In Part 2 Ralph Burns and John Moran continue their breakdown of why ROAS (Return on Ad Spend) is an outdated and misleading metric for scaling businesses. They introduce a better, more reliable metric that high-growth brands use to measure success—one that actually aligns with business revenue and profit, rather than vanity numbers. Expect insights on how to use Meta for prospecting and Google for conversions, why multi-channel attribution is essential in today’s digital landscape, and how top media buyers are shifting away from ROAS in favor of more effective tracking strategies. If you’re still optimizing for ROAS, you’re probably leaving money on the table. This episode reveals the key changes you need to make right now to maximize your ad performance.

Chapters:

• 00:00:00 – Welcome Back: Why ROAS is Failing You
• 00:00:07 – The Hidden Flaws of ROAS (And What to Use Instead)
• 00:00:23 – The Metrics That Actually Drive Business Growth
• 00:01:20 – Meta + Google: The Ultimate Ad Strategy
• 00:02:39 – Real-World Case Study: How This Brand Crushed It
• 00:04:13 – Stop Wasting Ad Spend: Smarter Budgeting Tactics
• 00:05:22 – Profit-First Marketing: Why Product Focus Matters
• 00:11:52 – Behind the Scenes: Live Campaign Breakdowns
• 00:18:30 – LTV & CAC: The Secret to Scaling Profitably
• 00:19:04 – Decoding Campaign Metrics for Maximum ROI
• 00:19:33 – The Overlooked Link Between Profit & Retention
• 00:21:16 – Treating Marketing as an Investment, Not an Expense
• 00:22:59 – How to Measure Business Health Beyond ROAS
• 00:23:24 – Bully Stick Central: A Scaling Success Story
• 00:24:25 – How Northbeam Helps Brands Scale Faster
• 00:28:11 – Final Takeaways & What’s Next for Smart Advertisers

LINKS AND RESOURCES:

• Tier 11 Jobs
• Perpetual Traffic on YouTube
• Tiereleven.com
• Mongoose Media
• Perpetual Traffic Survey
• Perpetual Traffic Website
• Follow Perpetual Traffic on Twitter
• Connect with Lauren on Instagram and Connect with Ralph on LinkedIn

Thanks so much for joining us this week. Want to subscribe to Perpetual Traffic? Have some feedback you’d like to share? Connect with us on iTunes and leave us a review!

Mentioned in this episode:

AppSumo – 13% off with code traffic13

Tier 11 Data Suite

---

Read the transcript below:

(Part 2) Why ROAS Sucks: The New Marketing Metric Everyone Should Use…But Aren’t

Ralph: [00:00:00] hello and welcome to the perpetual traffic podcast. This is your host, Ralph Burns and the founder and CEO of tier 11. And today’s show is part two of our two part series on why ROAS sucks. And, like I mentioned in the first show earlier this week, if you have not listened to that show from earlier this week, go back and listen to it. Why ROAS sucks. And the number one metric that we use here, which we have started to reveal here, and we’re going to get into more detail on that specifically on today’s show, this is a super important episode. And like I mentioned in our, first rebroadcast.

Ralph: This is one of the most downloaded shows that we’ve ever done here on perpetual traffic. And I think the reason is, is because it’s counterintuitive. It’s very relevant to a lot of the marketers who are listening to this show and you as a marketer, you as a CEO, you as a director of marketing or a VP of marketing, this is something that probably your team is getting caught up with and having been on multiple.

Ralph: Dozens of client calls the last couple of weeks. This is still a [00:01:00] metric that rules the day, which is ROAS. And ROAS is a no longer a leading metric. There are better ways to measure the growth and scale of your business online. ROAS, especially in app. Sucks. And John and I get into exactly why and how to use this new metric in order to scale and grow your business.

Ralph: So, we get into some other things here, which is, how to use meta for prospecting and Google for conversions. John gets deeper into that sort of deeper into the funnel, how we use the two platforms together. Once again, this is the first episode that we did with John as a member of tier 11, remember when he was over at solutions aid, he was only a Google guy.

Ralph: Now he is a multi channel guy and has a lot more tools in the toolbox. So we talk about that here as well as, , how to choose the right product to sell if you’re struggling with that on both meta and Google and how to use them together. Because Meta, Google, email, socials, SEO, TikTok, Snapchat, they all work [00:02:00] together to create conversions.

Ralph: They’re not isolated in their own little silo. That’s an old way of looking at things. If you’re looking at it, first click. ROAS on all the individual platforms. You’re looking at it the wrong way. You’re fighting, you’re fighting yourself with the money that you’re spending and the time that you’re spending on all your other marketing activities as well.

Ralph: So let’s get right into it here. It’s part two of myself and John. Take it away, boys.

Ralph: you’re listening to perpetual traffic.

John: So we looked at the last few years and we saw that Meta kept pushing a little bit harder and it hit a point of diminishing return and it became not profitable. So the client was upset.

John: So I I’ve had two calls with this client. One was to get the lay of the land and do the hours worth of research in order to figure out what happened and then one hour to rebuild the campaigns instead of Google. [00:03:00] And now the person’s kind of just off and onto the road. So I didn’t have necessarily a chance to look inside of Meta too much.

John: It was just on a screen share, but what was happening was Meta was going after they didn’t have exclusions. They didn’t necessarily have. It was just a spend on whatever Meta wants to spend kind of thing. And then Google was like, all right, because it’s performance max spend on whatever Google wants to spend.

John: So it was just kind of two ships passing in the night, but also crashing into each other and not realizing it. So the Meta spend just kind of kept scaling and then didn’t really push the bottom line. And then when they pull back 40 percent year over year from February to February, there wasn’t a reduction in that overall revenue.

John: That’s what we looked at is meta was, it was non targeted spend and non excluded spend that just kept growing and when it pulled back, it was like, okay, it’s probably going out on like sites or advantage plus was just kind of like spending it to whoever they wanted to spend on. It wasn’t actually going towards prospecting.

John: So what we did is said, Hold tight on meta. Don’t do anything on meta. We want to change Google first and see how that reacts. Because while you never want to think of [00:04:00] Google versus meta, you also want to know that when you’re going from warm, irrelevant audiences to good, proper cold traffic with quality items.

John: You do want to measure that change and then next, do the same thing on Meta and see how that doubles downs on that. And then talk about scaling is using Omnichannel, using the same amount of ad spend increases per platform regardless of what their levels are at. Which means if Meta’s doing 70 grand and Google’s doing 30 and you want to scale, add 20 percent to both channels equally.

John: You don’t want to interrupt the life cycle path of the customer journey. You just want to amplify it. So that would be phase like three. But this first phase was, what channel do we go through first? And because this is a in demand type of product that does have a great amount of inbound search, it was just very easy to clean up Google first.

Ralph: Yeah. They kept meta, in essence, the same. You wanted to change the one variable and see how that would be impacted.

John: Yeah, yeah, we go after cold traffic, detach Google from meta and turn Google into a prospecting network [00:05:00] and not a regurgitation of semi poor meta traffic. What happens? It goes after new customers and it does grow and it does scale.

John: That’s fixed. Now we have to fix meta. And then once those bolts are fixed, you can then start to scale both equally. But it’s, kind of, two underperforming channels. Fix one, see how it works. If it’s fixed, fix the other one, see if that’s fixed as well and then scale both.

Ralph: another important part to this that I think I don’t want to lose this in translation here is that the 80 20 of marketing, like the parental principle of Put your best, most profitable products in front of those cold traffic audiences, especially the ones that you know are your best sellers. Like it’s just, I don’t even know if that idea unto itself is something that a lot of businesses even think of.

Ralph: Like how many SKUs does this company have in total? Dozens

John: or is it thousands

Ralph: or is it hundreds?

John: Yeah, I’m still in it. So this is actually 764.

Ralph: [00:06:00] Okay. So out of those, the 80 20 is, let’s say it’s a hundred products, maybe 50 80

John: something. Yep.

Ralph: 80 something. Okay. Somewhere in there. And that shift just to on its own, taking that out of performance max, which I don’t know as if we’ve had you on.

Ralph: Well, we have actually had you on talking about Performance Max because you were all about Performance Max years ago, and oh, yeah, you know, it

John: is still fantastic for specific use cases, but if you fill it up with junk meta traffic, you can’t scale it.

Ralph: Yeah, because it’ll just retarget on brand really

John: retarget junk traffic and only show up for brand and then it learns off of that.

John: So it’s so there’s so many different moving parts pieces. Do you want to see the irony of this? I made it my golden rule to never have a digital marketing gold rule. So

Ralph: it changes like,

John: yeah, yeah, it’s so unique. It’s used and people are, they always ask me, john, what’s the best way to do this? John, what’s the best way to do that?

John: I’m like, I don’t have an hour to go through every. Scenario specifically to your business,

Ralph: right?

John: And that’s [00:07:00] what’s interesting. There is no what is the best? What is the best is finding the best campaign? Hierarchy and structure on each channel for that businesses is like is it over 300 or under 300? Is it impulse buy or is it not?

John: What’s the sale cycle? Do they return? How often do they return? Do you have influencers that are driving a whole bunch of traffic that performance max and advantage plus are going to remarket

Ralph: when we don’t

John: want to? Like, exactly. There’s 1000 variables I can think of where it’s like the best is for that use case, the best would be this, but it’s vastly different for an ordering business.

Ralph: Same type of customer, different industry with a different background, all of a sudden you might do something completely different than what we just shared on screen.

John: I think this is, I want to go back a little bit to what you said is the way we’re sick, the driving the most amount of traffic to the proper product.

John: I almost would say that most businesses do think that way. The good ones do, and a lot of people that are in positions of power will still. Sing that from the mountaintops team. We need to get the traffic to these products. The [00:08:00] problem is agencies may not necessarily do that if they seem good to quote unquote row as.

John: So it’s like, well, we’re getting a five X. Do we really want to do what that guy says? Well, yeah, that’s the owner of the company. He built it and now he’s here. She’s here because of what they know what to do, but your row as is going to stop that. And if you make these changes and you see that row has dips down 40 percent of whatever it just dipped on me.

John: You’re going to panic and switch back. And then you’re going to tell the boss, Hey, sorry, you know, sir, ma’am, like what you want is wrong. So that’s, what’s interesting is it’s just measurement, but a lot of times, yeah, if you actually put the ad spend towards the products that have built the company and measured differently and do an omni channel.

John: Wow, what a novel idea. Like let’s drive traffic to a good product that sells . Right?

Ralph: Right. When a lot of clients come to us, they can think of multiple examples here. They say, all right, well, here’s our strategy. This is what we’re doing, and then what I was doing this day in and day out, I’d be like, all right, well if you wanna market your company, give me a list of your bestselling [00:09:00] products and your most profitable ones, so your best sellers, the most popular.

Ralph: Ideally leased competition plus highest net operating income, gross profitability, contribution margin, you know, name your metric like those are the ones that matter the most because I can get an 800 percent row ass on a 7 product that you make a buck on

John: and

Ralph: look like a hero, but that doesn’t move your business forward.

Ralph: So I think that just done to itself. These are a little bit. More involved concepts that have nothing to do with traffic, but it’s just decision making and understanding the business and my sense is that with this customer, it’s probably one of the first things that you asked is, well, it’s 80 20. This

John: Yeah.

John: Oh, yeah. The shocking thing. If you’re running Google ads right now, or if you’re even your own business happened to run. Your Google ads account as an example, before you click on a campaign, just click product, click your product list. It’ll show you all the [00:10:00] products that are all marketed in all campaigns.

John: Sort descending by cost, not conversions, not conversion rate, not row at sort descending by cost. Look at the five products there and say,

Ralph: Cost of that ad spend. Okay. Ad spend. Got it. That’s

John: yeah. Yeah. So when you start descending by cost, that’ll tell you what the ad spend is being spent on. So when you start descending by cost, ask yourself, are these the five products?

John: That I should be spending the majority of my ad spend on right there. I was, I guess half of everybody here that would try this would probably look at this and say, Oh, you know what crap, I shouldn’t be spending majority of my ad spend on these five products right there. You know that you have a structure problem for your business period.

John: That’s it. I don’t care what the ROAS is. I don’t care. I don’t care anything. That is a structural issue in your business. Especially if it’s performance max, you have very little control over. So it’s quite interesting.

Ralph: Yeah, it is. Do you factor in that question about best selling plus most profitable?

Ralph: Ultimately at the end of the [00:11:00] day, like we want to be able to scale and grow businesses and you don’t do that necessarily. Just by top line growth, but you really are looking at, and every business has this differently. We’ve had customers set it up inside meta, for example, like I don’t even care about what the retail price is.

Ralph: I just want to know what the contribution margin is. We alter our conversion value or net profitability, like net operating income. Like I want to know exactly what I net on everything or those the types of conversations that. Agencies should be having was with businesses just to begin with, because for me, when I’m talking to my team, it’s like care about gross profitability.

Ralph: I care about net operating income. I care about customer centricity, which feeds all of that. But those are the types of conversations that I don’t think a whole lot of agencies really have in this day and age.

John: No, not at all. And that’s the part that just is shocking to me. Here’s a great example. This is one that we don’t even necessarily need to blur.

John: This is a company that I’m a small equity owner in.

Ralph: Another [00:12:00] screen share fun with John Moran here.

John: Yeah, yeah, baby. So I’ll do this here. And this is the part where it gets real fun. And I’ll actually share two examples on this part. Let’s do this period here. We look at this time period here, which is just February 1st to the 21st.

John: You’ll see something here that we have net quantity sorting descending.

Ralph: We are in Shopify now. We are in the back end of Shopify, which is one of the things that John typically looks at first. Because that’s what It’s where the money’s collected.

John: This is what you should be doing necessarily before you even start marketing.

Ralph: Yeah,

John: really? I mean, if you have any sort of sales. We spent any dollars. Yeah, I know. Yeah. If you’re not doing this, you skipped a step.

Ralph: Yeah. You might, uh, you might want to watch this. Yeah.

John: Yeah. And so we’re looking at like what products have what sort of profit margin. And I think we started this on the 25th.

John: So this is the kind of after it’s 54 percent profit margin, where I think it would just take [00:13:00] two weeks before that was at 52. So what’s funny is when we look at the, this beef cheek roll here had a 62 percent profit margin, had 27 sales. And then I think here, for example, this beef cheek rollout now has 46 sales.

John: So when from 27 to 46, we just changed the meta ads and we drove our gross margin for 52 percent up to 54 percent in two weeks. We’re like, excellent. What changed? We just changed the meta ad of what we’re marketing to a more profitable product. Whoa, like groundbreaking novel idea. Like, holy crap.

Ralph: And for our listeners that may not know the difference between gross.

Ralph: Contribution and net in your case here. Gross margin is what specifically for this customer?

John: Yeah, so this is just our net sales of the products minus the cogs, what it costs for us to manufacture and ship the product out,

Ralph: right? So that is gross profit. Just for those of you who are not familiar with some of these accounting terms, which are kind of important terms.

Ralph: If you’re an agency, you don’t know this [00:14:00] shit, you should get an accounting book or read something on it. Anyway, I digress, you were rolling there. So going up from 52 to 54, pretty nice increase, yeah, in about 12 days.

John: Yeah, what’s interesting is actually, I’ll do this here. I’m going to pull up that meta account.

John: And you want to know what’s funny is this is a fairly small account. I mean, we’re just doing stuff and this is all fake. That’s not actually what they call tofu mofu. So for listeners that can’t see my screen, I’m just taking a campaign that was already running and just simply just changing around what happened internally.

John: But all we did here is you see everything else was shut off. here and we just started marketing those beef cheeks and it’s literally just one ad inside the beef cheek and the beef cheek what we did is say hey are you a person who is a website visitor well you’re excluded has bought anything ever you’re excluded as well so if you ever heard about us or been to our website you’re not allowed to [00:15:00] see my ads anymore and when we did that now a beef roll is perfect by any stretch but at least you’re

Ralph: doing that right there if you’re not it’s the biggest mistake we see in our meta accounts John,

John: yeah, well, reason why this one was so bad.

John: And the reason why we took this such a harsh approach is because metal was spending about it had about 60 percent of its attributed sales to existing customers. And when we just we said, Hey, before we start to build out everything, like people who have interacted with the ads and all those downstream things that after the first prospecting, we’re spending 100 percent of our money on prospecting right now.

John: We have zero remarketing, which again is a failure. But it’s to reset the account because once I start filling it up with people who have started to interact with my ads for the first time, now I can kind of move into also who are the people have interacted with the ads or have been to the websites and build up my remarketing, that kind of stuff.

John: So I had to reset the account, but in doing so I just did it to most profitable products. And what’s nice about this is here’s a good example of when you’re thinking about Omnichannel, the right audience is spending [00:16:00] the right amount of money on the right products. The before and after change of this, this is probably the best thing that I can share to everybody that’s not necessarily in this day to day in the weeds.

John: This is a first four days before and after of this test. So the first four days of shutting off the Advantage Plus, shutting off the non excluded audiences, Basically turning this from a kind of warm to an all cold. What you’ll see here is the blended CAC went from a 91 down to a 60. The new customer ROAS went from an average of 1.

John: 2 to 1. 35. My new customers went from an average of 3. 5 a day or 14 up to 18. My new customer sales went from 8. 76 up to 13. 70 and my profit per new customer went from negative 2. 57 to negative 1. 17 because we’re heading in the right direction. Our LTV is fantastic. We have a 60 percent return customer rate per month on a cohort, so I can afford.

John: But now [00:17:00] it’s spending a lot less. The only area is after changing this meta, which is the only actual channel that we’re marketing right now, the only thing that actually happened that was bad, repeat customer sales, 4, 500 down to 2992. This was off of just an email campaign that happened the day before.

John: That’s the only reason why this thing kind of went down is because we had a really good email sale. That blasted through a bunch of return customers that didn’t come next week. Great. But the new customers where we’re actually attributing them, just by excluding everybody and going pure cold, just having our CAC go from 91 down to 60 in first four days.

John: What was that like a 40 percent decrease in our CAC just by structurally changing the audiences that we were going after. And this is happening on every channel. Like. For all clients, it’s amazing.

Ralph: And you know, you’re going to get them again because this is 60. What did you say? It’s a 60 percent return, right?

John: Yeah. That’s what’s nice is we’ve been taking this mantra for a little while and we’ve kind of changed this company around a little bit. We did a whole bunch of changes in meta, but if we look at like the last 30 days, [00:18:00] as an example, out of 393 orders, it’s 62. 3 percent return customer rate. This company, we acquired it and it was an SEO only company for years.

John: So. Not big push from the customer. So just grow organically for years. And so that’s why if I spent a dollar on these people, I will have them return all the time. That’s why we can afford to kind of lose on that CAC a bit, our actual purchase, if we can get to a zero CAC, where it’s break even now, it’s just how many free customers do you want?

John: That’s that scale. And that’s what we’re moving towards.

Ralph: Right. Right. And the lifetime value of something like that is like, Oh yeah. If you’ve been able to measure that and serve a longer term timeline.

John: Yeah. We have 240. of 12 month LTV, so 240 lifetime value for each one of these customers. So if we’re buying, we went from buying them at 240 now down to 112, that’s the CAC change of this last kind of four days.

John: But if we look at our top line metrics, because that’s just attributed CAC from only spend that happened on meta. But if we look at our [00:19:00] lifetime, Lee, as an example, this is where that change took place. We started the beef cheek campaign here. This was on the day before the 25th. That’s when we started here.

John: So we look at the 25th. Again, it’s not going to be probably the best and perfect. Now our profits up 2100%. So yeah, we basically, our sales are up 353. Our marketing costs are up 411. At least that profit at 506 because this is again, really high COGS. You can see the COGS are up 336. They’re really low AOV, really low margin product.

John: But if I can have a net profit of 506 and our blended CAC be 45, 34, bad day here, but 50, 57, 58, 80, our return customer sales every day is like 600 to a thousand dollars a day. Now we’re a little bit. Sometimes over a thousand bucks.

Ralph: Good. And that should just be growing over time.

John: That will continually grow.

John: Right? If I can wake up and have $2,000 a day, that’s over $700,000 in basically sales a year that I don’t have to get [00:20:00] out of bed for now.

Ralph: Yeah, because you’ve done your job on the front end. ’cause you’ve figured out the math. And we’re also looking at life timely, which is another great, I wouldn’t even say it’s an.

Ralph: App per se, but it’s like a dashboard literally that shows all this.

John: It’s amazing.

Ralph: Yeah,

John: check this out here. This is where businesses need to measure and stop measuring an app. Roa’s my net profit on the 29th was 240 because I had a 1. 4 new customer row as Which people are like, Oh no, I need 300 percent ROAS.

John: Yeah. Okay. That’s the wrong thing. And at 1. 4 new customer ROAS, I had five new customers. I lost 24 on every one of those new customers that day, but then made 1, 300 in repeat sales, which I don’t have to try for anymore. And then my contribution margin that day was 240 bucks. Excellent. So measuring what can I afford?

John: How many of them can I afford? How many can I scale? We’re still losing a couple of bucks per new customer on top line, which is okay. That’s what we’re moving towards is putting all of our ad spend towards new customers and then refining that. But there comes a day [00:21:00] where it’s like a dollar net profit per new customer.

John: We hit a hundred K and spend. We’re just cranking this thing up because that is just going to grow and grow and grow.

Ralph: And I love this case study because this isn’t like, Oh my God, it’s a thousand percent increase in two days. It’s like, this is a gradual process. And I think it’s important for businesses to look at this and say, the ad platforms are not an ATM.

Ralph: You don’t put the card in and just say, Hey, how much money do I want that day? It’s an investment into the future. And I think that’s a hard thing for people to wrap their head around, especially if you’ve got new entrepreneurs with new businesses that have never done this before, they realize that marketing is an investment.

Ralph: And it’s something that you have to, I guess I have to quote Qasim here because this is the analogy that I’m getting at, like, everyone stops planting corn. All they want is the popcorn in the bag at the grocery store. Eat the smart food because it’s delicious, but nobody wants to plant the corn. Like this is, this is [00:22:00] what you need to do.

Ralph: You need to plant the corn along the way in order to get the corn and then pop. The corn and turn it into popcorn point is like, that’s what you’re doing. And a lot of businesses have a challenge with this. When you’re working with a client and they don’t quite see it that way. We’re talking, this is one that they see it, they get it.

Ralph: Reputation alone. Maybe it’s because you’re John Moran and like, you know, I’ll just do whatever this guy says, because I know he’s fricking smart, but to the listener that’s out there, that’s maybe struggling with this. What kind of recommendations would you have to get a client? Or, you know, if you are in business, you have to convince your partners of this.

Ralph: Maybe you’re the director of marketing and you have to convince your CEO of this. Like, what do you do to take them down that path?

John: First thing I would say is this is going to be some pretty, pretty crazy talk, but it’s true. If you’re a business owner or a client, task all of the people that are working with you inside of your business or as a vendor.

John: When we’re [00:23:00] talking about marketing, for example, only measure business health. Never measure a report. If I was a business owner and I had a vendor saying, here’s my report on my paid channel, I would throw it away. I would, it’s useless because what I would say is if the agencies that are involved, if they’re separate or an agency that is holistic, if they are not being measured by your business performance, your business health, nothing else matters.

John: The company that Bully Stick Central Company. This is a company that was acquired last year. And you can see I’m screen sharing right now on the back end of the Shopify. And in the last 365 days, I think it was actually purchased in March. So give or take here a few weeks off. But we have a 44 percent business growth.

John: A total orders up 34%. The average order value went up 9%. And our returning 41%. It’s only down six. But it means that we actually have more new customers. Perfect. But they are not wavering. So this is really good business health. That this trend continues. With a 44 percent business growth and a 158 [00:24:00] percent increase in subscriptions.

John: You win, keep going. Good job. Yippee skippy. Did we lose any money? No, we’re actually slightly more profitable during this 44 percent year over year scale. All right, I’ll see you next year. That’s how this should work. Or, in a large client, this is a client that is scaled massively.

Ralph: Oh, we’re looking at Northbeam here, if you’re not on the YouTube channel.

Ralph: Yeah, I’ll explain that one. Yeah, okay. Yep,

John: yep. Just trying to navigate. Yep, this is a company that’s scaled massively from March 1st, 2023 to March 1st, 2024. And inside of Nordbeam, which is we’re using as a total metric tool, just looking at all cash in, all cash out, top line business health, what I only measure, and I’ll share this so the people that are not seeing it, the screen, the only thing that I measure is total spend across all channels all year and total top line growth.

John: Regardless of channel all year. What this means is that if I spent 142, 000 in paid media over this 142%, sorry, if I spent 142 percent more in paid [00:25:00] media in one year, I should see something close that in my total revenue. And it’s up 129. 3%. So that means we actually put about 20 million in ad spend last year and made about 80 million more in revenue because that number is 43 million spend, which is up 142 percent and 153 million, which is up 130%.

John: Good. So you’re scaling well. And then what is my media efficiency ratio? My company’s ROAS, if you want to use it that, but it’s my company’s. Cash in cash out for that scale of 20 million or actually probably 25 million. The media efficiency ratio only went down 5. 4%. So what is 5. 4 percent of a 3. 5? What is it?

John: I don’t know, but basically, yeah, it was like went from 3. 6 down to 3. 54.

Ralph: So my business

John: health stayed the same. You are pretty good. That

Ralph: was pretty good. That was quick math right there.

John: Okay. I’m kind of winging it. So I get pretty close. No calculator

Ralph: needed.

John: Yeah, [00:26:00] right now, my cost per acquired first time customer only went up 9 percent of 6 and 91%.

John: So it’s about 60 cents. What individual channels measure and grew and doesn’t matter. Doesn’t matter. Doesn’t matter. Doesn’t matter. Does not matter.

Ralph: Doesn’t matter.

John: Doesn’t matter.

Ralph: That’s a case in point right there of this whole thing coming together at a massive scale. And it’s just a shift in mindset.

John: Exactly. Because if Google is just going after brands, it couldn’t scale. That’s pretty much it.

Ralph: There were all kinds of levers that you had to press in that big X that we just showed in the screen share. Oh, yeah.

John: Yeah. That’s a year’s worth of daily work and grinding and really doing it. But as an agency or as an owner, you should only be measuring your business.

John: That’s it. Because if your business report’s going to tell you you’re crazy.

Ralph: Channel reports, toss them in the trash.

John: Right. I mean, think about it. Really? General reports don’t matter. If your business is failing, who’s going to pat themselves on the back?

Ralph: Well, the agency might. We [00:27:00] see that all the time. Or your internal team.

Ralph: Let’s not just bash agencies here. I mean, there are internal teams where, Oh, yeah, yeah. And you know this, it’s like you work with internal teams that maybe like, you know, are doing the Facebook side of the equation and you’re doing the Google side. We deal with this all the time. It’s like you have to be able to navigate through it.

Ralph: It’s more challenging that way. Because they’re also trying to keep their jobs, they’re trying to maintain favoritism with the boss that I’m doing my work and I’m doing my job and I’m substantiating my existence. But even if the business is going down, the boss is the one that’s catching hell from the CEO.

Ralph: All shit rolls downhill anyway, so.

John: Everyone just needs to get on the same boat, really. That’s the thing is, it forces internal. It forces one agency, it forces all of the agencies. Everyone has to communicate and work together. The bad agencies would be like, well, we did our job, but it was Meta that failed.

John: Our meta agency is like, well, we did our job, but then Google took all the credit that those are [00:28:00] not people that can work together. If you have two agencies that are in their own boxing corners getting ready for the fight, about ready to kind of come out swinging at each other, the company loses.

Ralph: Yeah,

John: that’s it.

Ralph: It’s true. Well, this has been amazing, and I know we’ve talked our way through probably two episodes here, so this will be a two parter, but you know, obviously we’ll have you on. Many, many, many more times a year, um, professional traffic because it is such a trip. And this is the reason like this conversation is the conversation I’ve been wanting to have on this show for probably five years.

Ralph: So, and in large part because now we are together and working with you has been a fucking dream and my team is so excited. They’re like beyond excited. And it’s because of this. It’s not just because, Oh, it’s like John Moran’s finally on our team. It’s like this type of thing that we just talked about here is next level.

Ralph: This is where our space is going. This is where we see collectively you and I, as well [00:29:00] as, you know, everyone on the leadership team, which you’ll have the chance to meet out in Denver like in a week or so, which is going to be a lot of fun. It’s like, this is our mission to do this. Like this feels good when you can actually sit and grow a business and help them achieve their goals.

Ralph: And especially if it’s a purpose driven business where they’re really doing good stuff, there’s nothing better. When we first met about this whole idea, we just want to grow businesses. I’m like, that’s all we want to do. I don’t know why that’s what we want to do, but that’s what we want to do. And it’s the most fun thing in the world.

Ralph: So this has been a trip having you on here today. And obviously I’m pretty excited to have you alongside Tier XI. So Jon will be back. It’s not just because Qasim’s away down in Argentina. I think he’s just going down there to catch a tan. He’s not like working or anything. Well, he’s

John: got a year round tan, so I don’t know what he’s doing down there, so.

John: He’s getting even darker. Yeah. He’s going to

Ralph: cut his hair. That’s when he’s going to go. He’s going to come back. He’s going to try

John: even more taller, darker, and handsomer, I guess, this way. Taller and darker.

Ralph: Is that possible? [00:30:00] Oh, my God. Uh, well, excellent. This has been great. And if you, uh, have not gone over to our Telegram channel.

Ralph: We’re going to try and coerce John to join it, but perpetual traffic. com forward slash telegram. I’m looking at telegram right now. There’s all kinds of stuff going on here, which is really cool. And so our way of keeping in touch with you, the perpetual traffic listener and getting real time feedback, creating a community.

Ralph: We often talk about creating a community as a way to build a business and all right, we’re eating our own dog food here to a certain degree, but it’s also, it’s great to have the listeners like yourself in there talking about. Um, commenting on things that we discuss here on the show and getting sort of the behind the scenes stuff on top of that.

Ralph: So definitely check out our telegram and make sure that you do if you were not, maybe you were in the car listening, go back and watch this episode, probably two episodes together. We’re going to do a two parter here on our YouTube channel, which is perpetual traffic dot com forward slash YouTube. And of course, all the [00:31:00] resources and show notes for the entire show are going to be over at perpetual traffic.

Ralph: com. Make sure that you follow me over on LinkedIn and Qasim on his socials. We’ll give him a shout out at Qasim Aslam on socials. I haven’t even asked you every once in a while, like you comment on LinkedIn and there’s like. 10, 000 comments. Where are you doing a social thing right now? We haven’t talked about this much.

John: I usually went LinkedIn. I, my posts, I really try to make them extremely purpose driven and impactful and actionable. So a lot of times it’ll take a few weeks worth of development of something, and then I’ll share it on LinkedIn. I don’t like the thing where it’s like. Comment like if you hate Google ads on Monday.

John: I just try to deliver strategic actual items for people to consume. I’m not very social on social media. I only have a LinkedIn. Uh, that’s it. I don’t even own a personal Meta account. But yeah, LinkedIn is great. I love that about

Ralph: you.

John: Yeah, I like it. It’s easier. I’m kind of all business all the time. [00:32:00] I love

Ralph: LinkedIn.

Ralph: Yeah, I think LinkedIn’s great. Yeah, I think it’s totally underutilized and it’s also from the business perspective, it’s chances are, it’s probably where our ideal customer hangs out. So we try and narrow our focus there. We’ve talked about that many, many times here on the show. So, but definitely check out John when, and if we’ll try and get them to post more, but John does what John does.

Ralph: So. Like I said, super psyched to have you on the show here today. Go over to perpetualtraffic. com. We’re going to leave a lot of resources there as we do for every show we do here and join that Telegram channel. Love to learn a little bit more about you and give some feedback on maybe future shows.

Ralph: So I hope you enjoyed this week’s episode. Make sure that you do watch this over on our YouTube channel, perpetualtraffic. com forward slash YouTube, if you’re listening to it and you said, you know, , they’re trying to explain it here, but I didn’t really get it all the way. The YouTube channel will show you exactly through screen shares, exactly what John and I are discussing.

Ralph: [00:33:00] Even if you did listen to it, hopefully you enjoyed it. And you’re now thinking differently about these metrics, and these are the metrics that really do matter in today’s marketing landscape. And this is a theme that we’re going to continue to come back to in 2025 with examples of how we’re doing it inside tier 11, obviously using the tier 11 data suite, which was just sort of on the leading edge at the time of this original recording.

Ralph: Now it’s incorporated into everything that we do here, , at tier 11 and something that you should look at. As far as NCAC determining how to scale and grow your business, not using ROAS, but using new customer acquisition cost as your Northstar moving forward. So if you like this week’s episode, make sure you leave us a rating and review.

Ralph: We want to get this out to as many marketers as possible. Just like yourself, leaving a rating and a review will certainly help us do that and change the perception on ROAS. And how we’re really leading the charge here on new metrics that really do matter that scale and grow businesses in [00:34:00] 2025 and beyond.

Ralph: So on behalf of my awesome and amazing co host, Lauren E. Petrulo, until next show, see ya.

Ralph: You’ve been listening to Perpetual Traffic.