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Metric Masterminds, Episode 102: John Pellinghelli & Kevin Simonson Deep Dive On The Evolution of Digital Advertising

By Scott Ginsberg, Content Manager at Metric Digital

Welcome to another episode of Metric Masterminds!

These weekly chats are digital marketing deep dives from our resident experts at Metric Digital.

(If you missed our last episode about email, prepare your brain.)

SUMMARY
Long gone are the days when having a website, publishing a few keyword heavy blog posts and posting on social profiles is enough. Today, doing business without a hyper focused, measured digital marketing strategy is like winking in the dark.

I sat down with our Co-Founders, John Pellinghelli & Kevin Simonson, to chat about the evolution of digital advertising. Talking points include:

1. Facebook & Google’s evolution
2. Growing a brand on social
3. Clients, sales and service
4. Expectations & metrics for online advertising
5. Service businesses versus product businesses
6. The future of voice search and other signs of the apocalypse
7. How major market variables like elections and events shape marketing
8. Lightning round

# # #

Scott Ginsberg: How have Facebook ads evolved over the past decade?

Kevin Simonson: Facebook is only about fifteen years old. It’s a teenager. And back when it launched, there was no ad platform. What exists now didn’t at the time. Five years ago, it did exist, but in a very rudimentary format.

Consider this perspective: Back then, organic reach was 95%, which is huge. Now it’s only 5%.

Image from HubShout

So back then, you wanted to get a big audience because they would see every post. But now, it’s not the case. If you build a big audience, you’re going to have to pay for them to see the ad again. You’re double taxed. That’s the biggest change.

The technology has also gotten so much better. What you can do and how you can do it has become easier, but the depth of what you can reach in terms of a core audience, and measuring it effectively, is amazing. Facebook changes all the time, for better or for worse. There’s always something new to try. Always something to be tinkered with.

With our clients, we challenge what might have been true a month or six months ago. We rebuild a lot of our tests, i.e., manual bidding versus auto bidding.

Scott Ginsberg: How have Google Adwords evolved in the past decade?

John Pellinghelli: The perception of Google Adwords is that it’s just search. Ten years ago that was true. Five years ago Google really started to figure out how to make display work. Now, essentially every single thing on the internet can be hit by Adwords (minus social, since Google Plus failed.)

Think about it: There’s Gmail, YouTube, Display, Mobile, Search, Android Apps, etc. All of your behavior on each one can be tied back to a platform. This is powerful for the end user because products are more targeted, not random ads. The savvy Adwords marketer can be more powerful than your average in house Adwords user, since they know how to take advantage of every platform.

Example: You’re tracking what people are watching on YouTube videos, building an audience off those people, using that audience to serve targeted display ads, driving them to your site, then capturing their email, building a lookalike audience off emails...

...and all of the sudden you’ve got this crazy hyper specific marketing system built out on actual user intent. Ten years ago, it was just somebody searching for a keyword and seeing an ad.

Scott Ginsberg: How can brands grow their following on social?

Kevin Simonson: First of all, as a brand, why do you even want more followers? Well, there’s the social proof that can help drive revenue. If you visit a social account with only five likes, you think it’s scammy. Or not real. Or not popular. But if there are one thousand likes, then it’s worth following. That’s what we call at Metric Digital the sheeple mentality. Everyone follows it. And there is value in that.

You can also buy followers in different ways. They’re not real people, though. And we don’t recommend that, but it is a tactic some people do.

Running “page like” ads or “account like” ads is an option. The argument is, the opportunity cost is not great, compared to other tactics you could do.

Earnestly, the best way to grow followers is more of a business development style of operations, rather than marketing. You could do swaps with other brands to add value with interesting content, then you earn word of mouth from real fans. From there, once you have established fans, then monetizing that earned audience can be a strategy, or part of one. But for the most part, there are other ways to make more money quicker and easier.

Scott Ginsberg: Should you add new social platforms like Snapchat to your digital marketing mix?

Kevin Simonson: The point is for branding. Not users who want to show pictures to their friends, families, or whomever they’re dating right now. From a marketing perspective, it’s about attention. In fact, everything you do is about that to a certain degree. How that plays in your marketing mix is a bigger question.

Does your brand suffer from shiny social object syndrome?

Regardless of the channel, you’re still creating content. And there is a cost associated with that, i.e., time, production value, and so on. This cost might not get as high of a return, short or long term, versus the cost of something like a paid ad. And look, brands do Snapchat well, and we enjoy their content. But they could be doing something else. Social becomes a problem when you try to fit a square peg in a round hole.

One rule for organic content creation on any new platform is:

“What do people talk about when they’re just hanging out?”

Most people don’t talk about their personal banker, for example. Nobody is creating really engaging content around that. Not that it can’t be done, but it’s not as natural.

Scott Ginsberg: Let’s shift gears into the world of client services. What are some of your best/worst sales techniques, both for clients and yourself?

John Pellinghelli: If someone takes me out for a bunch of drinks and food, that works. But what’s effective is a free audit. If they’re an expert offering free advice. It’s legit. There’s no commitment from the prospective client, and they get great advice. Often times we do it, clients use it, they love it, and then they hire us to do more work for them down the road.

John Pellinghelli connecting with clients. In the jungle.

The worst is the generic cold email from somebody who clearly doesn’t know your business at all. We get emails from other agencies who want to drive traffic for us, and we’re thinking, um, do you even know what we do? We’re an agency too, we can do it ourselves. Thanks.

Consider the tech vendor, who may be a generic salesperson who doesn’t know anything about the product, and comes from an old school, money driven relationship based approach. It’s not going to be effective.

Scott Ginsberg: Who are the best kinds of clients to work with?

John Pellinghelli: There are a few characteristics. Good clients are passionate and involved with their business. Could be owner, manager, coordinator. Whoever it is we’re working with day to day, they care a lot about their business. They want to learn new things. 

So we do ten new things, eight fail, but the two that work unlock the growth of the business. And as long as you’re approaching those tests with a solid framework and a smart mindset, it’s okay if they don’t work. But if you half ass and throw something up there, you have no chance from the get go.

Kevin Simonson: From a personality standpoint, we like working with clients who are competitive. We’re a performance marketing agency, so that personality is fun to work with. Trying new stuff is huge too. There’s tons of things you can always be testing or move forward, i.e., creative, ad unit, tactics. If you don’t experiment, you won’t grow.

Metric Digital's works with best in class digital brands

One final point is, when clients are willing to invest in making performance channels better. Meaning, optimizing site, landing page, working with creative team, understanding that there’s more to it than putting a bunch a money out there and driving clicks to your website. It’s blocking and tackling, and it goes a long way toward success

Scott Ginsberg: While what are the common mistakes brands make with online advertising?

Kevin Simonson: When brands don’t have tracking in place, or aren’t tracking properly. There’s no conversion goal. That’s really important because you can’t measure performance. Account structures often are set up in a way where you can’t know what you’re trying to know. And what and how you’re targeting leads to muddled data. It’s an unsexy answer, but it’s true. If you can’t measure everything, or you are measuring something, either way, if it bleeds into another area, it’s going to be wasted.

John Pellinghelli: There are also a lot of distractions. New tech, new ways to tech, spend money, etc. It’s exciting, but it can also be a pitfall for some people. If you switch over to testing a lot of different or unproven platforms just for the sake of testing, (looking at you, Snapchat) and you don’t have an email capture and campaign flow setup, then it’s just a bright and shiny distraction. Make sure you have the fundamental tactics in play first!

Kevin Simonson: Imagine the shiny object is at the top of the pyramid. It can’t be there if there’s not a foundation to support it. Adwords has been around two decades, Facebook is relatively new, but still, these foundational elements need to be in place first. New platforms are exciting, can work, and do work, but they shouldn’t be where you start. Just because you read some case study about some company who had a 100x ROAS on their dopey Snapchat filter, doesn’t mean it’s not a distraction.

John Pellinghelli: It all goes back to setting the right expectations, and knowing how it fits in your business.

Scott Ginsberg: Speaking of expectations, what do you need to have in place before running online advertising?

John Pellinghelli: As I mentioned, tracking is number one. If we’re spending money on anything, we have to be able to tie it back to some result. One of the first things we do with a client is an audit. We go into their analytics platform. If they’re ecomm, are they tracking and reporting revenue, are visits come in properly, are Adwords and social ads have the right utm parameters, etc. 

Campaign dashboard from one of Metric Digital's high performing clients

We ask them, “Can you attribute every single dollar back to a result?” From a performance marketing standpoint, if you aren’t measuring it, you can’t make a smarter decision moving forward.

Scott Ginsberg: Which brings us to the big question. How much should brands be spending on marketing and advertising? Is there even a quantifiable answer?

Kevin Simonson: This question seems to comes up on almost every client call. For good reason. This is a big part of company budgets. In principle, we recommend spending as much on marketing as you need to do figure out whatever you want to figure out.

John Pellinghelli: Wait. What?

Kevin Simonson: Yeah, I know It’s kind of ambiguous, but stick with me here. Digital marketing is not a formula. Every business is different, everything costs differently. Let’s use Mack Weldon, one of our clients, as an example.

They sell men’s underwear. If you want to sell this, and you make really high quality products, you would think, “Okay, men who work in finance are going to buy this. How much we should spend on that?"

Short answer: Whatever it takes to prove if it’s true. 

Build the ad set for 25-34 finance bros in Manhattan. From there you build ad set, do a/b test on image and copy. Within that set, you target the audience directly, but also do a generic one. Facebook then tells me how many people are in that group, which means we can estimate the cost of showing people those ads. And if we show those ads enough time and they click and buy enough, we can back out the cost of that test.

It may work or not work, but you want to do something purposeful with your experiments. Ask yourself: What do you want to experiment with? What do you want to figure out? When do you want to figure it out? And then go from there. That’s the context of the business. There is opportunity cost in using any marketing budget.

John Pellinghelli: My answer is much more straightforward.

$1,000,000 of unmarked dollars in a silver briefcase.

Kevin Simonson: Whoa, gangster.

John Pellinghelli: Seriously though, here’s the question. What’s your CAC? These channels are dynamic and fluid, and we can optimize toward any goal. If you can only afford to pay $100, then that affects volume. We need to know what level to hit, and scale accordingly.

Scott Ginsberg: Last client focused question. Metric Digital works with a diversity of clients, both service based and product based. How do you differentiate between digital marketing for the two?

Kevin Simonson: Services usually have a multi touch attribution. (Excuse the jargon!) Meaning, you sign up for a service, you start as a lead. Which goes to sales. And if it gets closed, somebody does the service. Much more going on than a single product, where you go to site, pick it, buy it. From a creative standpoint, regarding services and products, one is an experience, one is a thing. The difference is in how you talk about it. Once you understand the context of the channel, you can create ads accordingly.

John Pellinghelli: There are some similarities too. There’s attribution when people buy products. Most people don’t buy on the first time. What’s interesting is when you take service marketing and apply to product, and vice versa. We have retail clients who sell products. We get them to the site, but we know it’s unlikely they’ll buy on first visit, especially if they haven’t heard of it, or the price is high. 

Our conversion at that point is driving for an email signup for later marketing, or building a retargeting audience so we’re increasing our ability to come back and market to them later. Email is the best first step. It would be the equivalent of getting people in front of a sales team.

Scott Ginsberg: Let’s talk about the future of digital advertising. What does your crystal ball say?

Kevin Simonson: First of all, it’s becoming more mainstream to talk about marketing now. It’s easier to start your own business, have a side hustle, sell online, etc. It’s now easier to have conversations about marketing.

Another major trend is outsourcing. People outsource a lot more tasks and optimize their businesses. That’s grown in popularity. If you do something over and over again, there’s probably a better way to do it, for cheaper and without your direct involvement. We incorporate both of those trends in our business. We teach social marketing onsite at companies and through public classes, and every time students come in, they know more than the time before.

John Pellinghelli: Interesting point on outsourcing. Many agencies (not us) now outsource the work, but don’t tell clients. This is sad and unethical and really bothers us. Because the average skill and ability level of clients is way higher than years ago. It’s not a new industry anymore. Many of us left large agencies to start our own firm, and the dynamic is different. It used to be a full service two year contract, now clients have somebody capable internally who needs guidance on strategy or execution or both. Our advantage is, we deliver perspective and judgment, which we’ve gleaned from hundreds of clients over the years and thousands of audits.

John Pellinghelli: Another thing is, it’s always the year of mobile.

Kevin Simonson: Ahh! Again. Every year is the year of mobile. It’s been the year of mobile since I started like a decade ago!

It's the year of mobile. Again.

John Pellinghelli: Well, there’s more happening there with localization. It’s like the guys say on Silicon Valley: SoLoMo.

Scott Ginsberg: And what about voice search? Alexa doesn’t seem interested in the zombie robot apocalypse, but you can never fully trust a robot.

John Pellinghelli: People aren’t even thinking about voice search yet. Semantic keyword search, automation, artificial intelligence assisting people who spend less time distracted driving, this is the future. We need to figure out how we fit into the mix.

Kevin Simonson: When any new technology starts, there will be gaps in functionality. Which leads to opportunities. Facebook makes major changes to the platform, fires entire teams, and things goes wrong. That’s a marketing platform technology change, and thinking about how you can exploit changes in current channels is vastly overlooked. It means, "Oh, wow, somebody is ignoring this pocket, based on a change that’s being made to existing technology," and that led to discoveries that made people money.

Scott Ginsberg: Tell me about some digital marketing stuff most people don’t know about.

Kevin Simonson: So here’s something few marketers use, but we love the most. It’s a plugin called Ghostery. It’s simple and free and tells you what the website uses, i.e., Analytics, Doubleclick, SumoMe, etc. Gives us a good idea of what their trying to do and how they’re trying to do it. It cuts through some time figuring out what’s going on. It’s huge for initial conversations. When we know everything a brand is already doing, clients love it.

John Pellinghelli: Google naturally has so much data we can use. For a long time, Google knew what you were searching for, what was in your email, what naughty creepy things you watch on youTube, but never used it. Now we can. Which sounds kind of evil, so we try to only use it for good. What’s really powerful for marketers is being able to layer on audiences to every single type of advertising we’re doing.

Let's say customers are on your site, signed up for email, watched video and received email from competitors. These are targeting parameters to tack onto campaigns beyond the classic layers of age, gender, zip, income. Consider how much data you can put on campaigns. It’s so far removed from what the average person thinks Google is, which is search. It’s so much more advanced now.

Scott Ginsberg: Thinking more macro, how do you think major marketplace and cultural events have affected your strategies?

Kevin Simonson: The 2016 election comes to mind. And while it didn’t change our strategies, it did change our tactics. Facebook, for example, is a real time bid platform. It’s somewhat of an auction. An ebb and flow. In the election cycle, if some candidate says something viral, it affects what you see in your news feed.

Metric Digital reverse engineered Trump's Facebook ads. 

Orlando also had the tragic shooting, and that day, it was crazy on Facebook. Every two posts was something related to it. And we noticed the cost of those ads was going way up, because it’s inventory. Those spots were being taken up by the news, so it cost more to be there. Now, our strategy didn’t change, but we needed to pull back bids on a given day, as to not waste client money.

Olympics are another example. Brands make deals with networks to show products. And since television is down in viewership, fewer people see commercials. And since brands didn’t get enough impressions on commercials, they’re going to show ads on their website too.

John Pellinghelli: On the Adwords side, it’s less affected by major market variables like elections or events. But it does enable opportunities for highly creative ads. For example, better ad copy that’s more fun to write and easily differentiates from the competition, and strays away from the standard call to action copy like “save ten dollars.”

Also on the display network, most people don’t catch this: When looking at mobile apps, like CNN’s app, when there's a lot of news happening, they start doing push notifications. That drives thousands of people to the app at that very moment, and the result is huge spikes in visits. Which could result in thousands of dollars of spend.

Kevin Simonson: And let’s not forget, good ads are more relevant to the target. Particularly with the election, there comes a chance to be relevant to the event itself. When clients relate the creative to it, as opposed to a standard benchmarked message, it converts more.

Scott Ginsberg: Let’s compare Facebook vs. Google Adwords. And go:

John Pellinghelli: Adwords is better. Mainly because I’m the one who runs it.

But look, they’re different platforms. Should be used together. Smart advertisers do both, understanding limitations and benefits of each. Search is somebody actually looking for something, so there’s intent behind every click. When there’s intent, there’s a greater chance of taking action. There’s a leg up.

Downside is, search is very dry. It’s text based. There isn’t imagery with some exceptions. It’s not a very visual platform, and there’s only so much intent for different products. Once you reach the limit, you have to scale. Take a client who has a visually interesting product, and an audience actively looking, you have to move to social for that.

Kevin Simonson: Agreed with everything he said, except that Adwords is the best, de facto. But only because I run Facebook. The difference is, to grow an audience actively and prospect and find new customers and get sales, Facebook is the best way to crack that code and scale your business.

Scott Ginsberg: Okay, I think it's time for everyone's favorite segment of Metric Masterminds, The Lightning Round!

I will throw out a prompt, you must respond "Yea" or "Nay," and a brief explanation if need be.

John Pellinghelli: I am going to enjoy destroying you.

Kevin Simonson: Psht. In my mind, I have already won, son. Twice.

SEO is dead
==> Yeah or Nay? 

Kevin: Nay, it’s different and flies under the radar. There will always be the need to make sure the tech on your site isn’t breaking Google, though.

John: Also nay. We find that real, incremental SEO value comes from link building and content.

Bidding on your competitor’s keywords
==> Yeah or Nay?

Kevin: Yay if you’re a challenger brand, nay if you’re the 800lb gorilla.

John: It can be a great way to scoop new customers at a low CPA, but you’re opening Pandora’s box, and be prepared to defend your brand. Some of our clients have gone down that road before, and it can get expensive.

Retargeting is creepy
==> Yeah or Nay?

Kevin: Nay if you do it right. A lot of things are creepy if you do them wrong. It’s like whispering ‘nice’ under your breath if somebody shows you a picture of your baby versus saying 'wow cute kid’ at a normal volume.

John: Agreed. Retargeting is all about intention and thoughtfulness. Filling a need through gentle reminders. 

Facebook doesn’t work for b2b
==> Yeah or Nay?

Kevin: It absolutely can work.

John: 100% it can work.

Instagram ads
==> Yeah or Nay?

Kevin: Absolutely. 5 video carousel and stories right now are doing really well.

John: Yeah. Social ads are cheap now, so get them while they're hot.

Content is king
==> Yeah or Nay?

Kevin: If it is, I’m a jester.

John: Yeah, but only with savvy amplification.

Elvis currently living in Jamaica with Tupac
==> Yeah or Nay?

Kevin: Fat Elvis or skinny Elvis?

John: I am legally obligated to take the 5th on that one.

Facebook ads need a huge audience to work
==> Yeah or Nay?

Kevin: Nope. By definition, you’ll be able to scale a huge audience more, but that’s not the question.

John: Nay. Custom audiences are magic, and mass reach is a thing of the past. Target the right people at the right time with the right message, and a few hundred customers will do the job to grow revenue.

Thanks guys! 

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Scott Ginsberg Head of Content, Metric Digital The Metric Digital Blog A Blog on All Things Digital Marketing