Are Google Ads Still Worth It?, AI for Paid Ads, and Paying for Coaches Doesn't Make Sense (Reactions)

0:01Today, we're going to be talking about how effective Google Ads really are. So this was interesting for me because I ended up breaking down just Google ads in general. And I'm like, all right, what's the data? How profitable is it really? What are people doing? And what are click-through rates and all this kind of stuff? So let me actually share my screen so I can break down the data. In our company, MP Digital, we have some tools. We track roughly$2.1 billion USD a year in ad spend. And the average Google click-through rate right now is 3.22%. Average cost per click,$2.81. The average conversion rate, 3.49%.

0:49And on the flip side, when you look at organic visitors, SEO traffic, it's converting less than 1%. But you don't really have to spend too much money on SEO in comparison. Yes, you can do it time-wise or through people on your staff. or you may pay agency, but in comparison to how much paid advertising costs, it is much cheaper, but the conversion rates for SEO are much lower. 68.39%, and this one shocked me, of the users know they're clicking on a paid ad, and the part that shocked me is roughly 31 % and change, or 32%, however you want to look at it, they don't know that they're clicking on a paid ad.

1:30But the people that know that they're clicking on a paid ad, they do it because they believe that the query that they're clicking, the result that they're clicking on will provide the answer to the query they typed in. And that makes sense why they're clicking on it. The average advertiser is generating$6.26 in revenue for every dollar they spend. Now that doesn't mean that it's profitable because they may have other expenses in there, but that's just the data that we're able to track. And to sum it all up, Google generates$224 billion a year in ad revenue. People talk a lot of crap on paid ads, but if it didn't work, they wouldn't have ended up generating anywhere near that much revenue in paid ads.

2:15Now, here's the funny thing. When you think about paid ad revenue, a lot of companies say, oh, we can't make it work. But if Google's generating that much revenue, how is it that it doesn't work? It's not that it doesn't work for you. I mean, it's not that it doesn't work. It doesn't work for you. Your competition is still spending money. And the chances are the reason it's not working for you is because you're funnel. You don't have upsells. You don't have downsells. You haven't figured out how to get people back and continue to buy from you over time. You haven't figured out how to increase the lifetime value of your customer.

2:45That's the real key to make paid ads work. But check this out. I just broke down Google ads, right? And what I want to do is actually look at some of the other social networks. You're using the wrong, you are using, I have it somewhere here on ROAS. Where is it? I know we ended up breaking down this in the past. I wish I put the link in this before. Yeah, you are using the wrong Neil. Oh, there you go. I found it. Alright. So, check this out with the other social networks that you guys can compare to Google Ads. So, as you can see here, and this was from the last 30 days, at least when I put out this tweet, which, when was this?

3:37This is December 6, 2023. So, 30 days pretty much from November to December. When we're looking at the social networks, we were looking at a lot of companies' analytics. We have data to over a million sites, and we were breaking down which one has the highest ROAS. But before I break down which one has the highest ROAS, which is return on ad spend, let's first look at the revenue numbers from each social network, right? And not just other marketing channels, but only social networks. So when we're looking at the data and analytics, we were seeing that when you look at social networks, Facebook drove 32.37 % of a website's revenue.

4:17YouTube was at 28.19%. LinkedIn was at 11.47%. Instagram was at 10.92%. TikTok was at 8.44%. X was at 4.41%. Snap was at 3.18%. Pinterest was at 1.02%. There were other social networks like Reddit and some really tiny ones. we ignore them because it was so insignificant. Now, when we looked at which ones had the highest ROAS, which is return on ad spend, X was 6.8%, Pinterest was 5.2%, I mean, not percent, X was 6.8%, Pinterest was 5.2%, Snap was 4.9%, TikTok 4.1%, YouTube 3.9%, Instagram 3.3%, Facebook 3.2%, LinkedIn 2.6%. X produced the highest ROAS. Now, just because someone produced the highest ROAS doesn't mean you can get the most volume there.

5:14That's why you're seeing networks like Facebook and YouTube driving the most revenue volume. But what we're seeing is companies are going to start spending more time on platforms like X and Pinterest and Snap where the ROAS is amazing. It doesn't mean they're going to neglect places like YouTube or Facebook because the raws isn't as high because they're still getting volume. And the ideal thing to do is you leverage Google ads, Facebook ads, Instagram, X, all channels that are pretty much profitable. But funny enough, when I was showcasing Google first and then I did the other social platforms, Google still crushes most of these social platforms.

5:56Why? Because someone's typing in a keyword, buy affordable laptop. I want a red bike. Whatever the query is that they're typing in, you can show an ad that's directly related to the search query, which is why it's one of the best platforms out there for advertising. As long as there's attention, there will be demand. And that's marketing one-on-one. And what I would say to this also is when you think about people talk about performance max, people talk about Advantage Plus from Meta. These are the new kind of AI pushes from Meta and Google. I think we're going to get to a place where those are going to get a lot better.

6:34Right now, there's still a lot of human intervention that's required. I think there's always going to need to be a human in the loop to just make sure that things are working well. but I think going back to Neil's point start when he started us off it was more so like when people complain that it doesn't work it's because they suck like straight up it's like they don't spend enough time on on marketing and there's only two things that matter when it comes to business one how are you acquiring customers and then two how are you serving those customers and most people most people think oh sometimes it's like oh the product's enough no that's not enough you got to think about how you acquire customers too and that's what we're talking about here and just because AI stuff's coming out doesn't mean you could just rely on that completely, right?

7:10Like you actually have to be very thoughtful about it. And marketing should be something that's top of mind for you for at least one of the founders of the business. Yeah. And with this being a new year, I know we're in 2024 at this point. Another thing that Eric and I wanted to talk about is business coaches. I know we have very polarizing views on this. Eric is about business coaches. I think you pay quite a few of them or you used to. I'm pro coaching. That's what I'll say. You're pro coaching. I'm very against most coaches. And here's why when you find people online that are like, I'm a coach, they're, they're a coach because they're running Facebook ads and they've made their money by saying, I'm a coach.

7:58Dude, I met someone the other day who claims they make millions of dollars a month from coaching and it's pretty much pure profit. And they're known for having, you know, a handful of Rolls Royces and Ferraris and fancy cars. I'm like, what did you do? Oh, you said you're a coach and you're charging people and you, they're going to be successful by paying you because you have flashy cars and homes and stuff that you got from just running ads and telling people you're successful. Like, what did you actually really do? And this is why I don't like most business coaches. I think most of them are shams and it's a bunch of bull.

8:36And Eric's paid coaches that like, oh, we sold our agency to this place and all that kind of stuff. I'm like, well, Eric's bond agencies and some haven't worked out and he's learned from it. But I'm like, where's your coaches? Where do they save you? They charge you the money. And most of these coaches make their money by charging you. And that's why I think it's just a bunch of bull. But if you want to pay a coach for something specific, like I'm really good at M &A and look at all these deals I've done and I will help you with just that. Great. Or I've done sales within your industry, not sales in general, because a lot of these people pitch the dream and that doesn't work for all industries.

9:11Like mine, everyone's like, cool. What's the case studies and what's proof that you can actually provide us an ROI with our marketing budget of$100 million a year? Using some fancy sales skills that they learned from watching some of these videos isn't gonna help them close one of those deals, right? But if you wanna pay someone for something very specific, like I need help with operations, I'm a terrible manager and I'm not organized and I need some systems or procedures, or if I need help with M &A and you've done tons of M &A in similar fields or my field and I need help from you, I think paying those kinds of people, that's fine.

9:49I think just paying general business coaches is just a waste of money because what are they going to end up teaching you? What are they an expert in? Charging you money because they're successful by charging other people on how to be a coach and how to sell the same thing to others? So here's what I'll say. So I see, I know where Neil's coming from because Neil and I talk all the time. Neil got ripped pretty hard on that thread and I understand why people ripped him because they also don't understand where he's coming from as well. So the premise of it basically is correct. So basically, I'll reframe it for people, and this might help cover all the sides here.

10:26Coaches that are really good at marketing, that show off their Lamborghinis and show off their nice lifestyle, those are not the people that you want to be working with at the end of the day. Because out of the gate, when you're showing that stuff, there's a misalignment. It shows that you're not humble, first and foremost. And it shows that you're also shallow for thinking that really smart people are going to fall for that stuff. Just even to be impressed by your Lamborghini and like your, your really nice lifestyle. No, like they want to learn. Right. So that, that's really the premise of where Neil's coming from on those coaches.

10:56Right. And not just one of the, let me finish. I let you monologue for five minutes. Let me, let me finish. So what I would say is with the coach that the coaches that I've had in the past, the ones that have worked out well, have been there, done that. Right. So the coach I work with right now is, is Jerry Colonna and, you know, he's been a VC. He's worked with Fred Wilson. He's worked with the CEO of Twilio Etsy. The guy has a lot of range. He's a father. He can talk about business and everything, right? And he also doesn't need the money too, right? So he doesn't show anything off. He's a very humble guy.

11:26He's very grounded. And he also doesn't tell me what to do for the most part. He's just asked me really good questions, right? And that shows that he's coached up there. So it's like, has he been there, done that? Yes, he's done a lot of different things. Has he coached legit people? Yes, right? And so to me, he's worked. Now to Neil's point, the agency coaches that I worked with, I didn't realize this is my fault, by the way, Neil's absolutely right about this. Um, I didn't realize until a couple months working with them. I was like, Oh shit, they only had an exit for$2 million. What am I doing here?

11:55Like, cause they came recommended from someone else and I didn't do my due diligence. And I realized that the things that were telling me the questions, I was just like, dude, these guys haven't been there, done that. What am I doing? And the advice was really bad. And I'm just like, at that point, I think it was three, four months in. I was like, Hey guys, like I'm out. Like, thank you, but I'm out. So there's nuances to it. Go ahead, Neil. But you, you pay a coach. He asks you questions. How's that coaching? That sounds like more like therapy, a good coach. So a good coach, most of the time they're guiding you.

12:26They're not, they're not supposed to tell you what to do, right? A mentor or an advisor. Don't tell you what to do. Cause that's like advice. But to me, I've learned over the years, I used to think a coach is supposed to tell you what to do. but like this type of coach, like a business coach, executive coach, I'm looking for someone that asks me the right questions to get me to think through things. When I first started my business, the overwhelm was real. I didn't have the tools to help me scale. If only I had Shopify from the start to handle all the behind the scenes work. Shopify is the platform behind millions of businesses globally from huge names like Mattel and Gymshark to the smallest brands just getting started.

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14:38Ready to build a site that looks hand-coded without hiring a developer? Launch your site for free at framer.com and use code MS to get your first month of pro on the house. That's framer.com, promo code MS, framer.com, promo code MS. Rules and restrictions may apply. so they're just helping you retrain how you think yeah in some cases you'll be like dude what the fuck stop being an idiot like that will happen as well sometimes they'll just tell me like dude you're being stupid so yeah because i think of like a business coach like a basketball coach right they'll tell you what to do they help you train it's just different definitions that's what you got called out on right on one of them it's like different definitions but i think like the premise of what you're saying is is right i just think most people don't um they haven't most people aren't going to like dive into it you know my funniest was i was on stage eric was speaking about the Lamborghini, someone told me how they have five Rolls Royces, but they don't own a home.

15:26And they're like, buying a home is a waste of money. I'm like, buying five Rolls Royces is a waste of money. You could have bought a home, your Rolls Royces are getting depreciated over time. I'm like, what are you talking about? Yeah, you know, and I'm not saying buying a home is a good investment. For some people, like Eric and I, we would make more money by renting a home and taking the capital and just putting it back in our businesses. Yeah, putting it back in our businesses. but that's not everyone. A lot of people have made their net worth and their money in life, you know, by just buying a house.

15:58Like our parents' generation, a lot of them are millionaires because they bought a home back in the day for pennies on the dollar. They didn't have to do any investing. They paid it off and it's now worth millions of dollars in places like California or New York or wherever it may be. But the problem I have with most coaches, you know, like even the one you're talking about and that you use, he's probably great. You know, I don't know why he would go from being a VC and getting the two on 20 to being a coach, you know, being a VC. I asked him this. I didn't call him out, but I asked him this. I was like, so why?

16:31Because he's made his money already. And like the coaching thing, he's like, I don't look, I don't need to do it. I just have a lot of fun doing that. And here's the thing. The coaching business as a whole, it does 13,$14 million a year. He doesn't need to be one of the coaches, but he's one of the coaches, even though he's one of the co-founders, he just enjoys it. And I can tell he likes doing it. He's not money driven. But then if he's not money driven, then why charge for coaching and why build a team? Why not just do it himself and just help people? Well, because he believes that like, still, like if you're going to do something, the best way is still for profit.

17:02Yeah, I'm with that. At that point, might as well just be a VC and then make the money. Well, that's typically VCs on your board are like, they might tell you what to do, but they're not like, they're not, it's not a coaching. It's a little different because for example, he coaches the Twilio, the etsy guys right like they have their board they have their vcs as well but they still they still want a guy like him um he coaches like jack dorsey specifically yeah i mean think back to will jamble like sorry uh twilio is not jack dorsey i forgot who jeff lawson there you go jeff lawson yeah yeah yeah uh so uh so he he he pretty much coaches jeff lawson and correct and it's a lot of i mean you and i both know like everyone here like entrepreneurship's a lot of ups and downs.

17:45Right. And there's a lot of stuff that you have to fight through. So I just depends. But I think what we're really saying here at the end of the day with coaches is like, you don't, you want to work with humble, hungry, smart coaches, and you want to work with people that have been there, done that. And look, if someone's like a 20 year old life coach, like what are they coaching you on? So there probably are 20 year old life coaches, but no. And then even if they're in your space, it doesn't mean they're successful. Eric gave a prime example of the agency people. what do people know who really sold their agency for a few million dollars if they were really good they would have helped eric may avoid a lot of the mistakes it's like what eric's built a bigger agency than them and they're coaching him on how to actually make his agency bigger when they've never done it yep doesn't make sense anyway so take that for what it is that's it for today's episode please don't forget to rate me site mute rate review and subscribe check out this next video over here and we'll see you tomorrow dude