Here’s What You’re Doing Wrong in your PPC Campaign

Steve Trang: Everybody, welcome back to the PPC masterclass of Bateman Collective. On this episode, we're gonna be talking about location and budget strategies. So, you know, in the previous two, we recorded about, why PPC, why it's effective, and we talked about how Google works and effective bidding strategy. So, today we're gonna be talking about location and budget strategy. So, I'm in the Phoenix market.

Yep. So by default, I'm gonna start at PPC strategies. I'm gonna start in Phoenix. Is that the strategy everyone does?

Speaker 1: It's it's not what everybody does. It is what a lot of people do. Yeah. So, yeah, let's talk about this because this is, like this is one of the the biggest things. And I actually find myself talking about this a lot because even for PPC experts, this is a whole different game.

Because, like, let's just say you're in, like, the ecommerce world. You're just like, okay. We'll target The United States.

Steve: Anybody and everybody.

Speaker: Yeah. Because if they live in the middle of nowhere or they live in the heart of Los Angeles and they buy my product for $20, guess how much revenue I get? $20. Yeah. If this is real estate, now the place where they live is the product.

Steve: Mhmm.

Speaker: So their location has a lot to do with my success.

Steve: Mhmm.

Speaker: So it's, yeah, it is it is, like, a a very commonly debated topic. And and the reason I'm so excited for for this particular episode is because I think a lot of people learn things because there's a lot of kind of polarizing views out there.

Steve: Mhmm.

Speaker: There's people who, like, push really heavily for, like, very wide geographic targeting. Mhmm. And there's people who push very heavily for narrow geographic targeting. I'm hoping to add some balance to that conversation by talking about, like, how they're both kinda right and where you can kinda strike that balance and maybe because that to me, that's strategy. Strategy isn't just saying x is better than y.

It's saying, like, for a situation, x might make sense and maybe in a different situation, y makes more sense.

Steve: I think where a lot of people get into trouble or not a lot, but a bunch of people get into trouble is, when they get dogmatic and they're just unwilling to listen to the other position. Right? We're not saying pick one, pick the other. It's just evaluate the pros and cons of backyard, pros and cons of nationwide.

Speaker: Mhmm.

Steve: Pros and cons of being, doing both, and then make a decision and let the numbers talk.

Speaker: 100%. Yeah. That that's absolutely the the best the best way to do it. So I I think the easiest way to show this is, like, we can kinda share both sides Mhmm. Of the argument a little bit.

So let's just say I am somebody who kind of promotes a single market real estate model. What usually, what I'm gonna be saying is that focus Mhmm.

Steve: Is

Speaker: what you need. These people that are across a bunch of markets, they don't know what they're doing. You gotta be, like, go deep in a market, and why would you ever go somewhere else if there's more deals to be had in the market that you're already in? It just doesn't make sense, and you're gonna be better and operate more efficiently as a business that way. Meanwhile, people who are proponents of going into more markets, likely are gonna be saying, well, with the shifts that are happening in the market, like, some markets are really good, some markets are bad.

Like, if you were just focused in Phoenix during the hike in interest rates, I don't know a single wholesaler in Phoenix that was just like, you know what? That was fine. That was easy.

Steve: Yeah. That was pretty traumatic. You're you you just went straight into a really deep wound right here.

Speaker: Yeah. Yeah. Versus clients of ours that were, like, more flexible geographically. Mhmm. They some markets were totally fine.

Steve: Well, we were in the Midwest. It was like, what what are they crying about over there?

Speaker: Exactly. Like like so so diversification is a big one. The other thing is with PPC, your cost per lead goes down as you go into more markets. Right? So some proponents of of, more national type strategies will even say, like, go really, really wide.

Like, statewide campaigns in many states, you get this really, really cheap cost per lead. And there's people out there saying, like, you should never pay more than $70 for a PPC lead, for example, stuff like that Wow. That are focused on, like, these really heavily national models and a really cost per lead heavy strategy. Yeah. But there are benefits.

Like, let's just say you could pay less for leads and all else remains equal. Mhmm. You you're making more money

Steve: that way.

Speaker: So that that's a good thing. So so that's that's kind of some of the benefits of of going going nationally. Or like Robert Wensley, we talked about before, he'd probably say go national Mhmm. So you can focus on, like, the markets that have the highest spreads so you can be doing the right deals, which is technically, like, national Mhmm. But way different from, like, a Nick Perry model that would be, like, national, but let's do statewide campaigns in a lot of states Mhmm.

To get a really, really low cost per lead. And then we end up doing a lot of deals in rural areas. So so here's well, first, any any thoughts? Like, do you have have you heard any, like, arguments outside of what I've shared already?

Steve: The arguments against going nationwide is the is the inefficiencies because you gotta find a new title company. Mhmm. You gotta have boots on the ground. Yeah. Random places.

Right? Photos, lockbox. And then, like, I I completely took for granted because I just grew up here. Right? Completely took for granted how awesome we have it here in Phoenix.

Like, I could clear title this afternoon. Right? I get a motivated homeowner at 09:00 in the morning. By three, I can clear title.

Speaker: Yeah.

Steve: Now I'm not saying this is the norm, but if I make a big enough stink, right, I call the branch office. Like, hey. I got a foreclosure tomorrow. I need to clear the title today. It happens.

Speaker: Mhmm.

Steve: We had deals in Oklahoma City that took three months to clear title. Wow. Right? Because they have my understanding, they're one of the worst. Right?

Because they have abstracts.

Speaker: Mhmm.

Steve: Right? And so there's that. And then we had New Mexico where, like, we had deals. Like, we were buying it below. Like, typically, in Phoenix, they're in the good times.

You lock it up at 80, you're still doing pretty good. 80%.

Speaker: Even 90 in, like, the really good times. Right?

Steve: Like, there

Speaker: there were times, like Yeah. Yeah. Where it got crazy.

Steve: Like, in Albuquerque, we were locking them up at 70% minus repairs.

Speaker: Mhmm. Like, this

Steve: is a freaking grand slam. Finding buyers that were willing to go look at properties

Speaker: Yeah. We just don't wanna get off the couch.

Steve: No. We're like, hey. So, like, we got the property under contract, so we're looking for the first guy. Like, you know, when can you go out? Like, oh, I got opening next Tuesday.

It's like, that's in five days. Right? In Phoenix, if they ask for five hours, you could just like, alright. I'm never calling you again.

Speaker: Yeah. So I understand.

Steve: The the the working multiple markets did cause stress, but we also didn't have systems and processes here. Right? Like Mhmm. If I go into market knowing it takes three months to clear title, now I can be run a mark a business prepared Yep. For a three month title search.

Speaker: Yep. And and you'll find experiences all across the board. I think it matters, like, who you have on your dispo team. Like Right. Because I I just interviewed one of our clients that did well, like, moving to a national strategy.

They they moved to national, launched a PPC campaign, did over 7 figures their first year Mhmm. Doing that with, you know, pretty great return on investment. And when I asked them, they're just basically, like, you know, honestly, a deal, it doesn't matter where it is. Is. Like, this bill is the same.

Mhmm. Like, I don't get why people get so caught up on this. And then meanwhile, other people have, like, a hard time. And I think it depends which states you're going into. I think it depends on how you're doing it.

A lot of the people associate nationwide with rural Mhmm. Because a lot of people who go nationwide get rural leads.

Steve: Right.

Speaker: Now there's nothing about being nationwide that makes it so you get more rural leads except that most people do it wrong. Mhmm. So there's there's something to to think about there and, like, that's not exactly a fair association. But here's the, like, the easiest way, like, I've been able to distill this. There's so there's two words that I really love.

They're focus, diversification. These are two really positive words that mean completely opposite things. Right? Just two sides of the same coin. So the, there's also, like, different places where you can focus or diversify Mhmm.

In in your business. Right? So number one, marketing channels. You could have one marketing channel, very focused, maybe two, or you could have, like, 17 marketing channels. Right?

Like, that that's, like, diversified. Mhmm. Right? Exit strategies is number two. You could have one exit strategy or you could have all the exit strategies.

Mhmm. And number three is markets that you're in. So what I'm finding is that people that are, like, heavy proponents of one versus the other, it's just that they have a different opinion on what you should focus on and what you should diversify on in the business. Mhmm. So some people will say, like, you wanna be focused in one market.

Usually, those people, they have every marketing channel, and they have every exit strategy. Mhmm. Then meanwhile, like, Robert Wensley would tell you, don't be focused on the market. Be in a lot of markets, but one exit strategy Mhmm. One marketing channel.

Steve: Right.

Speaker: So who's more focused? Robert Wensley or the person in the single market? Like

Steve: Subjective.

Speaker: It's subjective because they're focused on different things. Right? He probably looks at their business. He's like, they're doing all these different exits. They have all these different marketing channels.

That's a complicated business. Meanwhile, that business is looking at they're in all these different markets. How could they possibly pull that off? So what I've seen, like, across our clients that we've worked with is if you wanna be diversified in everything, you're pretty much screwed. Mhmm.

You're never gonna be able to figure out how to do every exit strategy in every market with every marketing channel unless you're gonna, like, be like, obviously, to reach a certain level of scale, there's gonna be a company that needs to do that. I'm not aware of any company that's at that level now.

Steve: I I wanna say multiple exit strategies, but, I mean, New Western is doing pretty good.

Speaker: Yeah. But they're still very focused on their marketing. Right? They're mostly JV

Steve: Yeah.

Speaker: As far as I understand. And then they have probably a variety of extra strategies and variety of markets. Right? So they're they're starting to get in the end where they're like, okay. Two out of the three, now they're diversified.

Yeah. They're still focused on one.

Steve: Right. And they have multiple

Speaker: And they could grow more by also opening up direct to seller, but, like

Steve: Yeah. And they also do they they they have, national hard money lending and national, title.

Speaker: Okay. Yeah. And that's a whole another thing. Yeah. So, anyways, I I guess what I'm saying is, like, all diversified, probably not a great strategy.

You kinda have to choose what you wanna focus on and what you wanna diversify on. And usually those that are across like, a very common business model is heavy PPC Mhmm. Heavy, like, wholesale or innovation, many markets. Yeah. Another common business model is PPC is just like one piece of the marketing puzzle, and you've got a lot of other channels that drive a lot of volume too.

And you have a lot of exit strategies because you have to monetize every lead. The the reality of the situation is if you're more constrained geographically, your leads are gonna be pretty expensive for PPC. So what you have to think is, how do I become the company that monetizes those leads better than anybody else? How do I become the best at getting them under contract, the best at getting those contracts to close, and the best at making the most money per closed deal? So my revenue per lead that I get is high.

So there's other people, they're like, my PPC doesn't work because I can't pay for this. Meanwhile, I make way more money per lead, and then I'm doing awesome all day long. Right? So that's, like, one strategy. It's like, let's pay a lot of money for the leads, and let's monetize them really, really well.

Yeah. The other strategy is let's pay less money for the leads. When you when you go more national, you could think of it like you're so I'll I'll give an example. Let's just say you do MLS offers. Mhmm.

Like, that's your strategy. And you're gonna do five MLS offers, and you have to get one deal. What percentage of ARV do you have to do those offers at to get your one deal? Probably really high. Mhmm.

I'd

Steve: say north of 80.

Speaker: Yeah. If, like, I gotta get one deal out of these five. Let's just say you could press a button and submit an offer in every single house in The United States Mhmm. And you just needed to get one deal. What percentage of ARV could you submit those offers at?

40%. Yeah. Maybe lower.

Steve: I I

Speaker: don't know. Like, really, really, really low. Right? Mhmm. You

Steve: could submit an offer at every single listing in United States, maybe even 30%. Yeah.

Speaker: Yeah. If you think about it, that's kinda how Google works. Like, you can bid on all this traffic. So so when we when we're doing more of a national campaign, what we're doing is we're essentially, like, lowballing Google. Mhmm.

Where we're just saying, like, yeah. You have other people probably paying a lot of money. It's just this is my bid limit. Like Mhmm. I gotta be here.

And Google says, I'm not gonna give you that much volume, but then you add all these markets together, and you can do that because you don't have to get a lot of your

Steve: bids accepted. Well, yeah, the I guess the idea for the way I'm looking at it is that okay. So maybe today, Los Angeles, Phoenix, Houston, everyone's playing, everyone's bidding, and there's not that many, users searching. Mhmm. So no one's depleted their budgets.

Yeah. But in the meanwhile, Jacksonville, everyone's budget's depleted except for yours. And now you're coming in cheap.

Speaker: And all you need in a national campaign is one whole, one place. Yeah. And then you'll get a cheap lead there. Yeah. So it's that's the strategy there.

So I'm paying low. And then, yeah, maybe I'm, like, am I as capable of of monetizing a lead in that market as somebody who, like, lives there? Probably not. But if my lead costs a third Mhmm. What they would pay for it.

Well, now even if I'm not the best at closing, even if I'm not the best at exiting, I could still come out on top.

Steve: Right.

Speaker: So that's that's kind of the difference in the strategies. And then there's everything in between. Like, people like to think, like, local, national. There's also, like, how wide are you gonna go around metros?

Steve: Mhmm.

Speaker: Like, one thing we're commonly advising our clients on is if you're in like, like, people like to think of it as, like, oh, am I targeting Atlanta, or am I not targeting Atlanta? It's not that simple. Like, there's like, what does Atlanta mean? Atlanta proper? Like, the city limits?

The Atlanta DMA? There's actual Atlanta City. Which is really small compared to,

Steve: like, the DMA. Everything else around Atlanta. Just only Atlanta.

Speaker: Will you be surprised how often because because we do audits as a company Mhmm. Where, like, people come to us and say my PPC campaign doesn't work. Because, by the way, if anybody's listening to this, like, that that babymancollective.com/disruptors link Mhmm. That gets you to my team where we can do a consult with with you on your specific campaign.

Steve: Actually review it and analyze it.

Speaker: Yeah. Yeah. What we'll look like through the campaign. You'd be surprised how often we see something

Steve: like that where we're like

Speaker: yeah. Because here's what happens.

Steve: Down the radius.

Speaker: No. Because because the because an agency sometimes just does what the client tells them to. So the client says, I wanna target Atlanta.

Steve: And they don't ask all the questions.

Speaker: Agency goes in, types in Atlanta. That's the default. The default isn't a radius. The default is city boundaries, and you target the city of Atlanta. Really?

And then nobody notices that something's wrong. It's very common, actually. If especially if you're working with agencies that aren't in, like, this industry. Well, I

Steve: guess that makes sense because you're saying, like, other in like, outside of real estate, it doesn't matter. You're you're

Speaker: a buyer. You're a buyer.

Steve: You're a buyer. It's not look it's not location specific. But because our industry is so location specific.

Speaker: Yeah. It's it's like this is the kind of thing. Like, when I hire people on my team, they're they're, like, idiots about this until I, like, train them because they're not used to doing this. Like, you won't find people from other agencies that, like, think about this this way because this is something like real estate investment specific. It's the only industry I know of where this is, like, this big of a deal.

So that's where generalist agencies just screw this up. They just have no idea. And and but the thing is, with the information that I'm supplying everybody with today, you'll be able to even potentially give that to a generalist agency, and then they could figure it out Right. Or you know, like, what to tell them. Because now you know not to tell them.

Target Atlanta. Mhmm. Because then they'll target Atlanta. They'll do what you told them to do. And that I guess that's fair.

Yeah. But, you know, they're not they're not pushing back. Right? That that's what's important.

Steve: Okay. So Atlanta or not Atlanta?

Speaker: Yeah. So that's what I'm saying. It's, like, a lot of people are just, like, oh, I'm targeting Atlanta. Like, that it's, like, what does that mean? Does it mean Atlanta city boundaries?

Does it mean a bunch of counties surrounding Atlanta, just the main county for Atlanta? Are we doing Atlanta plus 50 mile radius or plus 20 mile radius? Are we doing some type of custom radius targeting? Mhmm. Like and all those different things produce a very, very different result.

So that's where we have to be, like, really specific about what we want, and we have to learn how to do that strategy. Like, as an example, your exit strategy greatly affects what kind of locations you're gonna target Right. As a business. Like, let's just say I wholesale versus I do novations. Like, how, like, how would that affect, like, what kind of properties I can deal with?

It affected a lot theoretically. Like, let's just say the property's an hour and a half out of Dallas Fort Worth. Wholesale, maybe. Mhmm. Novation, probably.

Yeah. Right? Because there's there's more retail buyers than there are cash buyers in any given place. Yeah.

Steve: So you're saying just based on the population, you can figure out what's the best exit strategy.

Speaker: Yeah. And based on the exit I'm talking about based on the exit strategy, figure out the right marketing strategy. Gotcha. So it's like the like, sort of the opposite. I mean, obviously, you'll get the leads wherever you get the leads.

Mhmm. But yeah. So so there are, yeah, there are different ways to do it. So the the default is so we'll start with single market just to make it simple. Like, if you have a single market and you just know which areas are good for you, target those areas.

Everybody's happy. Right. It's super simple. But that will screw you over sometimes. Like, I'll I'll show Well,

Steve: there's this saturation. You were so we're talking about on the previous, module on the, return investment, diminishing returns.

Speaker: So what what are you saying for a single market? Like, that's the issue you'll run into? Is that Well, yeah.

Steve: Diminishing return? You're only gonna target one area. There's only so much you can spend there.

Speaker: And your and

Steve: and the and the profit maximizer.

Speaker: Yeah. So usually what's gonna happen in a single market scenario Mhmm. Is you're gonna have PPC as one of your many marketing channels. Mhmm. And you'll push it to the extent that you're willing to push it.

And depending on how big the market is, that could be like like, there's there's people in this industry who will spend a million dollars across, like, a few markets. It happens Yeah. A month. But it it's rare, and they're usually doing massive volume at an extremely high diminishing return.

Steve: Mhmm.

Speaker: Right? And then there's some markets where, like, you know, you you're at, like, $5, and every time you push it to 7, you just can't Right. Spend more. So, yeah, that that totally happens. Here's an example of a time where, like, people go wrong really commonly with single market targeting.

So I'm, you know, for those listening that can't see, what I'm looking at right now is Riverside County, California. This is there's a lot of counties that have this problem on some level or another, but, like, this this is, like, one of the most blatantly obvious ones.

Steve: That's one county?

Speaker: This is one county. Maricopa County, by the way, another one kinda like this. Although the the beauty that Maricopa has is that those places where no one wants to be, there's actually no people there versus this one. So so what's gonna happen here? And and this is where, like, the stuff that we learned in the last episode of the series is gonna come in handy.

So let's just say I'm the client and I'm working with an agency, and I tell them I wanna target Riverside County, California. Alright. This is what we got. And when I say Riverside County, think what do I mean? Well, I really love homes in Riverside, and I probably love up to, like, Beaumont.

Yeah. Etcetera. If we get way out to Midland right next to the Nevada border because this county is very, very large and it stretches all the way to the border, chances are that lead to me is a way different value Mhmm. Than this other lead.

Steve: I mean, I I'm just picturing this. I apologize I'm interrupting you because, like, you know, I drive to California all the time to visit family.

Speaker: Yeah.

Steve: And, we drive through Quartzsite and we drive through Blythe. I would never have imagined that Blythe just past just across the border is Riverside County.

Speaker: Yeah. And here's here's what I tell you. More PPC budget is spent in Blythe than you would ever think, and most of it's wasted because most of the people targeting it are targeting it on accident because it's part of a county that also has really good areas in it. Mhmm. And people just do county targeting.

Yeah. Like, I just want it I just want it all. So so that that's just, like, the the simple example there. So just if you think of, like, the auction economics that we talked about Mhmm. In in the last episode, you know, everybody's putting their bid in and you're winning it.

Like, where do you like, the thing is you're not gonna be differently at different places within the county. Mhmm. Right? So if you're just submitting the same bid to Google for people that are searching in, like, the core of Riverside versus in Blythe, California

Steve: You're gonna win Blythe every time.

Speaker: You're gonna be, like, the hot guy at that auction. Like, you there's You're the king

Steve: you're the king of Blythe.

Speaker: Yeah. You're the king of Blythe. And then you have to think to yourself, do I wanna be the queen king of Blythe? And I probably don't. Yeah.

Right? That's that's not a that's not a high quality place to be at all. So and if it if it is, like, then that's a good strategy. But I guess what I'm saying people don't realize is people will target, like, nine good areas and then one bad area Mhmm. From, like, a population standpoint.

Or they'll just be like, oh, yeah. That targeting is good because it at least includes, like, the area I wanna be in. Nine nine 90% of it's what I want. Yeah. Maybe 10% is not.

The risk that you run is that you get 70% of your leads from the 10% that's bad based on how PPC works. Mhmm. Because what Google's gonna do what you're telling Google is I wanna get as many leads as I possibly can in this area. Mhmm. And a lot of people then think that e Google is evil, you know, against their, like, their mission.

Right?

Steve: Right.

Speaker: They think they think Google's evil because Google starts to, like, get them all the worst leads in those areas.

Steve: But you

Speaker: have to realize Google's doing exactly what you just told

Steve: us to do. Doesn't work.

Speaker: Yeah. Exactly. When Google's doing exactly what you just told us to do. So you're just getting the leads where you don't want them because your competitors also don't want the leads there, but your competitors are smarter than you, and they're not targeting them.

Steve: They're better at targeting.

Speaker: Yeah. Exactly. So that's that's a really common issue with, like, even county level targeting. So the we have a specific, like, rule that we use for location targeting. If you just get this right and you always get this right, people ask me, they're like, is this location targeting good?

Like, well, does it follow the three rules? Mhmm. And it that's different for every company. But, like, if you if you nail these three rules, it's it's kinda like, you know, from court, like, the truth, the whole truth, nothing but the truth.

Steve: Mhmm.

Speaker: The right locations, all the right locations, nothing but the right locations. That's how you target a campaign.

Steve: Mhmm.

Speaker: So there should be a few things that are true. Like, you should be able to look at it. Look at a map of all the areas you're targeting when you're done with your location targeting. If you could think of any areas in there where if you got a lead, you wouldn't actually find it valuable. This happens with us with our clients all the time.

Like, we push them on this, push them on this, push them on this, and then, like, the results aren't good and we figure out it's because we're getting a bunch of leads in bad locations, and those bad locations are the exact areas they told us to target at the beginning.

Steve: Yeah.

Speaker: We're like, well, okay. There's our problem. Like, that that's that's not target those and that's gonna fix it. Right? So you should just, like, go through this mental exercise, like, okay.

If I got a lead from there, is that good or is it bad? The answer is it's bad. Shouldn't be targeting it. The other side of that is, remember, the more locations you target, the cheaper things are gonna be. Mhmm.

There's it happens all the time that people include the right locations, but they don't include all the right locations. So the means, like, maybe I do business in LA and San Diego, but I just run the PPC ads in LA, but not in San Diego. Mhmm. Which means I drive my cost per lead up compared to where I could be. So that's pretty common.

Like like, one of the, like, worst things I hear sometimes is like, oh, yeah. We're in these two markets as a business, but we're just gonna test PPC in this market first to make sure it works, and then we'll expand it to the other market.

Steve: Alright.

Speaker: Which is like it's like saying, I'm gonna just, like, do this text marketing campaign real quick, and then if it works, then I'll do the direct mail. But if I can't get my text messaging to work, I'm never gonna do direct mail.

Steve: It just doesn't Really? It's like

Speaker: that. It it is like that. Yeah. Because because the PPC will work different in the different markets. Mhmm.

And and people always ask, like, which one has a cheaper cost per lead? Is it a or b? Mhmm. When the reality is a plus b is a lower cost per lead than either a or b individually. Yeah.

That makes sense?

Steve: Yeah. It's

Speaker: like and maybe it makes some sense right now, but most people, like, they just they just don't it just doesn't click. Like, they don't fully understand it.

Steve: So for those that are listening, say that again?

Speaker: So if you're looking at which one's cheaper, market a or market b Mhmm. The reality is market a and b together is lower cost per lead than either market a or market b.

Steve: So for example, if you had a a monthly budget of $10,000

Speaker: Mhmm. And

Steve: if I said Brandon, should I do 10,000 in San Diego or 10,000 in LA? You say, do 10,000 between San Diego and LA, and you'll have an overall lower cost per lead, meaning you will have more leads, more opportunities.

Speaker: 100%. That's what I would say, provided you can do business well in both of those. Right. Now if every single one of your contracts is gonna fall out in one of those areas because you don't know what you're doing Then don't do that. Then don't do that.

Right? So so that's where we have to think, like, revenue per lead is is kind of the metric we're looking at for that. But, yeah, that's why we wanna try to skew a little bit wider if we can. Like, the the ideal is just as wide as we can without without just going too wide. Yeah.

But I've I've seen everything in the book. Like, I've seen people start national campaigns. Mhmm. Had a client got 20 contracts in their first month with not that much budget. I can't remember what it was exactly, but it was it was, like, 5 or $10 a month, And they did 20 contracts, and every single one of them fell through.

The reason they had 20 contracts is because they didn't know how to comp properties in other states, and all of them were locked up too high. Yeah. And that's the kind of thing that, like, makes you really excited at first Mhmm. And then it looks really bad Yeah.

Steve: By the

Speaker: time it comes full circle.

Steve: We went through that.

Speaker: Did you go through that?

Steve: Yeah. We went through that with Lead Zolo. We're like, well, I guess, you know, we'll target this whole state. And, yeah, we had a bunch of properties that we underwrote, really poorly. And it wasn't necessarily that our after repair value was off.

Speaker: No. Different markets, they just trade at different percentages of ARV. Right. Yeah.

Steve: And so we did not communicate that effectively to our front lines. Right?

Speaker: Yeah. And that's They

Steve: don't they don't account for hold time or for contractor crew to drive an hour each way every day affects what you can what you're willing to pay.

Speaker: Yeah. Yeah. I guarantee that killed your sales team morale.

Steve: Completely. Yeah. Completely.

Speaker: Yeah. Because, I mean, nothing's worse for a salesperson than, like, I'm killing it. I'm having my best month ever, and then the paycheck never comes because you can't get any of the deals closed.

Steve: Yeah. No. That's that's exactly exactly what happened.

Speaker: Yeah. I I can only imagine. So so we're talking about, like, ways to do it. So so usually the way we'll do it is that let's just say you have a local market and you know which areas are good. And this is why I'm, like, I'm pushing on this so hard in this episode and helping people understand because then you'll be able to communicate really clearly to us or to whatever company you work with.

Like, this is exactly what I want, and I understand, like, the strategic decision that I'm making by choosing these locations. And I'm actually putting thought to it versus just saying Atlanta, and then the company targets Atlanta City. Right? So, usually, like, let's just say, like, there's a few counties and you know you could do anything across those counties and you just include those. Like, okay.

That's fine. That works for some people in local markets. Sometimes you gotta do custom radius targeting. In Google, you could do as small as a one mile radius, and we've done wacky stuff with that. We've done, like, yeah, the weirdest location targeting where we include, like, some things but not other things.

Like, if you have to stay away from certain areas maps.

Steve: Exclude what? Exclusion maps.

Speaker: Exclusion maps. Yeah. And, well, exclusions are even a separate thing. Yeah. But you can you can do exclusions on Google too, by city and stuff.

You can't do ZIP codes. A lot of people wanna target ZIP codes. Mhmm. Can't do ZIP codes.

Steve: That wasn't changed.

Speaker: It it did change. Yep.

Steve: Yeah. Well and, also, like, the the the mile radius, I think. I don't know if that was Facebook or Google, but for Fair Housing, like, we had we can no longer go as because, like, I used to be able to just target neighborhoods.

Speaker: Yeah. So Facebook, outside of the housing, you can target small radiuses. And within housing, you can target a 15 mile radius at a minimum.

Steve: Yeah. I really screwed up my when I was running my own running my own campaigns.

Speaker: Yeah. That's because, I guess, a little background for anybody interested. Apparently, it's discriminatory to people in some ZIP codes if you choose to run an ad to them about wanting to buy their house, but not to people in other ZIP codes. So according to equal opportunity housing regulations, we're just

Steve: I think it was really more targeted towards realtors. We just got wrapped into it.

Speaker: You think that's what it was? Well, yeah, I don't I agree with you. It wasn't it it's the whole housing category.

Steve: Yeah. Because it was, federal housing authority or FHA Yeah. And department of justice between the two of them. It was a major ordeal. Because, like, I mean, we talk about, like, how long I've been doing this.

Right?

Speaker: Yeah.

Steve: I mean, I I used to be able to target, like, how many kids you had.

Speaker: Yeah. Facebook Facebook has really wound that stuff down recently.

Steve: How many kids you have?

Speaker: It's not that the data's not there. You just can't see it, so it feels less creepy.

Steve: Whether you're married or single, how long you live in the property, what your credit score is. Like, I used to be able to target your credit score, your income. Right? I did all those things. And then this whole FHA thing came down.

I was like, well, that completely screws up my business.

Speaker: Yeah. Although there's still like, we'll we'll talk about it in the we have a an episode titled lead quality secrets that's after this one where we'll talk about, like, how the targeting's a lot more robust than we think it is. Yeah. You have to do it different.

Steve: Well, that was the thing. Right? I just I just said screw this. Like, it was kind of the same thing where I I did all my own SEO, right, for the longest time.

Speaker: Yeah.

Steve: Like, people that are listening that that don't know probably don't realize how old I am. But, like, I did all my own SEO for the longest time until Google algorithms changed.

Speaker: Yeah.

Steve: What was once considered white hat is not considered black hat. And I got sandbox, and you couldn't even find me in the first 20 pages of Google.

Speaker: Yeah.

Steve: And you know if you're if you people don't even find you on the page two. Imagine they can't find you to, like, to page 24.

Speaker: Yeah. My one of my sales guys always says this joke, like, where's the best place to hide a dead body?

Steve: Page two or page three.

Speaker: Page two or page three of Google. Yeah.

Steve: Yeah. Right? It's true. And so, that's why that's the reason why I learned PPC was because I said, f, forget SEO because, like, what's true today is not guaranteed to be true tomorrow.

Speaker: Yeah. Yeah. I I I totally I totally understand what you're saying. And it's, SEO is its own. Like, we we could do a whole separate masterclass just on SEO.

Steve: It's But the It's

Speaker: a wild world. But

Steve: that's what I'm saying. Like, I I I was targeting by neighborhoods.

Speaker: Yeah.

Steve: And that went away.

Speaker: Yeah. 100%. So you you'd be surprised. Like, Facebook's a little more limited. With Google, though, you can get pretty narrow, like, with your with your radiuses.

Places where that's more necessary are often gonna be, like, some cities where there's just, like, hyper localized situations like like Baltimore, Detroit, Cleveland. Mhmm. All great examples of cities where as you get closer to the center of the city, the leads get worse, not better, which is the opposite of, like, Phoenix, for example. Right. There's a lot of, like, high values of properties as you get closer to the city.

So so, yeah, you have to be kinda careful with a lot of those places. But what a lot of people find like, sometimes when they're trying to target locations, people are predicting where is the motivated seller. Mhmm. You have to with when you're working with Google, you just wanna be looking at, like, assuming I got a motivated seller. Do I want them or not?

Like, for example, in California, a lot of people don't wanna target Orange County because there's, like, there's not that much motivation in Orange County. Meanwhile, we have clients killing it in Orange County because regardless of if you think people in Orange County are generally motivated, if there's someone in Orange County searching for we buy ugly houses Mhmm. They're probably a motivated seller.

Steve: Right. You don't need a lot.

Speaker: Yeah. Yeah. Exactly. So so when we're targeting, we're not trying to think where are the motivated sellers. The only thing that should be going through our mind is if I got a lead from this area that was a motivated seller, could I monetize it well, or would I not be able to?

Yeah. If the answer is yes, I can monetize it well, put it in your targeting. If the answer is no, keep it out of your targeting. All the yeses need to be targeted. All the noes need to be not targeted.

That's how you win. So there's different ways to do it, like sometimes counties, sometimes a little more radiuses and stuff. If we're doing a national campaign, there's a specific strategy we're known for that's that's really effective. Mhmm. And I'll show it for anybody on YouTube.

I can I can show the the map right now just using Atlanta as as an example? So we we use something that we call satellite imagery targeting. And the way that satellite imagery targeting works is, you can see this map here. In in this website, if you're looking for, it's just blue-marvel.de/nightlights. There's Random.

Steve: Completely random.

Speaker: Yeah. Some some, like, company from Denmark. I I honestly there's probably tons of them. Like, you just look up, like, like, like, nightlight overlay for Google Maps. You know?

I'm sure you can find, like, a Google Earth file or something. This is the one that we use, but nothing special about it. But the idea here is you can tell the difference between a a metro area and not a metro area. Because, like, let's just look at Atlanta, for example. Atlanta proper.

What is that? It's gonna be this, like, tiny area right around Atlanta. Right? Because just I just go, like, a little bit over here, and I'm in Decatur. Right?

It's not Atlanta anymore. Right? If I'd looked up the DMA, which is the if you're not familiar, designated marketing area, the DMA goes all the way actually into Alabama, believe it or not. So what's gonna happen if I target the DMA? If you told your agency target the Atlanta Metro, what's that gonna mean?

7

Steve: K Spring and Buchanan and

Speaker: Yeah. You're gonna get leads in the middle of nowhere. Loudoun. Yeah. Which are really like, if that's your strategy, if you love rural properties, we work with clients sometimes that love rural properties.

If that's you, then great. I can tell you far more often than not, we're trying to figure out a way to get rid of the rural properties not to get more of them because, it's hard to find buyers for a lot of rural stuff. So if you use this strategy, then what you can do is you can see the density of the light, and that gives you some idea of where there are where there's, like, sustained population around Atlanta and where there's not. So you can kinda see, like, oh, there's areas where there are kinda light, but they're sort of far away. This is, like, what I would call our novation radius a lot of the time.

Right? Like, maybe even as far as Athens here. But if we're looking really, like, tight around Atlanta, if we're trying to wholesale, we probably wanna keep it to the, like, core area Mhmm. Where most of the buyers are gonna be really interested. So that's how you target the right locations, all the right locations, nothing but the right locations.

And as you learn more about the markets, you choose, like, do you wanna target them a little bit differently? Like, if Atlanta is your home market, you're not usually using this because you probably know something beyond this. Right. But if you are, like, entering into Atlanta, then this is a great way to see how do you target the area and how do you not. Because the risk with PPC, you just have that tiny, like, leak in your targeting, and then it becomes all of your budget going there.

And that's what people don't realize. They're like, oh, I you know, so what if I included just a little bit of rural aid? There's not that many people out there anyways.

Steve: Yeah.

Speaker: And you'll find it has 5% of the population that you're trying to target, and it has, like

Steve: 80% of your leads.

Speaker: 80 of your leads. Yeah. And and people just don't understand it.

Steve: It's like, I guess, the way to look at it is maybe like a hole in your boat is that wherever the hole is in your boat, the water will find it.

Speaker: 100%. And it gets it gets ugly pretty fast.

Steve: Yeah. And, this this this, nightlight that you you showed here, like, this is, a a campaign you had set up for us, was Arizona, Florida, and Texas. Right? So we had kinda like a quasi national strategy. So can you expand upon what you prescribed for me and my team?

Speaker: Yeah. Why did we choose Arizona and, Florida and Texas? Okay. There's a few reasons. So, yeah, this was, like like you said, like, kinda quasi national.

We weren't everywhere. So so why did we why did we choose to do that a little bit? Well, as you start to add a few markets, your cost per lead starts to go a lot down a lot. And let me I'll actually pull up, like, a specific a specific graph. Again, for you folks on YouTube and for everybody else, I'll try to explain the takeaway.

So what we did recently because people are always asking, like, you know, how much is the cost per lead over here versus over there, etcetera. So we actually use the the data of, like, a list of our clients and how many markets are they in and what is their cost per lead. And we found a model of best fit to basically model what should your cost per lead be based on the number of markets that you're in. Mhmm. And this is what the relationship looked like.

This is the line of best fit. So you can see for a single market, typical cost per lead being about $325 ranging as high as close to 500 as low as, like, $1.70 or something like that. And then as you get to, like, 11 markets, now we're, like, a 175 per lead. Right? As high as $2.75, as low as a 100.

And you go all the way to 200 markets, it gets way cheaper.

Steve: But You said 200 markets? Well, like 200 markets.

Speaker: Oh, I said 200 markets.

Steve: 200 markets.

Speaker: We have a list of 200 markets. Yeah. So

Steve: But it also looks like it's diminishing once you get to 200 markets.

Speaker: It does diminish, but at the same time, the gap between, like, 49 markets and 200 markets is you cut your cost per lead in half. You know? So it's like it's just a little bit per market, but it's

Steve: it's

Speaker: a lot overall. So we have to decide, like, where do we wanna fall on this on this line? Because, like, the more markets you're in, the more complicated things get.

Steve: Right.

Speaker: So there's a reason I prescribed that specific strategy to you. And and I'll I'll show, like, an example of how how we do this. So this is our our nationwide client location targeting sheet. And by the way, this is a part of the toolkit. So I'll I'll show the, I'll show the, sorry.

I'm fumbling around the right tabs. Where was it?

Steve: Well, the third test is thanks. Could be that one.

Speaker: Yes. That's it. No. Here it is. Alright.

Please, editor, cut that out because I showed our internal our internal company Notion on accident and our podcast stats.

Steve: Yeah.

Speaker: So I'll show here inside, like, the the toolkit that we give. There's actually a specific link to this sheet in here. It's called under general resources, the nightlight targeting sheet. Mhmm. And just to show you what I what we did here.

We have a list of all the metro areas in The United States. It's just shy of 200. Mhmm. And we have data here from our clients of the average expected deal spread across these different markets. We even have data from investor left about how hot that those markets are for their platform, their rank, their population, and some custom notes.

Like, Miami, for example, looks great on paper, but, like, people don't do well there when they're not from there because it's kind of like a foreign country. Right? So so we have those kinds of, like, those kinds of notes. Right? So this data is actually, like, wildly valuable.

If you guys download the toolkit, you can you can get this and start playing around with it. The really cool thing about this spreadsheet is this spreadsheet uploads directly into Google. Like, you select the right, markets you wanna target and the way that you wanna target them. And we have instructions on what all these things mean. It's it's mostly stuff targeted around Google Maps and and the the contiguous lights that I I'd shown on the map.

And then and then we, yeah, you can upload like, we I literally had someone, like, go through the entire United States with, like, a map and GPS coordinates and map out exactly where the lights are and where they're not. Mhmm. That's what made the sheet. So that's how we do our strategy with clients. So what we would do is we would look at this and we'd say, like, well, first, what are some states that we just don't wanna be in?

Mhmm. And, usually, there's a few states that you just don't wanna touch. Like, for example, New York attorneys are the worst attorneys in the world. It's an attorney state. Probably don't wanna be there.

Mhmm. I don't wanna have deals

Steve: with strategy.

Speaker: No. Like, if you live in New York, sure. Right. Give it a shot. But even people in New York are like, I wish I wasn't in New York.

Right?

Steve: People that are in the most difficult markets love how difficult it is because no one else joins them.

Speaker: That's that's true. That that's a fantastic point. But yeah. So nationally, usually don't like New York, but, yeah, if you could figure it out like, I know people who do really well in New York, but they just they, I mean, they still deal with a mutual contact of ours. I know he has a three hundred sixty five day cash conversion cycle because of how long it takes to get a deal done in New York, and he flips too.

And but and he has to buy so deep because of all the taxes you pay, and it's it's insane. Right? So if you're national, you're probably like, okay. New York, not my place. Oklahoma, probably not my place because you gotta have a license to to do deals.

Probably the same for Illinois. There's other attorney states that maybe you don't wanna be in. Maybe Hawaii is a little far. Mhmm. Like, so you make those kinds of decisions.

Right? And then we look at what what metros are left. Then we look at what kind of spread we want. Right? So we might choose, like, larger spread.

So for you, like, I there's a reason, like, we stayed away from, like, Midwest generally and stuff like that because we just we just don't want, like, those lower spread areas. There's a specific reason I recommended Arizona and Texas and Florida to you. So Arizona because you already know it Mhmm. And you can do well there. Yeah.

Texas and Florida are what I call bang for buck markets. The reason they're bang for buck markets is because you learn one state, but you get, like, four major markets Mhmm. As part of being in that one state. So, like, North Carolina, Florida, Texas are all really, really friendly to national wholesaling, because you'll do a lot of deals there. I think at one point, Robert told me that, like, 50% of investor lift deals are in Texas or Florida.

Just I mean, they're just massive states with, like, a lot of markets in them. You know? Like, if you're coming to Salt Lake City where I'm from, then you'll you you'll get a market, but you have to learn everything about Utah just to do the one market versus if you go out to go can go to Texas, you have massive, massive markets there, and you have a lot of them. So that's that's the reason that that that was, that that was recommended. You could bring your cost per lead lower by going into more markets, but it's a if you wanna kinda dip your toe into a national wholesaling strategy

Steve: Mhmm.

Speaker: Then adding, like, one of those bang for buck states in addition to your home market is a good way to kinda test the waters a little bit Right. And see. Like, one of one of my clients that went national, he started in California, and he got you know, we talked about he never get you don't always get leads in your exact location. Sometimes you get these stray leads. So So he got a lead from, I wanna say, it was San Antonio, Texas.

And didn't mean to get it, but he's got it. So and he was like, well, I I guess I I guess I might as well try to monetize this. Mhmm. And after doing that, he thought, well, that was easy. It's not that different from California.

So then he expanded into that market. And then he was there, and he was like, well, why not why don't we just try other markets in Texas? How much harder could it be? Mhmm. So he did all the Texas.

And then after that, he was like, well, if Texas is that easy, other places are probably easy too. And then he expanded to a bunch of other states. And Right. Each time the cost really just went down, down, down, and he was still able to do deals really effectively. So Yeah.

Steve: It's a

Speaker: good strategy.

Steve: Alright. So it looks like, anything else we gotta make sure we talk about here?

Speaker: I think I think talking about

Steve: Budgeting, for a new campaign.

Speaker: Yeah. One last thing on locations before we before we get deep, and just one other thing for national strategy that I see people messing up with sometimes. So you know how we talked about how, like let's just say you're targeting Riverside County in California. Riverside's really good, and then I don't remember the name of a small town that

Steve: Yeah.

Speaker: Isn't good. Well, more people are gonna be spending money here. The same thing happens on individual market market level. Like, let's just say you have, Indiana, like, Indianapolis, where the average wholesale spread might be, like, $12. Mhmm.

And you compare that to Phoenix where it might be, like, $20.25 grand, something like that. Mhmm. Where do you think the wholesalers have more money to spend on PPC on a per deal and per lead basis?

Steve: Phoenix.

Speaker: Definitely in Phoenix because they're making more money. Right? So what that means is in Indiana, there's the just the natural like, this this is, like, economics and game theory. Like Mhmm. The where there's less demand yet equal supply in Indiana, what's naturally going to happen is a lower equilibrium cost per lead.

Right. So that's that's, like, what'll naturally happen. So let's just say we ran a campaign in Indiana and Phoenix. What would happen in that campaign? Where would we spend our budget?

More likely than not, we'd find that most of our budget gets spent in Indiana. Right. It's like Indiana is comparing to the other example, it's like Indiana is the rural area and then Phoenix is, like, the good area. Yeah. Right?

So what where people go wrong sometimes and they think, like, oh, national, you just you just can't get good deal spreads doing that is they end up targeting areas that have, like, a really high deal spread and areas that have a really low deal spread within the same campaign. Mhmm. So what Google is naturally gonna do, like, if we understand bid theory and how it works is you're you're gonna be bidding the same across all those areas, and you're just gonna be more likely to win the bid in those rural area or those those lower spread areas. You're gonna spend a lot of your budget there. So there's no such thing as a blended high spread and low spread campaign is basically what I'm getting at.

A blended high spread and low spread campaign is just a low spread campaign. You can run a high spread campaign. You can run a low spread campaign. If you try to do them at the same time, you're gonna have a low spread campaign Right.

Steve: Because

Speaker: you're not gonna spend your money in the areas that are, like, most most attractive

Steve: Right.

Speaker: Generally. So this is another place where, like, people really mess up is let's just say I wanna target high spread areas and low spread areas. There's a right way to do that and a wrong way to do that. The right way is to have a separate campaign for just the high spread areas where we tell Google this is our priority area, and we wanna bid higher here. We expect to pay more per lead here, and we wanna dedicate this budget to these locations.

And then you have the low spread campaign where you're basically telling Google, we're okay. We're willing to get leads here, but they've gotta be cheap. Mhmm. That's the only way it's gonna work for us.

Steve: Yeah.

Speaker: Or you just do a high spread campaign, which is pretty common. But that's, like, one of the most common issues I see is you target, like, very valuable and not as valuable, and then you just get all the not valuable.

Steve: Right.

Speaker: And then you say PPC doesn't work. All I get is, like, leads and all these, like, I'm trying to do a national campaign, but all I can get leads in is the Midwest.

Steve: Yeah. I mean, it's basically the same thing with Riverside County again.

Speaker: Same deal, just on a different scale. Yeah. Yeah. So that's I think that's most stuff in terms of, in terms of location targeting, how you pull it off. It's definitely a different game if you're national Mhmm.

Versus if you're local. But the principles apply still. It's the right areas, all the right areas, none of their own areas.

Steve: Mhmm. Gotcha.

Speaker: No matter what you do.

Steve: And then if I'm starting off with a new campaign, like, what should my expectations be?

Speaker: Yeah. That's that's the other the other question is, like like, let's just say we choose our locations and we start a campaign. How long does this take to ramp up and what should you plan for and and all that kind of stuff? I think budget's probably the the the biggest question that people have.

Steve: Mhmm.

Speaker: And it's probably the biggest thing that turns people away from PPC because a lot it takes a little bit more budget than other channels do. So for us, our standard advice to people is that usually you wanna start a PPC campaign out somewhere between 5 and $20,000 a month in ad spend. Mhmm. We'll take as low as 2. That doesn't include a management fee, but $2 for ad spend and then a management fee on top of that.

And that's usually in circumstances where, like, you know you have to be really, really patient. And, honestly, we just don't do it that often.

Steve: Mhmm.

Speaker: It's kind of like, here's a here's a good good comparison for for budgets. Let's just pretend I have a die, a six sided die. Every time you roll that die, you have to pay a thousand dollars. K. If the die gives you a six, then you make $7,000.

Mhmm. Would you roll the die or would you not roll the die?

Steve: Roll the die as many times as I can.

Speaker: Why?

Steve: Because expected value. Right? Yep.

Speaker: So Expected value is greater than cost.

Steve: Right.

Speaker: What if you only had a thousand dollars? Would you roll the die or not? Like, all you have is a thousand dollars to your name.

Steve: I'm a crazy person, so yes. But the the most people would say no.

Speaker: Yeah. Okay. May maybe a better question. Not would Steve do it, but should someone do it?

Steve: Would a reasonable person do it? Probably not.

Speaker: Probably not. There's a lot of crazy people in this industry, so you're not alone. Yeah. You're you're not at all alone there. But the like, that's kind of that's kind of how it is with budget.

Right? Because because sometimes what I say is, like, you need to give PPC a lot of budget. You need to give it a lot of time. What people take from that is it doesn't work unless you give it a lot of budget a lot of time. It will work with a small budget just the same as my expected value of every die roll is greater than my cost Mhmm.

In that scenario that I just gave you.

Steve: Right.

Speaker: But if I want a situation where more likely than I end up on top, it's not that situation I just gave you if you only have a thousand bucks. If you had $10,000, it's different. Like, it's a lot more likely with $10,000 that you'll win that game.

Steve: Right.

Speaker: So that's kinda how PPC works. So where do you draw that line? Really hard to say where you draw that line. Mhmm. What I could tell you is time matters a little bit more than budget.

Our standard advice is that we tell people about six months for a new campaign. So one thing that you wanna think of for budget is take whatever amount you're thinking of spending per month, multiply it by six. If you don't have that money sitting in your bank account ready to go for the marketing and the PPC Mhmm. And I'd be a little bit nervous Yeah. Myself.

It's kinda like if you're gonna roll that die and you've only got a thousand bucks. Mhmm. It's like that's like, I'm not saying it won't work. And are you like, are the odds such that if a thousand people did this, on average, they would make more money than they lost? Yes.

Steve: Absolutely.

Speaker: But is it smart? Mhmm. Probably not. Right? I'd probably, like, roll smaller die Mhmm.

Where, like, you have to pay a $100 per roll. Mhmm. And so you build up enough capital to then play with the, like, the higher stakes game. So so yeah. Generally, like, 5 to $15,000 or 5 to $20,000 a month and then over six months is what you're gonna wanna look at.

And if you look at that and you're like, oh, 10,000 a month over six months, $60, I can't commit that. That's what tells me your monthly budget's too high, and maybe you wanna look at bringing the monthly budget down

Steve: Yeah.

Speaker: A little bit. You also have to be really strict with yourself about the timeline. I've noticed situations in this industry where people just, like, try PPC, fail, try PPC, fail, and then somebody comes along and convinces them to spend way more money than they did before. Like, you should spend $20 a month in PPC. That's the problem.

You're only spending 5 before, and that's why it didn't work. And now if you spend 20, it's gonna work, and it works. Mhmm. And they're like, oh, it's because PBC needs more budget when the reality is the 20, if it was spread as $5 over four months and you're actually stuck to it, it would work too.

Steve: Mhmm.

Speaker: But you just like, everybody says they're going to and then they don't Right. When it actually comes down to it.

Steve: Yeah. It's their stomach for fighting it out, sticking it out.

Speaker: Yeah. Like, I would take slow and steady over fast and aggressive. Mhmm. But I would take fast and aggressive over slow and unsteady.

Steve: Right.

Speaker: Does that make sense? So That makes sense. Have to decide, like Yeah. Where you gotta be. I guess know yourself, but, like, the best case scenario is give yourself ramp up, give yourself time.

Mhmm. Because you're gonna want like, here's the tricky thing about that scenario. You know what? I said in a prior episode, like, a 144,000 is roughly the amount of money in this industry. This isn't PBC specific.

In this industry that it takes to, like, prove a marketing channel works, assuming it does work. Yeah. That's what it would take to prove that that's a true thing. Yeah. So now you gotta think, like, you make pivots in marketing channels.

So, like, if you want time to, like, get data to see that it works or doesn't and then pivot and then do it again Mhmm. You

Steve: still don't have enough data.

Speaker: We're just we're just like like, people think we're crazy for saying you need this much budget. Meanwhile, the amount that I'm saying is, like, far less than statistically you should even have. Mhmm. That's the difficulty that we run-in this industry. And that's why so many people are like, PPC works or PPC works, and then it doesn't work because I had a good time and a bad time.

Or, like So we're

Steve: still subject to, to luck, to probably to to, we're not letting, the math work itself out.

Speaker: Yeah. Because the reality is if you let the math work itself out, the numbers are scary, and they're a lot more than you think. Mhmm. So that's where it's like like, we're all playing games where, like, none of us are usually playing a game where we have, like, a thousand dollars per roll and we got a $100 ready to go. We still are playing those games where it's like, we got, like, $4 ready to go, and it's a thousand dollars per roll.

Steve: Yeah.

Speaker: And we're we're hoping for the best. But you can yeah. The more budget, the more time you have, like, the greater likelihood of your success for sure as long as you make sure you're spending it right and you can track that you're headed the right direction based on leading metrics. I think that's the most important thing. Because the because the the analogy of it taking that much money is just based on lagging metrics.

Yeah. But let's just say you're $30,000 in and you have zero leads. Is more time gonna fix your problem? Mhmm. Probably not.

Steve: Yeah. There's a a mentor, Nick Peterson, you know, someone I worked with quite a bit. And, one of the things he always says is, there are two things you're undefeated, time and randomness. Right? Yeah.

And if you're not gonna give it a time, then in this instance, you're not letting time and randomness do its job.

Speaker: Yeah. That that is that is a totally fair statement. And it's this is, like, one of the trickiest this is the most difficult thing about PPC. Like, I've like, I I had a conversation with a client the other day where they're like, our lead flow slowed down. It's a massive problem.

We need to take action to fix it. And and the way I came to the conversation was, like, we're not gonna do anything about this. That was my stance. And it was the hardest stance to take. I just had to tell him, like, you're gonna wanna punch me in the face, but, like, we're not gonna do anything about this.

Because if we're gonna be reacted to this data when there's not enough sample to tell us that there's actually a problem, then we're gonna screw something up that wasn't screwed up Mhmm. And then we're going to actually be

Steve: in trouble.

Speaker: Right. Whereas now, we're just dealing with random variation. Mhmm. That's okay. And we did nothing, and then their results bounce right back.

Yeah. But it's it's, like, the hardest thing. It's, like, what I tell my team is, like, we're in an industry where everybody's, like, the kind of people where if you go in an elevator and you, like, press we're on, like, 1st Floor, like, let's press the 5th Floor button. Like, we would run-in circles in the elevator just to feel like we're doing something on the way up.

Steve: I mean, I made this comment the other day, you know, if I was stuck in traffic. I'd rather take longer to get there and drive than to sit there on the freeway.

Speaker: Yeah. That that that's a great analogy. And it it's it's like it's human nature. Right? I'm not I'm not I'm not blaming anybody

Steve: for this. I'm controlling it even though my controlling is bad. The the the ultimate outcome is worse. I'm in control. That feels good.

Speaker: That's so funny. Yeah. The the other thing that we see, like, you know, along that same topic with, like, random variation is there's, like I see this with people who self manage their campaigns all the time. So if you're thinking about self management, like, I want you to, like like, write what I'm about to say on your, like, bathroom mirror and, like, say this to yourself every day. Because, like, PPC, it just naturally goes like this, like, up and down, up and down.

So when it goes like this, do you think we change something when it's nice and high?

Steve: We shouldn't.

Speaker: No. And we usually don't. Yeah. So we're like, oh, everything's fine. And then it goes like this.

It goes nice and down. And then that's the moment where we say, oh, no. Something's wrong here. I'm gonna change something. And then where do you think it goes after that?

Up. Right. Right? And then we take this upswing, and we attribute it to what we did when we were down.

Steve: Smart we were.

Speaker: Yes. And then we start learning lessons that shouldn't be learned. Mhmm. This I mean, by the way, the same thing happens in business and everything. Anything like like, a lot of the stuff I'm talking about, this is just like

Steve: this We we give ourselves all the credit for all the success.

Speaker: Yeah. Yeah. Or or worse, like, I've had it happen with, like, with my team where, like, clients are like, every time I reach out to you because my lead flow is slow, it gets better. Mhmm. Like, are you guys just not managing things unless I reach out to you?

Mhmm. It's like, well, no. It's like, actually, these last five times you reached out to us, we haven't we didn't do anything. And outside of, like, the norm, like, it's not like, there are things that need to be done, like, on You reviewed

Steve: it, but you didn't necessarily make any changes.

Speaker: Yeah. Or or, like, tweaks, you know, because it's it's normal. Like, usually, most accounts will make changes about once a week, but they're they're they're more minor changes that aren't gonna, like, massively swing things.

Steve: Right.

Speaker: It's more like dialing, just tuning a little bit.

Steve: Yeah. I think, so maybe it'd be worthwhile, for your guys' organization to just create a a full presentation, a video perhaps on game theory and time and randomness. Right?

Speaker: Like Yeah. Maybe.

Steve: And and, you know, there's other things too, like, you know, exposure. Some of the things we talk about is, like, again, Nick, I was talking about, like, he is huge in crypto. He's like, the problem with all your crypto people is that you look at Bitcoin every morning.

Speaker: Mhmm.

Steve: Right? And this thing's going up and down, up and down. But if you just looked at it every month, it still went up and down all the time, but you don't get stressed about it.

Speaker: Yeah. It's it's not good for and the same thing's true. Like, this applies to, like, all of business. This is,

Steve: like, people that look at their stocks every morning?

Speaker: Yeah. Ugh. Yeah. There was a a study done by Fidelity Investments where they, which if you don't know, is I think it's just, like, one of those, like, brokers where you put, like, your IRA or four zero one k with, where they they basically want to study, like, which of our customers have the best success in the stock market. And they, so they broke it down by, like, you know, all the different data points you could possibly think of.

Turns out the the single data point that was most predictive of someone's success How

Steve: how how rarely they logged in?

Speaker: It was that they forgot their password. That was the single most predictive of success metric available, which is crazy Yeah. To to think of. But, yeah, we learn these things. So, like, if you work with an agency, like, when it goes down, you, like, email them, and then it goes up.

And you're like, well, it's you know, I guess every time it goes down, I gotta email them, and then they get then the agency is like, oh, I'll just press the, like, get more leads Google button and then we'll be fine. Right?

Steve: Right.

Speaker: Or when people self managing it, this is where I see, like, I find most people that I know that self manage in this industry, they have, like, all these crazy ideas about PPC that they've, like, learned through their own, like, experiments that aren't experiments at all. There's just, like, before and after analysis Mhmm. Of, like, just it was down, and then I did this, and then it went up.

Steve: Yeah. It's a mistaken, belief of causation versus correlation a correlation.

Speaker: Yeah. Yeah. The other thing that happens, like, along the same lines is people sometimes, like, try to test us against another agency. So they run both at the same time. It's happened to us, like, six or seven times.

More often than not, we actually come out on top. Sometimes we don't. In zero circumstances, has the client actually taken it to the point of statistical significance. Mhmm. So in all those circumstances, they set up the money, paid two management fees, got a little data that wasn't at all statistically significant to make a conclusion, and then gave up on the test and chose one of them.

We just we just don't do it. Like, it happens with our clients all the time. They're like, I wanna test this thing. Mhmm. I wanna test this landing page or something, then we get into it.

And we're, like, two weeks into the test, and the test needs six months. And they're like, okay. Let's go with that one. That one's the winner. Mhmm.

And we're like, well, if we're doing doing the test, we're gonna do it right. Like, there's no sense in just starting a bunch of tests that we need to actually finish.

Steve: Requires data.

Speaker: Yeah. And there's a there's an actual discipline of numbers called statistics that tells you how much data you need.

Steve: Yeah. I think you're gonna have to create a really simple video that breaks it down.

Speaker: Yeah. Probably.

Steve: That's digestible.

Speaker: Yeah. I'll I'll have to I'll have to think about that a little bit. But, I guess, like I mean, the topic we're talking about is budget. Mhmm. So here's here's the mistake that people make about budget.

They say you need a lot of budget to get a great return on investment. That's not true, actually. So I I recently did an analysis of all our clients with their monthly budget, their return on investment. There was no correlation between monthly budget and return on investment across them. What there is a huge, huge correlation between is monthly budget and consistency with the campaign.

Because the more budget you have now in a month, I'm gathering as much data as I would in a year with one twelfth my budget. Mhmm. Right? So I it feels a lot more consistent. Is it more consistent?

It's it's more consistent in the same way that if I flip a coin 10 times a day, it feels like it's more consistent than if I were to flip it once a day.

Steve: Right.

Speaker: Just because day to day, I'm getting a similar percentage of heads to tails. Yeah. It's not varying quite as much.

Steve: So I'm I'm gonna I might sound completely full of it. You know? But, like, the reason why I I I feel confident speaking on this, right, is that we had to study, statistics, stochastics, and all this other stuff Mhmm. To get my degree in electrical engineering. Right?

Speaker: I mean, an engineer is a fair person to speak to this. Yeah. Yeah.

Steve: And another thing too is, like, I've I tried really hard to become a professional poker player. So, like, expected values was the one thing you had to be good at. Right? Yes. Emotional intelligence is valuable, but, like, really, at the end of the day, you're just doing expected value calculations on every single hand, on every single bet.

Speaker: It's a great point. Yeah. Yeah. Yeah. So this yeah.

BBC is basically, like, professional poker, but way lower stakes, and on average, people win. Yeah. Well,

Steve: right. Yeah. It's it's good. You're the winning guy at the poker table. Because the guy that's not winning the poker table is the guy that's not good expected values.

Speaker: Yeah. Yeah. That that's a that's a super fair point. So I I hope this gives some clarity to, like, anybody thinking about the budget. The only other thing that you wanna think about is just the size of your market.

Mhmm. Some markets just really can't handle that much budget. It's it correlates a lot with population, but some markets have, like, less people searching on Google for the certain amount of population because they have more adoption to the platform and run the demographic. So that's something that you kinda have to keep in mind. And, and if anybody talks to my team, then we can kinda help you understand what an ideal budget might be for your market.

It's not a perfect science. Like, it's one of those things where you you just, like, look at all the data, you make the most informed decision you can Mhmm. And then you get ready to adapt to whatever data comes in once you made that decision. That's the best that you can do.

Steve: Yep. And if you guys are interested in getting a a a review and audit or strategy conversation, so bateman collective dot com slash disruptors. And if you guys, again, if you if you guys enjoyed that, night light I mean, it just doesn't sound like that's the right term, but the night light map. Yeah. Baymancollective.com/toolkit-disruptors.

So, hopefully, you guys got a lot of value here talk understanding location and budget strategies. And, make sure you tune into the next one. We're gonna be talking about lead quality secrets. That's a very different concept. So we will see you guys on the next one.