- Speaker #0
People do have a too complicated understanding of digital marketing metrics where they think it's like, well, this could the retire. 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 why and how. But unless you're actually scaling with new customers that are coming in even at the same cost, it's not effective.
- Speaker #1
You're watching Marketing Mystics.
- Speaker #0
Norm Farrar and Kevin King.
- Speaker #1
Mr. Farrar, good to see you again. Another week, another great podcast coming up.
- Speaker #2
Yeah, I can't wait to get into this one. How you been? You've been kind of traveling the world.
- Speaker #1
Yeah, I took a little first vacation. I'm actually taking for myself probably in, I don't know, seven, eight years. I mean, you know, we travel a lot and, you know, we mix in some fun and pleasure with what we do. But actually, I wanted to escape. So I hit... Went down to St. Bart's. I'd never been to St. Bart's. Have you ever been to St. Bart's in the Caribbean?
- Speaker #2
Yeah. Yeah, I was there. I went to St. Kitts and then over to St. Bart's.
- Speaker #1
Yeah, so I'd never been and I heard good things about it. It's bloody expensive. A Coke Zero. I didn't realize this, but in my room, they supplied, you know, 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 two thousand dollars a night for this place right on the beach literally it's that's what the price was yeah 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 because you know um so when i go to check out no it's 10 euros not dollars but 10 euros per soda so there's There's like 12 of them on there. It's 120 euro charge for.
- Speaker #2
for 12 sodas so i was like well it is what it is it's fine you know now this is where you say kevin 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 just you'd never recommend this this is going on trip advisor ones
- Speaker #1
that are that's right no you're right i messed up i should have said that i should have said that that was what would have come off uh but No, it was really good. It was a good time. And Sutton just wrote in a little journal. And, you know, the thing, though, is I thought about you, Norm. 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 because they have Cuban, real Cuban cigars. And down in the Caribbean, they're not really allowed in the United States. I mean, you have them up in Canada. Yeah,
- Speaker #2
but it's crazy expensive.
- Speaker #1
Well, yeah, so I went to one of those official Cuban cigar stores. Yeah. And picked up some Year of the Dragons. They're shorter, though, than the ones that we normally do. They're a little bit shorter. And sat there, and I've never, ever smoked by myself, ever smoked a cigar. I mean, you know, we smoke cigars when we go to events and when we hang out. Yeah. But I've always done it socially 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 three days. uh, good Cuban cigars and just sat there and, and, uh, just cleared my mind and wrote a whole bunch of stuff in general, personal stuff, business stuff, plan stuff. So it was good. It was good.
- Speaker #2
I forget all that crap. I just want to hear about the cigars.
- Speaker #1
Well, I, and, and, uh, hopefully the government's not listening, but, uh, there might've been, there might've been one that, uh, I forgot to take out of my case or something for, for you. I think. I meant to make sure I smoked them all, but I think I got a couple of labels mixed up or something. And I think there might have been one or two or three or four or some number that might have snuck back from my buddy Norm.
- Speaker #2
We won't say anything. And I'm already going to thank you. I'm already starting to drool, if you can tell. So how are you going to tie this into today's podcast, Kev?
- Speaker #1
I mean, one of the reasons 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 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're big in the Amazon space. But when you're around other smart people that are not doing things as you, you get outside your box. And that's one of the reasons that I went. I could have sat here at my house. I mean, I've got a nice view into my place, a nice place with a nice view and sat on my balcony and smoked cigars and wrote in my journal 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 head's 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 guest today is someone that came from me getting outside the normal fishbowl. Well, because I... joined Perry Belcher, someone I followed for quite a while. And he started a mastermind called Driven. He was part of traffic and conversion and digital marketer and all that stuff. And it's something called War Room, which I'd heard good things about. But I could never muster myself up to pay $25,000, $30,000, $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. 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 for this? But I bit the bullet and I went to one of Driven's, I got invited as a guest and I saw this guy speak. I think it was in LA. His name was John Moran and he was speaking on Google stuff and I didn't pull the plug right there. But I went to one when 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 is ripping you off. 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 pay the money for this. This is good value. And then. I invited, John had a partner, Kasim, who is one of the co-founders of Driven. And I tried to get Kasim to come to my event in Iceland. And he had some sort of conflict. And then I also, at the same time, I'd reached out to John. And John replied back and said, yeah, I don't really know who you are. But he didn't say that. But he probably checked with Kasim or somebody. He's like, all right, this guy's legit. Uh, and, uh, he ended up coming to Iceland and speaking at, uh, elevate 360, uh, with his wife, uh, Kate joined us with his wife and, uh, was just awesome human being and, uh, did a great, uh, great job. So that's the tie-in. So we have probably one of the top Facebook experts in the world on today. Uh, I think he's, you know, some crazy 2,500 bucks an hour or something. If you wanted to hire him, but this guy knows his stuff when it comes to Facebook and space and Google, uh Not Facebook. I said Facebook. I meant Google. I was going to say something. I misspoke. I don't know why I said that. I misspoke. Google. I can't get this right. It's Google, not Facebook. Erase all that Facebook stuff. It's Google advertising, and I'm excited to have him on. I think this is going to be great.
- Speaker #2
All right, so let's welcome John Moran, the king of Facebook.
- Speaker #1
Facebook. I, to my mind, believe I'm in the wrong.
- Speaker #0
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 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 this we ended up not really advertising for it but i i actually have a fairly large background in both So it works well.
- Speaker #1
All right. I don't know who starts there. I'm right. I'm right.
- Speaker #0
There you go.
- Speaker #2
Well, you know,
- Speaker #1
once in a while. Once in a while.
- Speaker #0
Once in a while.
- Speaker #2
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.
- Speaker #0
Yeah. Yeah. So I started like being an entrepreneur at 17 with a family owned business that was actually doing marketing 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 cost him uh awesome who you guys mentioned he him and i had an agency called solutions eight and we were a full funnel marketing agency so we did everything landing pages we did websites you know email marketing, did Facebook ads, did Google ads, mowed your lawn, washed your car. We did everything. You know, basically anything to make money. We were like, yeah, we can do that too. And so 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 work really well, the rest of the funnel work 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 masochists apparently. And we just had more clients in Google. We said, hey, let's just, you know, space wasn't really being owned by kind of 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 about 440 accounts today 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. And then I have like some personal clients and part of like, you know, I have some e-commerce stores that I've started with some partners and some attribution model companies, North Beeman, Wicked Reports that I became an equity partner in. And it just kind of grew from there. But we kind of made our success when we sold Solutions 8. It was an eight-figure acquisition, which was like once you do that in the agency space, you're like, oh, this guy knows this stuff. We just got an unsolicited offer that was too good to pass up. We jumped on it. So it was cool. It was like kind of springboarded 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 figure out how to rebuild it better. So it just, you know, that's been my my my personality for my whole life. So I think it works well with paid media because this is a big puzzle that you get paid to work on.
- Speaker #1
So you must really like the lockpicking because a lot of people would take an eight figure exit and. You and Cassim's the same way. He's still plugging away, doing stuff and say, okay, I'm done. I'm retiring. I'm going to sit on the beach. But that's not the case. Tuck that away, make some investments, have a little bit of fun, and you're still back at it. What's the drive there?
- Speaker #0
Yeah. Part of the thing is I've been working with so many clients for so long that when I sold my agency, 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 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. There was a little tumultuous there for a little while. And so it just kind of turned out that a lot of the clients wanted to go with me instead of with the agency that purchased us. So I ended up... Purchasing them off? I kind of inherited. a couple of clients. And then it ended up with like, you know, 25 or 30 personal clients that ended up just kind of kept growing because of referrals, essentially. So I kept trying to do my best for these clients. And then that in turn just kept growing into more clients and kept growing into 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 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 and real families. And so it's not like they'll be bad without me, but I can ensure their growth with me. And so what I kind of skipped over is I lost a company in 2015 before I joined Solutions 8 end of 2015, but I had a family-owned business and uh, costume was our vendor and we end up. I have a bad investor. They try to steal the intellectual property rights. At the same time, Kostin was shutting down his company and dissolving from his existing partnership. I had like 120 bucks in the bank. Kostin had probably less than that. And he's like, we got about three months of ramp before we both lose our house. Would you want to do this with me? I said, yeah, of course. 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 worker. We both can figure things out. So I've been in the time period where you had 120 bucks in the bank and try 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 I felt the real fear of, you know, having a wife and a daughter at the time and not knowing where my next meal is going to come from unless I go and kill and eat myself kind of thing. So 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 to this point 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.
- Speaker #1
Kassim says you're, you're the brains behind it. He's like, uh, I mean, I saw him speak at a, I think it's go high level. He's doing a little talk and he talked about his exit a little bit. And he said, look, this wouldn't have been possible without 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, Kassim's a really smart guy too. Uh, I mean, super, super smart guy. But. So what in the agency business though, 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. So what, what, what's, how is it, how hard is it to run an agency business?
- Speaker #0
It's, it's cutthroat. 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. Agencies come and go. 6,500 globally, agencies right now. I mean, you throw a dart at a dartboard, you're going to hit an agency that nobody ever heard of.
- Speaker #1
Google agencies or agencies?
- Speaker #0
Google meta, yeah. I mean, digital marketing agencies particularly. There's over 6,500 globally. And a lot of them in Australia, which is, you know, that makes sense. I've always been really tech savvy. But what was interesting is we noticed that the majority of the industry measures by in-app performance, what the attribution of those platforms tell you. And everyone wanted a Forex. That was the magical number for five years for some reason. Just give me a 400% ROAS or above and you're good. Dropship is becoming popular. Margins were becoming slimmer. So as long as you can Forex your money, you can live on a 25% profit margin. So 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 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 ROAS would kind of laugh at your face. They're like, oh, ROAS, you're one of those agencies, huh? Just bid more for brand and make your numbers look good and kill my business kind of thing. And what's funny is I always had a... a visceral reaction that I was like, no, I still want to grow your business. I just 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. And he taught me a lot of here's how we actually grow businesses in kind of like the big boy arena is like, he was like, okay, I like you a lot. You're smart. You're driven. You want to help me. I'll share with you what we measure. and then you go and figure it out because I'm going to pay you a lot of money, but I'm going to be like, I need a hundred new customers next week. I don't care what the ROAS is. I don't care what the CPC seat, I need a hundred new customers, or I'm going to go out of business. That's where I'm going to task you with. So it was kind of cool. I got to be like a good marketer again. Um, I 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 10 X return for a client and getting fired because their business started to go down. is wrong people wrong type of customers. We're buying more existing customers than new. So our LTV was being hurt. Our new customer growth was being hurt. And it was a spiral out of control. Great ROAS, but death of the company. And so after getting fired for those 10 Xs 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 NCAC and MERD and like LTV and all those things that we typically would measure how our marketing actually affects those businesses rather than looking at a metric that I I can... try to defend when getting into a combative relationship with a client. And almost every agency is still using in-app metrics. And so that's where I think the differentiator is. I charge a lot, but I grow a business. If you want to hop into the Google ads and ask questions, I can absolutely teach you. But 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.
- Speaker #1
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 8FIG grow up to 400% in less than a year.
- Speaker #2
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- Speaker #2
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- Speaker #1
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- Speaker #2
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- Speaker #1
That's 8Fig.co, 8Fig.co. See you on the other side. So how do you do that? Yeah, how do you do that? I mean, how do you I mean, I know that I've heard stories of like, oh, yeah, we turned off our Google ads. I don't know. Just use this old traditional measure, a 3X ROAS. 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 I mean, they always say, what's that saying? What can't what can be approved, has to be measured or whatever that saying is about measurement. So how do you measure this stuff or what do you do?
- Speaker #0
So what we do is a little bit different. We actually have, well, I guess I would say we used to go into third-party attribution. So I became an equity partner in Northbeam, an equity partner in another company called Wicked Reports, which, you know, there's other ones like Hyros and Triple Whalers. 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 campaign started, or paid media platforms, Meta and Google particularly, started to do more auto-targeting. 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 lookalike audience. So like, if I want to, I will. But if I find a better user over there, I'll go over there 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 existing customers. Like, well, 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's higher. They take less clicks. You know, the campaigns are so good at getting 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 a 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 at selling a bicycle too high a CPA, way too low of AOV. So when we started to import those, that's what 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 connect the dots between third-party attribution, which is where the industries are moving, but they're always about nine to 12 months behind new innovation. 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.
- Speaker #2
We've gone to a lot of shows and we've talked to a ton of sellers. And in the Amazon arena, it's always ACOS. I don't know about you, Kev, but how often the only thing I hear is ROAS, except if I go to a driven or if I go to a higher level event. I mean, it's still the common knowledge. Everybody is driven by ROAS.
- Speaker #1
yeah They are, and they're not looking at it like he just said, you know, a triple well and some of these things where you get all this attribution. And I just heard Neil Patel speak yesterday, and he said now the average touch point, it used to be two years ago, I think he said it 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 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 mean, our meta especially is like, don't, don't tell us anything. We, we, we got you. Uh, you know, we, we, we, we'll just run this stuff. Uh, we don't need your information. We know everything and everything already. So screw off. Yeah, we got you. We know how to charge you the most money and keep you happy. So we'll figure this out.
- Speaker #0
Yep. And if I shared screen on this, would people see it or is it just.
- Speaker #2
Depends if they're hearing it on the pod. We might have to just describe it because a lot more people will hear it on a podcast than a video.
- Speaker #0
Well, I'll, it might've, I just show some of her.
- Speaker #1
No, yeah. Go ahead and share, share for the people on YouTube that are watching that they'd have to see this. Those of you that are listening on Apple or Spotify, check out the YouTube channel, Marketing Misfits. You can go to marketingmisfits.co and there's a link there that'll take you to YouTube, or you can just go to YouTube and type in Marketing Misfits podcast. And that way you can see what John's about to show.
- Speaker #2
And Kev said he'd be doing a form of interpretive dance to the slides. So it'll be entertaining.
- Speaker #0
We shall look at metrics. All right. I'm sharing screen. Would you mind adding it to the view? There we go. Thank you very much. So here's a perfect example. This is my company. So it's something I can share because it's owned by us. This is in November before we scaled. And we have Facebook and Google. Google or Facebook spending, you know, 240 K and Google spending 22. So it's definitely much higher spend on Facebook. Now, if you look at the row as you got a 0.38 in Facebook and a 0.69 in Google. So it's like, okay, Google's doing better. Our costs require first-time customer is $360 in Facebook and $355 in Google. So Google has a better row as in Google has a better cost required first-time customer. Now, This typically is where people would say, okay, let's put a little bit more money into Google. It's cheaper and it's getting us better return. But 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 are 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 ECPNV, which is effective cost per new visit. So if you put in $100, you had to get three new people from Google, but $100 to get you about 50 new people from Facebook. So just even knowing how and where to scale is important. And if we look at, and I have a different screen pulled up here and called mission control. and this is not like a... commercial for this. I'm not even going to mention the company name or anything. 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 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 Google at all. Let's actually pull of money out of Google and let's push it all into meta. Now, remember we had a... better NCAC on Google and we had a better ROAS on Google, but it was most often second click. We were running a campaign type called Performance Max at the time, and Performance Max had auto targeting. We had all of our 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 from, you know, spending, I think was like $1 million in the last or in the previous five months to now in this last five months. So the most recent five months were up to 2.4 million. So this will this will load and I'll tell you the the 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 12% of the global ROAS as to scale 118%. So 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. ROAS is easy to get. 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 omni-channel traffic flow, but then also enact on it with a CAPI import into both Google and Meta to be optimized against.
- Speaker #1
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- Speaker #2
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So are you ready to elevate your business? Visit get.lavanta.io slash misfits. That's get.lavanta, L-E-V-A-N-T-A dot I-O slash misfits. And book a call and you'll get up to 20% off Lavanta's gold plan today. That's get.lavanta.io slash misfits. I got a basic question. Yeah. You're telling us all this. Most of it's going, would you? You know, I'm a branding guy. But you said earlier on that there's 6,400 agencies. Probably the high, high, high majority still go off of ROAS. How can you differentiate yourself? Like, 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 up and comers, 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 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 ROAS and not be a bottom feeder to get the new business?
- Speaker #0
Yep. So the one thing I would say is I would take a snapshot of your business performance metrics 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 we'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, you don't need cappy 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, the 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 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 could the rates 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, why and how, but unless you're actually scaling with new customers that are 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. But now your business is healthier because of it.
- Speaker #2
Lifetime value is different for different channels too. I just saw something where the lifetime value typically on TikTok is much lower than it is on Facebook because of the demographics of the audience. and their capacity to pay. 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 has definitely got to go on a meta. This other thing's definitely got to go on TikTok or on one of the other. What do you see there?
- Speaker #0
We typically try to syndicate omni-channel. Um, and that's, what's nice from our, from our content. When you syndicate Omnichannel, 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 TikTok, make a variation as 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 want to keep. be an example heavy, but I have an example pulled up of a campaign that is 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 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 ad spend goes to existing customers, almost 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 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, TikTok 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 is 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 We have 75 customers that we paid yet again for that our LTV, 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 ROAS, because that's how all of the agencies like to pat themselves on the back. It facilitates that kind of skewed perception on how well it's doing and thus shows a higher LTV.
- Speaker #2
So what's the number you should look at then? If it's not a ROAS, is it a when you're advising a company and you got to factor in all these different channels and like you showed earlier, we reduce the Google and we double down on the meta. What's the bottom line thing? And you said the Rosetta Stone guys, like all I want is 100 new customers. So what do I 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? Because you could generate me 100 new customers, but as Dan Kennedy says, he who can spend the most for a customer wins or whatever. So 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. Maybe it's not a ROAS, maybe it's something else, but what am I looking at? What should I be paying attention to?
- Speaker #0
So the biggest thing that I would say is of the utmost importance to watch is your what they call an NCAC 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. 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 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 six months out. If you have a SaaS tool, it could be within three months or after the first trial is over. So when you're looking at e-commerce versus even lead gen, you have to take into consideration what can you afford to spend for a new customer, period.
- Speaker #1
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- Speaker #0
If you make $100, you cannot spend more than $100. Very simplistic. It may take you a year. It 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 client that actually has a fairly large shoe brand. And he's a manufacturer of a shoe. And he didn't know what he could afford to spend for new customer.
- Speaker #2
That's why I asked you that. Like, what if you don't know that lifetime value?
- Speaker #0
Yep. And so there's a tool, if you're on Shopify, 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. I mean, I know the owner, but I'm not affiliated with the company at all. But 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 scaling and 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 as 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 branded 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 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 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 and 50 cents and CAC target. We, we know that we can't go over $33 for new customer because that 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 row is. It can be two, it could be a billion. It could be, you know, 0.5. It doesn't matter. As long as you're acquiring customers at under $33 scale to the moon. Very simplistic. I know I can afford to spend that.
- Speaker #2
But don't you want to pack it? You wouldn't go at $33 because you want to have a profit margin. That's a break even. So you would want likely if my target is, I don't know, a 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.
- Speaker #0
And I might have misspoke. I meant to say NCAC ceiling. I might have said target. That was my apologies there. So your NCAC ceiling is like once it goes over $33, that's stop. Like every sale we make, we lose money on. So that's your emergency button. 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 wonder if you are making or losing money. 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 divided by your new customers, and you can identify, you know, the, just simply the dividend of that, you know, new, all ash that you've spent divided by the new customer number, that will tell you how much you spent on that. And 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 everyone can get paid that month kind of thing.
- Speaker #2
You had history though, so what if I don't have history? What if I'm brand new? I just went out and I got some investors and they just threw in some money and we're launching this new shoe brand. Because Norm used to be in the shoe business. He knows everything about the shoe business from his father. We're launching Norm Shoes. True. And we have no clue what our lifetime values are 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 a year until I have data.
- Speaker #0
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 potentially six 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 doing good marketing, which is kind of funny to just say that, but if as long as your campaigns are structured well enough, which is not very difficult to do, it should scale pretty seamlessly. So what this looks like in real time, I guess I would say, is if I look... No, so sorry, again, I'm going to share screen. I'd like to do shares by examples. But what we did here for this company here, this is a company that owns... They do supplements. And I think we were doing it back here. We started with $380 or $480 per day. So that was our starting point. We said, okay, we can't go over $200. because our lifetime value is expected to be somewhere above 200. we're looking at about 180 to 200. So just 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. And 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 $7,500 per day budget since the 26th. But what you'll notice is even when I made that first scale on the 7th, just 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 all... all, you know, I'm tracking only new customer acquisition. So my cost per conversion went from $145 up to $158. And that is an 8% increase, but I'm still below my NCAC target. So yeah, so that's because we know our NCAC metrics in platform because we only import new customers. I can scale while still keeping a very keen eye on making sure that it does not go above $200 and it stayed below $160 the entire time. So I know that I'm profitable. I didn't even need to 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.
- Speaker #2
Hey, Kevin King and Norm Farrar here. If you've been enjoying this episode of Marketing Misfits, thanks for listening this far. Continue listening. We've 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?
- Speaker #1
Well, this is an old guy alert. Should I subscribe to my own podcast?
- Speaker #2
Yeah, but what if you forget to show up one time and it's just me on here? You're not going to know what I say.
- Speaker #1
I'll buy you a beard and you can sit in my chair too. You can go back and forth with one another.
- Speaker #0
Yikes.
- Speaker #1
But that being said, don't forget to subscribe, share it. Oh, and if 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.
- Speaker #2
Make sure you don't miss a single episode because you don't want to be like Norm.
- Speaker #1
Oh, I want to go down a different rabbit hole right now. We've been talking about, I mean, some great information, some high level information. But this is about marketing and what people have done either to succeed, which you've been describing, or what you failed at and came back because of the failure. Have you had any failures, any failures in business? And tell us exactly what you did to come back. And then we're pretty close to ending the show.
- Speaker #0
Yeah, yeah. I probably I always say I'm not the smartest. I 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 the longest time is people will get extremely hung up in data and forget the human aspect of everything. I did that for quite some time. If it wasn't in the number, it didn't happen. 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. I forgot about landing page experience. It's like, yeah, I just put some sort of creative. I'll check the data. But 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, I'm 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 told that to myself. I said, I'm becoming a bad marketer. I'm a good data scientist. And that's not what helps businesses grow. And so I think that my mistake for a good six months is I abandoned. like CRO and human nature and human emotion and the AIDA, the attention, interest, decision, action, I kind of abandoned all that. I was like, run the auto, check the metric. And so that was where I failed. So what I would say is for people who are also still measuring by in-platform ROAS. I found out that when my ROAS went down, the company actually did better because I was going after newer, colder traffic. 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 Fikey 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 money on brand has a 20 X 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 like in a human nature. Like if I Google a brand, I've already made a decision to buy. Okay. So stop paying so much for that. You're just adding on costs to make a fluffy ROAS. 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 brand campaign, at the end of the journey? No, I'm taking half my profitability out. Yeah, it has a great ROAS, but I'm losing half my money there. So those are the things that I kind of would bring myself back into like the human nature of how traffic flows and what's obvious and what do I do and what do I see in the industry? My wife, she's a digital marketer, got a wet dream. I love her, but she's like, I saw this ad on TikTok, I bought it on Amazon. I'm like, now I know. Okay, that makes sense. There's your omni-channel traffic flow right there.
- Speaker #1
How can Kevin and I manage the Feike brand on Amazon?
- Speaker #2
We need to reach them, Norm. And I agree with you. The creative psychology side of things and the numbers go together. And a lot of people focus on one or the other, or they don't understand how they intertwine. And there's a lot to that. Just real quick before we wrap up. How are you seeing AI affect meta and Google Ads Panda with less... less clicks happening on Google now, less scroll because AI is showing stuff. Where do you see it going? Do you see, you can start seeing all kinds of ads and perplexity and Claude and ChatGPT, and you're going to have to have a new whole animal to a way of advertising and going after sentience. And where do you see this going with AI and all this data science?
- Speaker #0
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 is, and also the reason why Amazon is so huge, is I believe that people are now going to be utilizing AI or be served via AI as 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 how they're operating throughout the internet. So I'm now being forced content 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 the channel that they're on or what your campaign is doing. The content and 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 webpage 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. So reason why anybody can sell anything on Amazon, because there's people that are knowing about that 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. Hostage tape, great example. That went 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 gangbusters 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 industry is trending nowadays.
- Speaker #1
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
- Speaker #0
I do. My partner at tier 11, his name's 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.
- Speaker #1
All right. That sounds great. All right, sir. Kevin, do you got anything else to say before we let John loose?
- Speaker #2
No, I want to keep talking to John for another three hours. I got lots of questions. I think we might just, we might just have to hire John, you know, for, for Dragonfish. Because based on what he just showed, that was just cursory, little basic stuff. I'm like geeking right now. I'm like Johnson. I'm like on the edge of my seat, like, dude, we can crush it with this guy. He won't gasp. I'm so happy. Yeah. He won't gasp.
- Speaker #1
So if anybody wants to get a hold of you, John, how do they do that or your company?
- Speaker #0
Yeah, LinkedIn is the best. I'm still part of a few different agencies, but I can either solve problems 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 the best way to get ahold of me.
- Speaker #1
Okay. And just one last thing. If you get sold by another eight figure or acquired by a three 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.
- Speaker #0
No, thank you very much, guys, for having me. I really appreciate it. It's an honor to be here, really. It really is. So thank you.
- Speaker #1
Well, thanks for coming on. All right. We're going to remove you for a sec. Whoops. What happened? It's not my day job. There we go.
- Speaker #2
Now, you read the manual, right? On which button to hit?
- Speaker #1
I don't know. I just point and click. And if it's the right one. Boo-yah.
- Speaker #2
No, 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 what he's showing on YouTube. But go over to YouTube and search Marketing Misfits on YouTube and check out John's episode if you want to see that, if you were listening to this. It's definitely worth checking out those examples that he gave. But this is where it's going. And it's all, like he said, the creative is super important. And I agree there on the psychology. But also the backside in most of these 6,500 agencies that he said are looking at the wrong thing. They're looking at ACOS and the Amazon world or ROAS and the general world primarily. And that's a misleading thing. And a lot of times you can cut back on your advertising and actually make more at a higher profitability. So really, really good stuff. I'm glad John came on.
- Speaker #1
Yeah, as long as you know what you're looking for. And that's what was... today's podcast was all about.
- Speaker #2
Exactly. And if you like this one, be sure to actually check out the rest of the channel. We have a ton of great episodes. 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. Do we have video on Spotify yet on the podcast, Norm, or is it just audio still on Spotify?
- Speaker #1
Audio, audio. 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 of weeks ago and it's doing fantastic.
- Speaker #2
Awesome. So that's it. You can go to marketingmisfits.co and follow some of the links there. Just go to YouTube and type in Marketing Misfits. That's probably the fastest way. And find us there. with a new episode every Tuesday. So we'll be back again next Tuesday with a brand new episode with another awesome guest.
- Speaker #1
All right, everybody. We'll see you later.
- Speaker #2
That's right. Take care.
