Mastering Google Ads in 2024 with Michael Nadalin

In this episode, Nathan interviews Michael Nadalin, the founder of Market Lead, a niche Google Ads agency in Australia. They discuss Michael's background and the growth of his agency, as well as the importance of expanding scope beyond Google Ads. They also delve into the effectiveness of Google's Performance Max campaign type and the challenges of being a Google media buyer in today's evolving landscape. The conversation covers various topics related to account management, client communication, understanding business goals, and the importance of financial knowledge in marketing. 

Follow Michael on LinkedIn Here: https://www.linkedin.com/in/michaelnadalin/
Follow Michael on Youtube Here: https://www.youtube.com/@MarketLead

Takeaways

- Building a successful agency is based on word-of-mouth referrals and delivering high-quality work.
- Expanding services beyond Google Ads, such as lead generation and consulting, can provide more value to clients and drive business growth.
- The success of Google's Performance Max campaign type depends on proper execution and understanding of strategy.
- Being a Google media buyer requires skills in tracking data, client communication, strategy, and data analytics.
- Google Ads is no longer just a standalone service, but part of a larger ecosystem that includes other platforms and services. Account management is crucial in understanding clients' business goals and aligning strategies with those goals.
- Conversion tracking is essential for optimizing ad campaigns and making data-driven decisions.
- Financial knowledge is important for marketers to understand the economics of the business and make informed decisions.
- Attribution in marketing is challenging and should be used as a guiding force rather than a source of truth.
- Small and medium-sized agencies should focus on niche markets and work closely with clients to provide value beyond basic keyword optimisation.
E-commerce brands should prioritise feed management and work with reputable agencies to optimise their Google Ads campaigns.
Understanding the unit economics of a business is vital for scaling and ensuring profitability.
Knowledge and skills are valuable assets that can lead to success and opportunities in the business world.

Chapters

00:00 Introduction and Background
08:13 The Power of Performance Max
25:58 Account Management and Client Communication
29:23 The Role of Financial Knowledge
31:47 The Challenges of Attribution
35:57 Advice for Small and Medium-Sized Agencies
39:27 Advice for E-commerce Brands
41:20 Understanding Unit Economics
42:27 The Value of Knowledge and Skills

Transcript

0:00

Welcome back to the Blues Brothers podcast, the podcast in where we talk about the challenges, insights and triumphs of scaling seven feet at eCommerce brands to eight figures and beyond. In this episode, we'll be talking about Google ads 2024 strategies. I'm joined with Michael and Natalie. This is our first time meeting, but I actually found out about Michael maybe three or four years ago on the solutions a channel when I was picking up and learning Google ads in the early days. So thanks for hopping on Michael. you're welcome. That's awesome to hear. That's how you discovered me. So many people find me from so many places and yeah, that solutions aid podcast did make a big impact for me, my business, even a few years ago when I was on it. Yeah. Yeah, for sure. I hopped on it a few weeks ago as well. And we got 300 subscribers in like a day, which was pretty crazy. Yeah. Yeah. so I want to start off with a bit of your background. You are the founder, the director of market lead, which is a niche down Google ads agency here in Australia, working with primarily enterprise clients from what I'm aware. So how did it start? What led to market lead? And what's the plan from here moving forward for the rest of the year? Yeah, awesome. So yeah, it's been an interesting journey for me. I started literally straight out of uni doing a job at a marketing agency, doing Google ads. So I didn't jump around, ping around. It was literally a very linear path for me. I worked at three agencies before I started my company three years ago. And yeah, it was, I had such a wealth of experiences and knowledges, like knowledge from so many smart people that, sorry, one second. Siren going by, there we go. it's such a wealth of experience from a lot of smart people that it got to the point where I, I got to have a very different journey from a lot of people. So that I know that run agencies. So for me, 95 % of my business has been built off word of mouth at referral. So it's either been based on my personality or my work. So I don't know which ones I'm more proud of, but it's been. Yeah, I've been running this company for three years now and it's turned into, you know, it's grown rapidly. I've got a team. I have fun every day. It's awesome. So I started off doing Google ads and then over the last few years, probably the last five years, I was doing a lot of meta ads and then of recent, like the last few years doing the landing pages. So really transform form from a Google ads type of approach to more of it, just like really focused on paid lead generation. So. Google ads, Facebook ads, and landing pages, which I like to coin as the holy trinity of lead generation because when we, when we were originally just doing Google ads and going to a landing page or a website that we weren't controlling, we weren't able to get the results for the client. But then when we took more ownership of the Facebook or the meta ads and the landing pages, we just noticed where clients would literally go from coming to us being like, that had been referred, they were like dead broke to literally making millions of dollars within months. And just knowing that we could own that part of the buyers or behavioral cycle of someone going from search to buy, it just made sense to continually do that. So that's kind of the journey. And right now, you know, we're in May, 2024. So if you're watching this in the future, you may be able to look back. But the focus this year is just... As I was mentioning before, like my business is really growing in a different direction right now. Once that it started as a Google ads company, then moved to more lead generation, doing a lot more of like private equity investments and actually buying into some clients businesses. And then we can actually help them grow and have more impact because as you shared with me about your business, like you're not just a Google ads agency, you're helping with the clients finances. And a lot of this is just beyond just running some ads is. You've got to help them with their sales, their operations, consulting, helping them get referrals and retain just like the whole enchilada. And they're realizing that that's more of the real experience clients need more than just advertising in itself. So yeah, that's a bit of the journey. Yeah, that's super exciting as well. We're sort of going down the same path too, which is we want to be looking at acquisitions in our client portfolio that currently exists in any other clients that are coming to us because it just makes so much sense if we're extending our value outside of Google ads and we're going all the way down to whether it's the P and L level or owning the entire customer acquisition. If you can own the customer acquisition in the business, what percentage of the success of the business is then driven by that? Right. It's. probably at least half, maybe even more. So it does make a whole lot of sense. team in place who is solely dedicated to that and they get to be rewarded with the upside only makes sense because most businesses, the biggest thing they struggle with is sales. And the only way to get more sales is if it's e -commerce by getting the right traffic to the right page or if it's lead generation getting high quality buying intent leads. So If there's the most important thing in business, 80 % of the time, the most important thing is sales. The only step before that is either the method of sales or getting leads as well. So it does make sense. And I think at a time and age now where digital is so, it's so flooded and it's so crowded out by so much rubbish, you need dedicated ninjas to like actually execute the strategies, not just trust that like, I'm just going to run some ads in and YOLO or work out. Yeah. Why do you think it's so flooded with, let's call it agencies that, under deliver on performance. I just think it's just like low barrier to entry. Like the barrier to entry is so low. And look, I'm not worried or concerned about that. Like I said, like my business is built off referrals because like I've got really high quality clients that, you know, these are people who have been in business for decades. So they know other really high quality business owners. So these people aren't going to Google and writing Google ads agency or that stuff. So for me, it's not much of an issue. It's more for like smaller businesses or like smaller agencies that That's where the issue is because if you're a new business owner and you don't know where to go and then you just go onto Google or YouTube and you find something, you don't know if they're good or not. And the challenge is everyone says they're the best. And that's one thing. And that's from the agency approach. The other side is like these businesses, they have competitors who just have these, you know, their competitors come out, just run some flashy ads and it's whatever gets visibility tends to get profitability. So you might have been working with a client who's got a legit business. great process, a great structure, great product, but they've got a competitor who's just like doing some crazy drop shipping, flashy videos. Just like absolutely rips off the customers low quality, but they just get all that attention where, yeah, they're just getting robbed. They're essentially just getting robbed the high quality exposure that they could have got. Yeah, it's funny what you said there. How many number one agencies do you think there are in Australia? Like a hundred? Yeah, it's actually funny. In our, in our like sales deck, we have number two agency in Australia because we play off it. Yeah. So who's number one in that scenario then? If we get asked we just said there's always someone better. good, good. You can always say number one is us in the future because we're getting better ourselves. It's not a bad one either. Yeah. I want to talk about performance max because my thoughts on performance max have changed a lot over the last six to 12 months. At the start, I thought it was great. Then I went through this period of no, it's terrible. It just over attributes and overoptimizes towards high intent users, which is just existing traffic and customers. And then in the last few weeks, I'm actually sort of starting to swing back. And the reason I'm swinging back is because brand exclusions. the new feature that Google rolled out. It was pretty terrible when they first rolled it out. It didn't really work that well. But in the last two to three weeks, I've been seeing it work incredibly well. It's actually doing a really, really good job at pulling all branded out. And we've done some incrementality tests across our clients where we've doubled budgets and performance max, then measured correlation on top line revenue. And top line revenue has increased with proportional profitability. So I want to get your full start to end. current thoughts on performance max, whether you've gone through a similar trend of hating it, then liking it, and then hating it again, and how you're finding it in the accounts. So everyone's going to have their own opinion. I think that's what the good thing about this is, but the opinion's got to be based on, are they being like a thought leader about this or a result leader? So I always base my opinions based on my experiences and facts. So people, I was chatting to my mate Cory this morning, we do a podcast together and he, you know, spends millions of dollars on e -commerce primarily. And we're talking about Performance max how people are like, performance makes horrible. We should do standard shopping, all those things. It's interesting because, because I've been doing performance max from the start and I was releasing content on it from the start. It's just been like, for me, it's just another campaign type. It's just another thing. So I, I forget that people are so interested in it because it's just part of the average day in and day out. For clients, I'm still seeing consistent. improvement in performance max month in month out by consistent growth. I just think the challenge that a lot of businesses have is they don't have the inputs done properly. So for example, they don't have, they're not managing their feed well. They're not structuring the performance max campaigns. Well, they're just not using the settings properly or actually doing any proper reporting on it. So when people have different experiences, like you've obviously got an agency where you're managing heaps of clients with P max. What you just, your feedback then is totally valid. Like, look, we've seen swings, but it's because you're doing it. A lot of people go, it's bad because this one time with this one client, it didn't work or yeah, it works great because it worked great on two clients. I think that performance max still is a really powerful, campaign type for Google ads. The challenge is most people are not executing it properly. So it's just like steroids. If you exercise and do the things properly and you take steroids, you'll get jacked and you'll get all the good stuff from it. The problem is most people are like just injecting P max into something that's fundamentally broken being it, poor products, poor feed, poor setup, poor website, just all these things that are done poorly. So when there are trends, I tend to see them more on like an individual client level rather than a macro level because the macro level is I constantly just seeing improvements because A lot of clients, when they're getting success, more data is feeding into the algorithm, which just means there's more data for it to start prospecting and growing for. So yeah, it's just an interesting, yeah, it's just a challenge to discuss it because everyone's going to have a different opinion. I just know we run it on clients. Once we know their feeds clean, they're getting the right search term from a standard shopping campaign. And then they'll just see like huge growth. I've got a client that was referred to me. that they were hitting 80k, like 80k revenue. So the company was doing quite a bit, the Google ads was a small percentage. By making two changes in the performance max campaign, we grew it from 80k month to 300k month US within a month and a half. Just a few tweaks, rice is consistent and the rice is about 950 to 1000%. So really high numbers. We had to do that because their margins are really lean. So I've actually got to be hitting a really high ROAS threshold was also hitting a pretty high revenue threshold as well. So I hope that answered the question, but it's just, it's just hard to discuss it because it's just, it's such a, it's cause it's based on an algorithm and your own data and your own efforts. People just think it's just like plug it in and then magic will happen. It's like, no, you've got to be doing so much like front end work to make sure that the quality going into this machine is really powerful. Because once you know that, then you can actually start to get those. outstanding results that people like us range and rave about. Yeah, I think there was a golden nugget in there as well to what you were talking about, which is a lot of people make an assumption about a campaign type about anything with either a few data driven tests or with just a mental model. But if you ever want to build an SOP, if you ever want to make a statement that actually has any validity, you need a mental model paired with actual data driven tests and results, because one without the other is Useless. I could make up any mental model that I want. And also I could run any tests that I want and draw any conclusion if it's not actually tied to something that actually makes sense. So it's really the pairing that makes sense as well as the fact that people don't have access to as larger data sets as I think they do as well. Like I think I have a large data set because we have access to over 100 accounts. And I look at like, let's say five to 10 accounts a week, but it's not really that much data. I can't talk to the macro. Can I? I can make inferences based on the data and the tests that we're doing. But at the end of the day, the people that have the data is Google or let's say an agency with like 5 ,000 plus accounts. Yeah. Yeah. But even in the own personal account, like you've got to have hundreds of conversion or data points to actually be in a position to ensure that you're actually making it with good inputs. Like thinking that like you can only have like, I know 10, 20, 50 conversions a month is enough. It's not, it's not. And it's one of those real fallacies like the well, the truth that the rich get richer. Like the more data you have available, high quality data, the more opportunities of this growth scale that you keep hearing about. Now I don't, you know, we have so many clients that have such like ridiculous growth or scaling. I hate that word. I really makes me cringe. Hehehehe. don't push that because it's only for few clients who actually have the data. But if you're like a small client, you need to be like kick, pouring and screaming to get all that conversion data. Because once you got that, the machine does really amazing things for you. Yeah. Carl's actually said this to me a while ago, which is you're just spending enough to annoy yourself, which I took away as there's this spending threshold in almost any account where you get enough data accumulated within a campaign to where the machine learning gets really accurate at who it should be prioritizing with bid adjustments. And if you're just not spending enough, you'll be spending just enough. So you're breaking even, or maybe you're a little bit profitable, but. It's through a two -exing or three -exing and spend that you actually see better efficiency, which a lot of people don't, can't conceptualize because it doesn't translate to traditional media. Where in traditional media, if you launch a, let's say a newsletter ad, you'll launch into the most specific newsletter that directly correlates with your target demo and you'll see the best results. And then as you try to scale it, you'll go into less relevant newspapers and you'll see worse and deficiency through your spend. But in digital, it's the opposite, at least initially. You will see an erosion eventually, of course you always will. But at the start, you'll actually see improvements, which is it's hard to wrap your head around, particularly if you're not sure if your campaigns are getting structured correctly in the first place, because everything that I just said is not true. If your campaigns are structured terribly, all the things that you said, if your GMC feed isn't clean, if you're not going after actual cold customers, but you're just heavy re -marketing, yeah, it won't work and won't scale. So you sort of need to have the foundations in place and then you'll see that play out in digital. Yeah. The other thing that people do miss is just the attribution windows as well. Like you've got to really understand in your Google ads account, how long it is taking people from their first interaction to buy. A lot of people are very reactive on a day-to -day basis. And they just go, our sales were down this day or the last few days where it takes on average, maybe 16 days from that first interaction for a purchase and actually not giving Google that time horizon to make. You know, if they know that it takes 16 days from someone to buy, then how do we make sure that, we don't make many changes in that period. So then Google can actually ensure that the people are. By taking action now do by so many people are so reactive on short -term data that that does what actually screws their account up. Once you get those early signs knowing that, okay, it takes this many days to buy this ideal budget. And these are the top selling products. If you go heavy on that. and really load Google up on the data. It makes all those numbers better. It makes the buying window shorter. It makes the sales of the product go better. It's more just like the, even just like the mental models or the psychology of the person running the account that tends to be the success of it or failure beyond just the performance max, if it works or not, because it's just so many factors that people don't get unless you're running heaps and heaps of accounts and you start to see these patterns that... after a long enough time you'd have to be stupid not to see them. Yeah, that's sort of where the that is sort of always the advantage of going with a smaller agency as well is because the artisan will always be the system. It's it's really hard to systematize looking at 50 to 60 accounts a day and building mental models and then starting to apply them and watching results play out. You your brain is sort of like its own little machine learning model and you're just pumping in data and it's getting better at better and making micro decisions. Yeah. and then trying to scale those micro decisions becomes quite difficult. Yeah. Well, that's why traditionally a lot of, you know, I'm noticing the best people who get results now are usually people who are working with like boutique agencies, not like huge agencies, because you can't, because those huge agencies, the success will come from the person running the account. So if you've got people into changing in and out of an agency so often, where's that IP line? Like we're living, whilst we're like, we work with technology, a lot of success will come from IP and it comes from the individuals because, It's really hard to put SOPs together for something that's so new, that's so dynamic. It comes to a bit of like, you know, data driven intuition at the end of the day. And it's really weird that it's like, you know, you can keep growing, but the best agencies who are getting the best results for clients are the ones who have like, you know, you know, a team of, you know, two, five, 10, 20 people, like anything like these huge agencies. You know, we pick those accounts up all the time because they just can't perform in this new market. Like these whole, you know, so many of these agencies as well do not keep up with the current trends of advertising. They're like, look, this is what's happening now. Like, sorry, this is what was working five years ago. People who work at that agency are treating it like a job. They're not actually got that entrepreneurial spirit of staying up to date with the newest trends and technology and advertising is super dynamic and it's growing and evolving so fast that. If you don't keep up with it within two to five years, you're out of the game. It's almost like you don't never had the skill set. Yeah, I think that's why also agencies will always exist. Because the second you take someone from an agency and put them in house, they can't stay on the forefront of the advertising changes. can't. And you can't just think that the one account you're working on is like the universal truth of data and processes and strategy. It's crazy. Like I work with so many businesses and beyond just like advertising and it's actually more beyond advertising. I tend to recognize that I'm a better business owner than most of my clients because I get to see them, how all of them run businesses. And I see the patterns of what works well. and what fails and this is an advertising, it's just structures, process management, leadership. And when you work enough across enough high quality businesses being an advertising or just like operationally. You just see patterns. And that's why if you, once again, if you took someone from agency in -house, you lose that pattern recognition. Cause what patterns are you working off? Like there's no diversity of patterns. You're just going, well, this works. So it must always work or this doesn't work. It must never work versus, you know, let's just say we've got 10 clients doing similar industry and you're like, two of them didn't work. Eight of them did. It's not the advertising cause it's working on 80%. What's that 20 % doing outside the advertising that these eight aren't. and just looking for those patterns, but it's so hard to say that when your data size is n equals one or two or three. exactly. What are your thoughts on Performance Max advantage plus it almost seems like Google and Facebook and Big Tech are rolling to a one -click world Where they want to enable smaller advertisers to be able to just come into the platform click a couple buttons maybe integrate some AI so everything's auto -generated and then they're off and The primary objective that I would imagine is that Google and Facebook are trying to maximize advertiser revenue? by maximizing inventory on the platform. So do you think we're going to move to, hey, it's just one click and we don't need Media BIOS anymore? What are your thoughts? Mmm, yeah, it's... There's so many benefits to it, but in the long run, there's not because it, it levels the playing field because then everyone just plugs and plays. And it doesn't matter how good the algorithm is, is because then the only person who wins or the only company that wins is the advertising company. Cause they literally hold the monopoly on deciding bids and placements. So I look, the best advertisers I see are the people who've been doing this for like, you know, five plus years. Like it's really hard for people just coming into the advertising game now. It's. actually understand strategy because strategy is where it all starts. Because if you're coming to the industry now and you're watching all the newest videos on Google ads and all the newest things from the documentation from Google or Meta, Facebook, you're just being brainwashed by what's current. But if you don't have these old school strategies, understanding like what keywords are, ad placements, you know, bidding strategies in different ways about it, you just, you don't know what you don't know, which means you don't know when, what you could have done. and what good looks like. So with like these one click world, I think there's a lot of advantages because you can get really good results from it. But it's like, what happens when you don't get good results? You know, it's the assumption that the one click works, but the one click works for a certain amount of time because you get results, but then you hit a plateau of either your margins are not good because the company knows, well, for every hundred dollars you spent $20. So let's make sure they spend $25.$40 and they cause they know how much you're making with so much input of data They're just gonna squeeze as much out of you to the point where you're like I can't do this anymore Because their goal is to make you spend as much money as possible So if they know every $200 you make it cost in the past cost you $10, they're gonna go well, there's $90 hanging out there. Let's get our little chunk again. So that's why I feel like as Much as it's good. I think that the sophisticated companies won't buy into it too much. And that's probably the other side of it. It's like, you've got to have plays outside of paid advertising to ensure that if you're losing money on the front end, you've got really good retention strategies through like email marketing or a really good brand or just other ways to ensure that you've the only dollar you've spent is the dollar to acquire them. And then after that, it's all just pure profit through email marketing and just great promotions. Yeah. In terms of being a Google media buyer now, how important do you think it is to be stepping outside of the platform? Should a Google media buyer just be in ads.google .com all day or should they be looking elsewhere? Nah, this is, I actually posted something about this on LinkedIn last night. Google ads is not what it was. You can't just be in the account and just think if you're nine out of 10 or 10 out of 10 for Google, you're safe. That's not okay anymore. You've got to be good at tracking data, client communication, strategy, meta ads, like dashboarding, data analytics. Like you've got to be, you just can't be, a good Google media buyer anymore. Like it just doesn't exist. Because the thing is, as soon as the client needs something, like the thing is clients won't just go, I need help with Google ads. They'll ask you questions about other things. And they're coming to you as the trusted advisor. Like the easiest way to make a lot of money is by starting off as the Google ads expert or the paid expert, and then actually just moving on to other services that they need. Because you can't... Google ads is not just like a pillar. Like, well, sorry, it is a pillar to like a bigger thing. It's not just its own lane anymore. Like that shifted probably maybe four or five years ago, you could have just been a Google ads person. Like you've got to really be more than that. Now you've got to really, and it might not be like you had no matter and Microsoft ads, it's just like, you've got to understand like client strategy, client communication, dashboarding, reporting, deep data analytics, predictive analytics, like data insight, like. way more than Google Ads. And you can't get that from just being in the ad account. It actually just comes from conversations with people, clients or experts in the field. Yeah, I think even something you touched on there was account management and talking to clients. I struggle to understand how larger end agencies operate with separate account managers and people that are actually on the tools. Particularly now I can see how like you could get away with it three years ago when it was negative keyword this changes this bid. It's very easy to just translate into a caller into communication. But now, understanding why you're making changes within the platform. as so complex based on the individual mental model of the performance marketer, which is what we've been talking about. I don't understand how you translate that effectively to a client and then also get an understanding for their business goals and their objectives. And then align that with the strategy with having a big disconnect in the middle too. The account management is arguably one of the most important aspects considering that you don't want to be making rapid changes. You don't want to be working off one day data sets. yet. who does want to clients, clients love to be reactive. They love to make changes based on one day of bad revenue. And so you need to be constantly fighting that because you know, conceptualize how the platform actually works. But an account manager might sit over here and go, the easiest out here is just to, just to tell the client, let's do that. And then that gets relayed back and they're making changes. the best philosophy I've, I've self discovered for that is a thing I call like, faster acts, slow to change. So it's good to be client facing with his specialist. Cause you actually start to pick up like the 90 % that's rubbish and the 10 % that's actually practical. But if you're getting someone else's digested version, you're getting their version of what they think the client means. So you're missing out on all those nuance points with data now, like you've got to be dynamic. You got to be agile and you've got to do things in a timely manner. The problem is most people do the things they should do fast and they take ages because there's like, I've got to put in the queue or whatever. And the things that they should not touch, they're like reactive to it as well. So we find that when we find a bit of data, like your strategy with a client or something needs to be executed, we call it like fast acts, slow to change being like we execute the strategy within a 48 hour window. And then we're slow to change it. We give it 21 days to actually a minimum. to start acquiring data because most people do the opposite. They're slow to act and fast to change. So you've got to put like, go, I've got my expertise. I'm funneling it down to a specific action right now based on data. It's not being reactive, but it's actually based on like being proactive, but we're not going to change, do any major changes for at least 21 days. We might make micro changes, checking in, adjusting budgets, a few things because checking keywords, search, whatever it is, but you've got to. Yeah, with that, it's, that's it. It's an art, not a science. And the art is actually an inner art of actually learning not to be reactive and actually just knowing that you know what you're doing. Yeah, yeah, I couldn't agree more. When you're stepping outside the platform, if you were going to give advice to, let's say, either a small early stage econ brand or Legion brand, and or early stage performance market, they're in their first year at an agency out there, or maybe they're in house, where should they be looking? What would be their primary spot that they should look at outside of Google Ads that's going to give us the greatest level of context as to the decisions that they should be making in platform. You've got to know the economics of the business. You've got to know the high level revenue and you got to go down to actually understanding the just leaving the high level expenses of the business before advertising. And then you've got to set expectations around that because they might go, we need a two X return. He's like, bro, you ain't going to profit with two X return. Like, yeah, but we'll scale. I'm like, yeah, you'll scale yourself to bankruptcy. The other side of it is they're like, yeah, because of all of these expenses, we need like a seven X return. You're like, okay, bro, like. I don't care like how good you think I am. This is probably unrealistic in this situation. So it's actually understanding the fine line of understanding where they are financially now based on revenue and expenses, where they want to go to with revenue and expenses as well. Because you were mentioning before, like you help clients, you know, triple their revenue, but in the past, you're noticing that their expenses were like keeping up with it. And that's not a reflection of you like blowing out ad spend. It's just there just think that... Business is linear. It's like it's not most of the time when you grow the margins go thin and then they can expand But most small business owners being an e -commerce or even advertised they don't know that because I haven't experienced it before so they just treat it like Everything's linear if I spend a hundred K this month and get my 5x return. I'm making 400 grand profit. It's like, yeah That's not what happens. If anything, you've got more inventory costs, more holding costs, more shipping costs, more personnel costs, because you're hiring people. And then you've got to hire three people for traditionally one because they're juniors and like all these things that these hidden expenses that people don't see with growth. you've just got to start to like flesh it out. And the easiest way is just use a Google shape. Just do some predictive modeling, just play around with some formulas and you'll be in such a strong position to figure out what's going on. Yeah, I couldn't agree more. We were talking about this before the podcast for about 20 minutes. But understanding the the unit economics of the brand is, is is vital. Marketing is generally for most non enterprise companies, the biggest line item on the entire profit and loss statement. And so if the biggest line item on your profit and loss statement, the person managing that has no idea about how to even read a PNL or understand the dynamics of your business. I think that's an issue. I think that marketing is so tied to finances and operations fundamentally, because this is the machine that you're acquiring customers with. And then you have contribution margin on each unit sold, that's then fueling everything else in the business, allowing it to operate. So if you're not very, very tight on monitoring that contribution margin, how can you ensure that expenses are going to be covered on a monthly basis? How can you ensure that there's going to be enough free cashflow to reinvest into marketing to grow the business? Because at the end of the day, a function of how quickly a business scales is how short that cash conversion cycle is, how quickly they can move cash into inventory back into cash and then reinvest. And so how many people even know that? So many people operate on like, well, you know, I spend ads today, I get charged, I get the money today, but then you're spending like all this money on inventory that takes like maybe three months, six months, a year to push. So you spend all this front end money to get the stock and then you're slowly paying it down. And some people just don't have the cash flow to actually start paying that off in an appropriate time. Like it's a lot. Look, this isn't just like launch a business, runs them ads, and then make some cash. It's a real business, all of this stuff. And that's why I've been given opportunities to, invest in companies or work with companies in the different setup models is cause they know game sees game. They know that I know this stuff just by the questions in like, geez, I really need this handle or that this type of person knows what they're doing. We want them to partner with us because it's not just like the old school Google ads or. Meta ads, you spent this much, you make this much, you're parting like this, so much more that goes into this now, because most businesses are not drop shipping businesses. That model works if you drop shipping and it's just like single transactions. But when you're actually holding costs, you've got employees and all these other things, there's way more economics that go into it just then Google ads costs, meta ads costs, management fees, and then how much you make. Yeah, I think there was probably this huge Delta in value back six years ago when ad costs were so low that an agency could come in and drive so much new customer acquisition for such a cheap cost and drive so much profit to the business that you could come in with the management fees of today back then. And all you would have to do is look at keywords and get a rudimentary understanding of the platform when you're good to go. But now the Delta in someone. coming into Google and just making a few keyword changes, there's almost no incremental value being provided. So all of the value is starting, essentially the game is becoming harder, where agencies now have to go all the way to the advisory level, or freelancers have to go all the way to the advisory level to get the value across the line that's relevant to the retainers that are being charged now, which is the same to what they were being charged previously, it's just the value discrepancy. I definitely agree. And I like it personally because it's, you know, don't wish it was easier, wish you were better. Like it forces you to grow. If you just want to be that person who does that, cool. Just get a job at some company. But if you're a company doing this stuff, you've got to keep up. Like other younger, smarter, more driven people are taking more ownership of what needs to be done and they'll do it. And the other thing is like, I, the best learnings I've got in my life have come from taking these responsibilities on. And most of the time, like just doing it once, twice, five times, you actually become 10 X better than the actual business owner themselves, because you've got a diversity of clients to implement these strategies across rather than it's going, I don't know. And just getting caught in that no man's land of like, I don't know. I don't know. I'm not the expert. Rather than just going, I'm just going to do this across a bunch of clients, see what the data I get. I trust that I'm smart enough to make. effective decisions and then do feedback loops of improvement. And then within like a short period of time, these things that you didn't want to have to take on, which you do have to take on actually become the biggest business opportunities because then you've got more things to leverage to get better results for clients, which helps them stay longer, which is, you know, the name of the game is to retain not to keep gaining new clients. Yeah, for sure. I think as a starting performance marketer or someone coming out of uni in marketing, join a small medium sized agency who's really niche down because you can learn about business. In fact, if you ever want to start a business, you should work in a small agency where you're working with small medium sized businesses because you're not starting an enterprise company. There's no value in working with an enterprise company. You're siloed into one very specific domain. And it sucks because most of the time you're just doing reporting and just talking about wanky stuff. Like I couldn't agree. That's what was my journey. And then you get to actually see you're on the front lines of business. You're getting a real mastery in business because you you're spending money, real money to help people make money. And you get to see why businesses crumble or why they succeed frontline full, like unfiltered. It's the best. Yeah. I, I wouldn't, I couldn't tell it if, if anyone just wanted to like master business work it and. digital marketing agency, because you'll see what business is really like. And it ain't that polished and enterprise that we think it is. Yeah, no, it's definitely not what the YouTube videos talk it up to be. Nah, man, it's, it's a grind. But that's the thing. It's good because it means that like only like the fittest survive. And it builds up like these internal muscles that, you know, these are things that, like I say this to my mates who are like in my kind of like business kind of mates group. I'm like, you could take everything away from me. And I know it get it back within a year because it's not about the money. It's not about the clients. It's who you become. Because now I know all this stuff. I can get back to it really easily because. The stuff's still relevant. It's not like I got some lucky fortune a few months ago and then I've leveraged that it's, you know, these skills, they're still what people pay for. They still what people need and like, they're not going anywhere. If anything, you need more of it now. You can't be complacent. Yeah, I wrote a LinkedIn post that I never actually uploaded, which was because I didn't know how it would be received. But I'll tell you, I'll tell you it anyway, which was like knowledge and skill is the biggest asset you can build over cash. And it's pretty much what you were saying is even the even the ideology of go and make a million dollars. not so that you could have made a million dollars, but so that you could give it away and see the person that you became. And it's more the skill acquisition and the changing character than the actual monetary goal. Something clicks in your mind when you hit six figures, multiple six figures, seven figures that you just realize like sometimes it's, you've just got to make the money, not for the money's sake, but for your own mentality, something shifts and people see it in you. You just get better opportunities in life. You get better clients coming to you. I don't know. It's some weird like energetic thing, but yeah, when you really do get these skills, you implement them, execute them, deliver results and just start to create. just a way of being that just, you just become unstoppable. Like I genuinely like it's crazy to say this. I just don't feel like I have to ever worry about money again, because it's like more opportunities are flowing to me faster than ever before. Just because of, you know, what I've kind of who I've become rather than what I've done and what, but who I've become is based on what I've done. And then the right people see you. And then I don't know, some cool stuff happens. We'd rant. Let's pull back to, if you were to give advice, to let's call it a seven figure e-commerce brand that's just sort of getting started on Google Ads. Maybe they're spending five, $10 ,000 a month. They want to turn into an eight figure brand in the next few years. What should they be focusing on when it comes to Google Ads? And I'm sure that this answer is probably going to go outside the realm of Google Ads. No. So if they're already doing seven figures, that's probably the best place to start because they've probably got really good inventory levels. they're actually making money. They know how to fulfill. So that fulfillment side and the operation side is probably being met really easily. So if they're not running any Google ads, you could probably plug in the most, like a good feed into an average P max campaign and kill it. But I'd be recommending at that case, if you were like a, yeah. you know, multiple six figure, seven figure e -commerce companies starting and then Google ads, start off with feed management, really get that clean, good keywords in the titles, a good structure in the account, work with a really good agency that you've seen or heard of that they do good work and then trust that the data will come over the next few months. It's not going to be an overnight thing. You might get initial wins where you're making, you know, 10, 20, 50 K a day, but then it drops down or, you know, it could not be 50 K a day. It should just be like five K a day or two K a day. But just knowing that because you've already got to set up business that's going well, have the faith that if you're already selling well offline, you're just going to kill it online. The struggle is when a lot of people to start online and they're just like trying to test out products that they don't even know works and then try to turn that into a seven figure company. That's where most failure is. But if you've got a proven business, proven products, I think you, if anything, Google ads is just going to make you print cash. Yeah, I couldn't agree more. Let's finish this off with one last question, which is if you were to give one health check for anyone, any business owner to go into their Google ad account right now and health check their agency, health check their internal team, what's the one thing that they should look at? it would be conversion tracking. Just like make sure you're tracking conversions properly, accurately to what you're seeing offline or what you're seeing in other analytics platforms, because your conversions are the guiding force for your ad account. If it's under, capturing data, you're actually like, you're slowing down the machine. If you've got too much, you just optimizing for something that's not real. You're trying to get it to be as accurate as possible because with a, yeah, with advertising platforms that are so focused based on its own feedback loop based on conversions, that would be the one thing. And I say that sounds so simple because 90% of the time when I review, audit or get new clients, that's the biggest issue hands down. If anything, it makes me look like a rock star for doing the most fundamental thing. So that's mine, but I'd love to know what's yours. I've realized I've been talking about today. What would you think your number one thing is? if it was an e -com account that was between 10 to 50 K ad spend, it would be check search term insights on performance max and check the proportion of revenue being attributed to brand search. Because I would say that's the most common thing that I see in accounts that I audit, which is in fact, I literally didn't know it this morning. their row as attributed was a five. You take out all the branded keywords row as attributed is a one point. And they keep trying to scale this thing and it doesn't scale. And it goes to what you were saying, which is the performance mass campaign is optimizing based on conversion data of existing visitors. And so when you try to pump spend, it just puts extra spend into existing visitors, raises big caps on brand search and doesn't actually spend on new audiences. Now, one question off the back of you said was offline conversion tag. Do you do much of that? Not really, not really. Cause most of the time it depends on the client. There's probably about 20 % of clients that have done it, but they've got to get their development team to do it. It's you might do it, but most of the time for clients, the data isn't the data size isn't big enough. I find, but I'd love to know what your opinions are. We've rolled offline conversion tracking out on three accounts. They all had to be big. We tried to do it on five. Two of them just weren't big enough that you just do not get enough matches of users to conversion. Recently, Google changed the way that they match conversions from Google Click IDs over to hashed user data. So it's pushing first name, last name, email address into Google and trying to cross -reference that way rather than referencing against the Click IDs. That made it more accurate. Yeah. and we saw CPLs drop in two of the accounts by about 20 % overnight. Important caveat there is you need to make sure that you're measuring CPLs based on the pre -existing conversion actions, not a new conversion action getting pushed in because you go and set up offline conversion tracking. And now suddenly your conversions double, but it's because you're just double tracking conversions. Cause you put that as a primary that's really interesting because yeah, Google click IDs are only valid for 90 days and you need thousands of data points to actually have any sort of significance. So it's super important to yeah. Ensure that you've got enough data. So many people are like, yeah, I do all these offline conversion tracking. That's why even when you said to me, I'm like, nah, I don't really do it because most clients don't have that like huge volume of data. And people are like, They just don't know this because they're not doing it. They'd go, I'm not doing offline conversion data. Yeah. It's probably good because you don't have the conversion data to actually feed back in. Don't waste your time on things that aren't actually going to be applicable to you either. Yeah. a good phase of advice to finish it, which is I've talked about attribution a lot on the last four or five podcasts. And I think the conclusion that I've come to over the last six months has been attribution generally is not the bottleneck in your business. And you need to better assess what the bottleneck is and go there because your attribution is probably 70 % right. And if you put 100 hours into it, you could probably take it to 80%. But is that going to be a large inflection point in the growth of your business? I'm not sure. I think that whole attribution thing is you just look at how much am I spending in my business overall or on ads? How much are we making? If you're looking for the attribution in the account, it's never going to be 100 % accurate. treat it like it's more guiding you in the right direction rather than being a source of truth. The source of truth is how much money have I made either in my business or in the Shopify account? How much have I spent on ads and try to do some correlation on a macro level? Then the micro level is looking at the raw assets or the targets in the account. It's never going to be accurate. It's only going to get harder. No matter how many advancements the AIs make or like the channels make in terms of attribution, it's going to get harder as we become cook -a -less multi -device. all of those things, even these softwares that do attribution, which are really good, they're still not 100 % accurate. So use your ROAS results as more of like guidance that you're going well, rather than going, this was the actual percentage down to 0 .001 % factor. Yeah, for sure. Thanks for hopping on. Where can people find you? Excellent. So people can find me on LinkedIn, Michael Nadlin, marketlead .com .au, marketlead on YouTube. Look, we're mainly a referral only agency just for more quality standards. So if you're thinking about working with us, you may not be able to, but if you want to reach out, you can. Very special conditions. But yeah, I really appreciate you having me on today, Nathan. You know, I watched some of your videos on YouTube. I watched your interview with Solutions 8. And honestly, the way you speak and just like the... terminology you're using and the application. Game sees game. Like I'm inspired by the stuff you're saying. So I really appreciate you giving me some education today because there are things that you've mentioned that I'm going to go away and be like, I'm going to look into this more and see how it's applicable. So I really appreciate your time and also educating me. So thank you. Thank you, I appreciate it. See you Michael. Excellent, see you mate.