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Ep 486: Why Most YouTube Ads Fail—And How to Make Yours Work with Pilothouse | AKNF
00:26:34
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- [00:00]
Doug
We have gone through some bumps along the road as a performance marketing agency focused on always the conversion, and I think our perspective of YouTube has shifted over the years. What I see a lot of brands doing is using YouTube as demand capture. I think it certainly lends itself much better to be used in a We actually had a good call with the measurement team over at Google. We had a good conversation there about how to generally in terms of how we're segmenting things, we've changed our approach pretty significantly. With YouTube and any kind of broader awareness effort, you have to make sure that you're putting a reasonable investment behind it. Otherwise you're not going to get statistically significant enough results to measure. My absolute minimum is typically.
- [00:56]
Eric
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- [02:32]
Doug
Thanks for having me Eric. Yeah, stoked to dig into it. I feel like we have maybe gone through some bumps along the road as a performance marketing agency focused on always the conversion and I think our perspective of YouTube has shifted over the years. So excited to kind of share some of that new perspective.
- [02:50]
Eric
All right, dig into it. What is this new perspective?
- [02:52]
Doug
Yeah, so I think what I see a lot of brands doing and what I even myself have done years in the past is using YouTube as demand capture and equating it to the same level of conversion performance that you're looking at on Search Shopping and pmax. And I think just it's a different platform. It's more akin to something like meta, even TikTok, maybe even more closely related to prototypical TV advertising. Right. I think it certainly lends itself much better to be used in a top of funnel since then, how we've used it in the past to strictly focus on the conversion. And I think the difficulty from that comes through. Okay, if we're not focusing on the conversion, how are we measuring performance both in terms of how do we optimize these campaigns if we're not optimizing towards conversion? And how are we on our back end measuring how impactful is our investment in YouTube overall? So I think those are the two questions that have been difficult to answer at times, but have a bit of a structural change and funnel changes with how we approach YouTube to address that.
- [04:04]
Eric
And you're zooming out a little bit. It sounds like, well, you're doing both. You're zooming in on the different campaign types that you're aiming for, but you're zooming out on its impact a little bit, which aligns with some of the recent podcasts we've done where people are urging brands to think about marketing like an investment banker, where you're really looking at like the overall trends from your spend.
- [04:22]
Doug
Yeah, exactly. So definitely zooming out on a larger scale, like to assess the impact of YouTube and top of funnel awareness style campaigns, wherever they may exist, whether that's YouTube or elsewhere, but certainly for YouTube. And then, yeah, I think generally I would say the biggest thing within that. And we actually had a good call with the measurement team over at Google. They're kind of piloting a new team structure strictly for measurement. It's going to be rolling out to agencies in Canada shortly here, but we had a good conversation there about how to measure some of this YouTube effort and the incrementality of such and different ways to go about it.
- [05:02]
Eric
This isn't on your notes here, but I'm curious, like, what are we on the brands that we are running YouTube for? What does the split look like in terms of allocation demand generation versus demand capture?
- [05:14]
Doug
Yeah. So when you're asking that question, are you thinking like comparing search and shopping campaigns to YouTube campaigns or within YouTube campaigns, our breakdown of like awareness style campaigns versus YouTube style conversion campaigns.
- [05:28]
Eric
That's interesting. Let's dive in on your notes here. And we're talking specifically, I guess within YouTube and then we can maybe talk broader after that about where it fits in within the whole Google suite.
- [05:37]
Doug
Cool. So I would say our breakdown for existing YouTube clients for more awareness style YouTube campaigns versus conversion style YouTube campaigns, it's probably 80% awareness, 20% capture, or even potentially 90, 10. So the vast majority of spend going more to awareness than it is to campaigns focused on conversion. We do certainly see YouTube as having efficacy for targeting big enough add to cart audiences and trying to push them across the line for a purchase. You certainly see efficiency there if you've got good creative, but generally the focus is more so around reach and getting eyeballs in a very engaged platform.
- [06:20]
Eric
Cool.
- [06:21]
Doug
I would also say generally in terms of how we're segmenting things, we've changed our approach pretty significantly on that front. So what you're talking about in terms of demand capture is what we would consider action campaigns. And those are people who have showed some level of intent towards a purchase, whether they've added to cart or measuring performance there by more typical metrics for performance marketing agencies like CPA and the volume of purchases that are coming through. So around 10 to 20% of our campaigns are built towards that. But the other 80%, 90% is more these upper funnel segments that we're building. And I think the most important thing as we're building these upper funnel segments is we're trying to aim the user towards the next desired action and we're excluding the audiences below beneath that segment in the funnel from that targeted segment. So if we're targeting, for instance, the easiest example is someone who's never heard of us. So we've got no direct ability to bucket a user because they've never viewed an ad or never reached site. But we're making sure that if they've never viewed an ad or reached site, we're excluding people who have viewed an ad or reached site because those are users who are further down our funnel than they would otherwise have been. And then that applies to people who we're targeting who have some level of awareness, but they haven't quite shown enough intent. Right. So people have viewed an ad but they haven't reached site before. So now we're excluding just the people who have reached site from that type of targeting further down, looking At PDP targeting people who have visited a specific pdp, we're then making sure that we're excluding add to carts from that audience as well. And that's something I see a lot of problems with advertisers on YouTube doing currently is they think they're targeting a lot of top of funnel. They're saying, hey, I'm doing some content targeting at top of funnel for awareness. And then you look at the new to returning users coming through GA4 as an example and there's a good chunk of returning traffic. And that's because if you don't give Google guardrails, it's going to automatically kind of gear itself towards the warmest traffic. We see the same thing happening. We've talked at length about brand terms coming through, prospecting campaigns and brand terms and PMAX campaigns and the like there.
- [08:31]
Eric
And then are you okay, that makes sense. The reason why you'd segment this out so you just get more efficient. You don't let Google take the easy path that it wants to all the time towards warmer traffic. And then are you also serving different ads and sending different destinations depending on where people are in this funnel?
- [08:48]
Doug
Yeah. And it's a different goal for each portion of the funnel. Right. For someone who's never heard of the brand, you're not necessarily trying to get them to click through and then add to cart in that first visit. You're just trying to make sure that you serve them with content that is geared towards someone who's never heard of the brand before. Give them your brand identity off the bat. Maybe send them to your homepage when they've had a view. Maybe you're trying to get them the next action is to get them to click and to view a specific pdp. And then you're giving. You're making sure that you're tying the content, not just the landing page, but the creative that you're serving them to the specific portion of the funnel that they're in. It's not always going to be exactly perfect, but what I also see as a problem is people build all these buy now type creatives that we launch at the bottom of the funnel because we're trying to get someone from an add to cart to a purchase and we launch that to people who have never heard of the brand before. You're telling them buy now, buy now. When they've never heard of your brand, they don't know anything about your products or anything like that. And they're supposed to be convinced to buy that product on that initial Touch point. Unless you're very cheap or very compelling, it's going to give you a really hard time to do so. Right.
- [09:52]
Eric
Okay, so you've got your different segments here and you may have listed them off briefly. You've got your unaware people and in there you're looking for unique views and unique costs per unique view. You've got your aware section. So those are people who've clicked through. So you've got unique clicks and you're looking at your cost per click. You've got people in the consideration. So they've been to your landing page, they've clicked on your ad and you're looking for them to have unique product display page visits and your cost per PDP visit. And then you're looking for people who have taken action. So people who've added to cart, made a purchase and you're looking for their cpa. So that's basically how you're breaking down these users. I'm wondering when you're in the unaware segment, how broad are you going with your targeting? Are you doing, are you doing campaigns that are fully wide open or are you layering on some targeting to start in that unaware group?
- [10:38]
Doug
Great question. Certain products, I would say do align themselves with broad targeting. It's not something I'd recommend for every brand. What I do really like for that unaware segment is content targeting. So instead of saying, okay, here's our demographic, here's our audience, where is our demographic? When they're on YouTube, what channels are they looking at? What topics do they care about? That kind of thing is allowing you to have your first touch point with a brand or with a customer. Be tied to something that they're actively having an interest in. And you want to make sure that your creative also speaks to that content that you're placing on. I mean, easy example, and I see this all the time, I'm actually, I'm a one time golfer, but I watch a bit of golf YouTube and obviously the golf clients out there are targeting that as their first touch point because it's obviously relevant to their content. I think that there's also an opportunity to analyze, okay, as a consumer, is my product an entry level product? Is my product more for the experts in the space and trying to align your placement targeting and your topic targeting towards channels that are specific to that type of user. So maybe people are just trying to learn how to julienne a carrot, maybe that's more entry level and you offer decent knives, but they're on the cheaper end. So that's the type of thing you would want to target compared to someone who's maybe very, very much deep into the culinary space and they're trying to learn very specific recipes from experts in the space. And you're selling a much more expensive knife, the three to $500 range. Right. So I think pairing the content and understanding where you fit within the market for consumers that have an interest in your niche can also allow you to place on the most relevant content, not just saying, hey, I'm a knife, I'm going to show up on all the knife locations possible. Hey, how, how can I consider where I am within the knife niche and make sure that I'm targeting the most relevant content as possible?
- [12:33]
Eric
Okay. And you mentioned this. So unaware is where the bulk in this, in this funnel, unaware is where the bulk of the spend goes because that's where the massive, you know, 10x amount of people are. And were you saying sort of it was like in your unaware section, it was like 80% and then your aware consideration and action all kind of split that 20 that's left over?
- [12:51]
Doug
Yeah, so I was considering anything outside of that action phase. So we're not targeting a purchase conversion as that 80 to 90%. I would say around 60% is true unaware. And then we're trying to do a bit of retargeting in that 20 to 30% range for people who have shown some level of intent. Either they've viewed our ad, they've started to click our ads, and when we look at unique P2P visits, so that doesn't necessarily have to be the buy all end all for your consideration segment. It could be spending X amount of time on site. You're really just trying to make sure that they're taking a post click action that is indicative of intent. So they haven't just clicked on site, they've clicked on site and then done something that you care about and you've identified actions that you care about that lead to valuable customers.
- [13:41]
Eric
So in that unaware section, you're saying you're not driving to a purchase objective, Are you just driving to an engagement objective in that portion?
- [13:48]
Doug
Yeah, exactly. So you're trying to make sure you're measuring the efficacy of your creative through engagement. You're making sure that, okay, when you look at these lower funnel segments as well, so you've taken a user from view to click to interacting on site, are they actually at a decent rate becoming unaware to considering the product? If that rate of going from unaware to aware to consideration is low, that's another flag that, hey, maybe I'm not targeting people in the right way or maybe my content isn't aligned enough with the unaware audiences that I'm going after as well.
- [14:22]
Eric
And then once you're in that consideration or beyond consideration into the action phase, are you almost always driving them directly to the PDP versus to the homepage?
- [14:30]
Doug
Yeah, typically there are some brands for sure that we have success with either. And it can be better to send to a homepage if you don't have any specific indication. Say you've got a bunch of different types of products. Right. You might not want to send if you offer apparel, you might not want to send directly to a genes PDP if you don't know that that person has specifically spent time on that pdp. Ideally you would set up your targeting so that okay, this person has genes intent, I want to send them genes content and then have them end up on a genes pdp. But that isn't necessarily always the case with your abilities to target these retargeting segments.
- [15:08]
Eric
Ki we've got a note here about searchlift.
- [15:10]
Doug
Yeah. So zooming out, we've talked a little bit about how we're kind of analyzing the different segments of the funnel and how we're looking at primary KPIs for how we're optimizing within the platform itself. But even within all that, how can we verify that our ad dollars, if they're not going to purchase conversion that they're having some impact on the business in a positive way overall. And there are a couple ways to do this. You can partner with Google, they have brand lift studies, 10k minimum of spend in a 30 day span for the US 15 came in in Canada, all of that in USD. But what I think is the most effective is using brand search lift. So analyzing okay my brand and it'll take some time, but analyzing the search volume for your brand and tracking that over time as you've invested in awareness efforts. Because people typically will come to Google to find your brand, they're not necessarily going to click on add to reach your site every single time. You should see over time brand search growth and that's a really strong metric I think in terms of how to reconcile efforts towards awareness that aren't necessarily attributing direct conversions and growing your business. So brand searchlift is a really big piece and brand search volume overall is something that I recommend people tracking rather closely.
- [16:30]
Eric
Very cool. And you're noting here that Google is coming out with a media mix analysis tool.
- [16:36]
Doug
Yeah. So they're working on their own internal Mmm. Option and then also media mix measurement. Yep, got it. They're also coming out with some multi touch attribution opinions as well. There's obviously a ton in the space, triple whale north beam, the like. And they're coming out with some recommendations and opinions on how those interact with Google. So it'll obviously be slightly biased coming from Google themselves but curious to hear what those opinions are again. We got a slight sneak peek on that the other week but yeah, waiting to hear a little bit more from them as well.
- [17:09]
Eric
I'm curious what are the conversations like with the brands? Because we've been, you know, this Google department has been going for a long time, as long as Pilot House has been going and we've got a lot of clients that we've been working on for a long time. I feel like what are brands opinions? So say they've got like an established campaigns running on all of Google suites and maybe they haven't dabbled as much in YouTube. Is that the case? Actually are there a lot of brands that are that really focus on the other aspects of YouTube and are now looking at getting into YouTube? Where does YouTube in our clients minds, where does YouTube play and how much are they willing to dive into it with us?
- [17:41]
Doug
Yeah, I think it's a bit of a mix. I think you've got some clients that have dipped their toes in and then they're like, well it was either too low scale or it didn't really equate to the performance I saw from search and shopping. Therefore I'm not really into YouTube. And then you've got other people who are like man, it seems really interesting. Obviously it's way sexier than search ads, right? Like you get a full 30 second, 1 minute long video that's way more exciting, it's more creative based. So there's kind of those two buckets where people have dipped their toes in potentially ineffectively given they haven't kind of looked at YouTube through this lens that we've been talking about it through and then you've got the other people who find it quite exciting. But I would say with YouTube and any kind of broader awareness effort, you have to make sure that you're putting a reasonable investment behind it, otherwise you're not going to get statistically significant enough results to measure if you spend 10 bucks a day on YouTube, you could probably spend 10 bucks a day on YouTube for a year and not really get any measurable impact on your brand searches. So that's the other tricky bit is having the confidence to invest My absolute minimum is typically five figures. That allows you to unlock brand lift studies as well. You could take them with a grain of salt for sure. But that 10k as a minimum for YouTube is pretty much where I start. And that depending on your brand stage might be workable for you. It might not, depending on what other investments you have going on.
- [19:04]
Eric
It's really interesting this whole season of DTC podcast where I'm talking with people who are doing interesting things top of funnel to create halos across their organization and increase conversion rates down the funnel, increase people in their funnel. And there's all like I was just did the podcast with Bilt and it was Spencer Toomey talking about just having Bilt on Mike Tyson's trunks during that terrible boxing match and how he's confident that it is driving brand awareness that it really did and it's like the most untrackable thing in the world. When you compare that with what YouTube does provide where you, especially when you're thinking about it this way, it seems like something that people should have a little more confidence in investing in, considering it's all part of the same suite in a way. Right. And we all know how big YouTube is in people's lives these days versus something like TV even.
- [19:55]
Doug
Yeah. And I think the difficulty comes from that example you gave is one impactful moment where you can very starkly determine, okay, this was the moment that, that launched and it got a ton of eyeballs in that period. Right. Whereas YouTube, you're probably not investing if you're a new advertiser, $200,000 in your first month of advertising on YouTube, you're spreading your budget out over time. So it can be, it's not that instant gratification of that halo effect. Right. It's going to be measured over a three to six month period, probably if not longer. So it can be difficult to kind of wait for those results. I think that's part of the difficulty with the platform as well. Not that I think it takes away from its capabilities, but I think that's why I see some hesitation around levels of investment there.
- [20:40]
Eric
I know, I think we were going to have Adam on and maybe we'll have him on at a future date to talk a little bit more about the creative side of things with this structure. But I've seen again, just even the past couple days like Taylor Holiday tweeting out examples of really branded mood board style story driven, high quality creative. And I feel like this, breaking it down like this when you, when you have this unaware Section there probably is that opportunity to do more interesting artistic storytelling at that highest level. Is that something we're experimenting much with yet? I guess it really depends on the client.
- [21:15]
Doug
Yeah, certainly depends on the client. More so with our higher spenders. Right. Like you have to warrant the cost of developing that creative. Right. Your average client can't necessarily afford to build a studio department for filming that creative and making that content. I will say that there is also an additional component for organic on YouTube. Right. Like it's not just paid YouTube that has an impact on, on your business. If you can start to grow an organic presence on YouTube, you're looking at. Okay, what queries do people look at for my specific niche? How can I answer them? Education and entertainment storytelling is a big one for these unaware consumers because you're trying to get them to resonate with your brand in that initial touch point. You just want them to care a little bit. Care enough to watch the whole thing. You don't necessarily have to get them to come through and consider a purchase on that first visit, but certainly the recommendation from Google as well is to build those stories. And it's just higher level marketing, which is something that can be. We're trying to bridge the gap between performance marketing, which is focused on conversion, conversion, conversion and trying to have the halo effect bring those conversions up by doing some of this more top of funnel work. And again, that doesn't necessarily have to just be paid. It can be organic as well.
- [22:34]
Eric
I also reiterate something from the motion podcast we did a couple weeks ago. It's like if you can make them laugh in a relevant way towards your brand, that is another great way to like set the hook of awareness or brand build. If you can actually make someone chuckle, it can be good as well.
- [22:48]
Doug
Yeah, absolutely. It falls under that entertainment side of education and entertainment. Right? Yeah. I'm always impressed when an ad can make me smile or chuckle because some of them certainly try and fall flat at tone deaf marketing.
- [23:02]
Eric
But yeah, a lot of those over the Super Bowl. A lot of ones that like, they just, that are just like the one where it's like seal and he's a seal. Like okay, like you've just two on the nose. Yeah, you've jumped the shark here. Commercials. But some of them, some of them were quite good. It's funny. I just saw it was a friend of mine, Tim Burd. He's the godfather of Facebook marketing. Shout out to Tim Bird. He, back in the in 2015, 2016, was talking about this method for Facebook advertising Mainly worked really well for like restaurants. And I don't know if you could get away with calling an ad technique this nowadays, but it was called carpet bombing. Basically was the idea that you blanket a region in low cost cost per view campaigns and then you retarget people based on the percentage of the video that they consumed. So the more they watched it, the more engaged they were. Is that something that gets into play in the YouTube environment as well?
- [23:55]
Doug
Yeah, it's kind of almost inherently built into how we're segmenting those different portions of the platform. Right. Like if we're looking at the unaware targeting and we're kind of gaining those unique views. A view is someone who has spent X amount of time or X amount of percentage of the video being consumed. Right. And then those people are the ones that we're focusing on the retargeting on. Right. So we're not retargeting to people who didn't engage with that initial touch point. So, yeah, I think it's very much relevant and almost inherently built into the structure that we've tried to reformat towards.
- [24:29]
Eric
And now it just has a. Does. Isn't called that terrible name. Cool. All right, well, thanks for coming on today, Doug. We've got this will come out next week. So this will be after this four nations final, Canada versus the US Tensions could not be higher. We'll see if the Americans boo the old Canadian national anthem the way we were nice enough to do in. In Quebec. But hopefully cooler heads prevail and it's gonna be an interesting game.
- [24:53]
Doug
Yeah. Winner. Winner takes the country, I guess.
- [24:55]
Eric
Winner takes the country. Winner. Yeah. They could become the, what, 10th? How many provinces do we have? I guess I should know that they'll become our territories.
- [25:03]
Doug
Thirteen.
- [25:03]
Eric
Thirteen. They'll become our 13th province.
- [25:05]
Doug
I should know that too.
- [25:06]
Eric
You heard it. I. I just think we should break off with Oregon and Washington and just do the whole Cascadia thing. That would be.
- [25:14]
Doug
That'd be.
- [25:14]
Eric
We'd have the best pot, that's for sure.
- [25:16]
Doug
Yeah, I think, I mean, for. For hockey's sake, we'll. We'll want Minnesota, right?
- [25:19]
Eric
Oh, yeah. If we can bring in Minnesota, that would be pretty good. Okay, cool. Well, I'll start hatching plans for that. I'll just be glad when it's over and I can stop getting trash talk from all my American friends. It'll be great. Who know nothing about hockey. I had a friend reach out the other. I'm like, do you even know what an off buddy you're trash talking? Me on this Canadian. Do you even know any of the rules?
- [25:37]
Doug
Like, it's great for the game, though. I'm. I'm glad so many eyes are. Are on it. Way better than the All Star Game. It's. It's awesome.
- [25:44]
Eric
And I'd heard that actually hockey is really facing an uphill climb with, like, TV viewership in the States. It's actually been diminishing quite a bit. So hopefully this does boy it back up because it is the best game on earth.
- [25:54]
Doug
Oh, I. I'm with you. I'm with you. You don't have to. Yeah, I won't have to fight you on Alex.
- [25:59]
Eric
Preaching to the choir. All right, brother, talk to you later.
- [26:02]
Doug
All right, thanks, Eric.
- [26:09]
Eric
Thanks for listening to today's episode. If you're not getting the D2C newsletter, you can subscribe for free at directtoconsumer co. And if you want to learn more about Pilothouse's all killer no filler services, take off to Pilothouse Co. I'm Eric Dick and this has been the DTC podcast. We'll see you next.