Optimal Meta Ads Setup: L1, L2, & L3 Approach Part 1

[00:00:00] Hey everybody, John Moran here. And today I'm going to share with you why I'm moving almost all of my customers off of Performance Max when new customer acquisition is the goal. So, it's not that Performance Max is a bad campaign type, it just sucks at acquiring new customers effectively. Performance Max

[00:00:16] saves some of the daily budget for repeat customers. It also saves some of the budget for remarketing of warm traffic or previous clicks in that campaign or even other channels. So, when you crank up Performance Max, new customer acquisition doesn't always crank up with it. So, I have a case study here that we are

[00:00:31] focusing on new customer acquisition because this client has a very good lifetime value. Their second, third, fourth purchases are very valuable to them. So, we need new customers to buy at a high value for the first time, but also repeat. And I don't want to keep paying for them. I don't want to have a

[00:00:44] three, four, five hundred dollar cost per acquisition on a returning customer that just takes my profitability, chucks it out the window, but the ROAS looks good. So, here's what I'm going to share with you. This is a client that we have since moved off of Performance Max, and I've given it enough time to give it a clear dedicated case study. What I mean by

[00:01:02] that is I waited about a month and a half before I shared the before and after. So, there is time where Performance Max latency is done, the conversions that are lagging or behind are done, and there's been enough time for standard shopping to make an impact. So, we've tested two main types, well, actually three

[00:01:18] types, but in two campaigns of Performance Max, a feed only, a full build, and a non-feed. And they've had fairly good in-app success, but new customer acquisition failed. It was too expensive. We needed to get below a 400, 425. If possible, below a 300 would be fantastic. So, what

[00:01:38] you're going to see here is a date range of April 25th to May 24th versus June 27th to July 26th, which was yesterday. And the total cost reduction is $63,000 between those two time periods. So, we spent 54% less. Now, you're going to see 58% less conversions. It looks like it was cut in half. Let me share with you

[00:01:57] what's going on. Inside of the back end, I'm going to look at two one large area and then I'll share with you another large area, but two kind of main areas. One is the first order date. This is something that you should be checking, especially if you're only running Google Ads, because you can kind of identify your activities in this Google Ads, your spend, your campaign types, and how is this affecting the first-time customers, the new customers, not total value, not ROAS, new customers and develop an NCAC.

[00:02:23] The other thing I'm going to share with you is the reduction in spend and actually what happened, which is actually pretty cool. So, let's go back to the first part. We took $45,000 in the PMax upgraded one, which is what which is what I was running previously, and reduced that down to zero. And then we took a

[00:02:40] shopping campaign, a standard shopping campaign, and we went from uh zero up to 25 grand. So, we went and actually removed about $20,000 out of the shopping network. At the same time, we also removed $36,000 out of the search network. So, I tanked this campaign in spend. I did that on

[00:02:59] purpose. One is because we're going into a slow season. It is going to get expensive, and I've been working with this client for this is my third year. Every time during the summertime, we tank new customers. So, I needed to pull back, but I said, "You know what? I'm going to get more efficient. I'm going

[00:03:13] to focus on new customer acquisition, not just simply counting new, brand, and repeat and counting it as ROAS." Now, two things you're going to say, "John, why didn't you upload the customer list and bid only for new customers or bid higher for new customers?" Did that. Each time I've

[00:03:25] tried that, the and actually I tried it on 14 other accounts, I could not get above a 35% of where I was previously in activity. So, I cut my ad spend and cut my activity down by 65% without trying. All I did was turn on bid for new customers, and it would not spend over a over 35% of where it was before. Doesn't

[00:03:46] surprise me when 50, 60, 75% sometimes of a Performance Max campaign is not new customers and not cold traffic. So that was number one. Number two, you're going to say why didn't you exclude the brand? Did that as well. I had no branded PMax. There was not one branded term in my performance Max campaigns. It did not

[00:04:02] show up. But the CPC did drop a bit, the ROAS stayed high, and new customers did not come in when I start to increase spend. So I think that the two channels, the search and shopping inside of performance Max, were denied entry by my existing customers and brand traffic. However, the YouTube GSP Discover

[00:04:20] display and and basically kind of remarketing aspect of those networks were still going after that warm existing customer audience to get a 1-cent click for a $1,000 sale, which is about our AOV. So, those two things I tested multiple times in other accounts, tested in here as well, still failed.

[00:04:38] So, we know that we've taken out $63,000 out of Google Ads, and we know that we've reduced 36,000 out of the search, and we reduced uh about 20,000 in shopping. So, what happened? In between the or the last 30 days, so in this last 30 days I have 181 new customers, okay? So, let's see what our

[00:04:57] cost is. It's 53861. So, 53861 is giving me a $297 cost per acquired new customer. We're under the $300 mark, which is finally where we need to be. Last year during this time, we were 456. So, we were down now to 291. And also last year when we reduced, we only spent I think uh 44,000, we still had a higher uh cost. So, we spent less and then we

[00:05:24] actually had a higher cost per acquisition. So, now we're at 300. What was the time period period before? Well, when we look at April 24th through May or sorry, April 25th to May 24th, which is the date range here, we're spending 117,000. And now what was that CAC? That was a 434 CAC because we had 117,000 in spend,

[00:05:44] 117,000 spend. We had 270 customers, which is here at 200 and Oh, there it is. 270 customers and we're at 434. So, reducing the spend by 54% did not reduce the new customers by 54%. It reduced it less. It reduced by about 35%. Good. So, what ended up happening is during the cold season,

[00:06:09] I've actually been able to drop my CAC down from 434 down to 297. Yes, I did lose volume, but it came in at a much cheaper CAC. The interesting thing though is that in app shows this. Watch Watch this. Inside of my branded Alpha campaign, which is just just brand. It's called Alpha because we had a beta and yada

[00:06:27] yada yada. But, that's brand. That's my brand campaign. I spent $400 less and then got 6.5 There we go. 6.5 more conversions and my conversion value went up 11 grand. So, I spent $400 less, made 11,000 more. Why? Well, Performance Max would have taken that and would have taken that credit.

[00:06:47] Are they returning? Yes, there's some returning. Is there new? Yes, there's actually more new. And how do we know? Well, what we saw here is that inside of the YouTube remarketing, we were able to take out $3,700 from my YouTube remarketing that is exclusive to only warm traffic on the site, but not existing customers. I lost

[00:07:08] one sale for 71% less, which means my my YouTube remarketing got more efficient. So, it's interesting is my YouTube remarketings are to convert much better. We can see that my in app cost per conversion here was reduced by 70%. My brand traffic was reduced by 25%. Now, the fun part though is is that the

[00:07:29] Performance Max used to get There we go. Performance Max used to get um a $232 cost per conversion and now my standard shopping campaign is getting me a $1,100 cost per conversion. Whoa, 200 to 1,100. John, you're crazy. Look at how much you increased the cost per conversion. It's not true because the

[00:07:50] amount of sales that are now unattributed from Performance Max that are now properly landing in the remarketing and the brand is coming in as such a much cheaper cost per conversion than what the fluffiness that that Performance Max was simply to take credit for to continue to spend the money.

[00:08:09] So, long story short, I didn't go from from a What was the the other one here? Sorry, the uh 232 cost per conversion up to a 1146. That was then separated. When you count new customer acquisition, I was probably still getting a 242 inside of Performance Max, but also getting a whole bunch of overspend. That was

[00:08:29] spending, remember, 50, 60% of just remarketing, existing display, YouTube, all the other stuff I saw just throwing all that money out the window. That was increasing my CAC. Remember, when you're putting your money in a in a in a pool, but you're only measuring one half, if that pool is unaffected by the amount of of change between new versus returning, you're going to see differences in those CACs, so returning CAC and new CAC. So,

[00:08:54] it's nice is now I have a pool where I could dump money knowing it's going only after new customers rather than dumping in more and more and more money and only being 50% as effective to that traffic. If I put a dollar in a campaign and half goes to cold, that's going to double my CAC, right?

[00:09:08] Because I'm not putting money towards the area that I'm measuring. Very simple stuff. So, what what we look at here is our cost per conversion went up 29%? No, it did not go from a 393 up to a 509. It actually went from a 434 down to a 297. So, Google Ads shows a 30% increase. Not true. Standard Shopping

[00:09:34] just sucks at attributing. We already know this. If you've been following me for some time, this is not new stuff. So, I went down $135. Google says I went up 115. If you measure it in app, you're wrong. Period. So, now let's look a little bit more recent time period. If I look at the last 30

[00:09:52] days here compared to the previous period, we're going to see something really cool. You're going to see me take $79,000 and bring it down to 53. I pulled 32% more money out of my campaigns and I took it down another $25,000. You'll see where I took it out. I took standard shopping out 15k and I took

[00:10:19] general out $7,800. What happened to my brand? Well, my brand spent 11% less and made Whoa, sorry. My brand spent 11% less and made 132% more conversions. And now look at the cost. I spent $155 less and made $32,000 more. So, the conversion value though is decreasing cost 38% lost uh let me do this. Lost 16, decreased it's 22, lost

[00:10:47] 27. Google thinks I am just um you know, hemorrhaging hemorrhaging cash right now. What's cool about this though is because the branded traffic spiked up so much, which I was got to get anyway and I didn't have to pay $400 per conversion in PMAX or $300 per conversion in PMAX, I took 32% of my cost out. I made 18%

[00:11:06] more conversions and $3,000 more in conversion value. But, what actually happened? Well, because of my standard shopping ads, I'm so much more efficient month over month because of negative keywords and and also the products and and obviously just good optimization. In the last 30 days, saving myself $25,000,

[00:11:22] last 30 days compared to previous period, I have 8% more orders. I took out 13% of my traffic by pulling back. I made 8% more orders. My returning customer rate didn't blow up because brand is not new customer or sorry, brand is not existing customers. So, when I pulled $25,000 out, you would

[00:11:46] think, well, the brand traffic's coming in. Uh-oh, that branded traffic's going to be a whole bunch of return customers. No, it didn't change. So, I have slightly better MER. My N CAC held. I pulled out fatty, like, you know, overspend on optimizations. And now for this last 30 days, we are sitting at

[00:12:03] $359,000 in conversion value for a grand total of 50k. That is a 6x MER. My new customers didn't suffer. So, Performance Max, awesome. If you're going to measure in app, if you're going to say, "Look at my ROAS." If you're going to say, "Look at my ROAS." Yeah, I made my ROAS worse and I performed better.

[00:12:31] The client thinks I'm performing better. I'm performing better even though Google Ads looks worse. And I think that's the lesson for for all of us here is that if you have a if you have a a client that you can speak to at this elevated level, it's it's something that is is is very very noteworthy. Um

[00:12:51] Let me just see here real quick. Let me pause this real fast. Okay. Here is actually the email from the client on Tuesday, July 11th. I said that we um I think pulling back from PMax and pushing a standard shopping up to lot year over year were even up 41% in revenue. Says, "Completely agree. Excited about the

[00:13:10] results. Want to keep strong results on some lower spend and then go into the fall. Would like to start back up in next week when you have, you know, blah blah blah." So, we're going to start meeting again next week. But, that was in the past. So, that's the thing, too, is we actually have

[00:13:24] a lot less spend, more new cold traffic, took my account down 150 bucks. A year over year I'm 43% higher than we were last year. And that's the reason why if I measure ROAS or if you look at Performance Max, you're going to fail. You'll you'll you'll have high ROAS all the way until

[00:13:41] you get fired. I'm John Moran. I hope this is worth worth some learning for you. Bye. Hey everyone, John Moran here with Solutions 8. And today we're going to be covering an issue that no one really knows about unless you're a good marketer. And this is actually the offline importation of the conversion actions that happened post lead generation. And when you want to upload

[00:14:07] them back into Google Ads, I bet you didn't know this, but W Braid and G Braid