Perpetual Traffic Podcast Episode Summary

Title: [INSANE Case Study] How to Spend LESS & Make MORE on Meta & Google
Host/Author: Tier 11
Release Date: November 19, 2024

1. Introduction and Special Offer

The episode kicks off with Ralph Burns addressing business owners and marketers who felt their 2024 efforts fell short, leaving money on the table or dealing with underperforming internal teams or agencies. He introduces a special offer for six businesses to receive free human-conducted business audits, emphasizing a comprehensive analysis beyond mere ad accounts.

Notable Quote:
Ralph Burns [00:01]:
"This is the number one complaint we hear from potential prospect clients who want to work with us potentially."

2. AdCritter Collaboration and TV Advertising Insights

Ralph shifts focus to discuss a collaborative effort with AdCritter, highlighting the effectiveness of connected TV (CTV) ads combined with display retargeting. This strategy aims to maximize reach without exorbitant spending, such as Super Bowl ads, and ensures consistent audience engagement through a multi-channel approach.

Notable Quote:
Ralph Burns [08:37]:
"TV advertising is one of those areas that we haven't discussed here on PT all that much... it really works."

3. Deep Dive into the Insane Case Study

The core of the episode features an in-depth case study presented by John Moran, showcasing how reallocating ad spend from Google’s brand campaigns to Meta resulted in substantial revenue growth while reducing costs.

a. Identifying the Problem

John Moran identifies that the client was overspending on Google’s brand campaigns, which, despite high ROAS, were not contributing effectively to business growth. This setup constrained the ability to acquire new customers and scale efficiently.

Notable Quote:
John Moran [09:00]:
"It's about taking your head out of the singular channel, looking at the business goals, then optimizing the spend regardless of what the platform says in terms of performance."

b. Reallocating Ad Spend

By pausing the $13,000 brand campaign and reallocating $37,566 instead of decreasing, Moran shifted the focus to Meta, which resulted in a 16% revenue increase and a 21% increase in conversions.

Notable Quote:
John Moran [15:17]:
"With 38 bucks of additional spend, all of my brand traffic just flew into here at 100,000 dollars."

c. Metrics: ROAS vs MER

The discussion highlights the limitations of Return on Ad Spend (ROAS) and champions the use of Media Efficiency Ratio (MER) as a more comprehensive metric. MER accounts for all marketing expenditures and their overall contribution to business revenue, providing a clearer picture of marketing effectiveness.

Notable Quote:
John Moran [25:05]:
"ROAS might be an indicator of overspending. Unless you do something with the money I saved you, you're not going to grow."

d. Results and Business Impact

The reallocation led to a $130,000 increase in in-app revenue and significantly improved MER from 4 to 36, underscoring the effectiveness of optimizing spend towards channels that align with broader business goals rather than focusing solely on high ROAS campaigns.

Notable Quote:
John Moran [20:58]:
"So this is a case study as to why the ROAS is bullshit... you just get more out of less."

4. MER vs. ROAS: A Paradigm Shift

The hosts delve into the importance of Media Efficiency Ratio (MER) over traditional ROAS. They explain that MER provides a holistic view of marketing effectiveness by considering all media expenditures and their aggregate impact on revenue, rather than isolating the performance of individual campaigns.

Notable Quote:
Ralph Burns [12:13]:
"When you actually see things going on and how he thinks and how things are moving inside the ad accounts... you'll understand why you want to watch this."

5. Audience Questions and Expert Responses

The episode transitions into a Q&A segment, where Ralph and John address various listener questions related to ad strategies, campaign optimizations, and metric interpretations.

a. Feeder Strategy with Performance Max and Standard Shopping

For clients with high media budgets on Meta Ads managed in-house, John recommends an 80-20 split favoring Standard Shopping over Performance Max (PMax) to ensure better signal alignment and efficiency.

Notable Quote:
John Moran [38:07]:
"I would heavily segment out those campaigns so that you have either categorical or SKU separations... then start to scale both of them equally."

b. Handling High Return Rates in E-commerce

When faced with high return rates in specific product categories, John emphasizes the importance of distinguishing between customer-driven returns and product-driven returns to tailor optimization strategies effectively.

Notable Quote:
John Moran [52:18]:
"Demand Gen is very poor at generating demand and very good at capturing demand."

c. Ad Allocation for Small Budgets

For small businesses, such as a one-man appliance repair company with limited daily budgets and high CPCs, John advises a 60-40 split between manual CPC or max clicks for incremental cold traffic and TCPA/TROAS for conversions.

Notable Quote:
John Moran [53:45]:
"If you're not on Search, be on Search. If you're not on Exact Match, go on Exact Match."

6. Tools and Recommendations

The hosts recommend leveraging advanced tools like Wicked Reports for enhanced attribution and accurate measurement of marketing performance beyond standard platforms like GA4. They stress the importance of comprehensive data integration to avoid misattribution and optimize marketing strategies effectively.

Notable Quote:
John Moran [61:09]:
"Invest in Wicked. The Wicked Reports tool just to get only the difference between your first click, your last click, and your customer journey."

7. Conclusion and Key Takeaways

Ralph and John wrap up the episode by reiterating the superiority of MER over ROAS for sustainable business growth. They encourage listeners to adopt a holistic approach to marketing spend, focusing on metrics that genuinely reflect business performance and scalability.

Notable Quote:
John Moran [50:39]:
"Growth is about MER. Those are the numbers that matter right there."

Ralph Burns [63:17]:
"This is how you need to succeed right now in digital marketing... smart, creative ways to scale and grow business will never go out of style."

Final Thoughts

This episode of Perpetual Traffic offers a transformative perspective on digital marketing metrics and ad spend optimization. By prioritizing Media Efficiency Ratio (MER) over traditional ROAS, and strategically reallocating budgets based on comprehensive business performance indicators, Ralph Burns and John Moran provide actionable insights for businesses aiming to maximize revenue and achieve sustainable growth.

For a more detailed analysis and visual insights, listeners are encouraged to watch the accompanying videos on Tier 11's YouTube Channel.