How a $2,500/hr Google Ads Expert Scales Real Businesses | John Moran

The Truth About Scaling people do have a too complicated understanding of digital marketing metrics where they think it's like well this clickthrough rate is higher so it probably could do this and make sure like we can argue all day left and right and back and forth and who knows what more how when where and how but unless you're actually scaling with new customers that are you know coming in even at the same cost it's not effective you're watching Marketing Misfits with Norm Ferrar and Kevin Kane [Music] mr ferrar good to see you again another week another great podcast coming up yeah I can't wait to get into this one how you been you've been kind of traveling the world uh yeah I took a little uh little uh first vacation I've Escape from the Metrics Maze actually taken for myself probably in I don't know 7 8 years uh I mean you know we travel a lot and you know we mix in some fun and pleasure with what we do but I actually uh I wanted to escape so I I hit went down to St barts i'd never been to St barts have you ever been to St barts in the Caribbean yeah yeah i was there uh I went to St kits and then over to St barts yeah so uh I'd never been and I heard good things about it uh it's bloody expensive uh a Coke Zero i didn't realize this but in my room they they supplied you know uh they had two cans of Coke Zero and two cans of regular Coke so I asked them to switch the regular Coke out for Coke Zeros and they kept that replenished but there's no little sign that says these cost anything you know and I'm paying like $2,000 a night for this place right on the beach literally it's that's what the price was um and it was a great place i mean don't get me wrong um but served its purpose but so I was like surely these must be just included cuz you know um and so when I go to check out no it's €10 not dollars but €10 per soda so there's like 12 of them on there uh it's €120 charge for for 12 sodas so I was like well it is what it is it's fine you know this is where you say Kev this is where you say you found some dirty underwear in your room and that's what I should have done that's exactly what I should you never recommend this this is going on Trip Advisor one star that's right no you're right i messed up i should have said that i should have said that those would have come off uh but no it it it was uh it was it was really good it was a it was a good time and uh Sutton uh just wrote in a little journal and uh you know the the thing though is I I thought about you Norm i I I you were in my thoughts i couldn't escape you no matter what I tried to do I tried to go have a vacation and escape you i couldn't escape you cuz they have Cuban real Cuban cigars and down in the Caribbean that you can't they're not really allowed in the United States i mean you have them up in you have them up in Canada yeah but they're crazy expensive well yes so I I went to one of those official Cuban cigar stores and uh picked up some Year of the Dragons that they're shorter though than the ones that we normally do they're a little bit shorter and and uh sat there and I've never ever smoked by myself ever smoked a cigar i mean I you know we we smoke cigars when we go to events and when we hang out um but I' I've always done it socially uh with somebody else i've never sat by myself so this is the first time ever and I think I did two cigars a day over 3 days uh of good Cuban cigars and just sat there and and uh just cleared my mind and wrote a whole bunch of stuff in a journal personal stuff business stuff plan stuff so it it was good it was good i I forget all that crap i I just want to hear about the cigars well and and and uh hopefully the government's not listening but uh there might have been there might have been one that I forgot to take out of my case or something for for you i I think Well I meant to make sure I smoked them all but I think I got a couple labels mixed up or something and I think there there might have uh there might have been one or two or three or four or some number that might have snuck back uh for my buddy Norm we we won't say anything and I'm already going to thank you i'm already starting to drool if you can if you can tell so how are you going to tie this into today's podcast Kev well I How Masterminds Shape Success mean one of the reasons uh is you know today's guest is someone one of the reasons that I can do what I what you know go off and spend $2,000 a night crazy for to to go to one of these places is because of masterminds and you know you and I know we go to a lot of events but when you're around other super smart people that are not doing the same thing as you I mean we we're big in the Amazon space but when you're doing around other smart people that are not doing things as you you get get outside your box and that's one of the reasons that I went I could have I could have sat here at my house i mean I've got a nice in my place a nice place with a nice view and sat on my balcony and smoked cigars and wrote in my journal and and clear my mind but I needed a change of pace i needed a change of scenery i needed a change of environment and when you do that no matter what business you're in if you're focused in the Amazon business and that's what your heads down on when you get outside of that and you go to something else where there's people that are doing similar but different things and they have a different approach to it that's where you really get the most bang for your buck I believe and you expand your mind and that's why we do the Marketing Misfits podcast one of the reasons we do that so this our guest today is someone that came from me getting outside the normal fishbowl where because I joined uh Perry Belchure someone I followed for quite a while uh and he started a mastermind uh called Driven he he was part of traffic and uh conversion and digital marketer and all that stuff i had something called war room which I'd heard good things about but I could never muster myself up to pay 25 30 $35,000 a year for a mastermind because my experience has been every time I'm in a mastermind I'm the one providing the value uh the most value and why should I be paying for that they should be paying me so I had trouble just coming across and saying "Why would I pay 30 grand a year uh for this?" And so but I I I bet the bullet and I went to one of Driven's I got invited as a guest and I saw this guy speak uh I think it was in LA and his name was John Moran and he was speaking on uh Google stuff uh and I didn't pull the plug right there uh but I went to one when one they had in Austin i think he spoke at that one as well if I recall and he was just going like behind the scenes and like just talking crazy stuff about how Google's ripping you off and and you can't trust the numbers and everything's in their interest and here's how you actually figure out what's really working and really should you cut your Google ads off or not because of this and this and this and I was like all right him plus a few other people in there made it to where I was like okay I'll I'll pay the money for this this is this is good value and then I I invited John's had a partner uh Cassm who's one of the co-founders was a driven and I tried to get Cassum to come to my event in Iceland and he had some sort of conflict uh and then uh uh I also at the same time had reached out to John um and John replied back and said yeah I don't really know who you are but uh uh he didn't say that uh but he's like he probably checked with CASM or somebody's like all right this guy's legit uh and uh he ended up coming to Iceland and speaking at Elevate 360 uh with his wife uh Kate join joined us with his wife and uh was just awesome human being and uh did a great uh great job so that's the tiein so we have probably one of the top Facebook experts in the world on today uh I think he's you know some crazy 2500 bucks an hour or something if you want to hire him but this guy knows his stuff when it comes to to Facebook and uh Facebook and Google uh not Facebook i said Facebook i meant Google i was going to say something i misspoke i misspoke i don't know why I said that i misspoke uh it's Google i can't I get this right it's Google not Facebook erase all that Facebook so uh it's Google advertising um and uh I'm excited to have him on i think uh this is going to be great all Unmasking the Google Ads Maestro right so let's welcome John Moran the king of Facebook i my mind is believe I'm in the wrong place it's Google it's Google sorry about that man oh it's actually you're you're you're actually spot on i've been doing Facebook since 2017 um I kind of made my name in Google because we we really sucked at doing creative and we couldn't really offer creative for people like fantastic media buying but if you're we were trying to offer Facebook for a long time and like well can you do the creative too we're like no you got to do that and then they're like well we can't do that we just ended up not really advertising for it but I I I actually have a fairly large background in both so it works well all right start there see Norm I'm right i'm running well you know once in a while once in a while once in a while yeah so why don't we get into a little bit of your background you were talking about since 2017 you were into Facebook but tell us a little bit about yourself yeah yeah so uh I I started like being an entrepreneur at 17 From Jack-of-All-Trades to Niche Dominance with with a family-owned business that was actually doing marketing uh for automotive dealerships and this is you know direct mail kind of you know newspaper old school kind of stuff and uh been basically since uh since then inside of marketing but fast forward uh from 2006 to 2015 where it started to move into more obviously digital was like the the thing to be on um that was the year that you know digital started surpassing traditional media so we we Kumam uh Aum who you guys mentioned he him and I had an agency called Solutions 8 and we were a fullfunnel marketing agency so we did everything landing pages we did websites you know email marketing did Facebook ads did Google ads mow your lawn wash your car we did everything uh you know basically anything to make money we were like "Yeah we can do that too." And uh so we we got pretty good at everything we were kind of a jack of all trades but what we started to notice more often is that if we built out this full funnel of everything we turn on meta and Google if meta and Google didn't work the funnel really didn't work but if you turn on meta and Google and meta and Google worked really well the rest of the funnel worked really well so we started to kind of think about like should we niche down into something and become kind of a master of one instead of a jack of all trades and we decided there's much more room to grow in the industry if we went to good companies with good funnels and we just became the expert media buyers essentially so we had a big focus in meta and Google from 2016 to about 2020 and then we started to go really hard in just Google in 2020 google became much harder meta became a little bit easier in terms of their interface and understanding attribution models and that kind of stuff it was just more simplistic on meta so we decided to take the harder route because we're mascus apparently and we just had more clients in Google we said "Hey let's just you know space wasn't really being um owned by kind of a a company that is you know trying to be the expert there." And that's kind of the direction that we took so I've been since then managed uh I managed about $440 accounts today um overseeing a little over I think it's like $190 million in annual ad spend or something like that something crazy but it's across four different agencies um and then I have like some personal clients that I'm part of like you know I have some e-commerce stores that I I've started with some partners and some attribution model companies Norbeam and Wicked Reports that I became an equity partner in and it just kind of grew from there um but we we kind of made our success when we sold Solutions 8 it was an 8 figureure acquisition um which was like once you do that in the agency space you're like "Oh this guy knows his stuff." We we you know we just got an unsolicited offer that was too good to pass up and we jumped on it um so it was it was cool it was like kind of springboarded into into the future but I've just been trying to become the expert in the space by be the first to know first to test first with results and first to first to teach i like kind of reverse engineering and like you know lockpicking is a hobby i like breaking things down figuring out and figuring out how to rebuild it better uh so it just you know that's been my my my personality like for my whole life so I think it works well with paid media because it's just a big puzzle that you get paid to work on so you must really like the the lockpicking because a lot of people would take an eight figure exit uh and you and Cassum's the same way he's still plugging away doing stuff and say "Okay I'm done i'm retiring i'm going sitting on the beach." Um but that's not the case uh tuck that away make some investments have a little bit of fun and uh you're still back at it what's uh what's the drive there yeah it's uh part of the thing is I've been working with so many clients for so long that when I sold my my agency we you know we we got into a situation where we were at a little bit of odds and ends with the acquiring company and we kind of made an agreement uh that I can take any client that I would basically you know that wants to come with me i won't solicit them but that wants to come with me in case you know things didn't work out with our relationship um it was a little tumultuous there for a little while um and so it just kind of turned out that a lot of the c a lot of the clients wanted to go with me instead of with the the agency that purchased us so I ended up I kind of inherited uh a couple clients and um and then the it ended up ended up with like you know 25 or 30 personal clients that end up just kind of kept growing because of referrals essentially so I kept you know trying to do my best for these clients and then that in turn just kept growing into more clients and kept growing into you know more advanced strategies to the point now where we're like off in La La Land with the stuff that we're testing right now that is unheard of kind of stuff and we just I just try to keep bettering myself and bettering the industry just because I have a lot of businesses that depend on it with a lot of real people uh and real families and so it it's it's not like they they'll be bad without me but I I can ensure their their growth with me and so what we what I kind of skipped over is what I lost a company when in 2015 before I before I joined Solutions 8 in 20 end of 2015 but I had a family-owned business and uh Kasum was our vendor and we end up have a bad uh bad investor where they try to steal the intellectual property rights at the same time Kasum was shutting down his company and you know dissolving from his existing partnership i had like 120 bucks in the bank uh Kuma had like basic probably less than that and he's like we got about 3 months of ramp before we like both lose our house would you want to do this with me i said yeah of course like it's it's you know it's an opportunity of a lifetime to work with a person that I like know and respect and who I know is also a hard work and we both can we both can figure things out so I' I've been in the time period where you had 120 bucks in the bank and trying to build something from scratch and a lot of the clients that I work with are in those in that same boat so I'm like I've kind of been there and and I've felt the real fear uh of you know having a wife and and a daughter at the time and not knowing where my next meal is going to come from unless I you know go and kill and eat myself kind of thing so I I take that to heart with a lot of clients and so what I don't want to do is like hey good luck you know we got you to this point and now now you're off to the races so I kind of kept working with them and then just kept growing from there so I'm still in it castm says you're you're the brains behind it he's like uh I mean I saw him speak at uh I think his go high level he was doing a little talk and he talked about his exit a little bit and he said "Look I this wouldn't have been possible without uh my partner John thank God I met John because he's the one that made me all this money." Uh so he he he gives you gives you all the credit i mean Cumm's a really smart guy too uh I mean super super smart guy uh but so so what in the agency business though is it that's a tough business isn't it i mean isn't it a race to the bottom and people bouncing around and like trying to get a better deal from somebody or once you set them up they think they can run it and they disappear for a while then they end up coming back uh so what what what's how is it how hard is it to run an agency business it's it's cutthroat um and everyone is in my opinion kind of like not everyone a majority of agencies are fine with the status quo and I think that's why there's so much turnover um agencies come and go uh 6,500 globally agencies right now i mean it's you throw a dart at a dart board you're going to hit an agency that knows what agencies or agencies Google Meta yeah i mean digital marketing agencies particularly um there's over 6,500 and globally um and a lot of them in Australia which is you know that makes sense they've always been really tech-savvy but what was interesting is we noticed that the majority of the industry measures by inapp performance um what the attribution of those platforms tell you and you know everyone wanted a 4x like that was the magical number for 5 years for some reason just give me a 400% rorowaz or above and you know you're good you know drop shipping was coming popular margins were becoming slimmer so as long as you can for extra money you can live on a 20 25% profit margin so Beyond ROAS: Navigating True Performance & Profit Margins the industry was moving towards where the owners of the companies were dictating the performance and then it was a reaction of the agencies to skew the performance in this particular direction even at the even at the detriment of the client and so we started working with some larger and larger businesses and some publicly traded companies that when you said the word rorowaz would kind of laugh in your face they're like "Oh Rorowaz like you're you're one of those agencies huh like just bid more for brand and make your numbers look good and kill my business kind of thing." And what's funny is I I always had a a visceral reaction to that i was like "No I still want to grow your business i just you know need to use something as a benchmark." And I was educated by some very large powerful smart people in the industry one of them was the old CEO of Rosetta Stone um and he taught me a lot of here's how we actually grow businesses in in you know kind of like the big boy arena is like he was like "Okay you know I like you a lot you're smart you're driven and you want to you want to help me i'll share with you what we measure and then you go and figure it out cuz I'm going to pay you a lot of money but I'm going to be like I need 100 new customers next week i don't care what the rorowaz is i don't care what the CPC is see I need 100 new customers or I'm going to go out of business that's what I'm going to task you with." So it was kind of cool i got to be like a good marketer again um I get basically utilize you know what I know is going to work in the industry or for that particular client without having to have this weird vanity metric that's not actually going to help and I have been fired before by getting a 10x return for a client then getting fired because their business started to go down it was the wrong people wrong type of customers you know we're buying more existing customers than new so our LTV was being hurt our new customer growth was being hurt you know and it was a spiral out of control great rorowaz but death of the company and so after getting fired for those 10xs a few times you kind of learn okay maybe this is the wrong way to measure and I've been measuring what we call our MPIs which is like ENAC ENMR and like LTV and and all those things that we typically would measure how our marketing actually affects those businesses rather than looking at a metric that I can try to defend when getting into competitive relationship with a client and almost every agency is still using it at metrics and so that's that's what I think the differentiator is is I charge a lot but I grow a business um if you want to hop into the Google ads and ask questions I can absolutely teach you but there is you know I'm more hired for a result rather than a report and I think that that is where the market has not yet figured that out and they haven't made that leap to media buying to business growth and I think that that's where if you don't head into that direction you're going to be left behind and I think that's why there's so much turnover it's like everyone's getting the same Forex result as my business dies Propel Your Product Launches hey what's up everybody kevin and Norm here with a quick word from one of our sponsors 8Fig let me tell you about a platform that's changing the game for Amazon sellers that's right it's called 8FIG on average sellers working with 8ig grow up to 400% in less than a year 8fig offers both funding and free tools for e-commerce growth and cash flow management and here's how it works 8ig provides flexible data-driven funding tailored to your exact needs you know they can fund anywhere from up to $50,000 all the way up to 10 million 8fig gives you free tools to forecast demand manage inventory and analyze cash flow visit 8fig.co that's 8fig.co to learn more or check the link in the show notes below just mention marketing misfits and get 25% off your cost that's 8fig.co 8fig.co see you on the other side so how do you do that yeah how do how do you do that how I mean how do you I mean I know that I've heard stories of like Demystifying Platform Algorithms oh yeah we turned off our Google our Google ads had I don't know just use this old traditional metric a 3x rorowaz uh and we turned them off and all of a sudden now our Facebook ads went from a 10x to a 1x or some crazy thing and you know there's all this correlation between everything so how do you how do you me how I mean they always say what's what's that saying uh what can't what what uh can be improved has to be measured or whatever that saying is about measurement so how do you measure this stuff or what do you do so what we do is a little bit different we actually have uh well I guess I would say we used to go into third party attribution so I became an equity partner in North Beam uh an equity partner in another company called Wicked Reports which you know there's other ones like high roast and triple whale there's everyone's it's a service you know it's a burger everyone sells a burger like which burger do you want from where so it's a third party attribution software like everyone else that is kind of now where the industry is just moving into which this is server side tracking and will tell you what actually happened off of you know the clicks that came in who was actually first what ad actually sold the user not just what was the last click and so you look through attribution to understand how the traffic is flowing through your through the sales cycle and then as you get a better understanding of that traffic flow you can then optimize towards it that was that worked for a while the bad part is the paid media campaigns started or paid media platforms meta and Google particularly started to do more autotargeting so your targeting capability became restricted because they can now use your targeting as an option so it's like hey I'd like you to target a lookike audience like if I if I want to I will but if I find a better user over there I'll go over there and get and go sell that user your product so your targeting is now optional and then the next thing that happened was your exclusions became optional so like don't go after our our existing customers like well we we won't if it has bad performance but we will if it does and so typically return customers have the best performance they spend more than anybody else their conversion rate higher they take less clicks you know the campaigns are so good at conversions from anywhere it gets them from the wrong users so what we found out more recently is if we actually only imported the first click uh that led a user to a conversion we can replicate that at scale which means regardless of what the paid media platforms believe because we've taken all the conversion tracking out and we've replaced it with our own server side data as an import now the campaigns have to optimize and show the metrics that we give it um so we almost take out the conversion tracking capabilities from Meta and Google on their own and say "No you are no longer allowed to see the people going to the conversions and to the confirmation page as a conversion." When that happens we'll import it and then you can show it but it's going to be the data that we want you to display things like a first click only or a new customer only or a new subscriber only or a new customer on a particular product that was trying to be sold so you can't have like you know your car ads selling a bicycle too high a CPA and way too low of AOV so when we started to import those that's when we can actually solve for two things which is one we understand the attribution because we can still see it but now it's actionable because we're importing them into the account and optimizing towards those so we kind of connected the dots between third party attribution which is where the industries are moving about they're always about 9 to 12 months behind new innovations so they're moving into the third party attribution software to understand what's going on but then the next step that people will kind of find out is if we import it now we can actually move the needle on our targeting and our exclusions because we're optimizing towards what we want not what Meta could get that makes sense you know we've uh we've gone to a lot of shows we've talked to a ton of sellers and in the Amazon uh arena it's always a cost i don't know about you Kev but how often the only thing I hear is ROAZ except if I go to a driven or if I go to you know a higher level uh event i mean it's still the common knowledge everybody is driven by ROAZ mhm yeah they they are and they're not looking at it like like you just said you know triple whale and some of these things where you get all this attribution and I just heard Neil Patel speak uh yesterday and he said now the average touch point it used to be uh 2 years ago I think he said was 8.7 or something like that touch points needed to actually make a sale and he said now it's 11.2 um and and it's going up and like knowing which of those touch points is which ones do you double down on which ones do you cut which ones do you keep along even though the the backside numbers might not look good but they're actually making a difference they're part of that that that cycle uh and that's where it's getting trickier and trickier and like you said now Google I The Evolving Customer Journey: More Touchpoints, Deeper Insights mean or Meta especially is like don't don't tell us anything we we we got you uh you know we you we'll just run this stuff uh we don't need your information uh we know everything and everything already so uh screw off uh you know we got you we know how to charge you the most money and keep you keep you happy um so uh we'll figure this out yep and and if I shared screen on this would people see it or is it just It depends if they're hearing it on the podcast we might have to just describe it because a lot more people will hear it on a podcast than uh video well I'll mind if I just show some for No yeah go ahead and share share for the people on YouTube uh that are watching they love to see this uh those of you that are listening on Apple or Spotify uh check out the YouTube channel MarketingMisfits you can go to marketingmisfits.co co and there's a link there that'll take you to to YouTube or you can just go to YouTube and type in marketing misfits uh podcast and that way you can see what John's about to show and uh Kev said he'd be doing a form of interpretive dance to the slides so it'll be entertaining we shall look at metrics uh all right i'm uh I'm sharing screen would you mind adding it to the Sure the view there we go thank you very much so here's a perfect example uh this is my my company um so it's something I I can share because it's it's owned by us um this is in November before we scaled and we have Facebook and Google google Facebook spending you know 240k and Google spending 22 so it's definitely much higher spend on Facebook now if you look at the rorowaz you got a 38 in Facebook and a 69 in Google so it's like okay Google's doing better our cost to acquire first-time customer is $360 in Facebook and $355 in Google so Google has a better rorowaz and Google has a better cost of acquired first-time customer now this typically is where people would say "Okay let's put a little bit more money into Google it's it's cheaper and it's getting us better return." But what we what we do particularly is we look at our traffic flow first and so we know that Google Ads that has spent 22,000 out of the 13,914 clicks that it received only 613 were new visits to the site so what this means is that only 4.4% of all of our traffic coming from Google is from a new user which means 95% of the people that are in this campaign have already been on our site most likely already came from Facebook so Google this is like you said before well if I shut off Facebook Google goes down that's exactly right and or vice versa and you don't know which one is which until you start to analyze the traffic and what's interesting is if we were to scale let's say Google instead of Facebook we would be paying what we call $37.15 of ECPN which is effective cost per new visit so if you put in $100 you're going to get three new people from Google but $100 will get you about 50 new people from Facebook so just even knowing how and where to scale is important and if we look at uh and I have a different screen pulled up here and called mission control and uh this is not like a a commercial for this i'm not even going to mention the the company name or anything i'm not I'm not trying to push this product i'm just using it to give you visuals but what was interesting is when we started to uh analyze the traffic flow we said okay we know that Google is very very warm we know that Meta is very very cold so let's not scale uh Google at all let's actually pull up money out of Google and let's push it all into Meta now remember we had a better end CAC on Google and we had a better rorowaz on Google but it was most often the second click we were running uh a campaign type called performance max at the time and performance max had auto targeting we had all of our you know existing customers excluded we had all of our existing customers and traffic and meta excluded like we have all of our proper exclusions but what we saw is that as we started to scale only Facebook and we took Facebook from about a uh from you know spending I think was like $1 million in the last in the previous 5 months to now uh in this last five months so the the most recent five months were up to 2.4 million so this will this will load and it'll tell you the the uh amount of spend but we basically just stuck a million dollars this quarter into Facebook alone and then pulled money out of Google and Google had a better result and what we saw after this there we go we see that our Facebook went from 1 million to 2.4 google went from 100 grand down to 84 we pulled money out and we can actually see that the new revenue inside of Google is up 1.4% and the new revenue inside of Meta is up 212 so our top line shows us that we were able to scale 118% and get $24 cheaper cost for acquired first-time customer and 189% more new customers with only sacrificing uh 12% of the global rorowaz as to scale 118% so those that type of metric there as an example is what will allow us to identify those traffic flows and then import those same users into meta or into Google so it says hey what's actually happening first click meta or Google can see that now and optimize towards those because we understand the traffic flow and where to add in the new ad spend roz is easy to get you know you bid nothing on brand and you get 10x easy scaling new customers at 190% in half a year that's the hard part and so you have to kind of go a little bit past the in platform metrics to truly understand how a business flow of sales cycle works and then make sure that all of those paths and journeys are funded properly at scale and that's what you need to not only visualize in terms of a uh omni channel traffic flow but then also enact on it with you know a cappy import into both Google and meta to be optimized against now a quick word from our sponsor Lavanta hey Kevin tell us a little bit about it that's right Amazon sellers do you want to skyrocket your sales and boost your organic rankings meet Lavanta Norman and I's secret weapon for driving highquality external traffic straight to our Amazon storefronts using affiliate marketing that's right it's achieved through direct partnerships with leading media outlets like CNN Wire Cutter and BuzzFeed just to name a few as well as top affiliates influencers bloggers and media buyers all in Levant's marketplace which is home to over 5,000 different creators that you get to choose from so are you ready to elevate your business visit get.lavont.io/misfits that's get.lavont e v a n ta.io/misfitits and book a call and you'll get up to 20% off Lavanta's gold plan today that's get.lavont.io/misfits i got a basic question you're telling us all this most of it's going you know I'm a branding guy but uh you said earlier on that there's 6,400 agencies uh probably the high high majority still go off of ROAZ how can you differentiate yourself like I I know you've got a lot of great content and you represent a lot of great brands but say you're one of those companies you're one of these upandcomers and you don't want to be a bottom feeder in Amazon it's easy it's perceived value you could do that you can you know drive traffic get more impressions and you have a great listing what are you doing or how can companies do what you're doing or something similar get away from rorowaz and not be a bottom feeder to get the new business yep um so the one thing I Actionable Metrics would say is I would take a snapshot of your business performance metrics at at the time now and start on a small change what I mean by that is last 30 days how much money did you spend on ads how many new customers do you have and what is the cost of those new customers now next week put ad spend into meta that's all you're doing regardless of what meta says it says it's doing better or worse doesn't matter you put in 10% more ad spend now the week after that say okay how much did you spend on ads total how much more new customers or less customers do you have and that is going to be your early indicator if you're spending in the right channel that alone can save 20 30 40% of anyone's daily ad spend and reallocate it to the other portion where they're seeing good performance so that they can take 40% of wasted ad spend out and put 40% or now technically 80% more ad spend into the areas that are working well and that is the basis to understand how the paid media platforms are actually affecting your company you don't need fancy attribution don't need copy imports all that stuff is basically going to happen anyway I mean you spend more on Meta even without third party attribution meta is still going to do its thing but if it's targeting the right customers right audiences and you're making the good decisions on where you're putting in that ad spend regardless of any report any you know whatever your agency is telling you your employee what you believe it doesn't matter if you're putting in more money in your ad spend and you're getting actual less new customers or new revenue out of it it is not working it's your bank account it does not lie it it is there's no one that can convince you you have more money than you do and so what's nice is people do have a too complicated understanding of digital marketing metrics where they think it's like well this clickthrough rate is higher so it probably could do this and it would make sure like we can argue all day left and right and back and forth and who knows what more how when unless you're actually scaling with new customers that are you know coming in even at the same cost it's not effective and if everyone kind of took that mindset and applied that for the next 30 days the clarity becomes becomes immediate um I know where to push money first because I can see the traffic flow you don't necessarily have to see the traffic flow to still test this like I would i would make the same test you would if I knew where the traffic was coming from or not because it's still you have to test everything so as you start to push in money into particular areas what you get out globally regardless of attribution regardless of customer path where you're spending your money it should be starting from there which means it should pop out the other side after it goes through whatever layers of attribution so that's the first thing I would say is understand what those business metrics are and judge performance of regardless of who's in control you your employee your agency whoever's in control that's how you should always judge everything and you're going to see that what you assumed was happening may not actually be what's happening or what you thought could happen is completely wrong um but now your business is healthier because of it and lifetime value is different for different channels too i just saw something where the lifetime value typically on Tik Tok is much lower than The LTV Divide: Channel Differences and Customer Value it is on Facebook because of the demographics of the audience uh and their capacity to pay and but so you see a lot of that as well on different channels like certain things are more applicable you know this B2B thing is this is definitely got to go on uh Meta this other thing's definitely got to go on Tik Tok or on uh one of the other uh what do you see there we typically try to syndicate omni channel um and that's what's nice from our from our content when you syndicate omni channel which means if I'm going to put this ad on meta I'm also going to make a variation for YouTube make a variation for Tik Tok make a variation that's like a Google inbound search make sure that's also on my landing page so there's consistency and congruency between between the the platforms and what the message is what we typically see the reason for the LTV is actually how the uh how the the account is targeting new or returning customers and I have another example I don't have to keep being an example heavy but I have an example pulled up of a campaign that is uh not trying to optimize for new customers we're just simply trying to optimize for a sale of a product we call it an immune defense product it's a it's an immune product for dogs and when we don't ask Meta through our Cappy imports to only count new customers we see that half of our Aspen goes to existing customers almost like like clockwork and it'll tell you how much money is actually going to those people and you can actually steer it towards those people or away from those people even by just counting them as a conversion differently so the result it's seeing is optimizing towards that and we get to tell it what result to optimize towards so LTV is typically higher on um on platforms that have existing customer audience targeting kind of built in at a higher level meta or sorry um Tik Tok doesn't really it burns through traffic real fast and you kind of want it to it's like everyone's going to see two ads and that's it meta's like "No in six months when this person is ready to buy again I'm going to go hunt them down." So it can be where it is an attribution and not a contribution where Meta is showing that it is the one bringing in that returning customer because it can count a what they call an engage view which means as long as you see an ad and never click on it you don't even have to stop it just has to pass by it'll take 100% credit we obviously stopped that by importing it so it can't do that anymore but what we're seeing is that it is still out of the last 258 sales 180 were new so you know we have 75 customers that we paid yet again for that our LTB our lifetime value is now reduced because of that because we had to chuck out another money to buy our customer yet again which they probably would have purchased from us anyway through SMS and email but because Meta is so warm traffic heavy to show such a high rorowaz because that's how all of the agencies like to pat themselves on the back it facilitates that kind of skewed perfection or perception on how well it's doing and thus shows a higher LTV so what's the number you should look at then if it's not a rorowaz is it a p what when you're advising a company and you got to factor in all these different uh channels and you like you showed earlier we reduce the Google but we double down on the meta mhm what's the bottom line thing like and you said the the Rosetta Stone guys is like all I want is 100 new customers so what what do as a business owner if you were pitching to me what do I need to look at to know okay John's agency is doing a good job they're they're because you could generate me 100 new customers but as Dan Kennedy says he who can spend the most uh for a customer wins or whatever so but I could be spending I could get 100 new customers all at a loss so at some point there's some sort of number or something I got to look at um maybe it's not a rorowaz maybe it's something else but what what what am I looking at what should I be paying attention to yep so the the biggest thing that I would say is is of the utmost importance to to watch is a is your what they call an ENAC metric which means what is the cost per acquired first-time customer that in and of itself is most likely the only thing you would ever need to track um the reason why is it's impossible to scale a business on return customer it is it's a benefit but you can't scale your existing customers unless you add new it's very very simple now you're going to have different levels of profitability based on what you can afford to spend on each individual product so you might have a product that has good margins and a product that has bad margins you should be able to know what you can afford to spend to acquire a customer on that product profitably even if it's not upfront so you have something called a uh CAC payback which is how long does it take you to be profitable after you pay for that customer could be the same day could be 6 months out if you have a SAS tool could be within 3 months or after the first trial is over so when you're looking at e-commerce versus even lead genen um you have to take into consideration what can you afford to spend for a new customer period are you looking to quickly boost new Influence Your Way to Amazon Success Amazon product launches or scale up existing listings to reach first page positioning the influencer platform Stack Influence can help that's right stack Influence pushes high volume external traffic sales straight to Amazon listings using micro influencers that you only have to pay with your products they've helped upandcoming brands like Magic Spoon compete with Cheerios for top category positioning while also helping Fortune 500 brands like Unilver launch their new products right now is one of the best times to get started with Stack Influence you can sign up at stackinfluence.com or click the link in this video down in the description notes below and mention misfits that's misfitts to get 10% off your first campaign stackinfluence.com if you make $100 you cannot spend more than $100 very simplistic it may take you a year may take after three purchases but you have to identify your CAC that you can afford to spend compare that to your lifetime value of a customer and with those two things you can be fairly consistent in your growth because you know what you can afford to spend i have a I have a client uh that actually has uh it's a fairly large shoe brand and he's a manufactured shoe and he didn't know what he could afford to spend for a new customer i was going to I ask you that like what if you don't know that lifetime value yep and so uh there's a tool if you're on Shopify uh for example there's a tool that costs $12 a month i mean very very very inexpensive it's called By the Numbers not affiliated with it uh I mean I know the owner but I'm not not affiliated with the company at all um but we what we did is if I can share screen again I'll just everyone can see it and I'll also explain the numbers got it cool and what we're seeing here is if we look at the previous year compared to the year before that we can see that the sales are up you know we get the cumulative total yada yada yada we're we're scaling and we we can identify that but what we notice most often with businesses is their AOV does not really fluctuate unless they change product or service so as long as your product or service doesn't change wildly each year you can kind of set your watch to a average order value of of this company here has a $72.77 average order value whether it's new or returning now we also have an annual purchase frequency this is very very low return customer rate on average each year 1.06 orders happen per customer so we only have 6% basically reorder rate annually now this is a brand not brand new company it's only about a year old and so we've been scaling the crap out of them so we just don't know what our return customer rate is because last year we had 6,000 customers this year we have 136,000 customers so we have a lot more customers than we had before so we'll see what this what this moves into but so far of all the customers that we've acquired this year we have to multiply the $72.77 by a 1.06 06 order rate and it gives you a $77.13 annual lifetime value for every customer regardless of attribution regardless of channel regardless of new returning customers this is your metric and it does not change more than 5% every year so if we know that we're going to be making $77 off of every single one of our uh sales whether it's new or essentially returning we have to say what is our profit margin on that $77 sale 50% profit margins let's just call it we have a $33.50 enc target we we know that we can't go over $33 for new customer because a 50% profit margin of a $77 sale we will lose money even after a year and that becomes give that to your agencies i don't care what the rorowaz is it could be two it could be a billion it could be you know.5 doesn't matter as long as you're Understanding Your Customer Acquisition Ceiling acquiring customers at under $33 scale to the moon very simplistic i know I can afford to spend that don't you want to pack it wouldn't you you wouldn't go at $33 you would because you want to have a profit margin that's a break even so you you more likely if my target is I don't know 20% margin you know so I can take some money out of the company or reinvest or whatever I would lower that to 26 bucks or whatever it might be and I might have misspoke i meant to say ENCAC ceiling i might have said target that was my my apologies there so your ENAC ceiling is like once it goes over $33 that's that's stop like every sale we make we lose money on so that's that's your emergency button you know that's what's nice is it's very easy to not go to an agency meeting that next week and then try to interpret the data and and wonder if you are making or losing money you know you really can't tell but regardless of who you're speaking to at any agency employee even Google if you just take all of your ad spend divide it by your new customers and you can identify you know the just simply the dividend of that you know new all cash that you've spent divided by the new customer number that will tell you how much you spent on that that could be something that could be checked daily so very very you know a very simplistic way of knowing if no matter what agency is doing what with what creative and what targeting what updates they have for you as long as everyone stays below 32 bucks obviously the further you go down the better but as long as it's below you know that you know everyone can get paid that month kind of thing you had history though for that guy so what if I don't have history what if I'm brand new i just I just went out and I got some investors and they just threw in some money and we're launching this new shoe brand uh you know cuz Norm's used to be in the shoe business he knows everything about the shoe business is from his father and we're launching Norm shoes uh and we have we have no clue what our lifetime value is going to be how do I how do I decide what to spend or how much money I need to get from my investors or pitch in to actually see if this thing's viable or not or I just kind of go blindly for for a year until I have data you you you kind of go blindly for a year until you have the LTV however if you don't count on LTV because you really can't in the first you know potentially 6 months to a year you want to at least take your average order value of a single purchase and then just do the same calculation of your net profitability now what you would have to do then is start small though and rather than being like hey we're going to start with 5K per day and budget start with $100 start with $50 you can grow into something very very quickly if you know what you can stop at as a ceiling but if you are also you know doing good marketing which is kind of which is kind of funny to just say that but if as long as your your campaigns and and are structured well enough which is you know not very difficult to do it should scale pretty pretty seamlessly so what this looks like in in real time I guess I would say is if I look No so sorry again i'm going to share screen i like to do things by examples but what we did here for for this company here this is a company that owns um they do they do supplements and I think we were doing it back here we started with uh $380 or $480 per day so that was our starting point we said "Okay we can't go over $200 because our lifetime value um is expected to be somewhere above 200 but we're looking at about 180 to 200 so just don't go below 200 or don't go above $200 in the beginning and if you're there go ahead and test at higher and higher spends." And in a very short period of time this was March 23rd to yesterday we went from a $500 per day budget we moved that up for a week at a $2,500 per day budget then we moved it up another week to about a 12 or 11k 12k per day budget we brought it down because we started running out of stock and now we've been about a 7k $7,500 per day budget uh since the 26th but what we'll what you'll notice is even when I made that first scale on the on the 7th just to yesterday compared to the previous period I was able to take a campaign from $100,000 to $200,000 in spend in the last 30 days and I know because I'm importing my new customers only i know that I have uh all you know I'm I'm tracking only new customer acquisition so my cost per conversion went from 145 up to 158 and that is a 8% increase but I'm still below my ENCAC target so uh yeah so that's because we know our ENCAC metrics in platform because we only import new customers i can scale while still keeping a very keen eye on making sure that does not go bel above 200 and it stayed below 160 the entire time so I know that I'm profitable i didn't even need to you know talk with my partner to say like I'm going to go from 500 to 10K a day like I just was able to do it so it worked out well that way hey Kevin King and Norm Ferrar here if you've been enjoying this episode of Marketing Misfits thanks for listening this far continue listening we got some more valuable stuff coming up be sure to hit that subscribe button if you're listening to this on your favorite podcast player or if you're watching this on YouTube or Spotify make sure you subscribe to our channel because you don't want to miss a single episode of The Marketing Misfits have you subscribed yet Norm well this is an old guy alert should I subscribe to my own podcast yeah but what if you forget to show up one time it's just me on here you're not going to know what I say i'll I'll buy you a beard and you can sit in my chair too we'll just You can go back and forth with one another yikes but that being said don't forget to subscribe share it oh and if you really like this content somewhere up there there's a banner click on it and you'll go to another episode of the Marketing Misfits make sure you don't miss a single episode because you don't want to be like Norm oh I want to go down a different rabbit hole right now um we've been talking about I mean some great information some highlevel information but this is about marketing and what people have done either to succeed which you've been describing or what you've failed at and came back because of the failure have you had any failures any any failures in business and tell us exactly you know what you did to come back and then uh Human Element vs. Data we're pretty close to ending the show yeah yeah i probably I I always say I'm not the smartest i've just made the most amount of mistakes so honestly the the biggest thing that I've learned and I know this is kind of along the same theme but it's been the kind of the same passion of mine for for the longest time is people will get extremely hung up in data and forget the human aspect of everything i did that uh for quite some time if it wasn't in the number it didn't happen um you almost forget how to be a good marketer and you become a data scientist and when I started to make that transition that's when I started to fail at everything um I forgot about landing page experience it's like yeah I just put some sort of creative i'll check the data but I I was skipping over human nature like you know would this be something I would be interested in why would I even do that or if I'm looking at this ad wouldn't I not even click on this and just go and Google it or sorry not Google it go and search it on Amazon ah so when I started to take my mind out of the you know so pure metric and back into well if I was to see this ad or if I was to click on that or if I was to buy this product what would I do next when you started to add in the human element back into the data then I think that's when you kind of become a good marketer again and that's what I I told that to myself i said I'm becoming a bad marketer i'm a good data scientist and that's not that's not what helps businesses grow and so I think that my mistake for a good 6 months is I abandoned like CRO and and human nature and human emotion and the aida attention decision action i kind of abandoned all that and I was like run the ado check the metric and so that was that was where I I I failed so what I would say is for people who are also still measuring by inplatform rorowaz I found out that when my rorowaz went down the company actually did better cuz I was going after newer colder traffic um and I think that's where the paid media platforms are actively trying to show fluffy numbers to give you a good report to your clients so they keep spending money with them makes sense but when you start to take the human element back in there and say why would anybody Google a brand name like I didn't just wake up one day and be like I wonder if Fiky is a thing like I just made that up like that never happens they had to have seen it experience it do something from somewhere and so I'm like you know what i'm just going to stop spending spending money on brand has a 20x return but why spend the extra five bucks to get them to convert at the end of the day i don't need to so then I started to kind of like look at things in a human nature like if I Google a brand I've already made the decision to buy okay so stop paying so much for that you're just adding on costs to make a fluffy rorowaz so take yourself kind of out of the you know what's the data and put yourself back into your client's shoes where it's like would I be happy to spend an additional 20 bucks for a $40 product at the end of my you know in my brand campaign at the end of the journey no I'm taking half my profitability out yeah it has a great rorowaz but I'm losing half my money there so those are the things that I kind of would bringing myself back into like the human nature of how traffic flows and what's the obvious and what do I do and what do I see in the industry my wife is a she's a digital marketer kind of wet dream i love her but she's like "I saw this ad on Tik Tok i bought on Amazon." I'm like "Now I know." Okay that makes sense there's your omni channel traffic flow right there how can uh how can Kevin and I manage the Fiky brand on Amazon right we need to reach them uh Norm I agree with you the creative psychology side of things is and the numbers go together and a lot of people focus on one or the other or they don't understand how they intertwine uh and there there's a there's a lot to that uh just real quick before we we we wrap up how are you seeing AI affect uh meta and Google ad spend uh with with you know less less clicks happening on Google now less uh less scroll because AI is showing stuff where do you see it going um you know do you see you going to start seeing all kinds of ads and perplexity and uh Claude and uh chat GBT and you're going to have to have a new whole animal to a way of advertising and going after sentience and where are you seeing this going with with AI and uh and all this data science i will be making a prediction in one to two years websites will be the least visited platforms of any business my opinion is AI is getting smarter at predicting and smarter at connecting people to people people to products people to services whatever it may be so what we're seeing now in my hypothesis AI's Impact: The Future of Content and Creative in Advertising is and also the reason why Amazon's so huge is I I I believe that people are now going to be utilizing AI or be served via AI ads that are going to educate inform and cause action ever before even going to a website you're going to buy in your mind that product before you ever visit the website and that's how people are starting to trend today is they are being served ads that are more relevant to what they're interested in based on AI's interpretation of who they are and what how they're operating throughout the internet so I'm now being forced content on on products and services that I'm interested in and the frequency of that being displayed to me is going to cause me to want to purchase that and then I'm going to visit the website to kind of like learn a little bit more and probably go buy on Amazon so content and creative will be more important than you know the channel that they're on or you know what your campaign is doing the content of the creative will still remain supreme it's just going to transform into being served better faster more efficient but if you're still focused on like web page and landing page and squeeze page and CRO imagine how you buy today you get 10 ads on Facebook and then you Google the brand it's the reason why anybody can sell anything on Amazon because there's people that are knowing about the product and saying "I want that." Amazon didn't do that amazon's not bringing in people and establishing industries in my opinion they're not the hostage tape great example that went you know crazy viral on social media it's the you know they look like you're being kidnapped while you sleep it helps you snoring sells like gang busters on Amazon but didn't start there so they they were they were convinced through content and then they buy somewhere so I'm thinking that AI is going to enhance that greatly and it's up to us to put out a lot of massive content and creative so that AI can interpret who we are and connect us to our users better but that's where I would say the focus is going to be that's how the that's how the the industry is trending nowadays all right we got to stop it there so at the end of every podcast John we always ask our misfit do they know a misfit i do uh my partner at Tier 11 his name is Ralph Burns one of the first Facebook agencies to ever be created over like a decade and a half ago i think he'd be I think he'd be perfect for this all right that sounds great all right sir kevin do you got anything else to say before we let John loose no I want to keep talking to John for another three hours i got I got lots of questions so I I think we might just have to we might just have to hire John uh you know for uh for Dragonfish uh cuz based on what he just showed that was just cursory little basic stuff i'm like I'm like geeking right now i'm like jonesing i'm like on the edge of my seat like dude we can crush it with this guy see why I'm so happy see why I'm so happy so if anybody wants to get a hold of you John how do they do that or your company yeah LinkedIn is the best um I'm still a part of a few different agencies but I can either you know solve problems or or connect with the right agency that could solve a bigger problem you know for more of a full funnel or full-fledged marketing effort so using my LinkedIn is is the best way to to get a hold of me okay and just uh one last thing if um you get sold by another uh eight figure or acquired by another figure company can those customers continue to follow you i think so all right I think that's it we're going to remove you and close out the show well thank you very much guys for having me i really appreciate it it's It's an honor to be here really it really is so thank you so much oh thanks for thanks for coming on all right we're going to The Misfit Connection: Who's Next? remove you for a sec whoops what happened it's not my day job there we go now you you read the manual right on which button to hit i don't i just point and click and if it's the right one booyah no that's that's good stuff john's a super smart guy i mean as you can tell and I know some of that might have gone over a few people's heads especially if you weren't able to see the uh what he's showing on YouTube but go over to YouTube and uh search marketing misfits on YouTube and uh check out John's episode if you want to see that if you were listening to this it's definitely worth uh checking out those examples that he gave uh but this is where it's going and it's all like he said uh you know the creative is super important and I agree there on the psychology but also the backside and most of these 6500 agencies that he said are looking at the wrong thing uh they're looking at a cost in the Amazon world or in the general world primarily and that's a misleading uh thing and a lot of times you can cut back on your advertising and actually make more uh and at a at a higher profitability so uh really really good stuff i'm glad uh John came on yeah as long as you know what you're looking for and that's what was today's podcast was all about exactly uh if you like this one be sure to uh actually check out the rest of the channel we have a ton of great episodes uh you can scroll right down there on the bottom or over on the right if you're watching this on YouTube or if you're listening on Apple Podcast or Spotify you can check it out as Do we have video on Spotify yet on the podcast Norm or is it just audio still on Spotify uh audio audio uh now by the way if you haven't checked out our clips YouTube channel check it out we're doing fantastic we're getting some great results with these short nuggets that we extract from every main podcast so we have two YouTube channels long format and short format and it just launched a couple weeks ago and it's doing fantastic awesome so that's it mark if you you can go to marketingmisfitits.co and follow some of the links there go to uh YouTube and type in Marketing Misfits that's probably the fastest way and uh find us there we're with a new episode every Tuesday so we'll be back again next Tuesday with a brand new episode with another awesome guest all right everybody we'll see you later that's right take care [Music]