Ep 41: The Top 3 Things I Look At to Tell You If Your Ads are Working

Description

Stop guessing whether your ads are working — and start asking better questions. In this episode, you'll learn the four questions Nicole uses to evaluate any local ad campaign, why ROAS looks completely different for local businesses than online businesses, and what the ad funnel actually tells you about where leads are dropping off. You'll walk away with a clear framework for tracking your results, knowing when to be patient, and knowing when something actually needs to change.

Timestamps

00:00 — Welcome & Nicole's mission to help 100K local businesses
 02:15 — Why there's no single "magic number" for ad success
 04:30 — How local ads are different from online business ads
 07:00 — What ROAS means and how to calculate it
 10:45 — Cash collected vs. lifetime value ROAS
 14:20 — Real examples: cleaning company, therapy practice, yoga studio
 18:00 — The 4 questions to replace "is my ad working?"
 20:30 — Breaking down the ad funnel step by step
 26:00 — Click-through rates, form conversion rates, and what to look for
 30:00 — Are your leads actually responding and converting?
 33:00 — Softer wins: the "vibe check" for local ads (Robert's gym story)
 36:00 — Overview of Hometown ADvantage membership
 40:00 — The July 6th live launch sprint + membership pricing

Links

�� Website: www.nicoleeldridgemedia.com

📸 Instagram: www.instagram.com/nicoleeldridge_ads

💻 Join Hometown ADvantage: www.nicoleeldridgemedia.com/hometown

Transcript

0:00

Hello, hello. Welcome or welcome back to Hometown Advantage, the podcast This is your host, Nicole. I've never said that like that before, but I just felt like it today I am your favorite ad strategist, the one that specializes in local specific ads because my dream and my mission in life is to help 100,000 local businesses from around the country the United States of America learn how to run ads so that they can grow their business, support their community, support their team members, and support their family on good money, not just like making it money, right? That's what I'm on a mission to do, and that's why I'm here today I'm actually recording this on a Saturday. I have been loving recording podcasts on the weekend. It's just something about having no other real work responsibilities to focus on. I can just come and be completely here and really use my full creative brain to share openly about the state of ads, how I'm feeling about ads right now, what we're noticing with ads, and I can give you the best advice with this clear brain that I can Also love my babies, and I love my husband to death, but what a fun little break, you know? During the weekend I get to come talk ads, which I could do every day, all day long I have a really good one for you today The title of the episode is the top three things I check to know if ads are working or not. But really what we're talking about today is how to know if your ad is actually working, and what I look for behind the scenes, and how I advise my clients to go about tracking things, how much to budget, all of these things So that when you're running ads, you don't feel like you're just flailing out in the water and praying things work. You can feel confident In the fact that it's either working or it's not Okay, so we're gonna talk a lot more about than these three things because there is a deeper story to them, but that's just a little lesson in hooks, titles, all of that. I knew that the top three things I checked to know if my ads were working would sound better than the most important ad metrics. That's boring. Okay, but I get this question a lot, and I understand why. It's really hard to keep spending money when you don't know if things are working in your favor or not. So let's dive in Now, s- a lot of people are looking for a magic number that tells them yes or no. And so the unfortunate thing I'm gonna drop on you right here in the beginning is that there isn't really a magic number or magic numbers I can give you. Actually, there are some. We probably won't get into those today, though, when it comes to this means your ad's working, this means it's not, cause obviously the real answer is it depends. It's like the most unsatisfying answer ever. It depends on what your goals are, how much you're spending, what you're selling, what you're measuring, your business metrics, all of that So I'm gonna talk about how we determine what numbers to look at, and hopefully by the end of this episode, you're gonna be able to stop asking, "Is it working?" And start asking a bit more specific questions at least Okay, now I'm gonna preface this by talking f- just for a second about the local ads versus online business ads, because again, they're not the same game. I talk about this all the time, how local ads are different, and they're different in a couple ways. One, local ads work on a much more compounding basis than online business ads. This is what I mean by that. You are targeting a much smaller set of people, which means your budget goes a lot further Also, your budget and ad dollars are more likely to result in things like local collaborations, referrals, repeat customers, all of this stuff, which again ends up compounding your possible results. Now, on the flip side of that, local businesses also have expenses that usually look a lot different than online businesses. So for myself running an online business, a lot of times I am happy to celebrate a 2X ROAS, which means for every dollar I put in, Meta/the universe spits $2 back out at me. Because it's literally like a money machine. Can you imagine having an ATM outside your house where you could put $1,000 in and it gives you $2,000 back? You could put $100,000 in and get $200,000 back. Some people like to scoff at a 2X ROAS, but if you don't have a lot of overhead, then you're literally just making a dollar every time you put in a dollar, which is amazing. Now, I will say that my launches of my group program more often resulted in 4 to 5X ROAS, so that's even better, right? But I would still be satisfied with 2X ROAS, and when we're running different types of ads that aren't live launches, sometimes that is closer to what we'd see as a 2X And I'm sorry if you don't know what ROAS is. I just realized I've been using that term a lot. Return on ad spend. R-O-A-S. Return on ad spend. If someone were to ask you, "Oh, you're running ads. What's your ROAS?" They're saying, "What's your return that you're getting back?" Side note, I once did a webinar and I was using this term that we use a lot in advertising, ROAS. And someone went on Threads and was like, "I can't believe I just heard an advertiser use the term ROAS and pronounce it as RO-as, R-O dash A-Z. Like, that's so strange." She was clearly talking about me. But then luckily, by the time I got there and saw it, there was, like, 100 comments on it being like, "That's literally how it's pronounced." That's how people say ROAS. We don't say ROAS, we say ROAS. Okay? That's just a known term. So if you didn't know that, now you do. Now, here is the thing about tracking your ROAS as a local specific business. It can be really tricky, right? Obviously, with my business, I know that I can spend $10,000 on ads, and then maybe a certain number of people purchase my program, and I make $80,000 f-from those purchases. That would be an eight, 8X ROAS, eight times. It's really hard to track that for local specific businesses because a lot of times you are giving custom quotes, or you are working in a membership model, or you often have customers that come back time and time again So it's not exactly fair to just track that first time purchase, right? Okay, so then sometimes that means we get into tracking two different numbers: cash collected ROAS versus potential lifetime ROAS. Let me explain. If you own a cleaning company and a client books a $200 clean And you spent $200 in ads to get that client. That's technically a 1X return on ad spend, right? But if that client gets that $200 cleaning every month for a year, that ends up being a $2,400 client, not a $200 client Which comes out to a 12X ROAS, okay? So I don't want this episode to be, like, full of me doing a bunch of math or you having to do a bunch of math. I'm just trying to show you how it's different and how, honestly, tracking c- has to come down to personal preference and comfort level. We like to track those two numbers. We will ask our clients, "What is the average lifetime value of your customer?" So for example, we are working with a therapy practice right now. One session costs around $200, but the average lifetime value of a client Is actually closer to $4,000. So we will just break down both. What is the cash collected return of every new client that has their first appointment and they came from ads? And then what is the lifetime value return on ad spend? Because that is what we should be paying closest attention to A lot of times the cash collected on the front end ends up being in the negative, but it's worth it because of the return over time Another example is a yoga studio. We just ran ads to a $37 offer where they could come in for the first month for $37 Now we can track cash collected based on how many people purchased that $37 offer, and we will likely come back in the red. But the idea is that a decent percentage of those people who came in on the $37 offer move into the monthly membership. Then they can say, "Okay, on average, our members stay for nine months, meaning our average lifetime value is nine months times the price of the monthly membership So that's the number we can use to track our estimated return on ad spend Okay, so that's the big overarching return on ad spend breakdown. Now Here's how we can break it down a bit simpler. I want you to replace the question, is this working, with these four questions. Okay? Question one What is a new customer actually worth to you? So if you knew a new customer was worth around $2,500, let's just say, to your business, how much would you be willing to pay to get one? Okay? This is gonna come down to some things expenses, some things overhead. I actually have a full formula that I teach in my program, Hometown Advantage But an example is that a gym owner who knows an average new member is worth, let's say $1,500 over the span of their membership can feel pretty good about spending $100 to get someone in Versus someone who's just thinking about this month's revenue We just started working with a photography client in my agency, and she shared how Even with our agency fee and with her ad spend, she would be happy to get one new client a month from our ads because she knows the amount that people usually spend with her is gonna be right around what she's paying, and she also knows that a lot of people who work with her refer her out to their friends, and they come back for other photo shoots Down the line. So she is willing to spend decent money to get one new customer in the door because it's going to pay her back time and time again down the road. Okay, now getting even more granular than that. I teach about the ad-specific funnel inside my program, and basically what it means is there are steps when someone sees your ad that we have to have them take to get them all the way from step one, seeing your ad, to step whatever number it is, I will break it down in a second, becoming a customer. In each step, you're obviously going to lose people, but the trick is knowing what the normal amount of people is to lose during each step so that you can fix wherever step an unproportional amount of people are falling off. So let me try and visualize it for you. Picture a funnel something you would put into, I don't know, to funnel car fluids into your car. I literally know nothing about car fluids. I'm just trying to think what else you might use an actual funnel for. Or you're, like, trying to pour something into a small bottle or something like that. And how it's open at the top And then very small at the bottom. At the top is going to be everyone who sees your ad, everyone who Meta chooses to target with your ad on their feeds. That's the biggest part. Okay? The next step is actually somebody clicking a little button that says See More on your copy or your caption. Because when someone sees your ad, they only can see the first two lines of the caption, and if the photo or the video plus those two lines are catching someone's attention, then a lot of times they'll click See More 'cause they wanna read what the rest of the post or ad says Okay? So you've got the top of your funnel, everyone's seeing your ad. You're gonna have a lot of people fall off, but not everyone, which is... At least that's the goal, into the next step, which is clicking See More. Okay? So now you've got a smaller amount of people who've now seen your ad, and they've clicked See More to read it. The next step is actually clicking wherever the ad is taking them. The first ad I teach in Hometown Advantage is the follower ad, so the ad takes them to your Facebook or Instagram page Maybe you are running a lead form, so it takes them to the form. Maybe you're running to a landing page, so it takes them to the page. That's the third step. First they see the ad, then they click See More to read the copy, and then out of all the people that click See More and read the copy, not all of them are going to click and actually go into the place you're sending them. But some hopefully will. Okay? So then you have those people who've gone to the next step. Not all the people who go to that next step are actually going to put in their information or do the next thing you want them to do. But that would be the next step. Are they filling out their name and email and clicking Submit to become a lead in your business? Are they following your page? Whatever the next step is, okay? And then the step after that is of all the leads that come in, of those people who have taken action from your ad, how many of them can you actually get in contact with? And then how many of them actually become clients and customers? Do you see how there is six steps? I can't... I didn't count as I went along, but six steps from someone seeing your ad to actually becoming a customer Okay? So we use those breakdown steps to see if our ad is working. First question we ask, are people stopping and paying attention? Is anyone actually clicking see more and reading the rest of our ad? Or are people just completely scrolling by because the ad is not stopping them at all? Are people actually clicking to go to the next step? Or are they not because the rest of the ad just wasn't compelling enough to make them take that action? We check this through click-through rates, and I tell you in my program exactly what numbers to look for your different click-through rates. It's different depending on what type of ad you're running, what your business is, all of that. Okay? A good ad stops the scroll. So if nobody's clicking, then you know that's a problem right off the bat. It's either what the first part of your copy says or what your creative looks like. It's not standing out Okay? Next step. Let's say people are clicking and our click rates are where we want them. Are the people who click actually doing something? Are they actually filling out the form? Are they actually giving you their phone number? Okay We know that if people click but they don't actually fill out the form or book the call or send the message, then something is stopping them from doing it. It might be what you're asking. They might not feel motivated enough by your offer to actually go through the steps that you're asking them to take Maybe some of your messaging on your landing page isn't matching the messaging of the ad, so it's the wrong people getting to the landing page, and they decide, "Nope, this isn't for me." There's lots of different things it could be, but that is the next step in the process that we're going to check to see if your ads are working. It's called your form conversion rate or your landing page conversion rate. Again, this is a number that I will give you inside the program of what you should be looking for. You also get a weekly tracking sheet, and I show you step-by-step on how to fill it out for each type of ad that we run. And I tell you, this should be your goal of your page conversion rate or your form conversion rate If we're not hitting that, we can troubleshoot together on how to get it up. Okay? And then the last question is at that bottom of the funnel stage. Are the leads who come through responsive and converting? Okay? So it's really common for people to get a big list of leads, but then not be able to get in contact with any of them I actually have a full lesson in the Hometown Advantage course on what to do when your leads aren't responding or converting. And I've got four or five different things that we do every time because it's common. It does happen a lot, but there's things we can do to change it. It doesn't mean meta ads don't work Okay? So those are the four questions that we think about. One, how much are you willing to pay for a new customer? Two, are people stopping and paying attention? Are they actually clicking? Three, are they actually taking the action that you want them to from your ad? And then four, are they responding and converting into actual paying clients Okay, so the biggest, most important question we're always gonna come back to is what are you willing to pay for your customer and what are you currently paying? What is your cost per acquisition? Because we can know absolutely cut these ads 'cause you are not getting your target cost per acquisition, or we can say, "Okay, that's great. We're on target, but let's see what we can do to make it even better so that you can pay even less to get a new client." We have other numbers we look at, but I'm not gonna go through every single number in Ads Manager with you today. Of course, we don't even look at every single number. But we do look at things like the click rates that I mentioned, and frequency, and your cost per lead, and all of that stuff to help give us more information and tell us the full story on what your ads are doing Of course, you do have to give your ad some time to breathe to get reliable numbers. I actually teach something in the course that an ad mentor taught me called the one, three, five, seven rule. It's just about not touching your ads too fast so that they have time to breathe and we can actually get reliable metrics from them The last thing I wanna touch on is that sometimes it's not all about the numbers that are in Ads Manager, okay? It's about are people telling you they saw your ad? Is your phone ringing a little bit more? What is the vibe? I always tell my students, obviously check the data. Let's go back to the data, yes. But also, you have your finger on the vibe of your business. Is something happening? Are people showing up? Give it time before you decide it's not working, but also just pay attention to those quieter, less direct wins because local ads can make such a big difference in that aspect. I have a client I had worked with, his name is Robert. He owns a gym. He wasn't getting a lot of direct response, like straight from his ad, became a member. But he always talked about how he started my program in March, and April was, like, his busiest month ever, and April has never been his busiest month ever. January felt slow when that's supposed to be the busiest month ever February felt even slower, and since he started ads in March, he saw April pick back up like crazy. Old clients coming back, new clients coming in, current clients bringing their friends because he was just getting visible again to them So the moral of the story is that, "Is my ad working?" actually just is not a good question to ask. Instead, you should be asking yourself, "How much am I willing to pay for a new customer? Is my ad stopping the scroll? Is the offer converting them into a lead? Am I getting new clients and customers?" Because most of the time when the ad is, quote-unquote, not working, it just comes back to one of those things. Now, if you want more in-depth, detailed support from me personally and my team on how to get your ads working even better, or if we think they're working based on these things, you are going to want to be inside Hometown Advantage, the membership. Not only do you get full access to my Hometown Advantage course, where I teach you step by step how to strategize your ads, how to create your ads, how to write your ads, how to set your ads up in Ads Manager, how to track your ads, how to scale them But you also get to submit your ad data every seven days, once a week, to us for us to review and give you direct feedback on what we would do based on your goals and your business Sometimes we might be advising you to turn certain ads off. Sometimes we might be advising you to spend more because your ad's working so well, you may as well spend more to make more. Sometimes we might be advising you to change up what k- types of ads you're running, what you're saying in your ad, your targeting settings, any of that goes There is not another place where you are going to get that level of support without paying thousands a month in fees On top of the weekly ad data reviews, we are also gonna be hosting live trainings. The first one is the first week of July. I'm hosting a live launch sprint, where all together we're gonna be setting up our local follower ads step by step. I'm going to give you templates to write, to create your reels. I am going to be walking you through step by step how to set it up in Ads Manager, and you're going to be following along with me, and you're gonna be on the call live with me so that you can ask questions along the way, get feedback, share your screen, all of it That is going to be only for people inside the Hometown Advantage membership when that goes live, which is gonna be July 6th We are opening the membership up on June 23rd You will have a choice to either join month-to-month for $99 a month, or if you are really ready for us to dive in together and go deep, you can sign up for the six-month commitment, where not only will you get one month free, but we will also set up your entire ad account for you. We set up your targeting settings, we create your Facebook Pixel, which has to do with tracking on your website, and if you've already run ads before, we'll record an ad account audit explaining why we think things worked or didn't based on what you tell us. We give you a whole form with all the information that we need about your prior experience with ads I'm so excited for this. This is just another step in my mission that I mentioned at the begi- beginning of this episode to support 100,000 local businesses around the country And I want you to be one of them, especially one of the first ones inside the membership version of Hometown Advantage If you have any questions at all, please reach out via Instagram, via email. My email is support@nicoleeldredgemedia.com. I'm gonna be sending emails about the membership. You can hit reply to any of those, and either someone on my team or myself will get back to you See you there