full

Why I'm Moving Customers OFF of Performance Max

John is on a mission. He's moving customers off Performance Max campaigns and pushing them into Standard Shopping—and it's paying off! He's seen an incredible 41% increase in revenue, with MER (Media Efficiency Ratio) skyrocketing by 6X after making the move. Listen to this episode now to learn how he achieved these stellar results!

Fair warning from John: If you attempt this and then measure inside Google Ads, you will fail. The episode is 15 minutes long, but I will show you areas you're probably not looking at.



Connect with John on LinkedIn: https://www.linkedin.com/in/johnmoran...


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0:00 Why I'm Moving Customers OFF of Performance Max

2:31 Transferring the PMax ad budget

6:43 Getting more new customers without Performance Max campaigns

12:11 Getting 6X MER even if Google Ads seems “worse”



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Transcript
Kasim:

Hey everybody, John Moran here.

2

:

And today I'm going to share with

you why I'm moving almost all of my

3

:

customers off of Performance Max when

new customer acquisition is the goal.

4

:

So it's not that Performance

Max is a bad campaign type.

5

:

It just sucks at acquiring new customers.

6

:

Effectively Performance Max saves some

of the daily budget for repeat customers.

7

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Also save some of the budget

for remarketing of warm traffic

8

:

or previous clicks in that

campaign or even other channels.

9

:

So when you crank up.

10

:

Performance max new customer acquisition

doesn't always crank up with it.

11

:

So I have a case study here that

we are focusing on new customer

12

:

acquisition because this client

has a very good lifetime value.

13

:

Their second, third, fourth

purchases are very valuable to them.

14

:

So we need new customers to buy at a high

value for the first time, but also repeat.

15

:

And I don't want to keep paying for them.

16

:

I don't want to have a three,

four, 500 cost per acquisition

17

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on a returning customer.

18

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That just takes my profitability,

chucks it out the window,

19

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but the row has looks good.

20

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So here's what I'm

going to share with you.

21

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This is a client that we have since

moved off of Performance Max and

22

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I've given it enough time to give

it a clear, dedicated case study.

23

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What I mean by that is I waited about

a month and a half before I shared the

24

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before and after so there is time where

Performance Max latency is done, the

25

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conversions that are lagging or behind

are done, and there's been enough time

26

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for standard shopping to make an impact.

27

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So we've tested.

28

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Two main types, well, actually

three types, but in two campaigns of

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performance max, a feed only a full

build and a non feed, and they've

30

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had fairly good in app success, but

new customer acquisition failed.

31

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It was too expensive.

32

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We needed to get below a 400, 425, if

possible below a 300 would be fantastic.

33

:

So what you're going to see here

is a date range of April 25th

34

:

to May 24th versus June 27th to

July 26th, which was yesterday.

35

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And the total cost reduction is 63,

000 between those two time periods.

36

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So we spent 54 percent less.

37

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Now you're going to see 58

percent less conversions.

38

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It looks like it was cut in half.

39

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Let me share with you what's

going on inside of the backend.

40

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I'm going to look at.

41

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Two, one large area, and then

I'll share with you another large

42

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area, but two kind of main areas.

43

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One is the first order date.

44

:

This is something that you should be

checking, especially if you're only

45

:

running Google ads, because you can

kind of identify your activities in

46

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Google ads, your spend, your campaign

types, and how is this affecting

47

:

the first time customers, the new

customers, not total value, not row

48

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as new customers and develop an NCAC.

49

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The other thing I'm going to

share with you is the reduction in

50

:

spend and actually what happened,

which is actually pretty cool.

51

:

Let's go back to the first part.

52

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We've took 45, 000 in

the P max upgraded one.

53

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This is what, which is what I was running

previously and reduce that down to zero.

54

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And then we took a shopping campaign,

a standard shopping campaign, and

55

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we went from zero up to 25 grand.

56

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So we went and actually removed about

20, 000 out of the shopping network.

57

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At the same time, we also removed

36, 000 out of the search network.

58

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So I.

59

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Tanked this campaign and spend,

and I did that on purpose.

60

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One is because we're

going into a slow season.

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It is going to get expensive.

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And I've been working with this client

for this, my third year, every time during

63

:

the summertime, we tank new customers.

64

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So I needed to pull back,

but I said, you know what?

65

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I'm going to get more efficient.

66

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I'm going to focus on new customer

acquisition, not just simply counting

67

:

new brand and repeat and counting it

as row as now, two things you're going

68

:

to say, John, why didn't you upload

the customer list and bid only for new

69

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customers or bid higher for new customers?

70

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Did that each time I've tried that and

actually I tried about 14 other accounts,

71

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I could not get above a 35 percent of

where I was previously in activity.

72

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So I cut my ad spend and cut my activity

down by 65 percent without trying.

73

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All I did was turn on bid for new

customers and it would not spend over a.

74

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Over 35 percent of where it was before.

75

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It doesn't surprise me when 50,

60, 75 percent sometimes of a

76

:

performance max campaign is not

new customers and not cold traffic.

77

:

So that was number one.

78

:

Number two, you're gonna say,

why didn't you exclude the brand?

79

:

Did that as well.

80

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I had no brand in PMAX.

81

:

There was not one branded term

in my performance max campaigns.

82

:

It did not show up.

83

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The CPC did drop a bit.

84

:

The ROAS stayed high and new

customers did not come in when

85

:

I start to increase spend.

86

:

So I think that the two channels,

the search and shopping inside of

87

:

performance max were denied entry by

my existing customers and ran traffic.

88

:

However, the YouTube GSB discover

display and basically kind of

89

:

remarketing aspect of those networks

were still going after that.

90

:

Warm existing customer audience to

get a one cent click for a thousand

91

:

dollars sale, which is about our AOV.

92

:

those two things I tested multiple

times in other accounts tested

93

:

and here as well still failed.

94

:

we know that we've taken out 63, 000

out of Google ads and we know that

95

:

we've reduced 36, 000 out of the search.

96

:

We reduced about 20,000 in shopping.

97

:

So what happened in between

or the last 30 days?

98

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So in this last 30 days,

I have 181 new customers.

99

:

Okay, so let's see what our cost is.

100

:

It's 53 8 6 1.

101

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So 53 8 6 1 is giving me a $297

cost per acquired new customer.

102

:

We're under the $300 mark, which

is finally where we need to be.

103

:

Last year during this time, we were

456, so we were down now to 2 91.

104

:

And also last year when

we reduced, we only spent.

105

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I think 44, 000, we

still had a higher cost.

106

:

So we spent less and then we actually

had a higher cost for acquisition.

107

:

So now we're at 300.

108

:

What was the time period before?

109

:

Well, when we look at April 24th

through May, I'm sorry, April 25th

110

:

to May 24th, which is the date

range here, we're spending 117, 000.

111

:

And now, what was that CAC?

112

:

That was a 434, 000 CAC because we had

000 in spend, 117, We had 270 customers,

113

:

which is here at 200 and there it

is 270 customers and we're at 434.

114

:

So reducing the spend by 54 percent did

not reduce the new customers by 54%.

115

:

It reduced it less, reduced by about 35%.

116

:

Good.

117

:

So what ended up happening is during

the cold season, I've actually

118

:

been able to drop my CAC down.

119

:

From 4.

120

:

34 down to 2.

121

:

97.

122

:

Yes, I did lose volume, but it

came in at a much cheaper CAC.

123

:

The interesting thing, though,

is that in app shows this.

124

:

Watch, watch this.

125

:

Inside of my branded alpha

campaign, which is just, just brand.

126

:

It's called alpha because we

had a beta and yada, yada, yada.

127

:

But that's brand.

128

:

That's my brand campaign.

129

:

I spent 400 less and then got 6.

130

:

5, there we go, 6.

131

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5 more conversions and my

conversion value went up 11, 000.

132

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So I spent 400 less, made 11, 000 more.

133

:

Why?

134

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Well, Performance Max would have taken

that and would have taken that credit.

135

:

Are they returning?

136

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Yes, there's some returning.

137

:

Is there new?

138

:

Yes, there's actually more new.

139

:

And how do we know?

140

:

Well, what we saw here is that inside

of the YouTube remarketing, we were

141

:

able to take out 3, 700 from my YouTube

remarketing that is exclusive to...

142

:

Only warm traffic on the site,

but not existing customers.

143

:

I lost one sale for 71% less, which means

my YouTube remarketing got more efficient.

144

:

So what's interesting is my

YouTube remarketing started

145

:

to convert much better.

146

:

We can see that my in-app cost per

conversion here was reduced by 70%.

147

:

My brand traffic was reduced by 25%.

148

:

Now, the fun part though is, is that

the performance Max used to get.

149

:

a $232 cost per conversion,

and now my standard shopping

150

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campaign is getting me $1,100.

151

:

Cost per conversion.

152

:

Whoa.

153

:

200 to 1100.

154

:

John, you're crazy.

155

:

Look at how much you increased

the cost per conversion.

156

:

It's not true because the amount of sales

that are now unattributed from performance

157

:

max that are now properly landing in the

remarketing and the brand is coming in as

158

:

such a much cheaper cost per conversion

than what the fluffiness that, that

159

:

performance max was simply to take credit

for, to continue to spend the money.

160

:

So long story short, I didn't go

from, from a, what was the one here?

161

:

Sorry.

162

:

The 232 costs per conversion up to a 1146.

163

:

That was them separated.

164

:

When you count new customer acquisition,

I was probably still getting a 242

165

:

inside of performance max, but also

getting a whole bunch of overspend.

166

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I was spending remember 50, 60 percent

of just remarketing existing display,

167

:

YouTube, all the other stuff I saw just.

168

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Throwing all that money out the

window, that was increasing my CAC.

169

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Remember, when you're putting your money

in a, in a, in a pool, but you're only

170

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measuring one half, if that pool is

unaffected by the amount of, of change

171

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between new versus returning, you're

going to see differences in those CACs.

172

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So returning CAC and new CAC.

173

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So it's nice because now I have a

pool where I can dump money knowing

174

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it's going only after new customers

rather than dumping in more and more

175

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and more money and only being 50

percent as effective to that traffic.

176

:

I put a dollar in a campaign

and half goes to cold, that's

177

:

going to double my CAC, right?

178

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Because I'm not putting money

towards the area that I'm measuring.

179

:

Very simple stuff.

180

:

our cost per conversion went up 29%.

181

:

No, it did not go from

a 3 93 up to a 5 0 9.

182

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It actually went from

a 4 34 down to a 2 97.

183

:

So Google Ads shows a 30% increase.

184

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Not true.

185

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Standard shopping just

sucks at attributing.

186

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We already know this.

187

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If you've been following me for

some time, this is not new stuff.

188

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So I went down $135.

189

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Google says, I went up 115.

190

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If you measure an app, you're wrong.

191

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Period.

192

:

now let's look a little bit

more recent time period.

193

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If I look at the last 30 days here

compared to the previous period, we're

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gonna see something really cool.

195

:

you're gonna see me take

$79,000 and bring it down to 53.

196

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I pulled 32% more money outta my campaigns

and I took it down another $25,000.

197

:

You'll see where I took it out.

198

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I took standard shopping out 15

K and I took general out 7, 800.

199

:

What happened to my brand?

200

:

Well, my brand spent 11 percent

less and made, whoa, sorry.

201

:

My brand spent 11 percent less and

made 132 percent more conversions.

202

:

And now look at the cost.

203

:

I spent 155 less and made 32, 000 more.

204

:

So the conversion value, though,

is decreasing cost 38%, lost

205

:

I'm gonna do this, lost 16,

decreased it to 22, lost 27.

206

:

Google thinks I am just you know,

hemorrhaging cash right now.

207

:

What's cool about this, though, is

because the branded traffic spiked up so

208

:

much, which I was gonna get anyway, and

I didn't have to pay 400 per conversion

209

:

in PMAX, or 300 per conversion in

PMAX, I took 32 percent of my cost out.

210

:

I made 18 percent more conversions

and 3, 000 more in conversion value.

211

:

But what actually happened?

212

:

Well, because I'm in a standard shopping

and I'm so much more efficient month

213

:

over month because of negative keywords

and, and also the products and, and

214

:

obviously just good optimization.

215

:

In the last 30 days,

saving myself 25, 000 last.

216

:

30 days compared to previous period,

I have 8 percent more orders.

217

:

I took out 13 percent of

my traffic by pulling back.

218

:

I made 8 percent more orders.

219

:

My returning customer rate didn't blow

up because brand is not new customer.

220

:

Oh, sorry.

221

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Brand is not existing customers.

222

:

So when I pulled 25, 000 out,

you would think, well, the

223

:

brand traffic's coming in.

224

:

Oh, that branded traffic is going to

be a whole bunch of return customers.

225

:

No, it didn't change.

226

:

So I have slightly better MER.

227

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My NCAC held, I pulled out fatty, like,

you know, overspend on optimizations.

228

:

And now for this last 30 days, we

are sitting at 359, 000 in conversion

229

:

value for a grand total of 50 K.

230

:

That is a 6X MER.

231

:

My new customers didn't suffer.

232

:

performance max.

233

:

Awesome.

234

:

If you're going to measure in

app, if you're going to say,

235

:

look at my ROAS, if you're going

to say, look at my ROAS, yeah.

236

:

I made my row as worse

and I perform better.

237

:

The client thinks I'm perform better.

238

:

I'm performing better, even

though Google ads looks worse.

239

:

And I think that's the lesson for all

of us here is that if you have a, if

240

:

you have a client that you can speak to

at this elevated level, it's something

241

:

that is, is, is very, very noteworthy.

242

:

Let me just see here real quick.

243

:

Let me pause this real fast.

244

:

Okay, here is actually the email from

the client on Tuesday, July 11th.

245

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I said that we I think pulling back

from PMAX and pushing a standard

246

:

shopping hub to like year over year,

we're even up 41 percent in revenue.

247

:

So it's completely agree.

248

:

Excited about the results.

249

:

Want to keep strong results on some

lower spend and then go into the fall.

250

:

Like to start back up next week when

you have, you know, blah, blah, blah.

251

:

So we're going to start meeting again

next week, but that was in the past.

252

:

So that's the thing too,

is we actually have.

253

:

A lot less spend, more new cold

traffic, took my CAC down 150 bucks,

254

:

a year over year, I'm 43 percent

higher than we were last year.

255

:

And that's the reason why if I

measure ROAS, or if you look at

256

:

performance max, you're going to fail.

257

:

you'll have high ROAS all

the way until you get fired.

258

:

I'm Jon Moran.

259

:

I hope this is worth worth

some learning for you.

260

:

Bye.

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