How much were CPC/CPM figures back in 1999? (Serious Discussion)

[Velo]

Just wondering since I'm pretty sure "test your campaign/strat out with some Google or Facebook Ads" isn't the best road going forward in 2022 unless you sink $1000+ immediately.

While $1000 is insignificant in the grand scheme of things, there are 3 things to keep in mind:

1) It can take a long time to "fine tune" your ads to the point you can, with reasonable certainty, (> 80%) rule out the fact that your product/service isn't wanted rather than the fact your ads simply suck/are unattractive.

(You don't want to trash an idea or mistakenly conclude that the idea isn't going to work when in fact it's the ads that are to blame - and indeed there always remains the possibility)


2) If you're a newblood trying to "start a biz" there's a good chance you're close to being broke and risking $1000 or putting it on a CC doesn't seem like a good idea


3) 50-60% of Internet users use Adblock. You can't assume the % of people who saw your ad and end up converting is similar to the % when it comes to the people among the population who never saw the ad in the first place.

Finally...even if you do end up converting it might not be economical. I suspect those "get 2-3X ROAS" figures touted by digital marketing agencies...who have a vested interest in "managing" your PPC spend...are likely full of BS. All the companies getting their ads in spot #1 on Google are probably paying through the nose because they can. You cannot.


In fact there was a scandal less than 8 years ago regarding how Yelp was basically "extorting" small business owners to pay for expensive ads...and when they refused they would simply demote their businesses to the 2nd or 3rd page so nobody would ever see their business. I don't know if this has been resolved yet (I highly doubt it) but this is basically how Facebook and Google operate now, except instead of calling you and threatening to demote (which Yelp employed people to do) they probably just write some code to do it automatically and nobody will care.


Basically what I suspect, although I do not have hard proof since I did not test any CPC/CPM campaigns until 2020, when CPC/CPM figures went through the roof, is the CPC/CPM gold rush from 10-25 years ago is over and you shouldn't bother with those anymore. Direct mail/cold calling/cold email/some local fairs/events should fare much better and have lower risk involved (direct mail is like $1/postcard, you can test a campaign out for $250 as DM should have a conversion rate around 1% IIRC).

It is also much slower but there doesn't seem to be a better alternative.

 

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[Napoolion]

Just wondering since I'm pretty sure "test your campaign/strat out with some Google or Facebook Ads" isn't the best road going forward in 2022 unless you sink $1000+ immediately.

While $1000 is insignificant in the grand scheme of things, there are 3 things to keep in mind:

1) It can take a long time to "fine tune" your ads to the point you can, with reasonable certainty, (> 80%) rule out the fact that your product/service isn't wanted rather than the fact your ads simply suck/are unattractive.

(You don't want to trash an idea or mistakenly conclude that the idea isn't going to work when in fact it's the ads that are to blame - and indeed there always remains the possibility)


2) If you're a newblood trying to "start a biz" there's a good chance you're close to being broke and risking $1000 or putting it on a CC doesn't seem like a good idea


3) 50-60% of Internet users use Adblock. You can't assume the % of people who saw your ad and end up converting is similar to the % when it comes to the people among the population who never saw the ad in the first place.

Finally...even if you do end up converting it might not be economical. I suspect those "get 2-3X ROAS" figures touted by digital marketing agencies...who have a vested interest in "managing" your PPC spend...are likely full of BS. All the companies getting their ads in spot #1 on Google are probably paying through the nose because they can. You cannot.


In fact there was a scandal less than 8 years ago regarding how Yelp was basically "extorting" small business owners to pay for expensive ads...and when they refused they would simply demote their businesses to the 2nd or 3rd page so nobody would ever see their business. I don't know if this has been resolved yet (I highly doubt it) but this is basically how Facebook and Google operate now, except instead of calling you and threatening to demote (which Yelp employed people to do) they probably just write some code to do it automatically and nobody will care.


Basically what I suspect, although I do not have hard proof since I did not test any CPC/CPM campaigns until 2020, when CPC/CPM figures went through the roof, is the CPC/CPM gold rush from 10-25 years ago is over and you shouldn't bother with those anymore. Direct mail/cold calling/cold email/some local fairs/events should fare much better and have lower risk involved (direct mail is like $1/postcard, you can test a campaign out for $250 as DM should have a conversion rate around 1% IIRC).

It is also much slower but there doesn't seem to be a better alternative.

I guess it really depends on the context of ads and what country market you are targeting.

1) I think you are right that it is not enough to rule out your business idea, just because the ads don't work. If it is a B2B service, emailing and phone will definitely yield more feedback. Obviously it sucks more to do it and I personally am very ridden with anxiety after those sessions. Best scenario would be to find a marketing strategy, what others are not using.

2) Depends. If you have money to spare. I have ads working on one of my sites, even though it is not generating a lot of traffic and numbers are quite low, I have still generated 3x more revenue (with time!) what I put into the ads. So far, but I get recurring revenue too from each client.. However those ads are really inconsistent for me right now and I can't predict the volume of clients coming in with that of a low budget. So a lot of work to do there for me, but I must admit, it will probably not work as a main lead generator for my case, since I have tons of competition. Still a nice kinda passive way to get more people using your service.

3) No click usually means you are not paying.

I agree with my local digital marketing agencies, they set up a campaign and just let it run. Actually, I have a few clients who I am doing the same thing and occasionally switch few things here and there. However I also can say that these people would never had been able to set it up themselves and are waiting analytics I send them every month to email. So if you can do it yourself and are a little tech savvy, don't fall into google ads plunders of spending more money to pointless search terms, then money going to more ads instead of agency is a better solution.

Was the Yelp case something what your regular scummy local directory does? "We display ads in our directory, pay us monthly that much". Because I have gotten a lot of calls about directory salesmen's, maybe the same thing.

What concerns about 1999, not sure, I was 7 at the time. But I am currently doing thesis on email marketing and a lot of people have said it is dead. But still not the case. I think same applies to CPC.

I guess at the end of the day, it is about finding something that works well, whatever the technique. And if it is not happening at all, obviously there is some error in the way things are being done.

 

[Simon Angel]

What concerns about 1999, not sure, I was 7 at the time. But I am currently doing thesis on email marketing and a lot of people have said it is dead. But still not the case. I think same applies to CPC.

Lol, it's so dead it accounts for 15-30% of my clients' revenue.

 

[Andy Black]

Why focus on the rear view mirror?

1) You can start Google Ads campaigns with a $5/day budget and count impressions (as described here).

2) Google Ads can still work. A new client hired 30 new call center staff in 4 weeks and are still missing a high % of calls. They went from unprofitable to spending $8k/day profitably.

 

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[Velo]

Why focus on the rear view mirror?

1) You can start Google Ads campaigns with a $5/day budget and count impressions (as described here).

2) Google Ads can still work. A new client hired 30 new call center staff in 4 weeks and are still missing a high % of calls. They went from unprofitable to spending $8k/day profitably.

Your #2 confirms my point...which is that when people start out they will usually not have (or are extremely uncomfortable) with something like $8k/day so that option is unviable.

What your post tells me is, "If you spend a lot of money, your chances of getting a decent return on Google Ads is great, if you're trying with something like $25-100/day which represents what a majority of the viewership on thefastlaneforum.com is even capable of then you might as well burn the money."


People will usually respond with something like, "Well, if ads didn't work, G/FB wouldn't be making money." What they don't realize is that the ads work, but NOT in the same way for the "little guy" starting out. They work for the guys who are already established/probably have spent something like $50K, $100K, etc. on campaigns.

The fact of the matter is Google and Facebook are the sharks/whales of the ocean, and they will never have any shortage of wannabe entrepreneurs "testing out" their platform to see if the ads will work, so if another one bites the dust after spending $2K (which they probably have to put on a credit card and pay back quickly or else suffer high interest rates) they don't care.

 

[Velo]

There's also selection bias when it comes to PPC agencies. PPC agencies will quote biased statistics like, "Our clients get a 3x ROAS. Therefore PPC is amazing/the best thing since sliced bread."

It doesn't mean that if YOU try doing PPC, you will get anywhere near the same results. Their clients are already established/well known names so naturally their ads will carry more weight than some nobody starting out. (Do you really think a large or mid-sized company will have trouble with name recognition?)

OTOH you might end up getting 0 clients after spending $1000 (and the worst part is, unless you spend a lot of time setting up "click tracking" mechanisms, you won't even know if the potential customers were actually fiddling on your site or if they just left immediately).


If you're working for a big company that has $100K+ in monthly ad spend, you can probably succeed in marketing regardless of the channel you decide to use (email/cold calls/direct mail/TV ads/whatever). This is the equivalent of brute force algorithms in CS - throw enough money at it and eventually you'll hit the mark.

People who are aspiring fastlaners but don't have a huge nest egg built up => forget about it.

Other than cold emailing, cold calling, and direct marketing, I believe you just have to contact enough people and find out if you can work some deal with them to start the initial pipeline. Basically this is the "missing link" that takes people from nothing to something.

 

[Andy Black]

What your post tells me is, "If you spend a lot of money, your chances of getting a decent return on Google Ads is great, if you're trying with something like $25-100/day which represents what a majority of the viewership on thefastlaneforum.com is even capable of then you might as well burn the money."

They weren’t spending $8k/day unprofitably. They were spending much less. I was just showing how quickly their campaigns were turned around.

Have a low daily budget while dialling it in or until you decide to fail fast.

Curious if you’ve read this thread. I’ve been following that process since 2009 wrote and still do the same for new clients.

• How to get profitable or fail fast with AdWords

 

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[Andy Black]

unless you spend a lot of time setting up "click tracking" mechanisms, you won't even know if the potential customers were actually fiddling on your site or if they just left immediately)

We use Hotjar or LuckyOrange. Simple and cheap to install and can give good feedback immediately.

 

[Andy Black]

People who are aspiring fastlaners but don't have a huge nest egg built up => forget about it.

I often start Google Ads campaigns with a $5/day budget. Laurel Portie has $5/day Facebook Ads strategies.

 

[Johnny boy]

It's a marketplace. There's gold rushes, periods where it's overpriced, periods when it's properly priced. There will always be winners and losers at any given time, it's just now that period where 95% can be winners is long gone.

We are still pulling in an insane ROAS on facebook ads.

Spending around $40 or so to get $800 of profit for a single customer. It's home services which explains things. But still....

 

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[biophase]

People will usually respond with something like, "Well, if ads didn't work, G/FB wouldn't be making money." What they don't realize is that the ads work, but NOT in the same way for the "little guy" starting out. They work for the guys who are already established/probably have spent something like $50K, $100K, etc. on campaigns.

Why would it work spending $50k and not $2k? Does it serve an ad with a $2k budget to a different person than a $50k budget? Actually the answer is yes. But not for the reason you think. The little guy starting out doesn't get the same results as the $50k guy because he doesn't have any data. But the problem is that you have to pay for that data.

And to answer your question, back in 2012, Amazon PPC for my niche product was $0.01 per click. I couldn't even hit my measly $50 a day budget and I had an ACOS of <1% for the first 2-3 years.

 

[MJ DeMarco]

How much were CPC/CPM figures back in 1999? (Serious Discussion)

It appears you don't want a "serious discussion" and made up your mind with the conclusion: paid ads is worthless for new entrepreneurs.

1) Yes, I'm sure the margin for error on new ads 3, 5, or 10 years ago was vastly different. You can throw up anything and get a good ROAS.

2) A new entrepreneur who pays for $500 in ads is vastly disadvantaged simply because:

• A) they have no data
• B) they have no experience
• C) they have no split tests
• D) they have not verified a productocracy

So yes, it is hard to launch a Google or Facebook campaign right from the start and be a paid-ads rockstar simply because you are competing again seasoned brands with data and experience. Expecting to be an immediate all-star is akin to saying, "The rookie baseball player is at a disadvantage over his seasoned veterans! So why play?"

Why would it work spending $50k and not $2k? Does it serve an ad with a $2k budget to a different person than a $50k budget? Actually the answer is yes. But not for the reason you think. The little guy starting out doesn't get the same results as the $50k guy because he doesn't have any data. But the problem is that you have to pay for that data.

Exactly. His argument is based on flawed expectations... "I'm gonna spend $1000 at Google and earn $2000!" When in reality it should be, "I'm gonna spend $1000 at Google and breakeven at best, but come back with tons of data and market feedback!"