John is on a mission. He's moving customers off Performance Max campaigns and pushing them into Standard Shopping—and it's paying off! He's seen an incredible 41% increase in revenue, with MER (Media Efficiency Ratio) skyrocketing by 6X after making the move. Listen to this episode now to learn how he achieved these stellar results!

Fair warning from John: If you attempt this and then measure inside Google Ads, you will fail. The episode is 15 minutes long, but I will show you areas you're probably not looking at.

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0:00 Why I'm Moving Customers OFF of Performance Max

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#googleads #googleperformancemax #googleadsbestpractices

Hey everybody, John Moran here.

2

And today I'm going to share with

you why I'm moving almost all of my

3

customers off of Performance Max when

new customer acquisition is the goal.

4

So it's not that Performance

Max is a bad campaign type.

5

It just sucks at acquiring new customers.

6

Effectively Performance Max saves some

of the daily budget for repeat customers.

7

Also save some of the budget

for remarketing of warm traffic

8

or previous clicks in that

campaign or even other channels.

9

So when you crank up.

10

Performance max new customer acquisition

doesn't always crank up with it.

11

So I have a case study here that

we are focusing on new customer

12

acquisition because this client

has a very good lifetime value.

13

Their second, third, fourth

purchases are very valuable to them.

14

So we need new customers to buy at a high

value for the first time, but also repeat.

15

And I don't want to keep paying for them.

16

I don't want to have a three,

four, 500 cost per acquisition

17

on a returning customer.

18

That just takes my profitability,

chucks it out the window,

19

but the row has looks good.

20

So here's what I'm

going to share with you.

21

This is a client that we have since

moved off of Performance Max and

22

I've given it enough time to give

it a clear, dedicated case study.

23

What I mean by that is I waited about

a month and a half before I shared the

24

before and after so there is time where

Performance Max latency is done, the

25

conversions that are lagging or behind

are done, and there's been enough time

26

for standard shopping to make an impact.

27

So we've tested.

28

Two main types, well, actually

three types, but in two campaigns of

29

performance max, a feed only a full

build and a non feed, and they've

30

had fairly good in app success, but

new customer acquisition failed.

31

It was too expensive.

32

We needed to get below a 400, 425, if

possible below a 300 would be fantastic.

33

So what you're going to see here

is a date range of April 25th

34

to May 24th versus June 27th to

July 26th, which was yesterday.

35

And the total cost reduction is 63,

000 between those two time periods.

36

So we spent 54 percent less.

37

Now you're going to see 58

percent less conversions.

38

It looks like it was cut in half.

39

Let me share with you what's

going on inside of the backend.

40

I'm going to look at.

41

Two, one large area, and then

I'll share with you another large

42

area, but two kind of main areas.

43

One is the first order date.

44

This is something that you should be

checking, especially if you're only

45

running Google ads, because you can

kind of identify your activities in

46

Google ads, your spend, your campaign

types, and how is this affecting

47

the first time customers, the new

customers, not total value, not row

48

as new customers and develop an NCAC.

49

The other thing I'm going to

share with you is the reduction in

50

spend and actually what happened,

which is actually pretty cool.

51

Let's go back to the first part.

52

We've took 45, 000 in

the P max upgraded one.

53

This is what, which is what I was running

previously and reduce that down to zero.

54

And then we took a shopping campaign,

a standard shopping campaign, and

55

we went from zero up to 25 grand.

56

So we went and actually removed about

20, 000 out of the shopping network.

57

At the same time, we also removed

36, 000 out of the search network.

58

So I.

59

Tanked this campaign and spend,

and I did that on purpose.

60

One is because we're

going into a slow season.

61

It is going to get expensive.

62

And I've been working with this client

for this, my third year, every time during

63

the summertime, we tank new customers.

64

So I needed to pull back,

but I said, you know what?

65

I'm going to get more efficient.

66

I'm going to focus on new customer

acquisition, not just simply counting

67

new brand and repeat and counting it

as row as now, two things you're going

68

to say, John, why didn't you upload

the customer list and bid only for new

69

customers or bid higher for new customers?

70

Did that each time I've tried that and

actually I tried about 14 other accounts,

71

I could not get above a 35 percent of

where I was previously in activity.

72

So I cut my ad spend and cut my activity

down by 65 percent without trying.

73

All I did was turn on bid for new

customers and it would not spend over a.

74

Over 35 percent of where it was before.

75

It doesn't surprise me when 50,

60, 75 percent sometimes of a

76

performance max campaign is not

new customers and not cold traffic.

77

So that was number one.

78

Number two, you're gonna say,

why didn't you exclude the brand?

79

Did that as well.

80

I had no brand in PMAX.

81

There was not one branded term

in my performance max campaigns.

82

It did not show up.

83

The CPC did drop a bit.

84

The ROAS stayed high and new

customers did not come in when

85

I start to increase spend.

86

So I think that the two channels,

the search and shopping inside of

87

performance max were denied entry by

my existing customers and ran traffic.

88

However, the YouTube GSB discover

display and basically kind of

89

remarketing aspect of those networks

were still going after that.

90

Warm existing customer audience to

get a one cent click for a thousand

91

dollars sale, which is about our AOV.

92

those two things I tested multiple

times in other accounts tested

93

and here as well still failed.

94

we know that we've taken out 63, 000

out of Google ads and we know that

95

we've reduced 36, 000 out of the search.

96

We reduced about 20,000 in shopping.

97

So what happened in between

or the last 30 days?

98

So in this last 30 days,

I have 181 new customers.

99

Okay, so let's see what our cost is.

100

It's 53 8 6 1.

101

So 53 8 6 1 is giving me a $297

cost per acquired new customer.

102

We're under the $300 mark, which

is finally where we need to be.

103

Last year during this time, we were

456, so we were down now to 2 91.

104

And also last year when

we reduced, we only spent.

105

I think 44, 000, we

still had a higher cost.

106

So we spent less and then we actually

had a higher cost for acquisition.

107

So now we're at 300.

108

What was the time period before?

109

Well, when we look at April 24th

through May, I'm sorry, April 25th

110

to May 24th, which is the date

range here, we're spending 117, 000.

111

And now, what was that CAC?

112

That was a 434, 000 CAC because we had

000 in spend, 117, We had 270 customers,

113

which is here at 200 and there it

is 270 customers and we're at 434.

114

So reducing the spend by 54 percent did

not reduce the new customers by 54%.

115

It reduced it less, reduced by about 35%.

116

Good.

117

So what ended up happening is during

the cold season, I've actually

118

been able to drop my CAC down.

119

From 4.

120

34 down to 2.

121

97.

122

Yes, I did lose volume, but it

came in at a much cheaper CAC.

123

The interesting thing, though,

is that in app shows this.

124

Watch, watch this.

125

Inside of my branded alpha

campaign, which is just, just brand.

126

It's called alpha because we

had a beta and yada, yada, yada.

127

But that's brand.

128

That's my brand campaign.

129

I spent 400 less and then got 6.

130

5, there we go, 6.

131

5 more conversions and my

conversion value went up 11, 000.

132

So I spent 400 less, made 11, 000 more.

133

Why?

134

Well, Performance Max would have taken

that and would have taken that credit.

135

Are they returning?

136

Yes, there's some returning.

137

Is there new?

138

Yes, there's actually more new.

139

And how do we know?

140

Well, what we saw here is that inside

of the YouTube remarketing, we were

141

able to take out 3, 700 from my YouTube

remarketing that is exclusive to...

142

Only warm traffic on the site,

but not existing customers.

143

I lost one sale for 71% less, which means

my YouTube remarketing got more efficient.

144

So what's interesting is my

YouTube remarketing started

145

to convert much better.

146

We can see that my in-app cost per

conversion here was reduced by 70%.

147

My brand traffic was reduced by 25%.

148

Now, the fun part though is, is that

the performance Max used to get.

149

a $232 cost per conversion,

and now my standard shopping

150

campaign is getting me $1,100.

151

Cost per conversion.

152

Whoa.

153

200 to 1100.

154

John, you're crazy.

155

Look at how much you increased

the cost per conversion.

156

It's not true because the amount of sales

that are now unattributed from performance

157

max that are now properly landing in the

remarketing and the brand is coming in as

158

such a much cheaper cost per conversion

than what the fluffiness that, that

159

performance max was simply to take credit

for, to continue to spend the money.

160

So long story short, I didn't go

from, from a, what was the one here?

161

Sorry.

162

The 232 costs per conversion up to a 1146.

163

That was them separated.

164

When you count new customer acquisition,

I was probably still getting a 242

165

inside of performance max, but also

getting a whole bunch of overspend.

166

I was spending remember 50, 60 percent

of just remarketing existing display,

167

YouTube, all the other stuff I saw just.

168

Throwing all that money out the

window, that was increasing my CAC.

169

Remember, when you're putting your money

in a, in a, in a pool, but you're only

170

measuring one half, if that pool is

unaffected by the amount of, of change

171

between new versus returning, you're

going to see differences in those CACs.

172

So returning CAC and new CAC.

173

So it's nice because now I have a

pool where I can dump money knowing

174

it's going only after new customers

rather than dumping in more and more

175

and more money and only being 50

percent as effective to that traffic.

176

I put a dollar in a campaign

and half goes to cold, that's

177

going to double my CAC, right?

178

Because I'm not putting money

towards the area that I'm measuring.

179

Very simple stuff.

180

our cost per conversion went up 29%.

181

No, it did not go from

a 3 93 up to a 5 0 9.

182

It actually went from

a 4 34 down to a 2 97.

183

So Google Ads shows a 30% increase.

184

Not true.

185

Standard shopping just

sucks at attributing.

186

We already know this.

187

If you've been following me for

some time, this is not new stuff.

188

So I went down $135.

189

Google says, I went up 115.

190

If you measure an app, you're wrong.

191

Period.

192

now let's look a little bit

more recent time period.

193

If I look at the last 30 days here

compared to the previous period, we're

194

gonna see something really cool.

195

you're gonna see me take

$79,000 and bring it down to 53.

196

I pulled 32% more money outta my campaigns

and I took it down another $25,000.

197

You'll see where I took it out.

198

I took standard shopping out 15

K and I took general out 7, 800.

199

What happened to my brand?

200

Well, my brand spent 11 percent

less and made, whoa, sorry.

201

My brand spent 11 percent less and

made 132 percent more conversions.

202

And now look at the cost.

203

I spent 155 less and made 32, 000 more.

204

So the conversion value, though,

is decreasing cost 38%, lost

205

I'm gonna do this, lost 16,

decreased it to 22, lost 27.

206

Google thinks I am just you know,

hemorrhaging cash right now.

207

What's cool about this, though, is

because the branded traffic spiked up so

208

much, which I was gonna get anyway, and

I didn't have to pay 400 per conversion

209

in PMAX, or 300 per conversion in

PMAX, I took 32 percent of my cost out.

210

I made 18 percent more conversions

and 3, 000 more in conversion value.

211

But what actually happened?

212

Well, because I'm in a standard shopping

and I'm so much more efficient month

213

over month because of negative keywords

and, and also the products and, and

214

obviously just good optimization.

215

In the last 30 days,

saving myself 25, 000 last.

216

30 days compared to previous period,

I have 8 percent more orders.

217

I took out 13 percent of

my traffic by pulling back.

218

I made 8 percent more orders.

219

My returning customer rate didn't blow

up because brand is not new customer.

220

Oh, sorry.

221

Brand is not existing customers.

222

So when I pulled 25, 000 out,

you would think, well, the

223

brand traffic's coming in.

224

Oh, that branded traffic is going to

be a whole bunch of return customers.

225

No, it didn't change.

226

So I have slightly better MER.

227

My NCAC held, I pulled out fatty, like,

you know, overspend on optimizations.

228

And now for this last 30 days, we

are sitting at 359, 000 in conversion

229

value for a grand total of 50 K.

230

That is a 6X MER.

231

My new customers didn't suffer.

232

performance max.

233

Awesome.

234

If you're going to measure in

app, if you're going to say,

235

look at my ROAS, if you're going

to say, look at my ROAS, yeah.

236

I made my row as worse

and I perform better.

237

The client thinks I'm perform better.

238

I'm performing better, even

though Google ads looks worse.

239

And I think that's the lesson for all

of us here is that if you have a, if

240

you have a client that you can speak to

at this elevated level, it's something

241

that is, is, is very, very noteworthy.

242

Let me just see here real quick.

243

Let me pause this real fast.

244

Okay, here is actually the email from

the client on Tuesday, July 11th.

245

I said that we I think pulling back

from PMAX and pushing a standard

246

shopping hub to like year over year,

we're even up 41 percent in revenue.

247

So it's completely agree.

248

Excited about the results.

249

Want to keep strong results on some

lower spend and then go into the fall.

250

Like to start back up next week when

you have, you know, blah, blah, blah.

251

So we're going to start meeting again

next week, but that was in the past.

252

So that's the thing too,

is we actually have.

253

A lot less spend, more new cold

traffic, took my CAC down 150 bucks,

254

a year over year, I'm 43 percent

higher than we were last year.

255

And that's the reason why if I

measure ROAS, or if you look at

256

performance max, you're going to fail.

257

you'll have high ROAS all

the way until you get fired.

258

I'm Jon Moran.

259

I hope this is worth worth

some learning for you.

260

Bye.