Setting Campaign Goals and ROAS | Google Ads Basics Part 3

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

to understand what their goals are.

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

everyone just rides off into the sunset.

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

without talking to the client.

What some good goals should be for us.

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

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

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

I think we have it all.

I already have a video on this.

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

But just a refresher for two.

Maximize conversion value when you add a target return on ad

spend will limit the spend.

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

other than a simple mathematical ratio.

It's X compared to Y.

If I spend and I get.

That ratio's off my Tarro has is below.

I simply reduce X.

Now my ratio's in line.

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

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

because This campaign is asking Google.

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

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

No.

Well, why can't you spend $86?

you know, this is a timeline, two days.

So it's gonna try to get like 1.4.

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

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

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

0.3 and that's never gonna happen.

Same thing with Target C P a.

exact scenario.

Can you spend $500 a day?

Sure.

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

No.

What can you get?

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

Okay?

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

I'll give you a really great small scenario.

Watch how touchy this is and understand that this is something

that is very that's built into Google.

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

grand a day, it was cut in half.

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

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

I lost, not really too bad.

I lost 40 conversions.

So what'd I do the next day?

. I said, oh, all right.

nineties, too low.

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

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

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

at 90, I spend 10 at one 20.

I spend 17 at one 10.

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

dictate what you can spend.

So that's how touch it is.

Any restricted bidding strategy will stop.

Spend.

Any questions there?

I know this is a lot of basic stuff.

But it's good foundational stuff.

It should hopefully stop any.

Miscommunications or misunderstandings in the future.

next we're gonna be talking about goal setting.

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

that I'd like to share with everyone.

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

We do have some, videos about it.

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

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

Regina has a fantastic calculator.

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

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

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

Puts you on the same wavelength as that client.

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

I have something to add to it.

Thank you Regina.

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

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

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

but this is your profit margin.

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

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

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

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

But here's, a really good client interaction.

This is a client.

we're scaling up.

this is a client here.

I'm not gonna say the name, obviously.

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

Three x, a four x a hundred x?

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

ROAS is actually going up.

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

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

use a CPA versus L T B model.

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

and I'll drop this in the chat.

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

but it is good goal setting.

one thing that always kills a client is poor performance,

even if it was outside of.

Well, Google looked good.

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

Whose goal?

Our goal.

Was it?

Right?

Their goal.

Did they agree?

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

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

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

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

why it's gonna limit scale.

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

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

land and how we can educate the client.

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

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

cuz they're like a brand new company.

So let's just assume that is true.

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

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

Your 90 day purchase frequency is 1.0.

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

multiplied by your purchase frequency.

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

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

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

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

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

client's new customer every three months.

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

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

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

and it will keep rolling in.

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

And here's the current breakdown.

So current C P A versus 90 day tme.

Here's where we landed.

We have $5,119 in spend.

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

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

their Amazon sales go up and down.

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

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

fall in between our goal and our current.

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

Now what does this mean?

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

who knows how to find their.

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

what numbers would you do?

Do we know this yet?

If not, that's okay.

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

what I would do to calculate that.

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

Yeah, I might have asked the question, Ron.

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

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

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

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

so far is coming in at $28.

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

That'll put us at a three.

getting a 2.25 me r.

All cash in all cash.

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

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

currently, this is not a glitch.

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

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

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

for every customer, is that good?

You have to tell me your prop margin.

You have to tell me everything else.

So this is a path to get to 300%.

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

I hopped into Google ads.

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

they would look at this and say, I agree.

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

and then we have further discussions.

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

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

happening on Facebook and Google.

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

on Facebook and then one on Google.

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

scale this, my mer should go up.

It's just an assumption.

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

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

Omnichannel, rg.

Gina, what's up?

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

attribute all the numbers.

what you're getting in Google Ads.

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

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

Not necessarily uh, it's close.

But actually that's a good point.

I'll cover that right next.

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

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

You can kind of deduce how close it is.

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

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

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

So it's okay.

you can compare the two.

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

unless you crank up the brand spend.

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

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

inaccurate actual number and another inaccurate actual number

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

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

that sort of just comparing it to the mer.

Does it make sense?

Yeah.

, yes.

Funny.

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

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

Yes, exactly.

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

meetings situation is by seriously simplifying this conversation similar

to what you have in that email.

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

showing this How does your business feel?

Is it profitable?

Are you happy?

Good, great.

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

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

You know what I mean?

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

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

mess support tickets to handle anything.

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

I had a lot of hesitations about it this year.

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

But I was like, too complicated.

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

than I thought it was gonna be.

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

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

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

data hole and look at the whole.

Like the client is looking at the whole company.

A lot of times it can be more well aligned.

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

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

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

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

Regardless of what Google is.

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

like, yeah, my Google says 2.1.

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

. Now the exact opposite's true though.

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

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

They don't care.

It's in a four.