Setting Campaign Goals and ROAS | Google Ads Basics Part 3

Jon: 00:00:11

Regina has put together a fantastic calculator on how to get the client

Jon: 00:00:14

to understand what their goals are.

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It's not a magic bullet where everyone's like, ah, now I absolutely agree, and

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everyone just rides off into the sunset.

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So all of the, the goal setting, this is a really good way to identify

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without talking to the client.

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What some good goals should be for us.

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I moved my RO from 90 to one 20 and I lost $10,000 in ad spend that day.

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Now I don't want to go over all the bidding strategies again cuz I think that

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that's a big waste of people's times.

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I think we have it all.

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I already have a video on this.

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We did a Friday training about it, so we're all set there.

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But just a refresher for two.

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Maximize conversion value when you add a target return on ad

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spend will limit the spend.

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If your return on ad spend isn't meeting that target, your row as is not anything

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other than a simple mathematical ratio.

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It's X compared to Y.

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If I spend and I get.

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That ratio's off my Tarro has is below.

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I simply reduce X.

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Now my ratio's in line.

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So when you're talking about scaling a campaign or trying to spend the

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daily budget, we already know that this will not spend the daily budget

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because This campaign is asking Google.

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Essentially Google's campaign is asking itself, Hey, can you spend $430 a day?

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, can you spend $430 a day and get a 2.25 roaz and above?

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No.

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Well, why can't you spend $86?

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you know, this is a timeline, two days.

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So it's gonna try to get like 1.4.

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Now, it will not actually not spend, unless you get that RO as This

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is what I can spend predictably and get close as possible.

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But if I spend $400 in one day, this role is gonna go down to like

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0.3 and that's never gonna happen.

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Same thing with Target C P a.

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exact scenario.

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Can you spend $500 a day?

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Sure.

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Can you spend $500 a day and gimme $20 conversions?

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No.

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What can you get?

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I can spend $180 a day and get $25 conversions as close.

Jon: 00:02:11

Okay?

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But when you remove the TZ, or you remove the T C P A spend is going to bump fast.

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I'll give you a really great small scenario.

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Watch how touchy this is and understand that this is something

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that is very that's built into Google.

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See this dip where my cost went from 22 grand a day down to 10

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grand a day, it was cut in half.

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All I did in this campaign, when you look at the change history,

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I moved my Roz from 91 20 and I lost $10,000 in add spend that day.

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I lost, not really too bad.

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I lost 40 conversions.

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So what'd I do the next day?

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. I said, oh, all right.

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nineties, too low.

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What if I go from, 1 20 down to one 10?

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It's like, oh, okay, yeah, we could do that.

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And then here's 17,000 so I can spend 22.

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at 90, I spend 10 at one 20.

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I spend 17 at one 10.

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That's how whatever your targets are is what Google will

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dictate what you can spend.

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So that's how touch it is.

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Any restricted bidding strategy will stop.

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Spend.

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Any questions there?

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I know this is a lot of basic stuff.

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But it's good foundational stuff.

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It should hopefully stop any.

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Miscommunications or misunderstandings in the future.

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next we're gonna be talking about goal setting.

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I have a fairly good calculation that I did this week actually for a client

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that I'd like to share with everyone.

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Goal setting is, is more complicated, target or topic.

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We do have some, videos about it.

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We haven't discussed it in great detail, but I think that one of the topics that

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keeps coming up is, you know, how do we talk to clients about their goals?

Jon: 00:03:35

Regina has a fantastic calculator.

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on how to get the client to understand what their goals are.

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It's not a magic bullet where everyone's like, ah, now I absolutely agree,

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and everyone just rides off into the sunset, but it gets them a lot closer.

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Puts you on the same wavelength as that client.

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We're talking about goal setting specifically in Google Ads, and

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I have something to add to it.

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Thank you Regina.

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Everyone click on Regina's link and just take a look at that document.

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This not necessarily go over it in detail on this call.

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I think we'll be all smart enough to know what this means essentially,

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but this is your profit margin.

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The returning customer breakeven, Roaz, and Regina's done a great job at

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explaining each one and what it means below as like a legend returning customer

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rate, new customer breakeven, roaz, and recommended Google Ads goal for us

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to, and this is something that a client can fill out, so it's, it's fantastic.

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But here's, a really good client interaction.

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This is a client.

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we're scaling up.

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this is a client here.

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I'm not gonna say the name, obviously.

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But the client says, what would you consider a good goal for us?

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Three x, a four x a hundred x?

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you know, smiley face as we're increasing our spend and the

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ROAS is actually going up.

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They're m e r, I should say, global, m e r, media efficiency ratio.

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here's a calculation that I, put together I think we can

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use a CPA versus L T B model.

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And I said, here are your current metrics and let me explain this

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and I'll drop this in the chat.

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This is something that we can, it's a little bit more complex,

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but it is good goal setting.

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one thing that always kills a client is poor performance,

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even if it was outside of.

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Well, Google looked good.

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Yeah, but they still canceled or, well, we're on track and hitting the goal.

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Whose goal?

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Our goal.

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Was it?

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Right?

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Their goal.

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Did they agree?

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So all of the, goal setting, this is a really good way to identify

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without talking to the client what some good goals should be for us.

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And if we think that the client may be undershooting or even overshooting their.

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If they're undershooting it, we can educate them about

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why it's gonna limit scale.

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If they're overshooting it, we're gonna lose profitability.

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So it's a really good kind of bar meter to identify where we need to

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land and how we can educate the client.

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I think we can use a cost for acquisition, whether it's new or

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returning for them, it doesn't really matter that it's all new at this point

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cuz they're like a brand new company.

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So let's just assume that is true.

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You can use cac, but you have to verify Cost of acquiring a new customer.

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So they said, here's your average order value, $59 and 82 cents.

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Your 90 day purchase frequency is 1.0.

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So the average lifetime value for 90 days is your average order value

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multiplied by your purchase frequency.

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So and 82 cents multiplied by 0.08 to get us a $64 and 60 cents.

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That's the average lifetime value in 90 days of every new customer.

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So if I took $64 and 60 cents, which is the average lifetime value of 90 days, and

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divided that by three, indicating a 300% return, My CPA target setting Google ads

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needs to be $21 53 cents, $21 and 53 cents means I can get a three x return on a

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client's new customer every three months.

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And that's a rolling three months If this happens every three months by month three,

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while we're up and running and rolling, you're gonna see the new and the repeat.

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Just gonna keep cranking, just, it's just gonna be evergreen

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and it will keep rolling in.

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Now if that's our target, we have 179 orders actually in the last 30 days.

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And here's the current breakdown.

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So current C P A versus 90 day tme.

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Here's where we landed.

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We have $5,119 in spend.

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That brought us 179 customers, so it's $28 and 60 cents.

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, they have Amazon and we've already proven that when we turn on and turn off YouTube,

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their Amazon sales go up and down.

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So I can't take credit for it cause I can't prove it with data.

Jon: 00:06:56

But this is just assuming that we're not gonna count them, which if we did, we'd

Jon: 00:07:00

fall in between our goal and our current.

Jon: 00:07:02

But that means that our current cost per acquiring new customer is 28.

Jon: 00:07:05

Now what does this mean?

Jon: 00:07:06

Well then if you wanted to kind of reverse engineer this,

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who knows how to find their.

Jon: 00:07:11

90 day CAC versus L T V return on ad spend.

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what numbers would you do?

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Do we know this yet?

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If not, that's okay.

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I just wanna see if anybody was following along with Ah, here's

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what I would do to calculate that.

Jon: 00:07:21

Average order, revalue and purchase frequency for three month period.

Jon: 00:07:25

Yeah, I might have asked the question, Ron.

Jon: 00:07:27

Now I'm thinking about it, but I was just gonna say it would

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just be 64 60 divided by 2060.

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Right now our roaz for our current c p A versus l t V of 90 days is 2.25.

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What this means is that we're currently getting $64 is our 90 day ltb.

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We already know this, and if our current sales the month

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so far is coming in at $28.

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We know that 60 divided by 28 means that we're getting a 2.25.

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Currently, if this was 2153, you'll see 64.6 divided by 21.53.

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That'll put us at a three.

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getting a 2.25 me r.

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All cash in all cash.

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that's, know, a 2.25 roaz, m e r.

Jon: 00:08:02

It doesn't matter how, what you call it, but that's

Jon: 00:08:04

currently, this is not a glitch.

Jon: 00:08:06

I'm interrupting the video you're watching, because I need to

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remind you that I'm always looking for people to join our team.

Jon: 00:08:10

So if you're passionate about Google Ads and you wanna work with the best

Jon: 00:08:13

Google Ads agency on the planet, please go to so late.com/apply.

Jon: 00:08:17

Speaking of working with the best Google adss agency on the planet, if you're

Jon: 00:08:20

having trouble with Google Ads and you want professional, That's what we do.

Jon: 00:08:23

You can go to so late.com, that's s o l eight.com to apply for your

Jon: 00:08:27

free, no obligation action plan.

Jon: 00:08:29

And if I've given you any level of value at all, maybe think about giving me a

Jon: 00:08:33

thumbs up and subscribe to your channel.

Jon: 00:08:35

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Jon: 00:08:37

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Jon: 00:08:38

If you have questions, comments, concerns, or confessions, hit me below the comments.

Jon: 00:08:40

And now back to your regularly scheduled.

Jon: 00:08:44

. And so that's why when he says, Hey, what's a good goal for us?

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I said, here's what we're gonna spend.

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If I come to you and say, I'll spend $21 to make $64 every three months

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for every customer, is that good?

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You have to tell me your prop margin.

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You have to tell me everything else.

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So this is a path to get to 300%.

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I did this all when he said, Hey, what's a good goal to consider from us?

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I hopped into Google ads.

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I hopped into the back of his Shopify, and I put this calculation together and

Jon: 00:09:05

they would look at this and say, I agree.

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I don't agree, or I don't know what this.

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and then we have further discussions.

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But that's, what we can do for our current clients.

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cuz we're looking at a blended m e r, it does not matter what is

Jon: 00:09:18

happening on Facebook and Google.

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No one will ever be able to fully attribute a person saw as six times

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on Facebook and then one on Google.

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You have to look at m because that's where you can see, if I

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scale this, my mer should go up.

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It's just an assumption.

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if I reduce that, my mer should stay the same, but my volume will get low.

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that's all we're doing is, is calculating m e r, making adjustments.

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Omnichannel, rg.

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Gina, what's up?

Jon: 00:09:41

what you just said about you're never gonna be able to

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attribute all the numbers.

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what you're getting in Google Ads.

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Is different from what you're really getting from Google Ads.

Jon: 00:09:50

So I don't know if that's what you were saying, but I'm trying to paraphrase.

Jon: 00:09:53

Not necessarily uh, it's close.

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But actually that's a good point.

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I'll cover that right next.

Jon: 00:09:56

So what your Google ads c p a is not real, is just indicative of what we could track.

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But if we looked at all cash in and all cash out Mer.

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You can kind of deduce how close it is.

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If we're currently making, let's say 10 grand globally, and we're only spending

Jon: 00:10:13

on Google, and let's say we're spending five grand on Google, your m e r is

Jon: 00:10:17

two, but even Google might say it's 1.6.

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So it's okay.

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you can compare the two.

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However, this number here is not gonna magically just gain better attribution

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unless you crank up the brand spend.

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But then we're all smart enough to know that's not real, not necessarily.

Jon: 00:10:33

So all things considered, if that campaign that's tracking a $28 60

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goes down to a 2153, all we took is.

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inaccurate actual number and another inaccurate actual number

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and move the trend line still being beneficial to the client.

Jon: 00:10:50

This doesn't need to be real for me to know that it should go down by seven and

Jon: 00:10:54

that sort of just comparing it to the mer.

Jon: 00:10:56

Does it make sense?

Jon: 00:10:57

Yeah.

Jon: 00:10:58

, yes.

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Funny.

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It's like, okay, Google says you're getting two and rally at four.

Jon: 00:11:03

If Google goes from two to four, you should go from four.

Jon: 00:11:06

Yes, exactly.

Jon: 00:11:07

At Startup ppc, the only way we're handling like the no client

Jon: 00:11:11

meetings situation is by seriously simplifying this conversation similar

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to what you have in that email.

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Like all we're saying to clients is like, Hey, your Google Ads roaz in Google Ads is

Jon: 00:11:22

showing this How does your business feel?

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Is it profitable?

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Are you happy?

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Good, great.

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Then this is our ROS goal, like not what you thought you should

Jon: 00:11:31

get, but this is what Google Ads is getting you and you're happy.

Jon: 00:11:34

You know what I mean?

Jon: 00:11:35

Like we're kind of just simplifying that whole conversation and just only talking

Jon: 00:11:39

about like the numbers that Google adss is showing because there's just no way in

Jon: 00:11:44

mess support tickets to handle anything.

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And it's working like, it's kind of crazy.

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I had a lot of hesitations about it this year.

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And it's been a learning process to figure out what that conversation looks like.

Jon: 00:11:54

But I was like, too complicated.

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It's not gonna work, but it's like working and it's, so much simpler

Jon: 00:11:59

than I thought it was gonna be.

Jon: 00:12:00

it also kind of makes you think like an entrepreneur just like them.

Jon: 00:12:02

Like it's like that's kind of what they're also looking at too.

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So when you kind of dig yourself out of the potential, Google has

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data hole and look at the whole.

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Like the client is looking at the whole company.

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A lot of times it can be more well aligned.

Jon: 00:12:12

And if you do that and then you base some metrics off, but what's really great about

Jon: 00:12:16

this is you can have a campaign that's at a 2.2 return and their goal is three.

Jon: 00:12:21

But when you look at overall business and business has gone up by 3.2 times since

Jon: 00:12:25

starting it, the client's just gonna care about that money in his or her.

Jon: 00:12:30

Regardless of what Google is.

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He if a person's like, wow, you're hitting a goal, and you're

Jon: 00:12:33

like, yeah, my Google says 2.1.

Jon: 00:12:34

They're like, so , you know, they don't care.

Jon: 00:12:38

. Now the exact opposite's true though.

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We're like, we're hitting a for X return.

Jon: 00:12:41

We're like, yeah, but I lost 10% in my company this last year.

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They don't care.

Jon: 00:12:45

It's in a four.