Question 1

What Should My MER Goal Be & Why?

Accepted Answer

Can You Remind Me What MER Is?

It’s essentially a business’ overall ROI from its media spend. (Media spend is usually synonymous with ad spend in the world of small eCommerce businesses, unless you print flyers or have other promotional expense that will scale as the business scales).

It stands for “Media Efficiency Ratio” and it divides the business’ total, gross revenue by its total media costs.

What Should My MER Goal Be?

The simple, two-step answer is this:

Step 1:

How many times does your profit margin go into 100? That’s your break-even MER.

By the way, we're using this calculation for profit margin = (Net revenue - Costs) / Net Revenue

Costs should include anything that will scale with each additional sale (i.e. COGs, fulfillment costs, & taxes)

Step 2:

Want to make more than just break-even so you can pay your bills? Tack on an extra 10%-30% and that’s your MER goal!

But Why?

The best way to understand why is with an example.

Let’s say an eComm business has an average profit margin of 30%. This means one third of the revenue is kept while two thirds of the revenue goes towards paying for COGs & fulfillment.

So, step 1:

Thirty goes into one hundred 3.33 times. So the break-even MER for this business would be 333%. Meaning this business needs to make 3.33X more revenue than what is spent on ad spend in order to break even.

When this business spends $10 on ad spend and breaks even, it means they made $33.30 in revenue (which is a 3.33X return). But remember, this company’s profit margin averages 30%. That means they only get to keep 30% of the $33.30 they made, or $9.99.

They are breaking even at about $10 spent and $10 made.

Now, step 2:

Let’s say they want 20% more than that to cover their bills. Then they’d go for a 353% MER (a 3.53X return).

So when they spend $10 on ads and make $35.30 in revenue (which is a 3.53X return), they get to keep $10.59 (aka 30% of $35.30).

Now they’re breaking even plus making an additional 59 cents each time they bring in $35.30 in revenue, which they can use to cover overhead and salaries.

Why Don't I Want My Goal To Be Higher Than That?

The higher the return you want to make on each sale, the less of the market you'll be able to capture.

This happens because, if you want a higher return, then you need to spend less and make more. The problem with this is that Google Ads is an auction system, and the cost per click is pretty "set." Meaning, whatever your competitors can afford to pay for a click, is what you need to also be able to afford to pay for a click. But if you want a return that's significantly higher than what your competitors are going for, then you won't be able to pay for a click that costs as much as they can.

Sales funnels always have folks at the "bottom of the funnel" who have their wallet-in-hand, and folks at the "top of the funnel" who aren't ready to buy yet. And so the people who aren't ready to buy are going to be more expensive. They'll need to click on 2 or 3 ads before converting. Some of them won't ever convert, etc. There's also people who will have a lower average cart value than other people. So, if you tell the algorithm "I only want the ones who are cheap to acquire and who spend a lot of money with me" then you're cutting out part of your market.

This is why a high goal will limit your ad spend & stop the account from growing. You won't be able to scale sales & the business will stay small.

Shouldn't I Factor In Repeat Purchases (Returning Customers)?

If you have returning customers making repeat purchases, it makes it easier for you to hit your MER goal.

But it doesn’t change your MER goal.

Keep in mind: Those customers will come back after some amount of time, so the MER will go up when that happens. This makes the MER goal an easier target for a business only after it’s able to get those repeat purchases in.

The positive consequence of this is that you get to grow your ad account (increase budget) & grow your business (increase sales/revenue) more quickly (and, eventually, more vastly than your competitors can). Have a higher repeat purchase rate than your competitors? You win the game! You have more power to win in the bidding/auction system that is digital ads, because you can afford to pay more to acquire a new customer (higher CPC) since you’ll get more revenue later from each of them.

Question 2

How often do you make changes to a campaign?

Accepted Answer

A very high spending account may need daily or even hourly changes. For accounts with smaller budgets, there may not be as much maintenance involved.

Similarly, this depends on if we’re achieving our goals or not. If we are, we may make slower optimizations (to not deter the performance of the campaign). If we aren’t hitting our goals, we make more frequent optimizations until we start achieving them.

On average, we generally make changes in an account every 3-7 days (again, depending on how much activity the campaign gets and your specific goals).

Too many changes harbors an ecosystem where it’s hard to keep track of the outcomes; making changes too infrequently means competitors may outperform your campaign.

Question 3

When should I consider using Remarketing?

Accepted Answer

Hold off on remarketing in the beginning to test the quality of the traffic in the campaigns, and if a campaign isn’t performing well then you don’t want to limit the ad spend by pushing customers back.

Question 4

Should I use search with my e-commerce business?

Accepted Answer

Shopping campaigns are way more effective than Search campaigns when you’re targeting a wide audience. This is because search campaigns require search terms to run whereas shopping campaigns use Google’s 70 million signals to determine whether to show the product to someone. The former is inbound and the latter is outbound.

However, always build both Search and Shopping campaigns for your eComm companies, because:

Shopping Ads and Text Ads (from Search) have different formats and they do appear in different placements/properties throughout Google network
Being different, there are instances when both shopping and text ads can appear at the same time. This increased exposure is beneficial.
In most cases, shopping ads do perform better but this is no guarantee so you also need to, at least, test search ads.
There are accounts where the reach for the shopping ads is not sufficient to spend the monthly budget. Thus, you need to supplement shopping with search.
Aside the above reasons, presenting a setup with search and shopping ads (and explaining the differences and the performance projections for each ad format) is better than the alternative (not having Search ads and wondering "why not").

Question 5

How often do we meet to review the campaigns?

Accepted Answer

This report is not proprietary and is easily reconcilable within your Google Ads account (which you retain full ownership of).

After you receive the report, we offer a meeting to review all activities in your campaigns, what happened over the last month, what is happening now, and what our plans are for future growth.

Question 6

Should I be running video ads and what can I expect?

Accepted Answer

If you want to remind recent website visitors about your offer, running video ads will help. Some videos show on YouTube while others show on the Display network (meaning, your videos can appear on other sites.)

Video ads are best used with Remarketed Audiences––those who have already gone to your site and completed a conversion. People who watch your video aren’t necessarily searching for a solution at that moment. So, using video ads to remind the right audience (remarketed) about your offer can help increase their desire to buy.

What should my videos be like?

This varies wildly depending on the industry, the product/service, the target market, the business branding, etc.

Here are a few ideas to choose from. Our recommendation is to make as many as possible because it's tough to know what will be the most effective until you test it with your audience:

Customer/client testimonial videos
"How to" style videos that address common hesitations or questions prospects have
Business owner "mission statement" videos where the company founder introduces themselves & their "why"
Professional commercial-style videos showcasing a product/service or a category of products/services
Affiliate amateur-style videos where a partner figure recommends the product/service

Here is our helpful 1-minute script template that could come in handy if you plan on making a video soon.

Here are 5 video ad sequence ideas to provide ideas for different video ads:

Tease, Amplify, Echo (3 videos).
The Direct Shot (3 or more 6-second videos).
The Mini Series.
The Follow Up (2 videos).
The Lead-In (2 videos).

Pro Tips:

Since videos are often skippable, it’s critical that you mention your brand or company name and your offer within the first 6 seconds.
For a bigger impact (but not mandatory) show your company logo within those first 6 seconds, and place it anywhere except the bottom right.
Start with a question or shocking statement in the first 10 seconds.
Tell the viewer "what's in it for them" (make them the hero of the story).
Video length and aspect ratio aren't important.
Don't mention time-specific details. Keep the content evergreen, because Google has to re-optimize every time the video is replaced.
Make a handful of videos & let Google rotate between them to find the winner. Don't limit yourself to one video.
Google will create sequences from your videos automatically (i.e. it will show video A to a user and then video B to the same user if it finds that to be the order that gets the highest engagement)

How long should my videos be?

The most important thing is the first 5 seconds because most video ads are skip-able after that. Make sure to include a value statement in the first 5 seconds. As for the final length of the video, it doesn't matter too much!

Where should I host my videos?

Videos will need to be hosted on your YouTube channel.

How will video ads impact my conversions?

Videos are often not clicked on directly. Instead, leads will watch the ad a few times then search the brand on Google afterwards.

This makes conversion hard to track directly, but you should see a rise in the conversion rate of your Branded Campaign and View-Through Conversions report.

How do I keep my audience engaged?

It’s important to remember that if your video ad is not engaging right off the bat, you’ll lose a big percentage of your audience immediately. So if you want to build effective video ads, you need to grab your audience’s attention with a great hook.

4 Tips to getting your audience hooked and engaged:

1. Start from the climax. Drop your viewers in the middle of the action––the most exciting, dramatic, or interesting scene in the plot. When you start at the peak of the climax, you successfully catch their attention.

2. Make sure that the story is relevant to your audience–and specifically made for your avatar. Address your viewers’ wants and needs and make them feel like the story is about them.

3. Use imagery and language (e.g. script) that your viewers aren’t expecting. This helps in disrupting behavioral patterns, beliefs, and any preconceived notions about your story or offer.

4. Keep your viewers guessing. Add some element of surprise to keep the anticipation going. Only reveal enough information that will make your audience curious to find out more.

Question 7

Can we spend more money on a specific product or in a specific location?

Accepted Answer

Begin with $50 per day (or an amount that makes sense to you). Try to split the Smart Shopping campaigns to two different geographical locations, then allocate the ad spend to each campaign based on performance.

So two identical smart shopping campaigns.

1: All of (ex: Country), excluding (ex: State)

Whatever ends up being limited by budget, or having the best ROAS, gets the most ad spend.

Since they both will have their own dedicated daily budget, you will want to balance that on how each of the campaigns performs.

Question 8

Why is the conversion rate higher when leads come from paid ads vs. organic?

Accepted Answer

The paid campaigns are always going to bring in higher quality website traffic than organic search results because:

Ads have headlines and descriptions - vast amounts of them - that have been optimized for click-through-rate by us and by the algorithms.
Organic searchers aren't always going to be sent the correct page. When someone does a search on Google and finds your website in the results, they might not get to the landing page/homepage. They might end up on a blog post, etc. In fact, you can see what percentage of the website visitors enter your site from the landing page/homepage by going into analytics.google.com, clicking on Aquisition, then Search Console, then Landing Pages on the menu on the left.
You're also getting a higher percentage of people who are motivated to buy. Many people are looking for information and will end up on an article on your site. The people who do click on an ad are looking to explore your brand/product/service from the perspective of someone who is considering pulling out their wallet.

Conversion rates from paid ads tend to be 6 times higher than conversion rates from organic searches.

Question 9

How do the ads get switched over during a site redesign or a new website with a new domain?

Accepted Answer

If it's the same website that's getting a re-design, setup tracking on all the new landing pages & forms during the week before the switch over takes place. If not, the only way to do it would be to pause the ads for a few days while you re-setup tracking.

Make sure you/your developers to make sure the same Google Tag Manager code and Google Analytics code get copied & pasted into the new design.

If it’s a new domain, then it’s considered a new website. It will need a new Google Tag Manager code and also a new Google Analytics “property”. Both sites will need to be up for about a week while you are switching over the tracking.

Question 10

Can You Join Our Company Slack Channel?  (...Or Other Communication/Project Management Channels)

Accepted Answer

We take communication seriously. And that’s why we don’t join external client communication channels or project management applications (like Slack, Ryver, Asana, Basecamp, or TeamWork).

Here’s why:

1. Juggling channels is inefficient

Each of our client managers may work with dozens of clients at a time. So you can imagine that joining every client’s Slack channel would get a bit noisy; not to mention each client uses a different platform type, which would result in a lot of clutter.

2. We have rock-solid processes inside our own agency

From onboarding to account setup to ongoing management, our communication processes are about as efficient and streamlined as it gets.

We have automations and purposely-redundant methods in place to ensure each client account is managed with the sharpest eye.

Which brings us to our final point:

3. Limited access and workflow

Each client is assigned a powerhouse team dedicated to their account: a client manager, a specialist, a backup specialist, and two strategists.

To provide the best service, client managers frequently rope a specialist or strategist into conversations with the client.

However, if a client manager joins a client's external communication channel, it is nearly impossible to rope in those other team members—and it is similarly clunky to forward client information out to the rest of the team.

With our communication systems, we can move efficiently, tie automations to our emails, and allow access to our entire team.

We prioritize frequent and meaningful communication

We try to set clear expectations early on regarding our time and yours.

While adding your client manager to your internal Slack channel might seem like the best way to reach us, our policy to stick with internal communication processes actually results in more availability to speak with you and higher-quality communication.

As always, we’re happy to chat with you about any questions or concerns. Reach out anytime.