Kyle Sulerud - June 7, 2021Today, I’m going to be answering a question about optimizing YouTube Ads. This question comes in from Miro and he writes,
“Hey Kyle!
I have followed your advice for a long time. I have started two campaigns both computer-daily budgets $60. One is targeting six keywords. The second is targeting custom audiences of URLs.
I have started with a target CPA of $30 per lead. The first campaign is getting two conversions and I pay around $28 in the digital marketing agency niche per lead.
When I have started a new campaign with max conversion last time, my lead was $17. The second campaign is not spending money. What can I do? This is cold traffic.”
Okay, so a few things to break down here. First, I want to point out that this really isn’t enough information for me to give a comprehensive answer. So, this tells me that either you don’t have enough data to really be asking yourselves yourself these questions yet, or you’re not really looking at this the right way, to begin with.
Let me try to address this as best as I can with the limited data. First off, you mentioned starting one keyword campaign and then one custom audience campaign of URLs. I would not run that custom audience campaign using URLs now to start a campaign that is not the targeting. There’s much better targeting.
It’s kind of surprising that it’s not spending any money but that’s probably good for you because any money that that campaign is spending right now would be a complete waste.
The campaign you have with six keywords could potentially be bringing you good results, but with it with a daily budget of $60, that is not where I would be starting. I would be starting with the campaign targeting placements that are going to give you much more targeted traffic as you’re starting out the campaign. I would not be adding keywords in or any other type of targeting until you’re at least above $100 a day with placements.
So you said you’re bidding $30 per lead and paying around $28 per lead. It sounds like Google is sending you traffic for exactly what you’re bidding for. Now, if this is only your first or second day running this campaign, there’s not much to say about it. There’s really not enough data to do anything with this. If you’ve been running this campaign for a month and you’re averaging two conversions a day for $28 each and you bidding $30, I would start decreasing your bids. Google is sending you leads right now for what you’re saying that you’ll pay for it.
If you’re trying to pay less per lead than that, then it’s time to start decreasing your bid and see what Google can possibly bring you leads for.
You mention that with maximize conversions, your lead was $17. Again, I don’t know the time frame there. I don’t know how many leads you got for $17. If it was just a day or two, then there’s not much to say about it. But if you were running that campaign for a year and you’re paying $17 a lead with maximum conversion, then I would be bidding closer to $17 when you’re starting with target cost per action.
So the other thing to consider is how much do you want to pay? What are these worth to you? How long is it taking you to make your money back?
If these leads are $28 per lead, but you are able to 4x your ad spend within a month, then you should be scaling up really quickly. You should be spending as much money as you possibly can on this.
If $28/lead means that you’re going to make a 2x return on ad spend but it’ll take you a year to get the money back on that, then you probably can’t scale up as quickly. If you’re losing money at $28 per lead, then obviously the priority needs to be bringing that lead cost down. So depending on what your actual return on ad spend is, possibly depending on how much money you have in the bank to invest in this, and how long it’ll take you to earn your return on ad spend back (how long it’ll take you to attain that), then you need to make those decisions about your budget and how much to spend.
Let’s approach this a couple of ways.
So, if this is a great investment for you at $28 and you have the money to invest, then let’s not mess with your target CPA right now. Let’s keep that at $30 and start increasing your budget. Increase that until you’re getting so many conversions in that you can’t handle anymore.
Then you address the bottleneck, whatever that’s going to be. Maybe at that point, you’re still just making a great ROAS and you need to just grow your team.
Or maybe at that point, you realize that your cost per click is too high, and then you can address your videos and try to make better videos. Or maybe you’re figuring out that your opt-in rate is too low, and you can make adjustments to your landing page or to your targeting.
So that’s how I would approach it generally. Of course, there are lots of intricacies here, but if this is a good result for you that’s how I would approach it.
If $28 per lead is too high for you, then priority becomes lowering them. That starts with simply lowering your bid and seeing if Google is still going to send you leads for under your bid. You lower it to $20 and then maybe to $15 then maybe to $10 and see if Google still sending you traffic. Are they still sending you leads or is that going to dry up? If it starts to dry up or if your lead cost isn’t coming down, then you really need to figure out the bottleneck need to figure out. Are you paying too much per click? Is your landing page not converting very well? Is there something else down your funnel that is causing these leads not to be worth as much?
Maybe you need to send more emails. Maybe you need a better video sales letter or whatever it is that you’re sending people to with this campaign.
You’re not really looking at either enough data or you’re not looking at the right data to be able to make these types of decisions. Really dig into your data some more. Dig into the bigger picture stuff. Dig into the smaller picture stuff and that should help you in making these decisions.