Unveiling the Downsides of Performance Max Campaigns

Kasim: 00:00:11

Today's conversation, we're going to find out from Qasim why he

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and , John Moran is the big brained

other side of Solutions Aid.

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We love John.

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We've had John on here,

obviously many times.

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Why are you guys all of a sudden

hating on Performance Max?

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drop the goods here.

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This is a big story.

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Stop the presses.

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It's interesting because we're

the performance max agency.

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I'm pretty sure I can prove this.

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We were the very first Google ads

thought leaders to really start

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charging forward into performance max.

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And I'm saying that out loud.

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So people know that I

realize the hypocrisy here.

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But it's a good example of why you

just can't get romantic about the

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methods that you're using because

performance max really was working

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phenomenally well, it was one of the

coolest things that we've ever seen.

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It was even more powerful and impactful

than smart shopping in a lot of ways.

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And now we see some

really major drawbacks.

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And some of them I think they're

based off of the market conditions.

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What ended up happening is nobody used

performance max for the first two years.

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And so it was blue ocean and we're

getting all this insane inventory for

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literally nothing, like no dollars.

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And then one day everybody migrated

over to performance max either

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because Google forced you to do it or,

whole world just caught on and said,

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okay, we can't fight it, join them.

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And then as soon as that happened,

blue oceans become red very quickly.

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And that's issue number one.

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And that's my guess incidentally.

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I have no real proof of that other

than observation, but my observations

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I think are pretty sound because I

have 200 clients, we have a hundred

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million dollars in ad spend and each

of those clients, if you look at their

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auction insights has anywhere between,

five and 50 potential competitors.

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And so I have the opportunity to see

some just more data than most people.

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And then the other issue that we're

seeing is Google's getting more

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aggressive with how they use

performance max, how they dictate

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terms, how they dictate placements.

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And so performance max sucks at new

customer acquisition specifically.

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So I'm not telling you never

to use performance max.

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That's not what I'm saying at all.

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But if your primary goal is

new customer acquisition.

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And incidentally, you're not going to be

able to tell this inside of Google ads.

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That's the real key, because if you're

running performance max, or if your

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agency is running performance max, or if

your employees are running performance

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max, your row as probably looks great.

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That's why we hate row as here.

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It's why I don't accept

row as a goal any longer.

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When I take on a new client.

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Because you're always looks great,

but what you don't realize is Google

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selling your own traffic back to you,

leaning heavy into remarketing, having

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a brand heavy into competitor traffic,

poachable traffic, bottom of the funnel

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traffic interest based traffic fine, but

those aren't necessarily new customers.

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And if your goal is new customer

acquisition then performance maxes,

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actually not an exceptionally strong tool.

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And what we've had to do is we've

had to pull back on performance max

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massively and lean into more traditional

campaign types for e com that's.

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Standard shopping or even DSA which

is dynamic search ads for Legion,

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that's traditional search and DSA.

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And there's other campaign types that work

really well, but especially when you're

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trying to teach the Google algorithm

where conversions come from and then

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lean into, your healthier models of

traffic search is always a great place

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to start because you're getting in front

of somebody that wants what you got.

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And for new customer

acquisition, it's really helpful.

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It's not awareness building per se.

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So the cost of your acquisition is going

to be a lot higher than performance max.

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And this is where things get really

hard and convoluted Ralph, to be

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honest with you, because everybody

wants their cake and eat it too.

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So a customer says to us I have

to have this row as, okay, great.

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I can get you that rose

and performance max.

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Awesome.

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I want new customers.

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These are all repeat customers.

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Okay.

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I can get you new customers,

but they're going to be.

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Five times as much.

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So your ROAS is going to drop.

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and what really, what people are saying

is I want new customers, but I want it

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at this ROAS, which it's difficult as

a narrative to sell and this is where I

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start to overstep my bounds massively.

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So forgive me for lobbying

grenades, but most agencies don't

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even realize that performance max

sucks at new customer acquisition.

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I get a customer that thinks

they've been getting a 900

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percent ROAS this entire time.

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Migrate over to solutions eight.

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And we're like yeah, you're getting

a 900 percent ROAS, but your cost to

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acquire a new customer, if you factor

in the fact that most of this is

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repeat business, it really puts you at

the, maybe a one to three potentially

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because those new customers are so

expensive and where performance max

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does help repeat purchases, and those

are potentially repeat purchases that

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you weren't necessarily going to get.

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that's why I said, we're

not abandoning it entirely.

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If your goal is new customer

acquisition, then you have to

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budget something for that goal.

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I'm going to pause there.

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How did I do?

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I threw a lot out there all at once.

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I look at performance max as

two separate things, either

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selling physical products online.

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Let's just call that e commerce.

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And then there's lead gen and lead gen.

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We've never been able to figure out

the lead gen side of the equation,

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and which is really sad because we

should be able to, the click farms

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are just like, It's too crazy.

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actually have exceptions to that

rule, but for the most part,

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I'm a hundred percent with you.

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Okay.

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Maybe we can explore that in just a bit

because we obviously, we have a lot of

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lead gen customers here, but pretty

much abandoned Depending on the forms and

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we've tried all the stuff like together

and then separately, I think that are

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both of our agencies, but on e commerce,

like the new customer acquisition goal.

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I'm just saying e commerce meaning

selling a physical product.

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Are we really talking about that here

when we say, all right, here's what I

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know, or what I should be talking about

when it comes to performance max, or

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are there other business types, other.

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niches that you folks have found.

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Performance Max works really

well with SaaS when it works.

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And what's nice about SaaS is it

either works or it fails quickly.

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And I love campaign types like that.

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Because there's so many campaign types.

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It's we'll know in 12 months.

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that's just frustrating.

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It's nice to know it's

going to fail quickly.

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But Ecom, I think, is Performance Max.

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That's really where

Performance Max belongs.

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Because Google can see everything.

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And we're speaking

specifically of consumables.

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Or not even necessarily

consumables, but E commerce.

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where repeat purchases are likely you

can think like apparel accessories.

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If you're selling saunas I'm

not telling you that performance

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max won't work for you.

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I'm just saying that the

problems that we're discussing

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probably don't necessarily apply.

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So I had actually thought from

your perspective, the new customer

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acquisition goal for It doesn't,

performance Max was working some what?

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No.

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And so it's helpful, but not, yeah.

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And for our listener, if you don't

know, Google has a button you can press.

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Quite literally, there's a box you can

check and it's basically asks Google

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to prioritize new customer acquisition.

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And man, it just tanks,

campaigns to date.

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I have yet to see it work one time.

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Of course it would.

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What's interesting is.

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It's strange either.

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see two things happening.

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The first one is the campaign just goes

to absolute shit and doesn't sell anything

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or it continues to sell to repeat clients.

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And Google is unable to

identify who a repeat client is.

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Every now and again, you see a minor

lift in new customers, but it's not.

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Enough to justify just leaving it

to that one box and letting go.

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I'll continue to test it and, like

we continue to test everything.

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And that's the other really frustrating

thing about Google is you can never

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be sure what happened yesterday

is what will happen tomorrow.

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It feels a lot like being gas lit.

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learned 29 days out of 30 that the

new customer acquisition setting

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and performance max doesn't work.

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But if I don't test it again tomorrow,

I could get left behind because

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one day some Google engineer will

realize Oh goodness, we put the

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wrench where the sprocket should be.

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And then they fix it.

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And now all of a sudden the damn

thing works and I'm the last to know.

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So you just have to be comfortable.

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So strange, man.

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Imagine every single day you have

to put your hand on the stove to

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see if it's going to burn you.

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That's what running Google ads is like

at a professional level because there's

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so many changes being made so often.

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can't take your experience at face value.

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Which is counterintuitive to the, I think

the last conversation that we had on

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this, where you actually felt the exact

opposite was coming your way, the fact

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that the agency model, the media buyer is

going to eventually become just another.

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Cog in the machinery and

no longer is valuable.

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But what I'm hearing from you is

with the volume of stuff that you

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guys do, that is actually not the

case because you have to have some

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intelligence in there in order to make

sure that the thing is working or no.

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I think, and this will get a little

philosophical, but it might be a worthy.

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Philosophical discussion.

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So you tell me Ralph whether

or not this is worth pursuing.

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I think looking at Newtonian time

as a factor all I mean by that is

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I'm sorry That's an obnoxious way to

phrase it apples falling on my head.

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Didn't you say you're supposed

to speak at a third grade level?

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The theory of relativity, let's

get into that just a tad, shall

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No, I'm trying to say is instead

of the way that you function with

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Google, as though this will exist in

perpetuity, which would be relative.

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the way that we have to exist

with Google now, the context

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that is time is very important.

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the context currently is Google's

trying to replace us with AI.

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And so if you think about what I said,

it actually makes a lot of sense.

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Like I have a dashboard in front

of me and the dashboard has 50

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buttons and two novels and a wheel.

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And then I wake up tomorrow and there's 49

buttons and they all do something a little

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bit different than they did yesterday.

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And then, the, now there's, instead of

two levers, there's three levers and

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there's two wheels and so on and so forth.

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And this is Google.

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It's breaking us down into the simplest

parts so it can ultimately replace us.

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If you've ever seen that

kids show Inside Out.

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It dude is phenomenal.

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It's one of the best, it's one

of the best movies ever made.

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this animated film and it talks

about the five key personality

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types that exist within you and

each has its own distinct character.

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And at one point during the movie

of Inside Out, they go into it takes

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place in this little girl's brain.

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And so the characters go into the

part of the little girl's brain

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that deals with abstract thoughts.

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And when they do that, they move

from being three dimensional to,

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with having like really nuanced

curves and they're like fully

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scripted little artistic beings.

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And then all of a sudden they

become blocks and they look

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like they're in Minecraft.

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And then from blocks, they get squeezed

into two dimensional characters.

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And then they look like

they're, dumpy little cartoons.

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And then from two dimensional characters,

they get squeezed into just shapes.

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Just like a line, and

a square, and a circle.

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That's what this feels like.

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It feels like we're in the middle of

the process of squeezing us into from

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a three dimensional, full on, decision

making, autonomous being, into you're

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just a block, and you can just, beep,

beep, boop, beep, I can just move the

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way that I'm allowed to move, and then

you're not even really moving as much

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as you're like, just pressing, and then

you're not even pressing as much as

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you're just a shape, and then you're gone.

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And where I do understand what you're

saying as far as, It sounds like

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the media buyer has much more to do.

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That's because we're in the

trash compactor in Star Wars, and

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we're trying to fight the walls

that are encroaching upon us.

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And what we have to do is fight the

AI from doing what it wants to do.

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And maybe I'm just trying to protect

myself from sounding like a hypocrite.

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How did I do?

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I think the world still

needs media buyers.

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Dude I don't disagree with you.

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It's not that the world doesn't need it.

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It's that the media companies.

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on a long enough timeline aren't going

to give you the buttons you need to buy.

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Yeah.

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That'll be up to them.

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It's going to be, give me your domain,

give me your credit card, and then hit go.

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Now, you'll still have a job, Ralph,

because you do post clicks, CRO,

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offer, creative, all that shit.

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And I'll come work for tier 11.

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I'm going to put in an application and

I expect to be hired at top salary.

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We'd hire John first, probably.

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I think everybody would hire John first.

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He actually knows what he's doing.