Jul 24, 2018
Once upon a time I (Joe) had an AdWords PPC budget that hit $45,000 a month. Over 5 years I learned AdWords on my own, had no training, a half dozen campaigns and a handful of ad groups. I thought I was pretty savvy and successful. This was about 10 years ago and to be frank, I’m older, wiser, more seasoned and would tell my 10-year younger self that I was a novice and wasting a TON of money. Don’t be like me.
Since 2010 I have heard dozens of entrepreneurs tell me they outsourced their paid advertising unsuccessfully. So when Jason Yelowitz introduced me to Strike Social Founder I was a little skeptical. But success and growth speak for themselves.
Patrick McKenna boot strapped Strike Social from his kitchen table in a rented home in LA about 5 years ago. In 2016 Strike Social was named on the Inc. 500 List for the fastest growing companies. Their rank? Number 17!
Strike Social helps brands improve their paid advertising campaigns, dramatically. One example Patrick gives is an ecommerce company that had their CPA go from $80 dollars to $16. This created great problems for the client. The first was rapid growth and much better margins. The second was access (or lack thereof) to monies for inventory. As you likely know – running out of inventory is an issue. Rapidly growing brands lack access to capital, run out of inventory and lose ground on the path to growth.
Strike Social does a free analysis of a client’s paid ad campaigns, a free test, and when the client comes on board and grows so fast they don’t have funds for enough inventory, Strike will provide working capital for inventory. If it weren’t for the rank of number 17 on the Inc. 500 list and the fact that you don’t get there without proving yourself, I’d say it all seems too good to be true. After chatting with Patrick on today’s Podcast, I say try them out get a free review. At the very least you’ll learn what you are doing right and wrong in your own paid advertising campaigns.
Mark: So one of the things that I find most difficult and frustrating about running a business in today’s internet world is this idea of having these coordinated campaigns across multiple channels and multiple platforms, and the degree to sophistication which you need to run each campaign across each platform. For example with Facebook and Google, it’s not so much to do just [inaudible 00:01:25.5] a couple of key words and hoping everything works for Facebook bring up a couple of ads and hoping it works. You really have to delve in and get super detailed. I understand Joe that you talked to somebody today that’s doing this for a living. And they started a company and not only have they just started and are doing well but they’re ranked really high in the Inc. 500 list specializing in running these cross-platform campaigns that are really highly refined.
Joe: Yeah. It’s Patrick McKenna from Strike Social and about five years ago he bootstrapped a company, he was literally working from the kitchen table in a rented house in Los Angeles. And he developed software that would analyze paid advertising campaigns and then go way beyond what you normally do in an excel file and so on and so forth. Standard stuff right? Well, that’s what I thought when he was introduced to me by our very own Jason Yellowitz, they’re neighbors. Patrick’s company Strike Social in 2016 was ranked number 16 … no number 17 on the Inc. 500 list. And I think you and I have talked about this that that’s impressive, number 17 on Inc. 500 list, you don’t get there by accident. You don’t get there without being really really good at what you do. Over the years, the last six years that I’ve been doing what I’m doing I talked to dozens and dozens and I might want to say hundreds that [inaudible 00:02:49.9] of people that started their own Google Ad Account and developed it as their business grew and managed it themselves and then got to a point where they said you know what I should outsource this. And they found somebody online and they outsourced it and what happened? It failed. That cost for acquisition went up, the budget went up and they had to bring it back in-house. Dozens of times I talked to these folks. So when I first connected with Patrick I was skeptical but then we talked, went into detail and he gave me some success stories that are really truly just incredible Mark to the point where I need you to listen to this podcast and consider talking with him about Quiet Light Advertising. They do testing for free. They do an analysis with their software and they’ll do a test for free as well. And then they prove themselves and then like every other agency they get paid on a percentage of spend. But here’s the kicker they’ve taken some clients and grown their businesses so dramatically that clients run out of inventory. That’s the number one thing we tell folks is don’t run out of inventory. It seems so simple but when people bootstrap the company and they grow they don’t have enough working capital. And I’ve listened to other podcast, you know the EcommCrew Mike Jackness podcast where they talk about trying to find sources of working capital for inventory. Well, Strike Social will be that source for their very own clients. Because they’ve run into it so many times where it was so successful the client ran out of funds to buy more inventory. So they became that working capital source. So really impressive story, I would encourage everyone to listen all the way through to the 31 minute mark where he starts to talk about the working capital aspect of it. But there’s a lot of good stuff here. He talks about some basic things that everyone should do. A quick story and then I’ll stop talking. But when I ran my own Google AdWords campaign for the company that you brokered for me back in 2010, the most I ever spent was $45,000 in one month on paid advertising. I worked my way up that, up up from that in 2005 to 2010. Of course, after the crash, it was much lower but at the max … at the peak, I had a total of 10 campaigns set up in Google AdWords. And I had it all done with my keywords and I used all the software at the time to find those keywords and develop them; 10 campaigns. So in talking with Patrick, he talks about that their clients have an average of 1,000 to 6,000 campaigns and that’s for one product, Mark. And that just makes me think about … again, yet again how much money I lost in two ways, really on wasted advertising spending and on not making it so good that my cost for acquisition came down dramatically. And I just want to encourage everyone that’s listening to think about it and listen to what they’re saying and have a conversation with them because odds are you’re not doing it as well as you could be if you’re doing it yourself. Just like what we talked about with book keeping, Excel is not accounting software. The basic pieces that you pull together for managing your campaigns across multiple platforms is not as good as what these guys have either. And it’s worth to listen to him, worth a test I think in my opinion and experience.
Mark: Yeah and I really have to agree with the fact that if you’re doing it in-house and look I’m running some campaigns in-house right now for both companies that I own. That for a variety of reasons … but you have to understand if you’re going to run it in-house, if you’re not going to have a specialist, chances are you’re not going to be doing it as well as it could be done. Because AdWords is an environment that really takes specialization. Facebook is an environment that really takes specialization. Frankly, I’m saying up a good automation sequence falls in the same category as well. So I’ll be interested to listen to this. I definitely will be listening to this. I’m always looking to pick up on some information.
Joe: Yeah and look Instagram is also in there as well. It’s something we talked about. You know when AdWords was it that was the player Facebook came along and started to become the second option. Well, Instagram is now that option to Facebook and it’s really starting to work. So those that have not expanded to those channels, listen, take a look, learn. And the other thing look this wasn’t a pitch for this guy’s services. This was helping people understand what they may or may not be doing right or wrong in their campaigns. And he talks about three things that you can do and focus on. And at the end Mark, I didn’t ask him for a contact information like at all. It’s in the show notes of course but for those that only listen the company is Strike Social. It’s strikesocial.com and you can email them at email@example.com that’s firstname.lastname@example.org it’s a … we didn’t talk about it at the end so I want to throw it in now.
Mark: Awesome well let’s get to it.
Joe: Hey folks its Joe Valley of Quiet Light Brokerage and today I’ve got Patrick McKenna with us from Strike Social. How are you, Patrick?
Patrick: I’m good. How are you, Joe?
Joe: I’m fantastic. Folks, anybody that knows Jason Yellowitz here at Quiet Light, you should, he’s been around for I think longer than everybody except for Mark Daoust the founder of Quiet Light. Jason was my broker when I sold back in 2010 and he happens to live across the street from you right?
Patrick: That’s right we live in Reno, he’s right across the street. Kids are always running in my house.
Joe: Jason is a good man and I wouldn’t mind having him as a neighbor. I often poke fun at Jason and his Bathrobe Millionaire book but it’s a heck of a success story and I still don’t have a piece of the bathrobe. Have you ever seen it laying around his house? Did he save it? Seriously is it like behind like a glass case hanging on the wall?
Patrick: It’s on the mantle sitting up there. He’s very proud of that.
Joe: Next time you’re in I want you to take a selfie in front of it and send it to me okay?
Patrick: [inaudible 00:08:47.7]
Joe: Look in all seriousness Jason is top notch. He’s my mentor. He’s mentored to many. He’s a terrific guy. And he introduced you to us. And as I mentioned before we started recording we do not do fancy introductions here at Quiet Light on the Quiet Light Podcast so I know it’s going to be hard for you but I want you to brag about yourself a little bit because you have a heck of a success story. Tell us about Strike Social and what you do, what the background is and all that good stuff for us.
Patrick: Sure, yeah we … you know Jason and I are sort of kindred spirits. We’ve been through the battle, it sounds like you have too … I mean a business is incredibly challenging. We did it like anyone else does it. We take the plunge, you bootstrap on a kitchen table out of our rental house in LA. And we started that process in March of 2013 and then we launched some technology and we got recognized in TechCrunch for this advertising technology, this analytics platform. By November after that article came out we’re selling like crazy and that was some different challenges. You think initially that wow this is great and that my products rate and the market loves it. And then you start to realize that you’re putting yourself out of business because you’re trying to fund invoices and all those types of things that come up when you’re running a business. So we went through all that stuff, raised a little money in 2014, raised a little bit more in 2015 and it’s standed globally and by 2016 we’re recognized in Forbes Fast 500 fastest growing companies in the US.
Joe: What number were you?
Patrick: Number 17.
Joe: 17 out of 500?
Joe: That’s incredible.
Patrick: Pretty amazing. That was up 2016 revenue numbers and we’re excited to see where we land this year for Fortune List. It will be the 2018 release that will be 2017 numbers so-
Joe: Got you.
Patrick: It’s that it so.
Joe: It sounds exciting and painful all the same time. You’ve literally started on a kitchen table at a rental in LA. and then grew the business, bootstrapped it from there. Probably like many of the listeners who are you know the listeners that are sellers and entrepreneurs and listeners that are hoping to step into the entrepreneurial role that you’re playing now. That’s pretty incredible. Tell us about what Strike Social does and who your typical customers are.
Patrick: Right. So initially we went out to the largest agencies in the world and we sold execution services around advertising. So initially we started with YouTube now we’re across all the social platforms and search as well. But we would basically like take on and execute buys for their largest customers. So our customers will be X-box in PNG and pick any Fortune 100 brand, the big guys. And then we started doing that here in the US then we went to Asia and then went to Europe and I don’t know if you know who the holding companies are but you know WPP [inaudible 00:12:17.3], the big guys that I mostly don’t talk to a smaller company. So it was really nice to have that reign for us to go sell in to and it was a really profitable situation for us. And we kept building technology and investing in technology and people and locations. We have a location here in Chicago where we’re headquartered. And then we have a location in Poland and a location in Manila. We’ve got about a hundred people here now and we’ve got boots on the ground from Japan, and Korea, and Australia, obviously the US, Singapore, Europe. So it’s been a really really fun ride and yes you go through all of the emotional ups and downs of running a business when you’re buying one.
Joe: Yeah. Good problems with that kind of growth, really good problems. Talk to me about the technology that you developed that originally got you recognized in I think you said TechCrunch and you said analytics platform. Can you talk about the actual service and why someone would use … like why these B2B advertising agencies would use yours versus having an expert in-house do it. What does it do and what’s different about it that made you the 17th fastest growing company in 2016?
Patrick: Yeah I think when video first came out I think it was really challenging for companies to understand, it is kind of a new medium, how do I be successful here? So our analytics platform so they showed them how to be successful. But what we did is we executed the media guys. So we look like a typical agency, we don’t really like that word because we built software solution to help us with that. And then overtime what we’ve done is we built this incredible artificial intelligence box that allows us to go across platform, plan and execute strategies. And so it’s all … it’s a human and technology solution combined. And like I talked about advertising now it’s a complicated orchestra. And what you need at the end of that is execution so … and we can talk about that more but it’s very challenging to stay up to date on these platforms and you need a partner and a technology solution to really execute and do well.
Joe: Okay. And you started out with YouTube, so at that time there were not a lot of experts in the field of buying advertising, buying that advertising space on YouTube.
Patrick: That’s right.
Joe: You know when I … when Jason sold my business back in 2010 I was spending a boatload of money on Google AdWords and I learned it from the ground up. I did it myself starting in 2005 and I … at one point I never had any training so I can’t imagine how much money I wasted over the years. I mean it was a point where I topped out at spending $45,000 a month. I mean Jason loves to tell the story of how I got mad at American Express because I went above my average so I cut my advertising in half and it’s the stupidest thing I’ve ever done. But I did it because I got mad. It is a ton of money; I blew a ton of money by not being the expert. But you guys learned that expertise in terms of buying ad space on YouTube and then you expanded to the other social media platforms. So are you now doing paid ads on Google AdWords, on Facebook, Instagram, Snapchat, things of that nature?
Patrick: Absolutely DBM, Amazon, all the ones-
Joe: What would DBM mean? You got me right there.
Patrick: Sorry … Doubleclick Bid Manager is Google’s DSP solution to get the rest of the web that’s not … that you can’t do in AdWords.
Joe: And what’s DSP stand for?
Patrick: Digital Supply-side Platform, so that’s how Google goes and buys display advertising on say the [inaudible 00:16:36.9] within New York Times.
Patrick: Yeah. So it’s another Google product. It’s part of their Google Suite and actually it’s interesting that you bring that up that’s … that they had a tagging solution there that … and we find this a lot in companies that are running small businesses on just AdWords that you can get really good multi variant testing on that platform rebuilt technology to allow you to expand that. I don’t know how extensive you got with your test. But one campaign maybe you have 40 different variables, maybe you’re really good and you get up to a hundred. We’ll do like 6,000 with their technology.
Patrick: So yeah we’re testing age, demo, interest, topic, keywords-
Joe: Let’s get really down to it. People that are listening, their ears might be perking up and this is why we’re talking because you don’t get to be number 17 on the Forbes fastest growing companies by screwing up.
Joe: Because you wouldn’t have the clients that would be referring and helping you grow your business further.
Patrick: That’s right.
Joe: So my initial thought as I said on our first call was more often than not I do valuations and exe-planning for people and see that they were doing fine on their own advertising. Managing it themselves and then outsourced it and it totally blew it up as in bang and their cost for acquisition went up. And usually, in my experience, it’s not a great thing. Your success in having people use your services changes my mind. So let’s talk about specifically we’ve got folks that are … was their physical product owners and of course there’s content as well but I think you said you don’t really do a whole lot of content stuff. Correct me if I’m wrong but let’s say we’ve got physical product owners that are mostly because of the crazy growth on Amazon doing Amazon sponsored ads our advice is always go well beyond Amazon grow your business so it’s not one revenue channel. Your value is going to be higher but they are challenged with how to do that. So do you do an analysis on a business and you’re looking at Facebook advertising for that physical products, do you take over the Amazon, sponsored ads, do you do Instagram all of these things?
Patrick: Yes, all of them. And you know what before we start with any business we start with an audit to get to a genuine conversation. You’d say okay here in the platforms you’re on tell us about your objectives, lets pull your data into a dashboard that you’ll own and take possession of. And more so you … where we see some quick wins and easy gaps and then we’ll go take you know what if you like what we’re saying we’ll go run a test for free to see if we can improve what you’re doing.
Joe: How much is the cost of the audit that you do?
Patrick: It doesn’t cost anything.
Joe: Okay the audit is free and the test is free.
Patrick: The audit is free, the test is free. That’s right and we just rolled out this … the reason I’m talking to you and I’m just talking to Jason about this is you know we just rolled out this Strike Marketing Partnership. You know we have a very large e-commerce company under our belt right now and we are able to take that business and improve their cost per lead from $80 to $16 and it really grow their business. They were able to-
Joe: Were they profitable at $80?
Patrick: Yes. Yeah, they were.
Patrick: Dramatically improved their numbers and now they’re on a path to being a billion dollar company.
Joe: And so you took it from $80 cost per lead … was it cost for lead or cost for acquisition or both? I guess it doesn’t matter but you took it from 80 to 16 and then where they able to use the same budget or I mean-
Patrick: They were able to increase it. Yeah you see that’s the key and I think the one point I want to make Joe is that we are entrepreneurs here and we’re in the advertising marketing space and like one of the guys that’s on our staff started panatea until he started the March Air Movement and sold it to a very large Japanese company because he doesn’t need to work. But he’s passionate about entrepreneurs, entrepreneurship and he’s an expert in building that brand. And when you said content you know content is critical in … when you start talking about AdWords and multi variant testing you can’t apply that same learning over to Facebook. It’s a completely different platform. Everything is grouped together. You have to be a little bit patient and let Facebook find that first customer for you. And then it starts to learn who your customer is and it’s started in and it’s off to the races. But if you’re open at that platform and if you’re doing it the same way you’re doing it on AdWords whether it’s YouTube or just AdWords so you’re not going to perform there, you’re just … you’re not doing it right.
Joe: What are in that Amazon Seller account? Do you guys handle the sponsor ads as well?
Patrick: That’s right yeah and we have a seat on Amazon so we have a partnership with them. Seat means that we get a seat.
Joe: You know I was going to ask that.
Patrick: Yeah sorry. I can see it on your face, what’s a seat?
Patrick: And seat that means that we’re in their partner program and we can log into their technology and buy inventory at stale.
Patrick: So … yeah and that means we also have a rep, and that’s the other thing to is that these platforms change all the time. And one of the recent ones was GDPR it’s made a … GDPR oh.
Joe: Come on now GDPR what’s that? This is going to be the acronym show. What is it?
Patrick: Yeah the acronym … I’m sorry, I spend a lot of time in advertising so you know neither all … there are all things … GDPR is a … it’s a European Union situation where the user is in control of their own data.
Patrick: And the platforms, you have to basically ask permission or I think you’ve probably seen on sites you go to now. They’re saying a. so do you like content, you need to accept my cookie. And if you’re in someone’s database right now and you have a European client in your database you needed to e-mail them and say hey by the way I need you to okay the fact that you’re in my database. Initially, don’t do that, I mean don’t be that; you can get fined significantly.
Joe: Most of our … the people in the audience, the people that are listening I shouldn’t say most I mean it’s anywhere from somebody doing a hundred thousand a year in revenue to you know 40 to 50 million in revenue. So it’s all over the map there a little bit. Let’s give some stuff away for free here that I don’t want this to be obviously you do the evaluation and you do the test for free. And then let me just answer that; let’s answer the quick question because people are going to say well what happens after that? Do you get paid on a commission basis part of the advertising how does it … part of the advertise you spent?
Patrick: Yeah I think that’s why we fall in that advertising agent bucket because we get a percentage of the media.
Joe: I did the same back in my Media Mind days when I used to buy time on radio; percentage of what you’re spending.
Patrick: There you go.
Joe: And about the job you do on that cost for acquisition the more you’re able to spend because the budget goes up. So it is the right-
Joe: Way to do it. Yeah. All right so let’s talk about that aside do you have any sort of hot tips? What can someone do just on their own looking at their own advertising budget in whatever platform you want to talk about?
Joe: Give away some tips or what can somebody do that’s using … let’s start with Google AdWords. What’s the biggest mistake people make and how can they fix it?
Patrick: Yeah I think that one of the biggest mistakes, I mean you can kind of take this across all platforms is trying to figure out the audience and the actual attribution and then finding the adjacent audience. So I’ll give you an example, and our artificial intelligence does this. The idea is that you need to expand your audience. So you find an audience that gives you a high lifetime value and you recognize that in keywords or interest in Google AdWords. For example, you might be targeting 18 to 54 year olds in AdWords. You need to break each one of those segments up and realize that 18 to 24 year olds aren’t interested in the same thing as a 45 and through 54 right? So if you’re trying … if you’re targeting people who are interested in the NFL, the 18 year olds that also have that same interest are interested in the UFC. And so you have to find those adjacent audiences to lower your cost of acquisition. Does that make sense?
Patrick: You expand the reach of the audience size and that’s something that our technology does and our big people are doing that.
Joe: Okay so it’s finding out their like audiences. I always hear something on the Facebook algorithm in the paid advertising part of that similar audience or look alike audience, is that what we’re talking about?
Patrick: Kind of, on Facebook it’s different. So AdWords is a multi-variant test platform. You’re basically setting up … hopefully, you’re setting up somewhere between 10 and 150 different campaigns. We’re going to set up about 1,000 to 6,000.
Joe: I think I had five or six and I had multiple things underneath there. So you’re talking about 1,000 to 6,000 campaigns?
Patrick: What was what was your target audience age range?
Joe: From the women 25, 54 but I honestly can’t recall if I even know. No, not much. I don’t want to talk about that because I lost a whole lot of money the more we talk about it.
Patrick: Oh my gosh.
Joe: Wasted money. But you’re doing a thousand campaigns inside of Google Ad Words?
Patrick: You can [inaudible 00:17:10.1]. That’s the only way, get out to get that. No, no, no, that’s my product. That’s the only way to get down to how am I going to expand this audience? What does this audience …. what is this audience also interested in? So it … what you basically said, what you told the platform was I want women 18 to 54 is that what you said, 18 to 54?
Joe: 25, 54 but-
Patrick: 25 and 54 and you basically said they all have the same interest and they don’t.
Joe: No they don’t.
Patrick: And they’re not even on the same device. So you’ve got to break it out by device; tablet, mobile, desktop. And you’ve got to break it out by each age group. You’ve got to break it out by each interest. And you got to break it out by each keyword. Because if you don’t get that data in there you’re science is [inaudible 00:28:04.6] value is.
Joe: Okay so someone doing this on their own in an Excel spreadsheet doing … think they’re doing fairly well odds are that they could be doing a whole lot better.
Joe: Right. Another … okay so the tip there was I keep, I want to call it look alike audiences but it’s not.
Patrick: Just call it multi-variant testing. In AdWords, you’ve got to multi-variant test, and you’ve got to get as granular as possible to get the learnings out of that, out of that platform.
Joe: Multi-variant testing, okay.
Joe: Second so the tip, the next thing you’ll sit down and tell somebody to look at?
Patrick: So on Facebook, it’s completely different. You can’t, you have to bucket everyone together and then as soon as Facebook finds you that acquisition and that’s you know obviously Facebook and Instagram then it starts to learn okay now I know who you’re looking for and it starts to find all the people that look alike. That’s where the look alike part comes in. Facebook’s AdWord is working in the background to figure that out. When we first set out it might be looking at your return and saying oh my gosh I’m doing way better on AdWords. You have to stick with it. And one of the things that we see as well is that you have a longer sign up or click to buy solution in your platform. What you’ll see is people will start that buy on Facebook and they’ll get to your form and realize that they don’t have enough time for this and they need to go sign up on the desktop. And they’ll go to Google search, look up your brand and you have to be able to do that. And that’s where that DCM code comes in to play; from double click.
Patrick: It actually digi up and see the assist on Facebook to AdWords, give the credit to Facebook that was the person who … that’s where they saw the ad. They’ll just go in to the desktop to finish filling it out
Patrick: That makes sense?
Joe: I did evaluation maybe three weeks ago for someone that back in the first quarter they reduced tremendous volume in their business by Facebook advertising. And then the algorithm update hit in I think April, you know by May. And they went from let’s say a half a million a month in revenue to 40,000 a month in revenue.
Joe: Incredibly painful.
Joe: They then jumped to Google AdWords and made adjustments on Facebook. But that type of algorithm update how do you and how does your agency … [inaudible 00:30:34.3] agency, how does your service address that, fix that, take care of that, and make sure that your clients are not going to be suffering from that major algorithm update that Facebook seems to be doing on a regular basis?
Patrick: Yeah, it’s a good point Joe I mean we’re all sort of at the mercy of the changes that happen. That update may have been Facebook’s response to Cambridge Analytics which was kind of like on the back end of that GDPR stuff I was talking about. So they have made changes and all these platforms change all the time. What we had is like when I was talking about Amazon with the seat, we’re in Facebook’s Ad Manager; we have a Facebook rep so we … those changes come to us before. Hey look here’s how you’re going to have to set these campaigns up in the future to be successful. Be prepared for this, this is going to be our algorithmic change and they’ll never tell you what’s in the science behind it. But you bring up a valid point about Facebook; it is a very content rich platform. You have to be testing instead of multi variant testing, different light items of campaigns. What you’re really doing there is your multi-variant testing creative. So you have to look at an audience and you have to understand is the audience tired of my ad? They’re seeing the same ad over and over again. Are they tired of that ad or is the audience exhausted with my product? They don’t want it anymore and I have to go somewhere else. But typically what we’re doing in Facebook is a lot of creatives popping. So well create a slot, 15 different pieces of creative image a week period [inaudible 00:32:19.0].
Joe: So with AdWords the campaigns you could have a thousand plus potentially.
Joe: Maybe at least 6,000 with Facebook it’s more about the creative and fifteen different creatives over a two week period.
Patrick: Yeah that’s right.
Joe: And then you’ll continue to test that and swap it out to just continually monitoring the click rate and conversion rate.
Patrick: That’s right.
Joe: What about video on Facebook is that something you’re doing and recommend?
Patrick: Yeah you know [inaudible 00:32:46.1] there are working really well, there’s video component in there. But yeah we’re seeing great conversion off of short video. And you know you … on that creative side you have to have high quality images and the videos don’t have to be very long; two, three … three to six seconds perfectly in there.
Joe: I think the quality I think the audience gets because that’s the number one thing in terms of their own website and the Amazon seller accounts is top quality photos that should be the first thing. All right so we talked about Google AdWords, we talked about Facebook, any other thoughts in terms of you sitting down with somebody having a drink and what they should look at if they’re running an e-commerce paid advertising campaign?
Patrick: Yeah I mean actually on the paid advertising side I … you just have to keep exploring the platform’s interest, is that really good … if you know how to use that platform it’s becoming a very good conversion platform. And it’s interesting when you start to see these new platforms come out typically because they’re new there’s not a lot of complex decision there so if you can … it’s kind of a land grab. It’s kind of like what Facebook did to Google. Facebook was a new platform, they finally got their Ads Manager to work properly and Power Editor is what they call it. And people have done really really well. Same thing is happening with Pinterest now. They’ve got their advertising technology and algorithm is starting to do really well in the backend of collecting data and saying oh this person who bought this is also buying this and they look alike kind of thing. Pinterest is becoming a CPA platform.
Joe: Okay, so AdWords, Facebook, Pinterest … and when we say AdWords when we say that we are talking about Google content searches plus I assume were talking about YouTube looped in there as well.
Patrick: Yeah YouTube is very tough in terms of direct conversing. What you have to do on YouTube is you use YouTube as a mid-funnel driver to your branded keyboard search. So I know that that sounds challenging but your creating an awareness campaign but you’re looking at how that’s driving cheap CPA in AdWords because it’s your brand and that costs less than say some generic term that like clubs or something like that; whatever you’re selling.
Joe: Okay. So when you work with a client do you work on … obviously, you’ve got a budget that you work on, goal setting with either cost per lead or cost per acquisition things of that nature. People … my point is that I know that when I was in the audience is just listening thinking about hiring someone that I was worried that they’re going to blow up my budget on it.
Patrick: Oh yeah.
Joe: Do you work with them on all those goals as well?
Patrick: Oh absolutely and everybody is logged in. We’re typically buying on your account so nothing’s getting taken out of there. And again like everything starts with that audit. But back to your point about I think what entrepreneurs do is they need that margin or store ad to be really high to afford the inventory. And what we go about with Dave and some of the other entrepreneurs here is we want to help you with that. So we’ll [inaudible 00:36:19.8] with you so that you can take a little bit more risk on the advertising side. And we talked about this a little bit before the show and it’s what I talked to Jason about-
Joe: Yeah let me just jump in and get to the point so people understand.
Joe: Part of the biggest problem that a bootstrapped physical products company has is amazing growth and lack of capital to buy more inventory; they’re growing at 100% month over month, year over year. And they’re taking all of that working capital and putting it right back in inventory and just trying to keep up. And what I do or anybody at Quiet Light does evaluation for that business we talk about planning. One of the simplest things to be more profitable is just don’t run out of inventory. But it’s kind of hard because they run out of money and can’t keep up with that growth. So what you’re talking about is as an agency, as a firm, as a partner-
Patrick: As a partner.
Joe: You’re willing to work with them and lend them money to buy that inventory.
Patrick: That’s right. When we went from $80 to $16 CPL, we broke our partner’s logistics. That … I can sum up what you’re talking about in just amazing growth; we have the same problem. So you don’t have enough capital, no bank is going to give you a decent loan, your business is too young in the first three years and so we recognize that. We’re able to look at your advertising and we’ll tell you what we can do on the execution side. But we have to make sure that you have the logistics down in the inventory to go take those risks. And we want to take those risks with you. So overall it’s to grow your business as big as you possibly can. So that’s the goal. That’s how we make money.
Joe: It’s [inaudible 00:38:11.9] it’s not all that different from Quiet Light, we’re here to help. We have that … sometimes that stigma of oh you’re a broker and that was the hardest thing for me going from entrepreneur owning my own business to entrepreneur that’s a broker advisor is that those entrepreneurs they say you know I never want to sell my business. I don’t want to talk to you. I don’t want you to talk me into something. But we are here to help and help you grow your business and build that relationship so that when you plan to sell you’ll exit and you’ll exit well.
Patrick: That’s right.
Joe: And what you’re doing is the same thing is you’re helping more than anything else. Of course, you’re a business trying to make a living too and obviously doing it very well. But you’re going to do the audit for free, you’re going to do the test for free.
Joe: And then you’re going to dramatically reduce that cost for acquisition or cost for lead whatever the case might be in what the parameters are that you set with the client.
Patrick: That’s right.
Joe: And they’re going to have a problem which is dramatic growth and they’re not going to be able to keep up with the inventory. They probably already can’t keep up with the inventory purchasing and you’re going to be there to help fund the inventory purchases and keep this growing which allows you to spend more money on their behalf and a great cost really a great cost for acquisition and make more money for yourself along the way as well.
Patrick: Yeah. When we started our company we did it on American Express and Google AdWords buy in YouTube. It [inaudible 00:39:37.5] credit card every $700, so you know I feel your pain that you were feeling and we get it and it’s real. Growth is tough to manage; very tough to manage. So for me, I like to consider myself sort of a scaling expert whether that embodies locations and sales. I’m good at that. I mean there are people here that will just do that … building a brand from scratch and selling it for hundreds of millions of dollars.
Joe: That’s amazing that you get that kind of talent that is choosing to work with you. It’s kind of a great working environment for these folks.
Joe: Ok look I never have to work again for the rest of my life but you’re making it fun and we’re changing people’s lives so let’s go ahead.
Patrick: Yeah and think about Joe, I meant it’s exciting. I mean you’re in this business because you get to meet really interesting other entrepreneurs. And they all bring something interesting to the table. When they take a nap on we’ve all been in that battle together and this is a new sort of idea like why are you doing this so-
Joe: It’s great.
Patrick: Yeah it’s got to be a part where we’re really excited about it and happy to bring it to the market.
Joe: Yeah listen, I want to end it here simply because people should be reaching out to you. It’s a very least they’re going to learn something in the review process. They’re going to learn at the very least what they’re screwing up on, what they’re doing wrong, and what they can do. Choose to do it themselves or-
Patrick: Anything works, that’s right.
Joe: Have you test it and prove that you can do it better than they can. And then they can free themselves up for other things as well like additional product development and clean documentation on their financials. So I say that in every podcast episode hire a good [inaudible 00:41:23.0].
Patrick: That’s right.
Joe: And one priest, they’ve heard me preach before. Patrick listen thanks for being on the show. Thanks for taking time out of your day I know you’re very busy. We’ll go ahead and get this produced get it out to folks and share it with you as well so you can share it with your team.
Patrick: Joe thanks for having me.
Joe: It’s great man, thank you. We’ll talk to you soon.
Patrick: All right man, take care.
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