Hey everybody, John Moran here. And today I'm going to share with you why I'm moving almost all of my customers off of Performance Max when new customer acquisition is the goal. So it's not that Performance Max is a bad campaign type. It just sucks at acquiring new customers. Effectively Performance Max saves some of the daily budget for repeat customers. Also save some of the budget for remarketing of warm traffic or previous clicks in that campaign or even other channels. So when you crank up. Performance max new customer acquisition doesn't always crank up with it. So I have a case study here that we are focusing on new customer acquisition because this client has a very good lifetime value. Their second, third, fourth purchases are very valuable to them. So we need new customers to buy at a high value for the first time, but also repeat. And I don't want to keep paying for them. I don't want to have a three, four, 500 cost per acquisition on a returning customer. That just takes my profitability, chucks it out the window, but the row has looks good. So here's what I'm going to share with you. This is a client that we have since moved off of Performance Max and I've given it enough time to give it a clear, dedicated case study. What I mean by that is I waited about a month and a half before I shared the before and after so there is time where Performance Max latency is done, the conversions that are lagging or behind are done, and there's been enough time for standard shopping to make an impact. So we've tested. Two main types, well, actually three types, but in two campaigns of performance max, a feed only a full build and a non feed, and they've had fairly good in app success, but new customer acquisition failed. It was too expensive. We needed to get below a 400, 425, if possible below a 300 would be fantastic. So what you're going to see here is a date range of April 25th to May 24th versus June 27th to July 26th, which was yesterday. And the total cost reduction is 63, 000 between those two time periods. So we spent 54 percent less. Now you're going to see 58 percent less conversions. It looks like it was cut in half. Let me share with you what's going on inside of the backend. I'm going to look at. Two, one large area, and then I'll share with you another large area, but two kind of main areas. One is the first order date. This is something that you should be checking, especially if you're only running Google ads, because you can kind of identify your activities in Google ads, your spend, your campaign types, and how is this affecting the first time customers, the new customers, not total value, not row as new customers and develop an NCAC. The other thing I'm going to share with you is the reduction in spend and actually what happened, which is actually pretty cool. Let's go back to the first part. We've took 45, 000 in the P max upgraded one. This is what, which is what I was running previously and reduce that down to zero. And then we took a shopping campaign, a standard shopping campaign, and we went from zero up to 25 grand. So we went and actually removed about 20, 000 out of the shopping network. At the same time, we also removed 36, 000 out of the search network. So I. Tanked this campaign and spend, and I did that on purpose. One is because we're going into a slow season. It is going to get expensive. And I've been working with this client for this, my third year, every time during the summertime, we tank new customers. So I needed to pull back, but I said, you know what? I'm going to get more efficient. I'm going to focus on new customer acquisition, not just simply counting new brand and repeat and counting it as row as now, two things you're going to say, John, why didn't you upload the customer list and bid only for new customers or bid higher for new customers? Did that each time I've tried that and actually I tried about 14 other accounts, I could not get above a 35 percent of where I was previously in activity. So I cut my ad spend and cut my activity down by 65 percent without trying. All I did was turn on bid for new customers and it would not spend over a. Over 35 percent of where it was before. It doesn't surprise me when 50, 60, 75 percent sometimes of a performance max campaign is not new customers and not cold traffic. So that was number one. Number two, you're gonna say, why didn't you exclude the brand? Did that as well. I had no brand in PMAX. There was not one branded term in my performance max campaigns. It did not show up. The CPC did drop a bit. The ROAS stayed high and new customers did not come in when I start to increase spend. So I think that the two channels, the search and shopping inside of performance max were denied entry by my existing customers and ran traffic. However, the YouTube GSB discover display and basically kind of remarketing aspect of those networks were still going after that. Warm existing customer audience to get a one cent click for a thousand dollars sale, which is about our AOV. those two things I tested multiple times in other accounts tested and here as well still failed. we know that we've taken out 63, 000 out of Google ads and we know that we've reduced 36, 000 out of the search. We reduced about 20,000 in shopping. So what happened in between or the last 30 days? So in this last 30 days, I have 181 new customers. Okay, so let's see what our cost is. It's 53 8 6 1. So 53 8 6 1 is giving me a $297 cost per acquired new customer. We're under the $300 mark, which is finally where we need to be. Last year during this time, we were 456, so we were down now to 2 91. And also last year when we reduced, we only spent. I think 44, 000, we still had a higher cost. So we spent less and then we actually had a higher cost for acquisition. So now we're at 300. What was the time period before? Well, when we look at April 24th through May, I'm sorry, April 25th to May 24th, which is the date range here, we're spending 117, 000. And now, what was that CAC? That was a 434, 000 CAC because we had 000 in spend, 117, We had 270 customers, which is here at 200 and there it is 270 customers and we're at 434. So reducing the spend by 54 percent did not reduce the new customers by 54%. It reduced it less, reduced by about 35%. Good. So what ended up happening is during the cold season, I've actually been able to drop my CAC down. From 4. 34 down to 2. 97. Yes, I did lose volume, but it came in at a much cheaper CAC. The interesting thing, though, is that in app shows this. Watch, watch this. Inside of my branded alpha campaign, which is just, just brand. It's called alpha because we had a beta and yada, yada, yada. But that's brand. That's my brand campaign. I spent 400 less and then got 6. 5, there we go, 6. 5 more conversions and my conversion value went up 11, 000. So I spent 400 less, made 11, 000 more. Why? Well, Performance Max would have taken that and would have taken that credit. Are they returning? Yes, there's some returning. Is there new? Yes, there's actually more new. And how do we know? Well, what we saw here is that inside of the YouTube remarketing, we were able to take out 3, 700 from my YouTube remarketing that is exclusive to... Only warm traffic on the site, but not existing customers. I lost one sale for 71% less, which means my YouTube remarketing got more efficient. So what's interesting is my YouTube remarketing started to convert much better. We can see that my in-app cost per conversion here was reduced by 70%. My brand traffic was reduced by 25%. Now, the fun part though is, is that the performance Max used to get. a $232 cost per conversion, and now my standard shopping campaign is getting me $1,100. Cost per conversion. Whoa. 200 to 1100. John, you're crazy. Look at how much you increased the cost per conversion. It's not true because the amount of sales that are now unattributed from performance max that are now properly landing in the remarketing and the brand is coming in as such a much cheaper cost per conversion than what the fluffiness that, that performance max was simply to take credit for, to continue to spend the money. So long story short, I didn't go from, from a, what was the one here? Sorry. The 232 costs per conversion up to a 1146. That was them separated. When you count new customer acquisition, I was probably still getting a 242 inside of performance max, but also getting a whole bunch of overspend. I was spending remember 50, 60 percent of just remarketing existing display, YouTube, all the other stuff I saw just. Throwing all that money out the window, that was increasing my CAC. Remember, when you're putting your money in a, in a, in a pool, but you're only measuring one half, if that pool is unaffected by the amount of, of change between new versus returning, you're going to see differences in those CACs. So returning CAC and new CAC. So it's nice because now I have a pool where I can dump money knowing it's going only after new customers rather than dumping in more and more and more money and only being 50 percent as effective to that traffic. I put a dollar in a campaign and half goes to cold, that's going to double my CAC, right? Because I'm not putting money towards the area that I'm measuring. Very simple stuff. our cost per conversion went up 29%. No, it did not go from a 3 93 up to a 5 0 9. It actually went from a 4 34 down to a 2 97. So Google Ads shows a 30% increase. Not true. Standard shopping just sucks at attributing. We already know this. If you've been following me for some time, this is not new stuff. So I went down $135. Google says, I went up 115. If you measure an app, you're wrong. Period. now let's look a little bit more recent time period. If I look at the last 30 days here compared to the previous period, we're gonna see something really cool. you're gonna see me take $79,000 and bring it down to 53. I pulled 32% more money outta my campaigns and I took it down another $25,000. You'll see where I took it out. I took standard shopping out 15 K and I took general out 7, 800. What happened to my brand? Well, my brand spent 11 percent less and made, whoa, sorry. My brand spent 11 percent less and made 132 percent more conversions. And now look at the cost. I spent 155 less and made 32, 000 more. So the conversion value, though, is decreasing cost 38%, lost I'm gonna do this, lost 16, decreased it to 22, lost 27. Google thinks I am just you know, hemorrhaging cash right now. What's cool about this, though, is because the branded traffic spiked up so much, which I was gonna get anyway, and I didn't have to pay 400 per conversion in PMAX, or 300 per conversion in PMAX, I took 32 percent of my cost out. I made 18 percent more conversions and 3, 000 more in conversion value. But what actually happened? Well, because I'm in a standard shopping and I'm so much more efficient month over month because of negative keywords and, and also the products and, and obviously just good optimization. In the last 30 days, saving myself 25, 000 last. 30 days compared to previous period, I have 8 percent more orders. I took out 13 percent of my traffic by pulling back. I made 8 percent more orders. My returning customer rate didn't blow up because brand is not new customer. Oh, sorry. Brand is not existing customers. So when I pulled 25, 000 out, you would think, well, the brand traffic's coming in. Oh, that branded traffic is going to be a whole bunch of return customers. No, it didn't change. So I have slightly better MER. My NCAC held, I pulled out fatty, like, you know, overspend on optimizations. And now for this last 30 days, we are sitting at 359, 000 in conversion value for a grand total of 50 K. That is a 6X MER. My new customers didn't suffer. performance max. Awesome. If you're going to measure in app, if you're going to say, look at my ROAS, if you're going to say, look at my ROAS, yeah. I made my row as worse and I perform better. The client thinks I'm perform better. I'm performing better, even though Google ads looks worse. And I think that's the lesson for all of us here is that if you have a, if you have a client that you can speak to at this elevated level, it's something that is, is, is very, very noteworthy. Let me just see here real quick. Let me pause this real fast. Okay, here is actually the email from the client on Tuesday, July 11th. I said that we I think pulling back from PMAX and pushing a standard shopping hub to like year over year, we're even up 41 percent in revenue. So it's completely agree. Excited about the results. Want to keep strong results on some lower spend and then go into the fall. Like to start back up next week when you have, you know, blah, blah, blah. So we're going to start meeting again next week, but that was in the past. So that's the thing too, is we actually have. A lot less spend, more new cold traffic, took my CAC down 150 bucks, a year over year, I'm 43 percent higher than we were last year. And that's the reason why if I measure ROAS, or if you look at performance max, you're going to fail. you'll have high ROAS all the way until you get fired. I'm Jon Moran. I hope this is worth worth some learning for you. Bye.