00:30:49

But, what the, the moral of that story is I went on YouTube and

John: 00:30:52

said, here's these exact people that I want to be in front of.

John: 00:30:54

And I waited.

John: 00:30:55

So I got to choose it, and then every two weeks I increased it 20% in ad spend.

John: 00:31:01

That was a small startup.

John: 00:31:02

I love the people to death, , Gavin and Paul for watching.

John: 00:31:04

Love You Guys.

John: 00:31:05

, but , we figured out a way that we basically just go after a lot of cold

John: 00:31:08

traffic, ignore every other metric, but mer , and grow that way, because

John: 00:31:12

if you have the right message to the right audience at the right time, ignore

John: 00:31:15

all of the, here's what's going on.

John: 00:31:19

Here's what Google is saying is happening, because Google only knows half the story.

John: 00:31:22

Now, we already know that all of your direct traffic that's coming in inbound is

John: 00:31:26

not your, , is not your brand of traffic.

John: 00:31:28

That woke up one day.

John: 00:31:28

I said, I wonder if s sol eight.com is a thing.

John: 00:31:30

It's not.

John: 00:31:31

, it's fake.

John: 00:31:32

So you have to look at where they're coming from before and you have to

John: 00:31:35

put your good marketing hat on and identify the areas that you are scaling.

John: 00:31:39

Is it called traffic?

John: 00:31:40

Yes.

John: 00:31:40

Can you crank it up?

John: 00:31:41

Yes.

John: 00:31:42

Are you able to attribute more sales to that who care?

John: 00:31:47

Did your sale, did your spend go up globally?

John: 00:31:49

Yes.

John: 00:31:49

Did your sales go up globally?

John: 00:31:50

Yes.

John: 00:31:51

Is your MER increasing?

John: 00:31:52

Yes.

John: 00:31:54

I'll give you a good example here.

John: 00:31:56

There's a company that we did this with.

John: 00:32:00

Recently and I use Norian cuz this is actually really

John: 00:32:03

important for everyone to see.

John: 00:32:05

And in this company I'm gonna take actually even before

John: 00:32:08

Black Friday, even before Cyber Monday, before all that stuff.

John: 00:32:11

And I'm gonna share with you a really interesting thing that no one is going

John: 00:32:15

to be able to be able to explain here.

John: 00:32:17

And , because it's not something that anybody has any idea.

John: 00:32:20

, that happens unless you obsess about the data.

John: 00:32:23

Here's what's funny.

John: 00:32:25

Before Black Friday and Summer Monday, when typically it's a slow time cause

John: 00:32:28

everyone waits, I took 13% more ad spend and created 76% more revenue

John: 00:32:33

and 56% more m e r media efficiency ratio and a $31 less cost per

John: 00:32:38

conversion, a cost for new customer.

John: 00:32:40

And I brought in a 33% new visits and 15% less cost for new

John: 00:32:45

visits, all by doing one simple.

John: 00:32:48

Turning off Pax.

John: 00:32:50

So here's what's funny is I went all standard shopping, killed Pax, went

John: 00:32:54

all standard shopping as a test.

John: 00:32:56

Now the roaz that I was measured to by the client said, Hey, you

John: 00:33:00

need to have a three X in Google.

John: 00:33:02

I said, okay, I give you a 12,000 x if you just let me go after all of your brand

John: 00:33:06

name, but you're gonna die as a company.

John: 00:33:08

Does that sound good?

John: 00:33:09

No.

John: 00:33:09

So I'm not saying that's how the conversation went, but that's how it

John: 00:33:12

was kinda leading to in a conversation.

John: 00:33:14

So in our Google Ads account, I have a two x Y, well, I'm only

John: 00:33:17

going after one click, brand new non-branded cold traffic customers.

John: 00:33:21

So just people that are Googling, specific keywords about specific type of products.

John: 00:33:25

And then they're clicking on my ads and then they go to

John: 00:33:27

my site and then they leave.

John: 00:33:28

And then I say, okay.

John: 00:33:31

Get another one.

John: 00:33:32

I'm not remarking why the sales cycle was long.

John: 00:33:34

People always came back direct.

John: 00:33:36

Remember this, the sales cycle was long.

John: 00:33:38

People always came back direct.

John: 00:33:39

That is a, that is a Pax nightmare.

John: 00:33:42

Why?

John: 00:33:42

Well, when the sales cycle is long, Google's going to focus on them for

John: 00:33:46

longer, and when they come back directly, or usually, which means come back through

John: 00:33:49

the branding, PAX takes that credit.

John: 00:33:51

This thing is not going to.

John: 00:33:52

So I did, as I said, shut up everything off, just do a hundred

John: 00:33:54

percent pure cold traffic.

John: 00:33:56

And what ended up happening is my spend went up by 20%, and you

John: 00:34:00

see, I'm 17,000 of the 20,000.

John: 00:34:02

Facebook was doing pretty much just remarketing.

John: 00:34:04

But when I started increasing my small amount of ad spend on

John: 00:34:08

a standard shopping campaign, my revenue went up exponentially.

John: 00:34:10

My merr went up exponentially, my cost required.

John: 00:34:12

A customer went down.

John: 00:34:14

There's no way.

John: 00:34:15

If you look at it, how does a 1 48 and 6 0 3 equal a $64 tax?

John: 00:34:19

Is that possible?

John: 00:34:19

Those two don't average down to that little is from what he can't

John: 00:34:23

track, so what he can't identify?

John: 00:34:25

Well, my organic traffic started to go up 140%.

John: 00:34:27

My email Travis started to get new signups, has started to

John: 00:34:30

convert my organic search just from Google itself, phone up 67%.

John: 00:34:33

My YouTube ads started getting more remarketing and that

John: 00:34:35

actually made more sales.

John: 00:34:36

People started Googling this company named coupon code and share.

John: 00:34:39

Affiliates started picking it up and Facebook has marketing start to increase.

John: 00:34:42

This is all through Black Friday, separate Monday.

John: 00:34:45

So we take 20% more or 13% more total spend to make 76% more even during

John: 00:34:50

Black Friday, separate Monday, and then Black Friday s Monday rolled around.

John: 00:34:52

And then, you know, everything was, was in lamb milk and honey it

John: 00:34:56

was, , we would hit a thousand x.

John: 00:34:58

I still, I'm still at a four x, but somehow we globally went down

John: 00:35:01

to a $30 cost per new customer y learn your top conversion path.

John: 00:35:06

And what Merck will do when you start to scale coal traffic and you start to pay

John: 00:35:11

less for that coal traffic to return.

John: 00:35:13

And when you.

John: 00:35:13

Spent even less to pay for that cold traffic.

John: 00:35:15

To find you in your branded campaign, it means your dollar to get a new

John: 00:35:19

customer and a new user, a brand new visitor to your site that wants to buy

John: 00:35:22

from you because it's the bottom of the funnel Standard shopping campaign.

John: 00:35:24

Those people that are going to buy or they're going to not, even if

John: 00:35:27

I spent 2, 3, 4, $5 after that $1 click saying, please, please, please,

John: 00:35:31

please, please, they say, nah.

John: 00:35:32

I wasted $7 on one person where I could have wasted $1 on one person.

John: 00:35:36

Got six additional new people for the same exact cost.

John: 00:35:39

Very, very.

John: 00:35:41

Mer Don is media efficiency ratio.

John: 00:35:42

All cash in.

John: 00:35:43

All cash out.

John: 00:35:44

It's at the beginning of this recording.

John: 00:35:45

It'll be up on YouTube, but it's basically take your company revenue divided by

John: 00:35:48

your company ad spend, and that is mer.

John: 00:35:50

Think of Roaz for all of your ad spend because your top conversion

John: 00:35:53

pass, you're gonna go through.

John: 00:35:54

500 different paths for 3000 conversions.

John: 00:35:57

, you'll be able to watch this.

John: 00:35:58

It'll all become very clear.

John: 00:35:59

, I'm right now I'm not doing any more q and a.

John: 00:36:01

We're gonna be doing focused learning.

John: 00:36:02

I'm gonna teach you guys all this stuff.

John: 00:36:03

It's gonna be brilliant.

John: 00:36:04

Fantastic.

John: 00:36:06

But when we're talking about the, scaling up that cold

John: 00:36:09

traffic murr matters, why?

John: 00:36:11

Well, that campaign spent a whole bunch more money, but the

John: 00:36:14

ro I still didn't get a three.

John: 00:36:16

Now, the, the client won and we, we six x to 10.

John: 00:36:19

In one month when we couldn't hit one X before, because we

John: 00:36:23

let Google identify as target.

John: 00:36:24

He says, this person's gonna buy.

John: 00:36:26

They may be right, but I don't wanna spend 20, 30, $40 on the same person,

John: 00:36:30

spend $2 and I'll, take my chances.

John: 00:36:32

When you look through the top conversion path, we're losing 70%

John: 00:36:35

of all of our first clicks, paid search traffic to our direct channel.

John: 00:36:39

Coming back, I have a 70% chance that this person's gonna come back and buy shit.

John: 00:36:44

I'm not spending any more money on 'em.

John: 00:36:45

I'll take my chance.

John: 00:36:47

It's a great chance if this person comes back and buy, I'm not gonna

John: 00:36:50

just hit 'em with, , more and more and more display ads on cnn.com and say,

John: 00:36:54

man, hope this really convinces you.

John: 00:36:57

Those people already made their decision.

John: 00:36:58

We're in an instant gratification.

John: 00:36:59

We're in an Amazon age now.

John: 00:37:01

You look at Amazon age or you look at Amazon ad or , a product

John: 00:37:04

and you're like, yeah, I'm either gonna buy that now, I'm gonna wait.

John: 00:37:06

You might get Remarketed too, but unless you see something that is

John: 00:37:09

outside of Google, like your favorite influencer doing an hour long episode

John: 00:37:13

on it, you may pick up more sales.

John: 00:37:15

, it's not within the realm of Google , , unless you wanna do a,

John: 00:37:17

, YouTube campaign with influencers.

John: 00:37:19

But here's the lessons and the takeaways.

John: 00:37:22

Mer media efficiency ratio, what was or overall revenue of your company

John: 00:37:26

divided by the overall ad spend of all of your channels that will give

John: 00:37:31

you a Merck Media efficiency ratio.

John: 00:37:33

How efficient is your media if you are use utilizing 80 to 90% of cold.

John: 00:37:40

, you will be able to scale that campaign until you hit a point

John: 00:37:43

of diminishing returns, which is simply just maxing out your search

John: 00:37:46

spread share and or click share.

John: 00:37:48

So you're pretty much maxed out.

John: 00:37:49

And then you have to think about something else.

John: 00:37:50

But , my philosophy, my, typical use case is you can spend two, three,

John: 00:37:53

4 million a month before you hit that point of diminishing returns.

John: 00:37:57

You're in a real good standing.

John: 00:37:59

So when you think about mer, it's company RO ratio.

John: 00:38:03

Do you wanna spend more for the existing users ratio's gonna go?

John: 00:38:07

Do you wanna spend the same amount of money on these new

John: 00:38:10

people to bring them to the site?

John: 00:38:11

MER stays the same.

John: 00:38:12

All even goes up, and that's what MER is and that's how you

John: 00:38:15

need to calculate everything.

John: 00:38:17

If you look at the difference between CAC and L tb, that's actually what

John: 00:38:21

we're gonna be doing next week.

John: 00:38:22

, , I'll stay that for next week is right now I just wanna have

John: 00:38:24

Mer, we're gonna do k and l tb.

John: 00:38:26

We're gonna do the fail points of automated targeting

John: 00:38:28

by audience definitions.

John: 00:38:29

We're gonna have a whole lot of fun here.

John: 00:38:30

It's gonna be, it's gonna be like the good old days, but these Friday lines are gonna

John: 00:38:33

be, , , costume's gonna be joined, I think next week, and we're gonna have kind of a

John: 00:38:36

podcast episode where we beat up models.

John: 00:38:38

, anything that, you all have learned so far, they have questions about, I want

John: 00:38:40

to keep it very tied to this topic.

John: 00:38:42

, I can't answer questions about other, scenarios, so I want to keep this video.

John: 00:38:47

Like training, ask version.

John: 00:38:48

But any questions on Mers so far?

John: 00:38:51

, more of the story is people are gonna come back and buy in different ways

John: 00:38:53

that they already would like to buy, and , they're also gonna go through

John: 00:38:56

your omnichannel performance, what your new traffic inside of Google will be

John: 00:39:00

remarketed to inside your Facebook.

John: 00:39:02

It's okay.

John: 00:39:03

Facebook's usually a fairly inexpensive remarketing campaign.

John: 00:39:06

Don't spend too much money on remarketing globally.

John: 00:39:08

That's a good lesson to take home just no matter what, network you're on.

John: 00:39:12

But scaling cold traffic winds.

John: 00:39:14

We had a client that we actually moved off of Pmax and it cost us one third

John: 00:39:17

to make the same amount of sales.

John: 00:39:18

Now a roaz is lower, but we went from 2,800.

John: 00:39:21

average new customers a week to 6,500 new customers a week with about 140% more.

John: 00:39:27

So we tripled our new customer growth with 140% new Aspen because both

John: 00:39:31

Facebook, Instagram, , and I say Facebook, Instagram, both Facebook, Instagram,

John: 00:39:36

and Google went just pure traffic.

John: 00:39:39

Rather than beating up on their existing customers and too much

John: 00:39:42

brand, we really started moving along.

John: 00:39:44

So ,, this is a really, really, really good use case for everyone to kind

John: 00:39:47

of wrap their heads around and think about, okay, if I can look at cold

John: 00:39:51

traffic, ignore Google Roaz and start to look at Company mer, because these

John: 00:39:55

people sometimes come back through email campaigns and they send to their

John: 00:39:58

friends am by hitting the right group of audience that starts to scale, and it's

John: 00:40:00

not too much of my existing customers and not too much existing traffic.

John: 00:40:04

Then you can start to see a good, a good scale.

John: 00:40:07

. oh, we got some, some questions.

John: 00:40:08

I think.

John: 00:40:08

, in that case, what bidding strategy would you use on standard shopping?

John: 00:40:11

I like either manual cpc, maximize clicks if I have really good feed, or

John: 00:40:15

even a low T row as . Those are areas.

John: 00:40:17

My primary one is a low T row as my secondary one is manual cpc, and

John: 00:40:22

my third one is maximize clicks.

John: 00:40:24

But that's a very specific use case.

John: 00:40:26

, low T Row as like . , just something that is not going to hinder, spend too

John: 00:40:30

much, , but allow it to have a slight learning, , strategy about itself, , mean

John: 00:40:34

that it's just gonna stop going after the high spend relevant, , keywords

John: 00:40:38

if they don't actually make any sales.

John: 00:40:39

So it's a good way to kind of have a, an automated negated

John: 00:40:42

keyword tool built into it.

John: 00:40:44

, how do you use MER to identify what new campaigns to introduce or where to.

John: 00:40:48

Perfect.

John: 00:40:48

, this one is actually, , first indication is, , if I look at a

John: 00:40:53

non-brand cold traffic campaign and I look at my roaz or my C p A

John: 00:40:58

there, you have to actually look at,

John: 00:41:00

, . If you have to, ignore the roaz

John: 00:41:03

So, for example, MER is a good way to identify a o v divided

John: 00:41:07

by cost per new customer.

John: 00:41:09

And then you have to know what is.

John: 00:41:13

Difference between people that are coming through paid traffic

John: 00:41:16

and then lost Twitter channels.

John: 00:41:17

I'll give you a really, really fun example.

John: 00:41:19

, let me share screen.

John: 00:41:20

And I'm just gonna do a big, , a big notepad here and I'll give

John: 00:41:24

you a really good example.

John: 00:41:26

here's a great way to calculate mer.

John: 00:41:28

, all revenue lasts 30 days equals, let's say a hundred thousand dollars.

John: 00:41:36

Okay?

John: 00:41:38

All spend in Google Ads.

John: 00:41:42

Let's just say you're only using Google Ads right now is 25 anti people.

John: 00:41:48

$25,000.

John: 00:41:50

So, And, but then, , Google conversion value shows, let's say 50,000.

John: 00:42:01

This is important as MER is a hundred thousand that just took place, period.

John: 00:42:07

We have a hundred thousand fine.

John: 00:42:09

50,000 of that though Google took credit for it.

John: 00:42:12

Good.

John: 00:42:12

Is it actually a hundred?

John: 00:42:14

Could be.

John: 00:42:14

Is it 90?

John: 00:42:15

Possibly.

John: 00:42:16

It's somewhere in between 50 and a hundred.

John: 00:42:17

We know that cuz Google's not tracking.

John: 00:42:19

. So just know that Google Ads conversion tracking is tracking 50,000.

John: 00:42:24

So our mer, which is Rev divided by spend, equals 400% because

John: 00:42:36

we made a hundred thousand, we spent 25 all cash into my company.

John: 00:42:39

Well, some of that was emailed.

John: 00:42:40

Sure.

John: 00:42:41

Where do those people come from?

John: 00:42:42

Oh yeah, Google.

John: 00:42:42

Ha.

John: 00:42:43

So we have, that's what I'm saying.

John: 00:42:44

We have to look at this thing in a very, very specific vacuum.

John: 00:42:47

All of the revenue that comes.

John: 00:42:49

Uh, divided by all the spend because you can last click attribute

John: 00:42:53

them for where they came from.

John: 00:42:55

But if you're only advertising on Google, obviously it has to come from there.

John: 00:42:59

But Google won't track all of that.

John: 00:43:00

Sometimes it's 60, sometimes 70, sometimes it's 30 to spinning out a

John: 00:43:03

long sales cycle, or fusing analytics.

John: 00:43:06

That's a converted tracking source.

John: 00:43:07

So this is Mer right here.

John: 00:43:09

MER is 400.

John: 00:43:12

. Okay.

John: 00:43:12

Now we have to look at is what campaigns are non-brand bold traffic

John: 00:43:21

keywords, non-existing website visitors and non customers, not customers.

John: 00:43:31

The questions that you have to.

John: 00:43:32

So things like a non-brand standard shopping or a non-brand search, or a dsa

John: 00:43:36

that doesn't really have too much brand.

John: 00:43:38

Pax?

John: 00:43:38

No, can't use pax.

John: 00:43:40

PAX is not good because it dynamically remarks people that are existing

John: 00:43:42

on your website from even organic.

John: 00:43:44

It's gonna take credit for it.

John: 00:43:45

That's not cold traffic.

John: 00:43:47

You can, you have to go with what you can control.

John: 00:43:49

Now the problem is, is those campaigns are usually about a 100% roaz or, a 200% rise.

John: 00:43:57

That's okay.

John: 00:43:58

That singular click, non-brand call drive versus visit five, whatever.

John: 00:44:03

What this means though is if you have a seven day conversion lag, seven

John: 00:44:09

day conversion lag, that Oh, lag.

John: 00:44:11

That means that your brand and look, yeah, that's good.

John: 00:44:16

Look.

John: 00:44:18

Very happy . Where'd they come from?

John: 00:44:21

You're non-brand cold traffic campaign.

John: 00:44:23

That's how they found out about you.

John: 00:44:24

Well, what is , these campaigns here, if they're at 100 to

John: 00:44:27

200%, let's just say it's 200%.

John: 00:44:30

So 200% roaz, but physically, but, but the CPA is 45.

John: 00:44:43

And Roaz is 700%, your CPA is seven.

John: 00:44:48

Why?

John: 00:44:50

They're pretty traffic For this campaign right here.

John: 00:44:53

The people that found out about you for the first time, Google a brand name.

John: 00:44:55

Now what's the, now what's the combination between the two of those 400%.

John: 00:44:58

Ah, it is 400%.

John: 00:45:00

You know why?

John: 00:45:01

That's by mer.

John: 00:45:03

Now it's starting to make sense, right?

John: 00:45:05

Okay, so now if we know that, , this campaign here that is 200%

John: 00:45:11

ROAS and has a CPA of, $45.

John: 00:45:15

, it's got a little crazy.

John: 00:45:16

What if we added, I don't know, let's say 30% more ad spend to it?

John: 00:45:23

Hmm.

John: 00:45:25

What we add 30% more spent to it.

John: 00:45:28

Roaz does not move.

John: 00:45:32

CPA does not move.

John: 00:45:35

. Okay.

John: 00:45:35

So that's good.

John: 00:45:36

So why are you scaling a campaign that only has a 200%

John: 00:45:39

raw as we're gonna lose money?

John: 00:45:41

Well, because after I added my 30% raw as to it, all my revenue in the last 30

John: 00:45:45

days after, for, let's say two months, but for one 30 and all my spend here

John: 00:45:50

moved up to, what was this, like 35?

John: 00:45:53

I don't know, 40, 45.

John: 00:45:55

I dunno.

John: 00:45:55

That's just bad of math . But , your MER stays about the same,

John: 00:46:00

but now you're starting to.

John: 00:46:02

Because you're taking a campaign that doesn't have that great of

John: 00:46:06

metrics, but it is brand new cold traffic, non customers not existing

John: 00:46:11

and putting more aspect to it.

John: 00:46:13

So when you use MER to identify with new campaigns, you're measuring a point in

John: 00:46:17

time and you're taking the campaign that has the highest chance of increasing

John: 00:46:21

just pure new, brand new cold traffic.

John: 00:46:22

To you it's saying if this stays about the same and my CPA stays about the

John: 00:46:25

same, does my overall revenue go up?

John: 00:46:27

And , TJ.

John: 00:46:29

If that is the case here, you should have a campaign that looks like this.

John: 00:46:33

Well, if I just go for a hundred dollars up to $300, is

John: 00:46:35

my CPA increase or decrease?

John: 00:46:37

Nope.

John: 00:46:38

Ah, so my MER will stay the same.

John: 00:46:42

Pull that campaign.

John: 00:46:43

Yeah.

John: 00:46:43

Are you profitable?

John: 00:46:44

Yeah.

John: 00:46:45

cool.

John: 00:46:45

, so long story short, PMAX is used for marketing audience sources.

John: 00:46:49

No, not necessarily.

John: 00:46:49

What Pmax is really, really, really good at is finding a group of people

John: 00:46:55

that it knows will buy, spend up to a point of dimension returns, hang tight.

John: 00:47:01

It's not gonna be pushed to find more traffic.

John: 00:47:04

They'll be pushed to remarket, but those people don't buy you faster.

John: 00:47:09

, as you take in PAX and you say, okay, I hit a hundred dollars a day,

John: 00:47:12

$200 a day, $300 a day, $400 a day.

John: 00:47:14

My roaz went from 300%, 300%, 300%, 200%, okay.

John: 00:47:18

Back down from 400 down to $300 a day.

John: 00:47:20

My RO goes from 200% up to 300%.

John: 00:47:23

Lock it in there.

John: 00:47:24

Don't use a tcp, a, don't use the few RO as that is going

John: 00:47:26

to remain there for a long.

John: 00:47:29

you've said Google, how many people do you know next week

John: 00:47:33

that'll buy this can of almonds?

John: 00:47:36

Says, here's it.

John: 00:47:37

I'm like, Hey, can you find more?

John: 00:47:38

Nope, I'm not built to find more.

John: 00:47:40

Why?

John: 00:47:41

I'm built to convert.

John: 00:47:42

Why aren't you gonna find more people?

John: 00:47:44

I don't know if those people are gonna convert.

John: 00:47:45

I know these people will convert.

John: 00:47:47

That's what PAX does.

John: 00:47:48

It's very good up to a point that you have to stop it, and then you

John: 00:47:51

look at other channels to push, even if the metrics look bad.

John: 00:47:56

Focus on your.

John: 00:47:58

, that will be the decid factor if you scale the right traffic.

John: 00:48:01

this becomes increasingly more valuable.

John: 00:48:02

Store has returning visitors, returning sales, I mean, LTV to the moon.

John: 00:48:06

Well, I'm very, very, very, very, very glad you said that.

John: 00:48:09

I'm gonna have some fun with you real quick and I'm gonna show

John: 00:48:11

you a really quick snapshot.

John: 00:48:13

, I'm going to change the name of this , . So check this out, tj.

John: 00:48:19

When you do this for one or two years, for example, you get to

John: 00:48:25

a point where I was gonna take like the last seven days for fun.

John: 00:48:30

I changed the name of this company and said, no son, no can see it.

John: 00:48:32

But my media fist ratio, my mirror is now 20.

John: 00:48:36

It's been 165 grand last week to make 4.38 million.

John: 00:48:40

This isn't just like some, oh my gosh, it's amazing.

John: 00:48:42

No, this company was up and running for 20 years.

John: 00:48:45

It's been growing now a lot more.

John: 00:48:47

We went from 21,000 new customers to 65,000 new customers per quarter

John: 00:48:52

in a year by following this.

John: 00:48:55

So when you look at your cost of acquiring a customer download or 40.

John: 00:48:59

My Google Ads campaign right now is we're gonna get a six x and I don't really care.

John: 00:49:02

I could care less what the, what the MER is my cost per required.

John: 00:49:05

New cus went down Y.

John: 00:49:06

This is a company that sells medication to animals.

John: 00:49:10

Well.

John: 00:49:11

People that buy medication for animals buy all the time.

John: 00:49:14

they have, their LTV is like 3, 6, 9, 12 orders per year.

John: 00:49:17

I'll pay for them one time, let them come back and just increase my revenue

John: 00:49:21

because my cost per conversion is so low.

John: 00:49:23

I'm gonna get a whole bunch of new customers every single week that I don't

John: 00:49:26

have to pay for ever again in my mer.

John: 00:49:28

Skyrockets in the moon.

John: 00:49:31

So exactly when you have good L t V, that's, uh, tj, you're jumping ahead too.

John: 00:49:35

Actually join us next week.

John: 00:49:36

We're gonna do CAC versus ltv.

John: 00:49:37

Cost acquiring a new customer versus a lifetime value of the customer.

John: 00:49:39

How do you pay for that customer less?

John: 00:49:41

Imagine this, here's a great one, tj, if you had a cack in LT V

John: 00:49:45

model, what is a cost per acquired new customer for the first sale?

John: 00:49:48

Well, 500% cost be $50 to make $50.

John: 00:49:51

Good.

John: 00:49:52

Are you running a brand campaign?

John: 00:49:54

Yeah.

John: 00:49:54

It's got a great return.

John: 00:49:55

I'm sure it is.

John: 00:49:56

What's your brand's cost for conversion?

John: 00:49:57

$20.

John: 00:49:58

Awesome.

John: 00:49:58

So the $50 made the first time and you pay $50 for it.

John: 00:50:02

That person come back and spent another $50 and you didn't pay anything, right?

John: 00:50:05

Your customer?

John: 00:50:06

No, I spent another $20 on it.

John: 00:50:07

Well there goes your profit margin now do that for a few years.

John: 00:50:11

and your brand campaign eats away at all your profit but has a good Roque.

John: 00:50:15

, and that's where people fall into it.

John: 00:50:16

You look at ROEs and think, well, that must be.

John: 00:50:18

Nope.

John: 00:50:18

You just take all that cost for a conversion.

John: 00:50:20

Every single one of your brand conversions just chuck out the window.

John: 00:50:22

Why?

John: 00:50:22

Because this is like, I don't know, the 17th conversion that person did

John: 00:50:25

with us , this year, , or this decade.

John: 00:50:27

So yeah, you, you simply just hack off all of your profitability to have a good roaz.

John: 00:50:31

Google wins, you lose, but hey, Roaz looks fine.

John: 00:50:34

Right?

John: 00:50:34

Who cares?

John: 00:50:35

amea.

John: 00:50:35

Doesn't Pax go into more audience signals when we bump up?

John: 00:50:38

Sp Nope.

John: 00:50:39

What it does is it first exhausts all the available lowest hanging fruit,

John: 00:50:42

especially for any tcp r t Roz on Pax.

John: 00:50:45

Why says, Hey, I need to maximize the conversions.

John: 00:50:47

Well, what's going on?

John: 00:50:49

Well, I need to maximize conversions.

John: 00:50:51

Where am I gonna go?

John: 00:50:51

, the bob who is googling a keyword?

John: 00:50:55

No, that, that doesn't seem right, but Ted just put a item in his

John: 00:50:58

cart and Mary has visited 13 times.

John: 00:51:01

I'm going to those two people.

John: 00:51:03

Well, here's more Aspen.

John: 00:51:04

Great.

John: 00:51:04

I'm gonna go after them harder.

John: 00:51:06

That's what happens.

John: 00:51:07

And when, I mean, if you try to scale Pax and you find a time where you

John: 00:51:10

couldn't scale, scale, scale, scale, scale, scale, scale to the moon, your

John: 00:51:12

ClickSure is only 12%, but your row ass keeps dipping while you keep adding it.

John: 00:51:16

More Aspen, it's trying to remarket too hard.

John: 00:51:18

, TJ says, so interesting.

John: 00:51:19

I'm trying to use dynamic search to increase new customers

John: 00:51:21

that use PAX for retargeting.

John: 00:51:22

It makes knowing how the campaigns function at each level

John: 00:51:25

of the funnel more important.

John: 00:51:26

So Good.

John: 00:51:26

You're exactly right.

John: 00:51:27

Just know that this though, you don't have to necessarily scale pax.

John: 00:51:30

Actually, I'd actually hang tight on Pax, just scale dsa.

John: 00:51:33

Why Pmax will use more and more and more of its ad spend to do more

John: 00:51:37

remarketing on all those seven channels, and that campaign will simply become.

John: 00:51:40

Efficient with the more cold traffic that you have.

John: 00:51:43

So don't scale Pax, because then it's gonna go off on its own plus

John: 00:51:46

remarket years at the same time.

John: 00:51:47

Andrew says, how do you determine when to kill lower brand campaigns since you

John: 00:51:51

can be paying for attorney customers who would have converted anyway?

John: 00:51:54

I spend the least amount as humanly possible in order to capture a

John: 00:51:59

branded conversion that I was going to get that sale anyway, because

John: 00:52:03

it's very easy , to make that sale.

John: 00:52:05

, here's a good, good method.

John: 00:52:07

, when you're running heavy cold traffic, run very little.

John: 00:52:10

, brand traffic.

John: 00:52:11

Now, I'll give you a scenario that's been true since the dawn of time and

John: 00:52:14

history of mankind, but you look at this, , screen here in the last July aug, I

John: 00:52:20

mean, , it, this campaign runs very well.

John: 00:52:22

Like there's, , I mean, conversion spike up here because it's

John: 00:52:24

running pmax, so have to spike.

John: 00:52:26

I'm spending, it's gonna happen.

John: 00:52:27

Conversions and then go back down.

John: 00:52:29

Cuz again, Pash just does have your marketing.

John: 00:52:31

They run a lot of Facebook ads.

John: 00:52:33

Everyone's happy.

John: 00:52:33

In this scenario, our C looks great.

John: 00:52:35

But, , if you look at the brand campaign, I spent 706 $9 to make 133,000.

John: 00:52:40

My cost for a conversion is 60 cents.

John: 00:52:42

Would you pay 60 cents for a branded conversion?

John: 00:52:45

Yeah.

John: 00:52:46

Well, why is it 60 cents?

John: 00:52:47

Well, my insights tab, or I'm sorry, my auction insights tab.

John: 00:52:51

, so I'm the only one there.

John: 00:52:52

. Perfect.

John: 00:52:53

Well that's why Solo, of course John, of course your branded

John: 00:52:57

campaign is gonna be low.

John: 00:52:58

, there's no one there and that's all I'll spend on Another person comes

John: 00:53:02

in and starts to bid up a little bit.

John: 00:53:03

I bid five pennies over him and or her, and I just hang tight.

John: 00:53:06

I will not spend more than what it needs to protect myself,

John: 00:53:11

cuz if I'm not measuring ROAS in Google, I could care less.

John: 00:53:13

It's a snapshot in time.

John: 00:53:15

I look at CAC versus ltb and.

John: 00:53:18

But I need to protect myself from all the investments I'm making in the cold

John: 00:53:21

traffic because if I get three clicks on, three brand new people that are

John: 00:53:25

semi-interested, and then they come back and Google my brand name cuz they're

John: 00:53:27

ready to buy, but they've only been there once or twice before, they don't

John: 00:53:29

remember my name, I lost that money.

John: 00:53:31

So I'll protect myself to get the return traffic.

John: 00:53:34

I paid for it, I heard, but I'm not gonna just crank it up, even though the raw

John: 00:53:38

eyes looks like it's a million percent.

John: 00:53:39

It doesn't matter.

John: 00:53:40

That was fun.

John: 00:53:41

Everyone, , let me know.

John: 00:53:42

I know there's like 21 people here.

John: 00:53:44

I'm gonna try to do some q and a at the end.

John: 00:53:45

It should be very topic discussion, but, uh, lemme know

John: 00:53:47

if everyone had a good time.

John: 00:53:48

, I had a blast.

John: 00:53:49

I've been speaking for 58 minutes now and, , yeah, it's a good topic.

John: 00:53:51

I love this stuff.

John: 00:53:52

, so that's good.

John: 00:53:54

, way to think about how Google Ads actually affects your business.

John: 00:53:57

, thank you Andrea.

John: 00:53:58

And then, uh, I mean, have you found a way to see what channels

John: 00:54:01

are hidden in the direct traffic?

John: 00:54:03

direct traffic is simply just someone going to the browser and typing in

John: 00:54:07

your URL directly and clicking enters.

John: 00:54:10

Normally it's returned.

John: 00:54:11

The reason is, is because if you've ever gone to Google, you open up

John: 00:54:14

a new tab and you type a g o, it's like, oh, you wanna go into Google?

John: 00:54:17

And you're like, yep, that's direct visit.

John: 00:54:19

Usually it's return.

John: 00:54:20

, so, , Sergey says, best Friday ever.

John: 00:54:22

I see you a great time.

John: 00:54:23

Happy.

John: 00:54:24

Woo is the best one so far.

John: 00:54:26

Good.

John: 00:54:26

I'm so glad you guys like this.

John: 00:54:28

, it's gonna be just knowledge bombs, , that are just gonna be flying out

John: 00:54:31

solutions eight, and , you're gonna start to think and learn like I do.

John: 00:54:35

So it's cool stuff.

John: 00:54:35

Everyone, , I appreciate and happy new everyone.