Why Scaling and Maintaining Efficiency Don’t Mix: A Guide for Entrepreneurs and Marketers

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Your local marketing want tobe guru with a public service

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announcement, which is you cannot scale and maintain efficiency.

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Generally speaking, as a rule, you can't scale and maintain efficiency.

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So if you have well performing campaigns and you wanna scale those campaigns,

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the efficiency of those campaigns is going to decrease as you scale.

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It's just like, Going to the gym, trying to put on muscle.

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Not that I've ever done that, but so I've read, you can

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either bulk up or cut in, right?

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You're either trying to put on mass, you're trying to cut in.

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You can't do both at the same time.

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They're diametrically opposed practices.

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You can't scale up a campaign and maintain efficiency.

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This isn't even a marketing truism or Google Ads truism.

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This is an economic truth.

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Now you might say, well, wait a minute, dude, I've done this in the past.

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I've added budget and maintained, you know, more or less the

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efficacy of the campaign.

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Fine.

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But that means that you weren't scaling to a degree that was impacting your market.

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So if you think of, the efficiency of your campaign as a bell curve, right?

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And a bell curve, it's at its peak efficiency in the center.

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And then as you traverse outside of that bell curve, it begins

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to decrease in efficiency.

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That's why it's shaped like a bell.

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If you were able to scale and maintain efficiency, all that means is that you

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were a very small fish in a very big.

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Pond that is the available market.

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And so you weren't scaling enough to exceed the limits or

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the width of the peak efficiency.

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Piece of your, bell curve.

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I hope that's well described.

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The issue that we run into, and the reason I'm making this video is 'cause

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we just lost a client and a member of my team goes, you know, every

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nightmare client we have thinks you can scale and maintain efficiency.

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And I'm like, I am a man on a mission.

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Now I shall jump on my soapbox and explain to the world why this is impossible.

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So I'm, I'd like to take this outta the Google Ads sphere because

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it's not a Google Ads problem.

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It's an economic problem.

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So imagine for a moment that you sell, Corn flakes.

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And because you sell corn flakes, you need corn, right?

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So you buy a bunch of corn.

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And the analogy here, by the way, the corn being the inventory that you need, Put

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that, take that idea, put it on a shelf.

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You buy corn flakes or you buy corn to make corn flakes, bam.

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That's your business within the realm and confines of Google ads.

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What you're buying from Google is visibility.

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It's users.

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You're actually buying people in a really weird way when you think about it.

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You're buying eyeballs, right?

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So, the users are the corn, Google's inventory.

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What Google sells.

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You are people.

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So Google is selling you the visibility of available to them via

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the media network that they've built.

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So corn people got it.

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Good.

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Put digital back aside, we're back on our corn.

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You create corn flakes.

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In this hypothetical analogic example, you buy corn to make corn flakes, then

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you go sell corn flakes and make money.

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That would be your r o i, right?

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Or your murder.

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As you.

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Increase your efficiency in selling.

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You're like, oh my goodness, this is working great.

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I'm making so much money I need to sell more corn flakes.

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Well, what do I do to sell more corn flakes?

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I need more corn.

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So then you go back to the story you bought the corn from and you

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say, Hey, I need all your corn.

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And they're like, alright dude.

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But that's fine.

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But we have other people that want corn here.

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Like you can't have all the corn.

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And you're like, but I need it 'cause I have to make my corn flakes

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'cause I'm selling the corn flakes.

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And they're like, okay, cool.

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Incidentally, this is an organic ecosystem.

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We're all good capitalists in theory, and there's two or three

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other people going, well, hold on.

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I've got a restaurant and I need corn for my restaurant, so I want, I'll pay you.

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What is he paying you?

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I'll pay you 10 cents more for about a bushel of corn.

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Just gimme some of that corn.

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And then another person is like, well, wait a minute.

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sell New England clam chowder.

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I don't know.

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I'm running outta corn things.

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I shouldn't have gone with a corn analogy.

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I should think this through more when I hit record.

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You know what I'm saying?

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So now what?

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What just happened to the price of corn?

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It went up.

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Who did that?

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You did.

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You increased the price of corn by trying to scale, and then your

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attempt at scaling caused this little domino effect where everybody

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else is like, well, wait a minute.

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I need corn and they're all gonna bid up the corn.

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And then, the more you scale now, you're not just at this store,

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you're at the store, you go to the grocery store next door, and then

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you go to like the Costco and the bulk buy and the whatever you become.

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You become the catalytic event that sets off an upward price spiral that

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incidentally, is now not simply dependent upon you stopping your campaigns, because

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now what you've done is you've put other people into a position where you've.

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Domino affected their entire assembly line, basically when it comes to

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them, you know, buying their corn.

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So now that those things have been impacted, what's really interesting about

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these is they can be runaway trains.

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And we've seen that inside of campaigns.

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So you're growing your corn flake business.

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In order to do that, you need to buy corn.

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Corn will get more expensive the more you need it.

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That's supply and demand.

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Simple economics, Adam Smith stuff here, right?

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So analog example.

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Hopefully we've all accepted this horribly where I should just stop

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recording and quit, but I'm not going to 'cause I have more videos.

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Shoot today.

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We're here, right?

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You're with me.

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Bam.

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Put this aside.

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Digital back.

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You're buying visibility.

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Google knows, you know, whatever you sell.

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You sell rocking chairs and Google knows that people who buy rocking

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chairs are in a bell curve, right?

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Right smack dab in the middle of people who buy rocking chairs

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are old World War II veterans.

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Right.

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They love to rock and just tell the old World War II story.

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I, if you watch those documentaries, I'm obsessed with 'em, but it's, there's

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always a dude in a rocking chair.

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The problem is we're running out of old World War II veterans.

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God bless them.

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Which means there's a limited number of them, and so you're selling your

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rocking chairs and you're like, oh man, these rocking chairs are crushing it.

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Let's go sell more rocking chairs.

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Hey, Google, I need to sell more rocking chairs.

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Let me spend more money get in front of more of these World War II veterans.

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Google's like, dude, I've only got so many of these guys.

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And the discovery channels on one line.

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Beating me down because they want to, you know, put the documentaries

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and Tom Clancy's on the other 'cause they love to read Tom Canon books.

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And, there's only so much visibility and so the price starts to go up and then

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you're like, oh, okay, well I'm gonna go outside the, the width of the bell curve.

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Who else buys rocking chairs?

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Well sassy Southern ladies who drink tea, they don't buy 'em as

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well as Old World War II Veterans, but they do buy rocking chairs.

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And then on this side we've got fathers whose daughters are out on dates, right?

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They just sit on the port for the shotgun rocking.

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And, again, not as good as the Old World War II Veterans, but

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each of them is hyper fishing.

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But you're traversing outside the center of the bell curve now, and you are

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also putting yourself in a position to where as you buy more of that traffic,

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the people that are, you know, Lipton is bidding on the tea ladies and then.

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I'm not gonna say who's bidding on the dads.

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Smith and Wesson is bidding on the dads, and we're all increasing the costs of

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this traffic because you're, you're growing, you're scaling, which means you

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cannot maintain the efficiency you have.

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When you try to scale now, can you scale up and then get efficient?

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Yes.

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you can.

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You should.

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There's, it's a lot like that bulk up cut in, bulk up, cut in, right.

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You bulk up and then you cut in.

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So I.

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I'm not saying that efficiency goes away forever, but I'm saying you cannot scale

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a campaign and scale in this particular context is just defined by grow to a

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degree that would impact your market.

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Right.

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Again, you can grow when you're right smack dab in the

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middle of that bell curve.

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That just means you're not very big when compared to your market, but when

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you're trying to scale and impacting your market, you're, the efficiency

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of your campaign is going to decrease.

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like I said, it's, an economic axiom.

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And I'm making this video also so that we can send it to potential

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clients or maybe even problem clients.

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If you got this video from, you know, a client manager, account

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manager, then you know what you did, you know, you didn't, it's okay.

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We all do that.

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But, you know, just watch yourself.

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So I'm saying just kidding.

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I love you.

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Thank you for being a client and gimme money.

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And I think I did it sort of, I got the point across not, well, it wasn't elegant.

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You know, it was It's free content.

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You're welcome.

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And I'm rooting for you.

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I shoot a video every day.

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I hope you subscribe.

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If you disagree with anything I said keep it to yourself.

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I'm just kidding.

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No.

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Drop in the comments.

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Let's have a conversation about it.

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I'd love to go back and forth and, you know, maybe you some

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know something I don't already.

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You have a better analogy for the corn.

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I thought the rocking chair piece was good though.

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for having been extemporaneous.

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I thought I did okay there.

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Thank you to everybody who puts up with me.