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- [00:00]
A
What's better, Standard shopping and performance max for scaling to customer acquisition. Still standard shopping.
- [00:05]
B
Today we're going to be breaking down what we refer to as the ad flow funnel. And that is a system we use to scale spend from $37,000 a month to $100,000 a month while actually lowering NCAT.
- [00:17]
A
I have actually a perfect swing of $40,000 going one way versus the other. Number one, you're listening to Perpetual Traffic.
- [00:31]
B
All right, I get it. You're a small business, you're a startup, you're a lean team. Everyone's doing dozens of different things and you got to move fast and be smart to compete with the big guys and the big gals. You've seen their endless resources. You know they are power. They have more money than you, but you can level the playing field. And all their data scientists and their massive teams. Finally, the secret weapon that you have is ActiveCampaign AI. The ActiveCampaign AI suite is built exactly for you. The small business, the startup, the lean team. It's the secret weapon that saves the average user up to 13 hours a week. Just think of what you could do with 13 hours a week. It's not about saving time on writing. It's about getting predictive insights that used to be out of your reach. From predicting which deals are most likely to close to generating on brand content in seconds. From the AI brand kit, ActiveCampaign puts enterprise level capabilities in your hands. Compete smarter, not harder. Discover the power of autonomous marketing with ActiveCampaign. Go to activecampaign.com to get started today. Hello and welcome to the Perpetual Traffic podcast. This is your host, Ralph burns, founder and CEO of Tier 11. And today's show is one of the past episodes of the Tier 11 AD lab where we tackled the scaling trap. Yes, there is a thing called the scaling trap, and John actually solved this. Most advertisers hit a wall when they try and scale, and this is the problem for tons of advertisers because what happens is you spend more money on the platform. But you notice that in your Shopify store, in your CRM, nothing is really moving as far as increasing sales. So an example I believe he actually gives in today's episode is that you might see 10 conversions in Meta, you might see 10 conversions in Google, and then you check your Shopify store and you may see 10 conversions. So you're not getting 20, you're actually getting 10. They're all claiming credit for it. So this is one of the things that really is a problem when you start to scale up. So what if I told you if you had a framework that would allow you to triple your ad spend without killing your profitability and not just recycling the same people over and over again to buy you actually going out and finding new customers? Well, John did this and today we're going to be breaking down what we refer to as the ad flow funnel. And that is the system that we use to scale spend from $37,000 a month to $100,000 a month while actually lowering NCAC. That seems like a crazy wacky thing to say because usually the law of inverse profitability says that when you start to scale, you actually increase your NCAC. Well, if you do this right and you use CAPI imports plus edge tag, we obviously use tier 11 data suite. For this particular project here, we were able to do just that. So this $80,000 test that we did, it also proved that Google Performance Max campaigns aren't the silver bullet that everyone says they are. And we actually compare them to standard shopping. So we're getting a little meta, getting a little Google here and you'll see exactly what those strategies are on today's show. So without further ado, take it away John and yours truly. John, I know you've been cooking up a lot of stuff.
- [04:05]
A
Yeah, Lab, I, I am trying to settle the age old question of what's better, Standard Shopping or Performance Max. So I've tested the absolute crap out of them and I have a very high spend test and I've come to find out that a feed only PMAX and a Standard Shopping are almost one to one identical in terms of performance, which is kind of revolutionary. I've isolated the data to be as one to one as possible while being able to in a very short time period test swinging $40,000 in the PMAX and $40,000 into standard shopping, or sorry, actually take 40 grand from standard shopping, push it into PMAX and then take the same 40 grand out of PMAX and push it back into Standard Shopping. And I have a comparison of both and I'm looking at new and returning non brand new customers, yada yada yada. So what I mean by this is when you're tracking the same data from a top line perspective of if I was to put 50 grand into PMAX feed only, non brand new customers only, or If I put 50 grand into standard Shopping, non brand new customers only, which is also a basically a feed only which one is better. And typically Performance Max looks way better because you do have more traffic, existing customers that start to convert this piled on top of but what about for new customer acquisition? There is a time period that may be coming very soon with the chatter on Google that standard shopping could go away. That's you know, kind of the the chatter like they were like oh ECPC is going to go away and then it did like okay, like some of that is is going to be real and Ralph's just completely gone though. Don't worry about it.
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B
Hey, if you're an agency, one of the biggest sticking points I've found as an agency owner is CRO. That's conversion rate optimization. CRO is hard these days and we've had tons of guests here on Perpetual Traffic that have talked about it. But one best secret weapons that we use inside tier 11 is a tool called Unbounce. In fact I started using it over 10 years ago when I was first starting tier 11 and we still use it today. The best part of it is you can empower your team to consistently deliver high converting campaigns and save billable hours if you're on a billing model, but also make more money for your clients to get better results. By being able to build quickly and using their drag and drop builder now even more so with built in AI copywriting and conversion optimized templates, you can build killer landing pages in half the time it used to take you. The power of Unbounce Landing pages is a solution specifically built for agencies. You can manage multiple clients from a single account and also Unbounce offers agencies domain based pricing so you only upgrade when you're ready to bring on new clients. That is brilliant. You don't have to pay the same price if you're using it for one client or for clients. Totally makes sense, right? That's why they have this agency program. So head on over to Unbounce.com PT for perpetual traffic listeners only. You can get 10% off when you enter the coupon code PT10OFF. They do not offer discounting, so this is only for you, the PT listener. When you enter coupon code PT10OFF at checkout, head on over to unbounce.com PT. Convert more customers all in one platform for your clients. Launch pages fast and grow your agency with Unbounce.
- [07:46]
A
What we're looking at is if we were to push admin into one versus the other, what would come out on top? And because we're looking at situational differences, I have two use cases that I'd like to share with fairly large testing that when you start to strip out the branded data when you start to strip out the return user data. When you start to strip out the return customer data, when you start to strip out basically anything that that campaign not provide and you have clean data versus clean data. What does it look like? And it's actually fairly interesting. I'm going to share screen here. Hopefully this pops up for everyone. Hey, Ralph's back.
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B
I'm here.
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A
You look like you're film from a potato. Okay, turned off the iPad.
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B
I sent you a picture of me doing the ad lab for my.
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A
I got to see this.
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B
Oh man, front porch.
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A
And this actually looks pretty good. There's, there's Ralph outside. I actually like that background. It looks great.
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B
It's a nice French porch orange cushions which was my wife's latest addition. But anyway, so I heard about 25 of what you. You're opening. So. Okay, I'm just gonna let you just let go at this point.
- [09:00]
A
Yeah, I'm gonna, I'll recap it for you week over week measuring both the same thing which is both pmax and Standard Shopping are both non brand, both new customers only. I mean basically everything's identical. Pmax is a feed only. Standard Shopping is, is obviously the shopping feed. So yes, PMAX can do prospecting with those fees they can do remarketing with those feeds and I want to know how much does that actually work and how much is it actually is more just like direct response versus oh it's smart AI bidding that has advancements and pardon my French for all the bullshit that Google feeds us that I've never actually seen in actual testing. And this is another one of those tests but the first time that we're measuring edge tagged people and also optimizing off of both non brand new customers only. And I have a. Well we were on one and then we did the other one and now I've swapped it back over to the other one. So I have actually a perfect swing of $40,000 going one way versus the other. It's a 4% different change week over week. So it's, it's actually a really, really, really, really perfect test for this because we're going to break it down data style which is how we usually do it here and can analyze the similarities and differences. So I'm going to go ahead and share screen and we'll kind of go through this and I can now do this. Yeah. So for those listening at home without well with I should say with Ralph Wi Fi connection. So it's probably on the radio. The, for the audio listeners out there, what we're looking at here is an ads account that has a non brand standard shopping and a non brand Performance Max campaign. And these two are running at the same time. But what you'll see is that they're very well, whatever through very short time periods. April 10th of the 14th versus August 2nd through the 7th. So we're looking at week over week, same days here. What is the change if we pull 36k out of feed only and put 42k into the standard shopping? So it's not an exact perfect storm because the PMAX was underspending a bit. But out of 74, $75,000 per week, we're only at a 4% spend difference from the top line. That's what my, my goal is, is to try to be within a couple grand week over week. But we're still spending like 75k a week. This is a very large spend account and we have a lot of good data that we can identify very quickly because of it. So we're crowdsourcing this data. So this last few days we took 70 or we took $40,000 out of feed only PMAX and we pushed it into non brand shopping. Now just for clarification, these are as close as I can get. These type these campaign types are both essentially shopping campaigns. The only difference is Performance Max can re engage and retarget existing customers and they can remarket omnichannel traffic but it will not be reflective in the data unless it actually came first click from that campaign. I make very general statements and a few of the general statements I make are number one, pmax goes warm, gets more existing customers. That was my my statement. Number two that is also the reason why you typically see higher roas. Number three, the prospecting elements of Performance Max are junk. My opinion, they do not take a display ad, go find Ralph for the first time, warm them up and get them to search or get them to click and get them to buy. That's what that's a lot of typically is seen as a positive attribute of Performance Max. And so I'm testing that as well. So all of the stuff that we get with Performance Max AI overviews the AI matching the smart targeting, the prospecting capabilities. Even when you're running a feed only, you're still running PLAs on shopping, GSP, YouTube, display, Discover, you're still running those, those five more channels. Like all of the benefits that we get for Performance Max when actually measuring an incremental lift into customer acquisition, is it better? And so this was kind of my test to See head to head standard shopping and feed only what what's working and what's not. And the results are kind of not even surprising. So as an example, when we look at the differences here, this is standard shopping increasing the ad spend. So this is pulling out or putting 42,000 into brand or non brand standard shopping and pulling 40k out. But here's the top line. This is what I thought was very interesting is because top line matters the most if we're spending in campaign A and not campaign B and then we're spending in campaign B and not campaign A, you should see top line differences. If the spend is the same, something that is better is going to do positively better in the account. So the spend is the same. We only have 4% difference week over week. The conversions we're looking at new customers only is a difference of 1.3%. So they are the same. Spend on different channels delivered a positive or negative contribution to the top line of 1.3% which falls well below 10%. Natural ebb and flow of any account. So basically anything under 10% is kind of like no change. We took 95% of our ad spend performance max and we shoved 185% into non brand standard shopping and our results are 1% difference. The that. Oh sorry, 4% difference. I was looking at the all conversions but we're looking at the same, basically the same thing from a. From an attribution standpoint. So we have a actually 4.4% less and so we're literally splitting hairs. The conversions by conversion time management, measuring cash is the difference between 724 and 692 or 4.42%. Again, 32 conversion differences out of 700 is not, it's not a change. It is simply just not less.
- [14:52]
B
Statistically significant. Right?
- [14:55]
A
Not measurably better. Basically the same. It's basically the same. Now we look at conversion value again, 6% difference. I have some days that show non brand standard shopping better, some days that are showing feed only better. But then again when you measure them week over week, they're about the same. CPC did go up slightly. Yes, it did go up 14%. So that is an element that we have to look at is the account will go up 14%. Why? Because the feed only is going to have inexpensive display clicks. Now it's 232 versus 317. That's almost a dollar difference if you're looking at like if we're rounding it, you know, 320 versus 230. So it's about 90 cents difference. That's a, that's a big change. That's 50% more expensive in CPC, but it is not delivering any measurable results. Why? PMAX has display remarketing with the feedback and that's the PLAS. Those are 50 and 75 cent clicks. Have they made a difference in terms of conversion? No. So is the CPC reduction in shopping worth it from a results perspective? Does not appear so, at least not yet.
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B
I'm close to asking you the bottom.
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A
Line on all this because it's basically, it's.
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B
From my standpoint, it seems like you're reaffirming what you've always talked about, but you're just retesting it again.
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A
Oh, there's a little hidden gem.
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B
Okay, all right.
- [16:15]
A
There's a little bit. Go for it. Yep. So this was the first one we did is like taking it out of Standard Shopping and pushing into pmax. And then like, what happened? Be like, hey, it looks to be about the same. But PMAX stopped scaling. So we push it back into Standard Shopping. And Standard Shopping has actually spent a lot more than pmax did. But so far, when it met the same spend and threshold levels, it's getting the same result. But I'll, I'll go through two differences that we saw that people usually confuse with better performance and that's what we're going to be getting down to. So is it actually better? No, not that I can see. And I'm gonna, I'm testing this in a. In a few different accounts. So, John, should I use a PMAX or Standard Shopping? It's something that we hear a lot. We get a lot of Q and A over that. And that's, that's why I'm demystifying everything here. So it's like, it's actually about the same if you're measuring everything correctly. So long story short, yes, clicks change, you know, conversion value by cost is the same. The CPA is 9% difference. I mean, the conversion rate is, is again 2.0 to 1.9. Again it's 0.08% difference. There is no difference really, even in conversion rate. Right. So let's look at the actual detail of what we're seeing inside of, inside of here as well during this test. So this is where I think is actually kind of interesting.
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B
And we're selling supplements here just for.
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A
Yeah, everyone. Yeah, Anyway, exactly. We're doing, doing, doing supplements. Yep.
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B
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- [18:00]
A
We'Re looking at the conversions we had in feed only PMAX 212 new customers, 90 returning and inside of standard shopping we have 120 in new customers, 45 returning. So why is it always like an.
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B
Why is it always a percentage In Google it's 121.36.
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A
I've never. Oh I know, I know. The percentages are like fractional percentages. I know, it's so funny. I guess they're like trying to be extremely specific.
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B
Right. It's 0.36 of a person actually bought there apparently. But anyway.
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A
Exactly. Right. And so they're definitely not a Wally.
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B
Fat person, that's for sure.
- [18:39]
A
Not a Molly fat person. Yeah, exactly. And we have a different, a couple different points too that we'll kind of go through this.
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B
Yeah.
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A
So we have, we have basically one third of the total return. New customers are returning about you know, 40 to 120. If we're looking at 1/3 of the ratio when we're looking at feed only it is about 90 to 212. More. More closer to like 40, 45%. So there's definitely more, more returning customers in feed only than there is standard shopping. So that is something that you have to take into consideration. It is going to do more new customers on non brand but those display is going to returning customers. So that display returning customers is going out, outbounding, finding them. I know this seems like for you and I repetitive but I've been saying the same stuff for two years. We still get the kind of the same questions and the same even you know, internally from the teams like we get a lot of the same questions, what's better? Pmax, standard shopping, that kind of stuff. So it does seem that we are looking the more returning customers for ratio instead of feed only. So pmax. Yes. Is going to have better roas. Is it real? No. Are you selling something to the client that maybe you didn't do? Yes. Is it something you can scale? No. That's what we actually also saw here, the feed only because it is going to utilize a percentage of its daily ad spend for returning customers. It hits a point where the cost that when we had this thing on 15k per day we tapped out at about 87, 80 and 98. Now we're actually on 15k per day. Since the. Since the first we try to push this thing as high as we could drop in, the T roas just started to overspend and the. Even the click started to reduce. So that's what. That's when we shut it off and went back to standard shopping. And that's when you saw the differences between this time period here of scaling as hard as we can versus versus not. Here is the kicker though. Using the same T row as a 40% my standard shopping campaign with this full daily Aspen of 15k. Right now I'm seeing a 26 increase in cost just by swapping the 15k from this one and putting in 15k in here. This one will spend 15k immediately. So week over week I had to pull 37 out and I was able to dump 60,000 in performance max could not do this. Yeah. So Performance Max could not scale up. Why? Why does a PMAX scale? 40% of every dollar you put into it does not go to new customers and it actually stops the spend. Why we're not counting returning customers. So that money is going out to those people. They are coming in, they are buying it cannot be seen. So we're not actually getting roas from those people. We're not getting conversion value from those people. It actually stopped Performance max. It reached a point of diminishing returns. That says I can't go any higher with my current structure and my current setup. What's your current setup? My algorithm. What are you doing? Not spending all my money on new. What are you doing? Reserving some for returning. Why? Roiz looks really good. I get to trick really stupid marketers. Okay, stop doing that. No, I can't. That's what it's built in to do when you stop measuring the return.
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B
So it's embedded. It's embedded into the campaign type.
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A
Exactly.
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B
Yeah.
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A
It's embedded into the algorithm. It will. It has a. I can't scale because I can't count. Wrong. Standard shopping blew pass it by 40 grand in two days. Yeah, that's the big difference. So if you're running Feeder, which most people or a lot of people are nowadays, they're running feeder and you're running PMAX Feeder. If you hit a scale ceiling, that's going to get stuck there. The inability for performance Max to retain the cold approach from it to its prospecting is the downfall to its scaling to the point where we're missing $25,000 in three days and it would not scale up. It couldn't get past that with the same 40% T row as go on both. So this is, this is what we do in the ad lab. We try to break things. And that was actually something that we, we looked at here is it's still on 40%. Like they're both still on a troas target of 40. So I'm sorry, I'm screen share. I'm not sure if you see it. They're still both on 40% troas here. But that one did stop that scale like it was 43. And I was like, okay, let's push it down and then swap it back over. And that one scaled up 233%. So this one is still scaling extremely fast. Now the conversion rate after dumping in, you know, $60,000 in seven days on top of 25 is pretty, pretty rough. But the conversion rate only went down 0.3%.
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B
Cool, right?
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A
Like great. Like that's, that's not bad. And our CPA went up to 46 and it's still $2 below our ceiling target, which used to be on this one over here. So it's, it's very, very interesting how we can scale this thing up and only go up 14 in CPA by standard shopping, though we're able to put another 21 grand in that we couldn't with performance max. So what's better, Standard shopping and performance max for scaling to customer acquisition still Standard Shopping. Can performance max get there? No, it can get very close. But it has a built in fail point that it spends too much money on returning customers on the display channel. That actually didn't do any prospecting. No. Did it find new customers? Nope. What did it do? In remarketing existing customers, we've like isolated it. It's beautiful. Like it's really cool to see.
- [23:56]
B
Well, I think it's, it's pretty cool because you're just reaffirming every now and then. Like I think we were talking about this earlier today on our one on one. It's like, you know, you want to test the boundaries obviously and try new things, but also you want to make sure that you're not missing anything. So something that didn't really work in the past. You couldn't get new customers from before. Performance max. You're retesting that saying. Okay, well it really is non branded Standard shopping, which is, that's the place to scale. And retesting or re challenging your previous beliefs is always a smart thing. All right, hope you enjoyed today's show. We do do these lives every single Friday. So if you like these episodes on Perpetual Traffic. You'll love them even more if you join us over on our Tier 11 YouTube channel, where John and I. Typically it's John and I. Sometimes it is some other special guests. Every Friday at 2:30pm Eastern. We get right into it. We're cooking up some crazy stuff over on the Ad Lab and what we call the performance kitchen. These are the types of things that we go through. So if on today's show you liked what you saw, definitely check us out. Subscribe to our YouTube channel. That's 211.com forward/YouTube. You can see it right there. It's the Ad Lab show up every Friday, 2:30pm Eastern. And of course, if you've watched today's show and you say, forget it, I don't want to try and do all this stuff myself, then obviously we're here to help you and we can do this. We can deploy these types of strategies that John has tested in his own businesses. He has a number of different businesses as he mentions on these shows. But then we are now deploying it into the last three to four months here as of this recording back into tier 11 and getting extremely outstanding results using these strategies. So check us out if you need our help at tier11.com forward/apply. So on behalf of my amazing co host who was not here today, Lauren E. Petrillo, until next show, see ya.
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A
You've been listening to Perpetual Traffic.