How to get Cheaper Leads Ep 246

In this insightful discussion, the host delves into the intricacies of optimizing lead costs in paid advertising. He draws parallels between his early experiences in fitness and marketing, emphasizing the importance of understanding the integral components of any system to effectively troubleshoot issues. He outlines a three-part framework for diagnosing and improving campaign performance, which includes analyzing cost per thousand impressions (CPM), click-through rate (CTR), and conversion rates on landing pages. By dissecting two of his recent campaigns, he demonstrates how evaluating these metrics can pinpoint whether issues lie with ad engagement, messaging, or the offer itself, allowing for targeted adjustments to reduce lead costs and enhance overall campaign efficacy.

• Speaker A introduces the topic of paid advertising and the importance of understanding the process to generate leads effectively.
• Emphasizes the journey from initial struggles to gaining a comprehensive understanding of the advertising components.
• Highlights the anticipation and excitement for the new setup and the support received from the audience.
• The speaker draws a parallel between learning marketing tactics and personal experiences with fitness and dieting, suggesting that a one-size-fits-all approach is not effective.

"And so hopefully, if you're running paid ads right now and you're trying to get leads and you're like, how does this work? These are the pieces. Welcome to the game where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons we have learned along the way."

The quote introduces the podcast's focus on paid advertising and the broader goal of customer acquisition, retention, and maximizing customer value, while acknowledging the trial and error involved in the process.

"What's going on, everyone? Happy Wednesday. Hope you guys are as excited as I am for the new setup that we have here. I can't even tell you how stoked I am. This has been a long time coming. Thank you guys for the support and just the messages that I've been getting has been great."

This quote conveys the speaker's enthusiasm for the new podcast setup and expresses gratitude for the audience's support.

"So what I want to talk about today is so many of the ideas that I can finally put on paper and make visual for everyone, which is how to fix lead cost, right?"

The speaker sets the stage for the main topic of the discussion, which is addressing the issue of lead cost in paid advertising.

• Speaker A discusses the realization that understanding each component of marketing is crucial for problem-solving.
• The speaker shares personal experiences of uncertainty and the fear of deviating from a single known strategy.
• Compares marketing to personal fitness, highlighting how a lack of understanding of the underlying principles can lead to challenges in adapting strategies to individual needs.

"But the thing is, as soon as it would break, then I was like, crap, what am I supposed to do now, right?"

This quote reflects the speaker's initial frustration when the single strategy they knew in marketing failed, leading to a sense of helplessness.

"And so in thinking through this, it really came down to understanding the aggregate parts."

The speaker emphasizes the importance of understanding all parts of the marketing process to effectively manage and adapt strategies.

"And so once I figured this out within the marketing, all my anxiety around marketing and paid advertising, et cetera, just kind of went by the wayside because I just understood all of the integral pieces so that I could fix it."

The quote highlights the relief and confidence gained from comprehending the integral parts of marketing, which allowed the speaker to troubleshoot issues effectively.

• Speaker A introduces the concept of cost per lead as a critical metric in paid advertising.
• Mentions that there are three pieces to figuring out cost per lead.
• Indicates that the discussion will provide a big-picture overview of these components.

"All right? And so there's three pieces to figuring out what your cost per lead is, all right? And I'm going to break down each of these things and this is going to be a big kind of bigger picture overview."

This quote sets up the next part of the discussion, which will delve into the three key components that determine the cost per lead in paid advertising campaigns.

• Paid advertising involves buying attention from platforms like Facebook, YouTube, or Google.
• The cost per 1000 impressions (eyeballs) is referred to as CPM (Cost Per Mille).
• Average CPM across most markets is around $25, which translates to approximately 2.5 cents per eyeball.
• After acquiring impressions, a certain percentage of users will take an action, such as clicking on the ad, measured by the Click Through Rate (CTR).
• Unique CTR is important as it accounts for unique individuals interacting with the ad, not multiple clicks by the same user.
• A CTR of 0.5% to 1% is average, while anything above 1% is considered good, and above 2% is exceptional.
• With a 1% CTR on 1000 eyeballs, one would expect to receive ten clicks.

"So in the beginning, you're going to buy this nice eyeball from Facebook or YouTube or Google. There's a little pupil for you, right?"

This quote explains the initial step in paid advertising where a business buys visibility or "eyeballs" from major advertising platforms.

"And these eyeballs for most markets will cost around $25. There's obviously some niches that will be more expensive, but for most, the cost per eyeball is 25."

The speaker is providing an average figure for the cost of acquiring 1000 impressions (CPM) in most markets.

"Now, how many eyeballs does that cost? And the term for this is CPM, all right? And just so you don't get confused about this, CP for most CP stuff is cost per, right?"

The speaker is clarifying the terminology used in paid advertising, specifically the meaning of CPM (Cost Per Mille), which is the cost for 1000 impressions.

"And so you buy 1000 eyeballs. So I'm going to put 1000 under here just to make this really simple here, all right?"

This quote is simplifying the concept of buying impressions by equating it to purchasing 1000 "eyeballs".

"And then from there, you're going to have a certain percentage that take an action, right? That click, all right? And so we call that the CTR right click through rate."

The speaker introduces the concept of Click Through Rate (CTR), which measures the percentage of users who click on an ad after seeing it.

"If you get above 1%, you're doing well. If you get above 2%, you're just killing everyone, right? So let's just say we have 1%, all right? That's what our click through rate is."

Here, the speaker sets benchmarks for what constitutes average, good, and exceptional CTR percentages.

• The host invites business owners who want to grow their business significantly to reach out for assistance.
• Acquisition.com is mentioned as a resource where business owners can apply for help in scaling their businesses.

"Mosey nation, real quick. If you are a business owner that has a big old business and wants to get to a much bigger business, going to 5100 million dollars plus, we would love to talk to you."

The speaker is addressing business owners, offering services to help scale their businesses to higher revenue figures.

"If you like that, or would like to hear more about it, go to acquisition.com. You can apply anywhere on the page and talk to one of our team and see if we can help you get there."

This quote provides a call-to-action for business owners interested in growth, directing them to a website where they can seek further information and assistance.

• Cost Per Click is calculated by dividing the total cost by the number of clicks.
• Example given: $25 spent on advertising for 10 clicks results in a CPC of $2.50.
• CPC is a basic metric but does not represent the cost of acquiring a lead.

"So my cost per click is going to be this ten clicks from $25. So if I have $25, right, and I get ten clicks, then it means that my cost per click is $2.50, right?"

The quote explains how to calculate the CPC by dividing the total ad spend by the number of clicks received. In this case, $25 divided by 10 clicks equals a CPC of $2.50.

• Not all clicks result in leads; the conversion rate is the percentage of clicks that become leads.
• A 20% conversion rate is used as a standard example for many niches.
• With a 20% conversion rate, 10 clicks would result in 2 leads.
• CPL is calculated by dividing the total cost by the number of leads.
• Example given: $25 spent for 2 leads equals a CPL of $12.50.

"My ten clicks, all right, are going to go to a landing page and then I'm going to have a conversion percentage on this page, right. Not 100% of clicks, obviously become leads. And so what that means is that of my 10, 20 percent are opting in, which means I get two leads."

The quote clarifies that not all clicks convert to leads and uses a conversion rate of 20% as an example. In this scenario, 20% of the 10 clicks (which is 2 leads) are obtained.

"My cost per lead is going to be $25, just like before, divided by two leads, which means my cost per lead is twelve dollars fifty cents, right."

This quote demonstrates how to calculate the CPL by dividing the total spent ($25) by the number of leads (2), resulting in a CPL of $12.50.

• Analyzing CPC, conversion rates, and CPL is crucial for diagnosing and improving ad campaigns.
• A higher CPC might be due to less engaging content or a more direct response approach, which platforms may not favor.
• A campaign with a higher CPC can still be successful if it leads to higher click-through rates and conversions.
• Attempts to lower CPC by making content more platform-friendly can sometimes lead to decreased performance overall.
• Understanding these metrics can take time but is essential for successful ad campaigns.

"And so looking at each of these pieces is how you can diagnose your campaigns and ultimately be able to fix it, right?"

This quote emphasizes the importance of analyzing each metric (CPC, conversion rate, CPL) to diagnose and improve the performance of ad campaigns.

"And so for me, this was like a huge breakthrough in understanding that took, I mean, honestly, probably took me two or three years to actually understand this."

The speaker reflects on their personal learning curve, indicating that grasping these concepts was a significant breakthrough and that it took an extended period to fully comprehend.

• The performance of a campaign is influenced by how much the platform favors the advertiser and the competition for the audience.
• Click-through rate (CTR) is affected by the quality of messaging and creative design.
• Conversion rates are determined by the attractiveness of the offer, the headline, the page design, and loading speed.
• Improving conversion rates can also lower lead costs, but it's not the only factor to consider.
• Advertisers often focus on lead costs, overlooking the importance of CTR and ad display quality.

"This is going to be how much the platform likes you and how many other people are marketing to that same audience. That's where the cost is going to come from for your click through rate."

This quote explains that the cost of achieving a click-through is partly determined by the platform's algorithmic preference for the advertiser and the level of competition for the targeted audience.

"It's going to be how compelling your messaging is and how good the creative might be."

The quote highlights the importance of the content and creative aspect of the ad in influencing the click-through rate.

"And then the same thing here on your conversion is how good is the offer, how good is the headline, how compelling, how well designed is the page, how fast does it load, et cetera, so we can increase this conversion percentage."

This quote emphasizes the factors that contribute to the conversion rate, including the quality of the offer, the headline, the design of the landing page, and the page's loading speed.

• Examining cost per thousand impressions (CPMs) is a starting point for troubleshooting a poorly performing campaign.
• High CPMs can indicate issues with the ad creative that need to be addressed.
• If the CTR is exceptionally low, the focus should be on refining the messaging.
• When the conversion rate is low, efforts should be concentrated on improving the landing page and the offer.
• Understanding each component allows for targeted fixes and reduces anxiety around campaign management.

"I'm looking at my cpms. I'm like, well, how much is it costing for us to get this displayed? And if it's like $80 plus cpms, I'm like, okay, I don't think that's reasonable. I think something is missed in the creative."

The speaker uses the cost per thousand impressions as an indicator of campaign health, suggesting that high CPMs can be a sign of ineffective creative elements.

"If my click through rate is like 0.2, then I'm like, all right, our messaging is way off. I don't need to worry about this other stuff because this is where I need to focus."

This quote indicates that a very low click-through rate points to a problem with the ad's messaging, which should be the primary focus before considering other elements of the campaign.

"If I've got a page that's converting at 5%, then I'm going to try and fix this, because these two don't even matter if I'm at that percentage."

The speaker suggests that a low conversion rate is a critical issue that needs to be addressed, possibly even before considering CPMs or CTR, as it directly affects the campaign's success.

• The speaker expresses excitement about being able to produce content independently.
• There is an invitation for feedback and engagement from the audience, indicating the value of community interaction.

"I'm beyond stoked about it. I can make these on my own now. I'm so excited."

The speaker shares their enthusiasm for the new ability to create content without external help, emphasizing personal growth and development.

"And so, anyways, if you like the setup, shoot a comment, shoot a review, tag somebody, and if you like more stuff like this, hopefully you do, because it's going to be done."

This quote is a call to action for the audience to engage with the content by commenting, reviewing, or tagging others, showing the importance of audience interaction in content creation.