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“How Expensive Are My Ads?”

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48
I told my CEO friend to fire his ad guy. Here’s why.
September 30, 2022

Dan Russell

Editor of the Goldpan Report

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“Prove it,” I told him.

This ad expert wasn’t happy with my response to his long-winded explanation of how he’s running a client’s ad campaign.

The look of pride was wiped off his face and replaced with what most people would view as indignation—how could I be ripping on his work like that? How could I possibly know the intricacies of his self-proclaimed “very advanced advertising knowledge?”

But, having had a lot of these conversations, I looked this guy in the face and didn’t see indignation.

I saw fear.

Fear that his worst fears were about to come true—his insecurity around being new to the advertising world, his insecurity around running a small business, his fear of losing a client because one asshole (me) was going to come in and utter the words that every ad manager hates: “I wouldn’t have done it this way.”

The truth, though, is that I wasn’t trying to be an asshole. I was trying to help my friend out—the CEO of the company who hired this ad guy. And I was asking perfectly reasonable questions—the problem was that this ad guy’s insecurity was leading his decision making, not logic. And it was making me concerned.

Proven strategies are only proven when they work for YOU

Let’s back up.

This guy ran his own Facebook ad business. He was pretty new to the scene and was what I call a MINO—a Marketer In Name Only. That means he was well-versed in everything having to do with Facebook ads and had very little experience with the rest of the marketing world.

So when I asked him to run me through his Facebook ad strategy, he started explaining his multi-tiered, super-fancy, blow-your-mind-with-its-complexity ad buying process. One which he learned, no doubt, from a training program sold by an internet marketing guru. I have zero problems with any of this. It’s how I got started in the industry, too.

His strategy went like this:

He would run one Facebook ad campaign to Audience A and another separate campaign to Audience B, splitting the budget evenly between them. No retargeting involved whatsoever. I asked why he was doing that, and he launched into an explanation of how Facebook’s algorithm works and how the Audience A campaign was “feeding the beast” while the Audience B campaign was generating sales.

When I heard that, my bullshit meter ticked up a notch. This guy wasn’t following any of the traditional Reach/Engagement/Conversion ad buying strategies that Google and Facebook are built around—so I was skeptical.

Skeptical, but not dismissive.

So I told him to prove it.

See, nobody actually knows how the Facebook algorithm works. If they did, they would be able to set up a campaign with a management bot and walk away for weeks at a time, all the while making money hand over fist. That doesn’t happen—it’s why consultants like this guy exist. So I knew he was full of at least some shit, but I wanted to find out exactly to what extent.

I also wasn’t eliminating the option that he really did know what he was doing. I’m not a genius and I don’t claim to be a genius, so there’s always the possibility that someone has figured something out that I don’t understand.

So I gave him an opening.

“Prove it,” I said.

At this point, he could have taken a breath, been honest, and said, “listen, I’m working off the best of my knowledge and the trends that I’m seeing in the Facebook ad space. I’m starting off with what I know, and once I have a baseline of data, I’ll be able to test my strategy against other strategies.”

That would have been a mature, well-crafted, insecurity-free response.

But he went the other way:

“Listen, I ran a half million dollars in ads last year using this strategy. This is how Facebook works. This is the strategy that’s leading the market right now.”

BOOO!!! Wrong answer.

Listening to that response, I immediately surmised two things about this guy:

  1. He may have wasted up to half of the $500,000 he managed for his past clients
  2. He thinks $500,000 is enough ad spend to draw conclusions about “how Facebook works”
  3. He completely lacks critical thinking skills and is following an instruction manual instead of letting the data lead his decisions.

Now, this is actually a pretty normal situation for a MINO. They specialize in one thing, which means they haven’t yet built the strategic perspective that would have taken their ego and insecurity out of the mix. With the right manager who DOES have that strategic perspective, this guy would have been able to do a lot of good.

However.

This guy was reporting directly to my friend, the CEO of the company paying for the ads, and my friend didn’t know the first thing about advertising technicalities or marketing strategy. Hence me being on this call to help him out. So this MINO was pouring my friend’s money into campaigns that were based on a strategy that my friend just had to believe was going to work.

Jeff Walker calls that “hope marketing.”

I call it idiocy.

The fewer assumptions you make in the world of advertising, the fewer chances you’ll have at being wrong and losing money. This ad guy was making a lot of assumptions, and the odds were high that he was wrong about at least one of them.

When I chatted with my friend next (the CEO of the company), I told him straight up that his ad guy is making dangerous assumptions in the campaign and that the Audience A/Audience B strategy was based on a premise that had yet to be proven in his own ad account.

When you launch an ad campaign with so many assumptions, you either have to back up your assumptions with proof or replace the assumptions with tests.

In this case, the test would be to run the Audience A (“feeding the beast”) campaign alongside the Audience B (sales) campaign for a period of time, and then switch off the Audience A campaign. After another short period of time, you can compare the ad costs.

  • How did CPC and CPM change?
  • Did sales conversion rates rise or fall significantly?
  • What happened to the CTR?
  • What happened to the number of impressions per day?

All of those questions would have resulted in a conclusion as to whether the Audience A campaign was worth the investment. And yet, this MINO ad buyer hadn’t been planning on doing any of that. He was just following the instruction manual of whatever training program or mastermind had handed him that strategy. I told him (the ad guy) this exact statement on the call, and could tell he still didn’t get it.

So when my friend fires the ad guy for doing his job, the ad guy is going to get pissed off, say he did his job, and then he’ll take the results of the Audience B (sales) campaign, put it in his portfolio touting all the sales that were generated, and leave the Audience A campaign out of his portfolio. His future clients won’t know he wasted money on the Audience B campaign, and my friend will be left holding the bill.

Do your research when hiring marketers, especially MINOs. It’s not a bad thing to hire a specialist, even when they lack strategic insight. But it’s imperative that you supply MINOs on your team with someone who can offer common-sense strategic direction when it’s needed. It will save you a ton of money, time, and headache in the long run.

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Dan Russell

Editor—Goldpan Report