Is Your Location Targeting Hurting Your Results?

"Hello and welcome to the Collective Clicks Podcast. I'm your host, Brandon Bateman, and I'm joined by Garrett Cragan today."

"Who is, what do we call you? Product R and D."

"Rockstar. Rockstar. Yes. Rockstar. Digital marketer. That's best in the business. That's right."

"We are a company that helps investors level up their digital marketing. The information you'll get in this podcast will help you do that, but if you want to reach out to us to have us do that for you, you can go to batemancollective.com. So, to get started today, Garrett, let's talk a little bit about a nugget. What's one thing that you think is relevant right now that investors will benefit from in the digital marketing space?"

"Yeah, let's talk nuggets. One of the biggest pain points that we've seen lately on Google is cost per clicks are quite high. And the ability to see what people are actually searching has been taken away bit by bit. Over the last year by Google. So, an awesome way to get back those search terms and also bring down that cost is by having some ads running on Bing. Bing is quite a bit cheaper than Google and it does also tend to trend a bit older, which is great for our audience."

"And then on top of that, they don't have the same limits on the search terms they show you, which helps what you're actually spending money on to see if they're good searches or bad searches. And that's gonna, in turn, bring up your lead quality and bring down your ad spend waste. So that's an easy way to scale and scale efficiently with much better results."

"Yeah, that's awesome. I just have one question. Are you ever gonna call it Microsoft? No. Or are you just never, you're just putting your foot down?"

"No way. Just not gonna call it what it's actually called. It's Bing. It'll always be Bing. Yeah. Context for everybody. Good old Bing ads rebranded as Microsoft Ads, and I don't think anybody actually calls it that in the industry. I think the reason they did that is because it's not just Bing, right? It's Bing, Yahoo, AOL, and some other smaller ones too."

"Oh, DuckDuckGo is another one that's on there. Yep. So there are good search engines here. You could say, what would you say to someone who says, 'But who actually uses Bing? There's nobody uses Bing, so why would I even want to advertise there?'"

"A couple of factors. One, it's the default browser on all Windows desktops. So if they don't change that engine it's there natively, which old people usually don't. Which they don't. And also if they're like making a search for our keywords, then they're our target audience. So if they're there and searching it, then doesn't matter where it's being searched. Yeah. Yeah."

"You make a good point. What if you start to run Bing ads and then nobody ever... Like some people hypothesize, then you just won't spend any money."

"Yeah. Cause you pay per click. So not a big deal. Either they search and it's a win or they don't, and you didn't lose anything from it."

"Yeah. Fair enough. Yeah. Cool. So Bing. Good platform."

"Bing. The main topic for today is locations. I want to talk about where are people going wrong with locations? What are you seeing as a media buyer in accounts and how that's basically how location targeting impacts results. Yeah. And all those kinds of things. Locations are one of your single biggest levers for results."

"I like to think of results in two different ways. Cause clients ask us all the time, how do we get better results? And I ask myself that question every single day. And there's kind of two ways to do it. The first one is taking your parameters you already have and doing better within them. Being more efficient, optimizing. The second one is actually changing those parameters. Parameters are like, the locations you're targeting, all that kind of stuff. So you could have locations and you could be trying to optimize to get the most leads or the best leads within those locations. But sometimes it's worth thinking should you be in different locations to begin with, and does that change the game? Because you can make a lot faster progress by changing parameters than you can by optimizing within them. What in your opinion, what are some things that someone should think about as they're deciding what kind of locations they want to target with?"

"Great question. I think there's a few factors in making that location targeted decision. The first is how wide of a radius can your operation handle? If you don't have the operational infrastructure right now to handle nationwide, then I probably wouldn't go that wide because it is, it's gonna be hard to reach those leads and work them effectively. That's the first is, just your, like what's already in place. The second is going to be probably budget is a big one. Of like how much do you have to spend and how are you able to like disperse your campaigns and still have enough data brought in to learn effectively? And then I think the third is just where have you seen the most success historically in your other channels? And that's probably where I would start on paid is what's already been verified and vetted out in your other channels."

"Yeah. Understood. One question that a lot of people have is they hear that in this industry things are regulated pretty heavily from a location standpoint. So I know a lot of people like to target zip codes. And stuff like that. And there's been some restrictions on different platforms and basically the, there's a kind of rumor going around that you can't really do much with locations. To what extent is that true and what can we do?"

"Yeah. So there's been a definite crackdown on Google in the housing industry or Facebook too, or vertical? Yeah. On both, because they don't want people in housing to restrict based on underprivileged zip codes, because that's been a like historic way to isolate the underprivileged, which by the way drives me crazy."

"Yeah. Because I don't feel like I'm discriminating by you are choosing to show my ad in one zip code, but not in another. But for the betterment of the world, I guess we'll stay away from that. And because our ads are going to fall under housing on both platforms, we have to find other ways of targeting that help us to still reach our ideal areas without being blocked for foregoing the route of zip codes. And so in general, what you can do is, target by a number of other methods by city, by state, by DMA or by radius are the most common ways that we've done it historically on counties too. In counties as well. Yeah. And so those are gonna be the ways to still reach that audience without getting caught in the game of cat and mouse with Google and Facebook of trying to work around their rules."

"Yeah. And to expand on that a little bit you'd be surprised by how granular you can get with Google though. Like we might not be able to target zip codes, but we can target a one-mile radius which is pretty better, honestly in certain cases."

"Yeah. Yeah. Zip codes are like an arbitrary thing. Versus versus radius is can be a little bit more narrow. Facebook though, it's 15 miles. So that's definitely a barrier. I know I've worked with clients I'll give one example. We had a client in Long Island and they like they like Queens, but they don't want Manhattan and. I can't remember all the other areas, other boroughs. I think Queens isn't a county, it's a borough. So we had to do a 15 mile radius of Queens, and that actually goes into so many other places when you look at such a densely populated place like like New York."

"So anyways, there there's isolated circumstances where it's problematic or maybe you want like a little town in 15 miles out from that town is just way too rural for you. Sure. So that's where I think Google's a little bit more friendly than Facebook."

"Definitely. The other thing is with Facebook, you can't do actual cities. You can only do radiuses of cities versus Google. You can target cities. So, anyways, but to what extent do you feel like that really hurts us?"

"I don't think it does, honestly, because I think it just gives you more control over the exact outline of the area that you are targeting. I don't think there's that different of an audience composition at the radius or the city level than there is at the level of a zip code. And as our ads run, we can see which of those different ways of targeting are better and which performers and so we can gather data on that just like we could with zip codes. So I don't think it's a hindrance at all."

"Yeah. I've been doing this for a while. I remember the times before that change. And I've met a lot of investors, surprisingly, that kind of cite that time when the change is made is that's when everything stopped working. Which the thing is, because there's other things that happened too, then right now you can't target by age. You can't target by gender. Like all these things that we could theoretically discriminate we only wanna buy men's houses. Not any women who own houses or some evil thing like that. So we can't do that."

"So anyways, a lot of people really struggled with that but, really what the crazy thing is our overall, our strategies didn't change because we had tried all that and we had strategies that were working better before then. And they also weren't

restricted when those changes happened. With the exception of some select things for a few clients. So zip code targeting was another one of those. I even when we could do zip code targeting, I obviously suggested to our clients that we not do it because it's really narrow. You wanna talk about the relationship between how narrow you are and the potential success of the campaigns."

"Yeah. And before going into that I think this is just an example of how Google does not have the best interest of the business at heart. They're always going to change things and change the game and what worked before can't overnight just stop working. And so that's why it's important to always be testing and try new things because they like to change the rules and all of a sudden things are a lot harder."

"Yeah. It's not, you don't just need something that works. You need to find as many things that work all the time and be very flexible so if something stops, you can do something else."

"Totally. Yeah. But going into the how the size of the targeting and the effectiveness of the ads goes in general, the wider you can target, the more inventory you are bidding on. And so the lower you can bid and still win the bid. So for instance if you're in like an auction of an estate if you're bidding on all of the things versus just one item from that auction the odds of winning one thing are a lot higher than if you only wanted that one thing very badly. And that same idea is how things work as well in PPC where the wider you go, the better your odds are of winning the clicks that you want at a lower cost per click."

"Yeah. Yeah. And assuming everything else is equal, lower cost per click equals better results. It's not the only thing that matters, right? So if you're adding locations to your targeting that just deteriorate your lead quality to get a lower cost per click, then it's a losing bet, absolutely."

"But if you're targeting all good locations. So that's where I think what's happened sometimes is I've talked to people that just know, there's like a certain area of town where there's a lot of motivated sellers, for example. So they're like, I wanna target that zip code. But I think what we fail to realize about PPC is you pay for the click after it happened and you're targeting them based on intent. So let's just say you have the zip code where there's not usually motivated sellers, but then someone demonstrates motivated seller intent when they're searching and they're there, then you probably still want that person because they said that they wanna sell their house as is implying it's in poor condition or fast or whatever the case is."

"So that's where we've we've noticed that some of those areas that are clients where they want, they do have higher volume, but it doesn't mean the other areas don't have any volume. And if you're already filtering based on people being motivated sellers, then you don't need to be quite as narrow with your targeting as you think. It's not like you're just blanketing these areas."

"Yeah, absolutely. And I think a bigger indicator of a lead's quality isn't as much where they are because like what worked historically might not work anymore For every searcher it's more about like their past behavior and all of those cues and data points that Google has on that user. So what I would recommend as a very broad rule of thumb is go as broad as you can handle and as broad as is effective because that gives Google more room to use its algorithms and processes to find the intent in that haystack because just having keywords and just having the right location, isn't as effective as pairing that with intent data, which is where things are heading now on Google and on Facebook is being able to leverage more than just where a person is to know if they're a high or a low value prospect."

"Yeah, I think there's all this rhetoric around in the business world of like focus, and I think sometimes with location targeting and digital marketing, it's we're on the wrong track. Where, people say yeah I, do work in both those counties, but I really want to double down on this county so that we can make it work. And I wanna focus. But what people fail to realize is that by being more focused geographically, you lose the luxury of being more focused other places. Sometimes I think you fit like, there's a target. This target has a bullseye. If you target more places that bullseye can be hit."

". Yep. And that means that you can be extremely focused based on all these other things that you talked about, these intent signals to where we can know if someone's gonna be a motivated seller versus if you're more narrowly targeted then and you have a certain amount of budget, then you have to you might be able to target the bullseye, but then you also need to target the arena around the bullseye. And maybe you need to go one ring out from there, because you just can't fit all the budget into the bullseye. So being hyper-focused on locations makes it so you can't be focused on others."

"And there's some relationship there. I like your analogy of the auction. Cause that's how Google works. And, Facebook too, in its own twisted way."

"Yeah, but let's not talk about that. But the, another analogy I use sometimes is, imagine you want to pick apples, so you go to an apple orchard. What a lot of people think choosing locations is, looking at that orchard from afar, detecting which tree has a lot of low hanging fruit on it, and then deciding you're only gonna pick fruit, from that tree. And it's not completely wrong because you, will find some low hanging fruit on that tree. But the thing is just because another tree has a lot of fruit high up. , it could also have some low, hanging fruit."

"Alright. So the way that this works with the, these algorithms, if you target wider, you don't have to just choose the, trees with low hanging fruit because what you can do is you can set bid limits. That's kinda how it works with PPC. So you could tell your person working in the orchard or something, you're not allowed to. , you're not allowed to pick any fruit that's higher than five feet in the air. Or whatever the case is. And in doing so, you make sure that they focus, even if there's trees that have a lot of high fruit, but also have low hanging fruit, you make sure you get the low hanging fruit only and that makes you more efficient."

"So if you look at that, let's just say you're pushing a certain budget into it, and you just chose the tree that has the most low hanging fruit, or that you've seen the most low hanging fruit in historically, or whatever the case is. What happens is you spend some time picking that low hanging fruit and it's great, but then you have to start climbing higher and higher in the tree. and soon enough now you're picking fruit that's higher than in the tree next to it, where it's nice and low hanging."

"So there's some element of it, depending on your budget. . Yeah, absolutely. And so the way that that this, looks in process is having a tiered structure where not all of these are equal and not all areas perform in an equal way. And so what we recommend us as an in between of going broad and just saying, go for it. Google spend our budget which, I wouldn't recommend. Or, the other end of saying I, only wanna target this one county because that's where I drove lots of leads that closed eight months ago."

"What, we would do instead is, give d different tiered amounts of leash or rope. That Google can have on each of those areas based on how much we want it to spend. So we say this, area, we seem to be very effective. We are okay. Okay? If each lead costs up to 200 two 50 a lead, because that's been very effective. And so the odds of that ratio being stronger is higher. Whereas this, other county. , we still wanna target it to bring down our, overall cost per lead. But in general it's, going to be lower quality."

"So w. , we will give Google less rope and say in, in this area, let's keep our, maximum, our target cost per lead to one 50. Because it's, ratios of quality to close deals is a lot lower, but we don't wanna just wipe it out because then that brings that that, bed floor a lot higher."

"Yeah. You're, basically showing that it's not like locations are black and white. No, there's lots of gray there's, good locations. There's great locations, there's okay locations. And what a lot of people say is just, do the great and get rid of anything else. But then you limit your volume pretty significantly and, you can drive the cost in the Great Up. A lot. A, funny way a client of ours said this is I, explained this whole like apple orchard thing. He's yeah, I get it, but it doesn't mean anything if the apples are crap. . Yeah. And he, but he's basically saying is there's some areas where we can't actually. The apples."

"And the, point there being that strategy that Google has, it's gonna get you the lowest cost per lead. That doesn't mean it's the best strategy. So what you're talking about with this tiered structure is, great. We did this with the client recently where there's this big city. and they want leads there. And then there's all these like smaller areas around there. And this, is a pretty high volume investor that does probably at least 400 deals a year

. And, they they, do it in all those areas."

"But what he said is, I only wanna target this core city and the reason is my spend will go to all those other areas if I target those and I really want leads in this core city. So he had worked with four PPC companies before him that just said, okay, just target that city what we did differently. is we changed the parameters. We, said we're gonna target that city, but we're willing to pay X dollars per lead. And then we had three tiers. We had the top tier, and then we had a tier below that where we said, these areas are all worth this much per lead to us."

"And then we had a lowest tier where it's we want leads here, but we're only willing to pay this much. Because the thing is, just because it leads less valuable doesn't mean you don't want it. It means you wanna pay less for it. You can't pay a thousand bucks per lead for a $300. But if you get it for 50 bucks, then that's a six x return. So it's, a good business."

"That's, really interesting. So a lot of people are sometimes frustrated because they target a lot of areas, and what they find is that they only get leads from the worst areas that they're targeting. Can you explain why that happens and how we can avoid it?"

"Yeah. So in general, like you were saying, Google does a very good job of hitting the targets We give it, and it's going to do it at the most efficient way possible. And if it doesn't have inputs of, like, How that lead performed in the pipeline, it's going to assume that was the exact kind of lead that we wanted. And so in general, h how it does that is, is it reaches the areas of our of, our targeting. That have the lowest amount of competition. And in general that is going to to, coincide with the least desirable areas that we're targeting. And so those leads are, gonna be quite cheaper. than going after a metro, but they might not be reachable for your team or they might not be just for other reasons. Very qualified. And so in general it's, helpful to, to have A larger number of radi being targeted than just one large radi. That way Google has, better inputs to like, measure performance than just all reach the outskirts of this radius. And, that's been very helpful for us in the past."

"Yeah. And it's, not even like Google does that like this, it's a confusing concept cuz if you look at you look at channels like Cold Call direct. whatever the case is like to, make a phone call costs a certain amount of money. To send a postcard costs a certain amount of money. And so we deal with a lot of marketing channels where there's a fixed cost, but then the value is variable. So you wanna send the postcard to the right place. You want a cold call at the right person. PPC is weird because the cost is variable and the value is variable."

"Yep. So it's not like this is good or this isn't, it's that this is okay, we just wanna pay less. And, what happens with that? Because of that variable cost component. in the auction system. It's basically if you target two areas, one of them has an average cost per click of a hundred bucks, the other one has 10 bucks. You're gonna get most of your clicks in the $10 area. Just because that's where you win your auctions, you're coming in hot with those bids in the other area. You're just not."

"Yeah. So it's, interesting. It's like Google's like sinister and I'm gonna give you the worst leads or something. No. It's just, you told it, get me as many leads as I can and Right. And it's doing that, it's finding where it can get you the best leads best. different conversation. Like you said, there's some quality implications here. You could even think of a, keyword list, the same way we're talking about locations. Where you can go wider, you can go more narrow. There could be higher quality, lower quality, and you risk unless you provide the right parameters or the right tiered structure to Google, you risk bad quality."

"So Totally. Anyways, that's why it happens. Like you have those, outskirts towns and those have one 10th the population altogether of the main area, but then you get all your leads there. So you either don't target them if they're not good, or you use a tiered structure."

"Yep. Or you have a really big budget."

"Yeah. . That's the secret. That's always helpful."

"Yeah. If you have a huge budget, you just get everything That's right. And then it's it's not like you're picking and choosing."

"What do you think, I'm curious to hear your thoughts on the nationwide model. Lots of investors are doing this recently. What do you think?"

"As a marketer I think it's very effective and smart and the way Google and Facebook work is they work best with lots of data points, so the more leads it has to work with. The better it learns what keywords, what audiences, what demographics are best engaging with your ads and with your content and becoming leads."

"So the better it's fed, the better it performs. And as you go broader and you're targeting the cost per lead goes down, which helps your budget drive more leads. Per dollar be because each lead costs less. And so from a a, marketer, I would love to. Help all of our, clients eventually shift nationwide because it makes the, engine much more effective because it has more fuel essentially. And that goes even one step further. If, we can feed Google. More data around quality and say, this lead was, this much more valuable to us than that lead. And that becomes even more effective as it has more data points to pull from. So I love Nationwide because it really does help Google and Facebook perform dramatically better. We obviously drive awesome results for, all models, but Nationwide is in, particular, very well fitting for PPC."

"Yeah, I, I think. . You know what I love about Nationwide? If you can figure it out, there's nobody stopping you from a hundred X-ing your lead flow."

"Totally. There's, so many leads to get. I think I also think there's something people often misunderstand, I think of nationwide as like you go after all these areas that are like these tertiary areas. Or far out rural or something, and that's why your lead cost goes down. But the reality of it is you're. We live close to Salt Lake City, right?"

"You could say the cost per lead in Salt Lake City is whatever it is, which honestly, last year was really high and this year is very low . Yeah. It's a one of those big movers. But, you could say there's that, that that cost per lead. The thing is the way that you get cheaper leads by going nationwide isn't that you just target a bunch of cheaper areas. It's that you could even target 20 markets that were exactly the same as Salt Lake City in some hypothetical situation, and you'd have lower. . Why is that? Why does the cost per league go down even when you're in equally competitive areas? You're just targeting more of them?"

"I think it's, probably a, misnomer. Calling it nationwide, it's it's more just localized versus multi-region targeting. And so like we, we talked about e even if they are equally pursued markets with equal number of advertisers in those, spaces, there's still a, wider range of, or. That, that Google can pick from as opposed to just having this handful of trees to, choose. It has more and, it can, better match the, intent and the cost with your budget, even if they are still on their own still very high demand regions."

"Yeah that's, really interesting. And I think a common misconception around this is, . Yeah. That you think if the average cost per clicks in that market is 60 bucks, you think you pay 60 bucks. What people don't realize is for any given keyword, if your average cost per click is 60 bucks, there's someone who paid a hundred another who paid 80 another paid 60. There's someone who got that click for $10. Yeah. In a really small volume of them."

"I think another another example of this would be let's just say I'm a. and I want, I buy my houses from wholesalers and I want to flip 30 houses each year. If I flip 30 houses in one market, what happens to me is I have to, I probably get a bid more for those wholesalers cause I have to buy more of the houses that I see. Versus if I wanted to flip two houses that year, I can probably buy them really well."

"Now a lot of those people who do. flip two houses each year. Don't, because they don't know what they're doing. But assuming I'm, I know what I'm doing, I could find just the two best deals. And it works the same way in PPC. You can pick off the, cheap stuff, but you can't afford to do that if you have to be aggressive. The, task of getting volume works against efficiency. And it's, always kind of a, trade off. The other thing is we've had some clients try an nationwide strategy just because. , they hear that you can get so many more leads and it's cheaper, but the just because a lead could be closed at a certain rate in the market and it could be dispositioned for a certain amount of money and all those things, doesn't mean that your team

can, that's the other thing."

"I think a lot of operational complexity comes with nationwide. Where we see our clients, we've, we have seen some companies expand. When they expand regions, their number of leads goes up and the quality stays exactly the same, but their actual team performance is lower just because it's a harder barrier to comp properties in a variety of areas, and it's harder to disposition properties outside of your core area. You have any advice on that? Oh, . You mean like how do teams like improve their operational efficiency if they're going nationwide? Yeah. Cuz the thing is, we know that theoretically those leads are a certain value and they're being bought at a certain cost, but it becomes hard as a company to, to actually get that value out of them when it's every time a different market. I'm gonna pause it here. I have no."

"Fair enough. I was just curious. I have no idea. So we, let's just cut that, one out. Perfect. Move on. I have no idea."

"All right. How to answer that. All right, we'll just I'll just jump into something different. Okay."

"What was the thing we talked about just before that we were talking about how going into multi-region still it brings down cpl, even if they're Oh, yeah."

"In the operational complexity. Competitive, yeah. Sorry. I just was like, I don't know. I'll just pick up there. Cool."

"But yeah, some companies we have worked with they, just really struggle to deal with that operational complexity. They end up getting a lot of properties under contract for too high a prices. Their acquisitions team doesn't know what homes are worth, especially in this market where prices are sliding a little bit and I guess the, point they're being it's, not all in theory, right? The theoretical truth is if you could go wider, then you bring your cost per lead down, and that means that you increase your return on investment. But if your revenue per lead slides faster than your cost per lead, , which isn't necessarily cuz the markets are worse cause the lead quality gets worse. It could be cuz you just don't perform as well."

"Yeah. Then you can lose and and I think that's really tough. So there's a balance a lot of our clients are doing well target a few markets within a state or a few states. We have some that do really well, like completely wide."

"I think it's a little bit I think it's a difficult model, but I think it can work really well. It seems like most companies just take advantage by. the, fact that they're just gonna pay maybe way, lower cost per LE 25 or 30%, of what they would've before. And then even if you don't close quite as well or don't disposition quite as well, it can be more profitable just because the lead cost is so much lower. So it's a, yeah, I guess it's just a little bit of an interesting. model."

"One thing that people really struggle with just because of that, nature of how the spend gravitates towards the least competitive areas, especially with nationwide advertising, is just r rural leads. And how do you deal with that and areas that are harder to disposition, unique properties?"

"I think that there's a, bunch of different ways that people handle this. I'll, share that first and then I want to hear your solution because I think it's way better than, a lot of these other things. But, how do you do that? Like how do you, predict the disposition? The dis is disposition ability a word, the disposability? Nope, that's not it. That's not it."

"I I, don't know. How do you predict the capability of dispositioning a property in a certain area? Is it based on the number of people in the county? Population wise? We've had people try to do that. Some people try to do it based on cities. Like I only wanna sell in cities that have at least. , 50,000 population. But then the thing you don't realize is that if you looked at a metro area, you're cutting out a lot of really good areas there because it's a tiny part of the metro area, but it's overall connected to the whole thing. And it might not have a lot of people in that specific town. Every, market has their own place where it's like you in Salt Lake City, you have Salt Lake City, and then South Salt Lake City is a different city. And just because I want Salt Lake doesn't mean I want South Salt Lake."

"Don't want South Salt Lake, but maybe South Salt Lake's not actually that big. It doesn't have that much population cuz it's geographically really. . So I think targeting based on cities doesn't work. Other people just try to do like a radius of cities, just say, okay, then I'll do within this many miles of it. But then sometimes you get really rural stuff, sometimes you don't, sometimes you don't even get part of the metro that you should have gotten."

"So what's your solution to dealing with that?"

"Yeah, so we've b been working on an, answer to the, this question for, quite some time, and what we've, found that. we offer to all of, our clients is we've built out a, basically a database that breaks down all of the different radio of each of the metros in the country. And we have it, it broken down by, by, population, by deal spread and by a number of, factors. And then we work with, our clients. to help them build out a custom location targeting map based on this da this database that we've built out. And what's cool about this database is it's based around a pool of of, nighttime views of, the nation based on lights. And, this was your kind of brainchild. So I'll let you dive into. Nitty gritty of, this targeting method, but it's been very, effective and our clients love it."

"Yeah. What we call it is satellite imagery targeting. And the, yeah. The way that it works is we, choose to include or not include a location based on the light density of that location and the light density itself basically correlates really strongly with ability to disposition a. because it just shows how many people are there. And, cuz Lions, you are around cities and things like that, they're arbitrary. I could have just made that city two cities instead of one city, and now it has half the population. Does that represent that It's not as easy to disposition in?"

"So, I guess the way that we, yeah, the way we did it is it's based on proximity. And continuous lights. So think of it like if you're going to drive from the center of a market, let's say I'm in the heart of Atlanta to whatever property this is. . The ones that are easier to disposition, we find are the ones where, on my way to that property, I'm gonna be passing houses left and right the whole way. If I drive and I pass houses left and right, but then I go through farmland and then I eventually get to this town. It's not as easy. But if it's part of that core metro then, it's part of what people consider to be like the, actual metro, which doesn't necessarily align with the DMA or whatever, it is that people use to, to do that."

"So, anyways, that's, I think that's a pretty neat, way of going about it. One last question. There's a, fun strategy going around. We have a lot of our clients asking us about it because there's people teaching different strategies around locations and how do you choose locations, how do you know which markets to go into and all that kind of stuff. And what, people are advocating for is that you do an analysis. And I'm not gonna lie, this sounds pretty cool. I don't, I think in theory it's not. I, think in theory it's cool. In reality it's, not as cool if you understand how PPC works. But I'm curious to hear your, take on it."

"Basically the concept is you should look at different. You should predict maybe based on median home prices, what your assignment fee would be in that market. And then you kinda wanna model out your, stuff and, look at the average cost per click in that market. And you're looking for these, really good ROI markets where the spreads are gonna be big, but the cost per click is low according to your research with Google, like with keyword planner. And then you also do this on a keyword level, so you might run a nationwide campaign. You look at each different market and you basically analyze these a hundred keywords across that market, and you find which ones are the cheaper ones in that market, and then in the campaign targeting that market, you only include those cheaper keywords. So you're like zeroing in on where that best intersection between locations and keywords is. Does that make sense? Is that pretty clear?"

", what are your thoughts on that? I think it sounds awesome and I think if Amen if, that worked, I think. Could all make a lot of money doing it that way. Where I see issues coming from that strategy is it doesn't really line up with how Google works these days. It doesn't work very well with really, tight boundaries like that cuz it doesn't let you set those kinds of, tight but those type bounds anymore. It just doesn't. So if we wanted to target those keywords, there isn't really a, guarantee. That Google would bid on only those keywords. It, could very easily find some searches that look like that keyword. that actually performed quite a bit differently than the analysis that that, you just spent hours and weeks like

breaking into, because it's a lot of data to pull because goo because Google's actually no, sorry privacy laws."

"And, so that's one. And then going that tight in, Targeting it by location again, sounds great. Let's, cut out all the waste. But that bring, brings up your cost and that paired with the, lack of, control over what you're actually bidding on from, a search term perspective means that you are bringing up your cost on search terms that you don't necessarily want."

"Yeah. And you can't see. So it sounds great, but with, but it's put like pushing against where Google is, heading right now from a machine learning perspective."

"Yeah. I, agree with everything you said, but I'm gonna play devil's advocate. Okay. And because I think there's more to unpack about why it's not a good idea, . Yeah. So let's just say you have a perfect, theoretically perfect negative keyword. , and let's just say that locations aren't any more narrower than you would've gone otherwise, you're just putting them in different campaigns. So it's I'm still targeting the same 20 markets. I would've, now I have 20 campaigns instead of one campaign or two. And I still am, like I'm able to just have perfect exact match keywords, which doesn't exist anymore, but let's just say you could. And you can get relatively close with some pretty aggressive negative key wording and, stuff like that. What do you think in that scenario?"

"I think it's, so if it is broken out into one campaign per like target area, that's gonna really hurt because just for those, not like super. Deep into, how things are built up in, in goo Google ads, your data and your budget is set at the campaign level. So the more granular your account structure is and the, more campaigns you have and the more spread out your budget is in general, the less data. Google and you have at your disposal to, to optimize your accounts. Each campaign might have at most one click a day with it being that, spread out and it, might have one lead per month if, it's that disperse. And so it's, it gets really hard for Google and for you to be able to like, identify trends and bid more. effectively if things are, that broken out and, that granular from a budget perspective data's your friend with the algorithm. Last thing you wanna do is split it a bunch of ways. So it's less powerful. Exactly. I think. Yeah. Yeah, that, that's really interesting. So you say campaign granularity is just not good?"

"It sounds awesome. Structure. Yeah, exactly. Because the, algorithm just even with the same everything, if you just split it into 20 different ways, it just wouldn't work as well. Yep."

"Understood. There's another case for this about how in each of those markets you need to have creative specific to that market. So you're going to like, for example, in your ads, instead of just saying sell your house fast, like you might on a nationwide campaign in Atlanta, maybe you say sell your house fast in Atlanta, and then you're more relevant compared to those other companies. What's your take on that?"

"I don't think that it is the best tactic of having that written in, a static ad and in a static landing page where that text is, hard coded in, into the ad and in into the page. We do instead when we are, very broad in our targeting, is we add an element into our ads and into our pages that, that, pulls the location of the searcher and puts their city, puts their state into the messaging in our ads and in our page. And so you can still have that benefit of being very relevant to the searcher. Without having to, make your, targeting be that granular and that detailed. So there's the, benefit of being relevant and being oh they're, in Atlanta. I'm in Atlanta. Perfect. That's there, but it doesn't come at the cost of, Google and data size and data wholeness, I guess is probably the, right word for it."

"Yeah. I, love when you find solutions like that. Like it's a. you don't add granularity, but you do add personalization. Because granularity is the enemy of what we're trying to accomplish."

"Yeah. The personalization is good, so you want to get one but not the other. Exactly. And, the other thing about this is it just does that on such a deeper level. Cause it's not if someone's in Atlanta, that's just Atlanta. There's Atlanta and there's Alpharetta. And there's Marietta and I don't even know if I'm pronouncing these places right. But Sounds good. There's I don't know how much of people's targeting usually is like the city proper. But suburbs are a pretty big deal."

"Yeah. And you can have a different ad for every single suburb ever in the entire United States. We're talking about if you did that on the campaign level, you would have, I don't even know how many campaigns it would be It would at least 10,000. Absolutely. And, that would just be absolutely insane. So we can be much more personalized."

"The other thing I want to note is I think the concept of avoiding an area because it's too high. , either a keyword or a market. I don't think it fully makes sense in my opinion. I agree."

"Okay. I'm glad you agree with me. Yeah, of course. Yeah. Good, good. Echo chamber here. Yeah. But I think so, if we look at that strategy, let's just say we are doing it with one market and we look at all the keywords and we try to find the ones that are cheaper, and we try to just target those ones. The problem is next week it's different. Which ones are. The week after that, it's different. You could say, okay, let me do this analysis every time. But I think all of those problems can be solved with bidding."

"It's true value-based bidding because if if you know that a keyword is worth a certain amount of money, let's just say the average cost per click in that market is a hundred bucks, but I know it's worth 30, no problem. I'll bid 30 and there's only two things that can happen. Number one is I get nothing because I'm not bidding high enough. And then what did we really risk by having that keyword in our. , pretty much nothing."

"Yeah. Number two is the average click cost per click stays at a hundred bucks, but when the click for 30 bucks comes along, I get it. Yep. And that means I don't have to push as hard on another keyword because now I got this one at an extreme discount. You have any thoughts on, that overall?"

"I think there's a, very strong correlation between cost of a keyword and the intent and the value of that keyword. Other advertisers probably aren't bidding on a keyword at a, at an aggressive manner if it hasn't been found a as, of value to those, other bidders. So it, it doesn't make sense to me to exclude keywords that are high cost because they're likely going be high value. The, key is, bidding in, a way that matches your, businesses unit economics of I like this is, a great keyword, but once it's cost goes above this, based on my usual lead contact rates, lead qualified rates, and one contracts rates at this point that, that, cost per click stops being a, win for me. So I, I wouldn't take it out, I would just give it bounce or on, like from, here to here. This is like a great keyword, but beyond that, it stops being a, win. . The awesome thing about that strategy is it's not just that you're looking at it on a monthly basis or a weekly basis or a daily basis. It's every single time. There's an auction. Yeah. You decide if it's at your right price. There is no way to be more responsive, more accurate, like more quick adjusting to the market."

"So it's, I just think more, more robust. I, I. I have an unpopular opinion, which truthfully, I don't believe to be an opinion. I think it's a fact. If there's haters come, hate me. But I think that when it comes to location targeting, the single most important thing everybody says, it's roi, which I agree with that, but I think there's another metric that's more useful for selection of locations and that's revenue. Revenue per lead is basically it's really simple revenue per lead, but the, things that affect it are your close rates in the area and your spreads in the area. And because of the nature of digital marketing, how we can automatically optimize for cost per lead and all that stuff, I think it's not that important to try to find low cost. or high cost or whatever the case is. What we want is undervalued things, but we don't have to find undervalued things by finding them and targeting them. What we do is we find them by targeting everything but bidding on everything according to the value. So if I, if we know our revenue per lead is a thousand dollars and we know we want a five x return, we bid $200 on those leads, and then we're bidding to a return on investment. Because the thing is the, cost is, In any given market, you can get leads for a thousand dollars, you can get leads For $500, you can get 'em for $200, $100. Nothing's outta question. The real thing is how much volume are you gonna get

for those things? Because if you wanna pay a hundred bucks per lead and you want a hundred of them, and it's a small market, it's just not gonna happen, right?"

"But that's where if you just bid according to, value, I would argue that the, cost or the historical cost you saw in a market or whatever the case is, doesn't matter because you can make the cost, whatever it needs to be in the future. You just have to make it some fraction of what the revenue per lead is. You have any thoughts on that?"

"I think it it ties back to a, guiding principle in marketing and especially in ppc, is the people that win in PPC are, the people that have the best margins. . If you have ha have good margins, then you or like, taking it farther, like a, good like operation, then you can bid higher, spend more and, target wider and win. Where people that have worse margins have to be much more. And, so I, think it's, important to get that dialed in and, then your world of, options on paid becomes much, much larger because you can't afford to go where o other people can't go. That said if things aren't quite there yet in, in, your case. The key is, knowing where you are from a, margin perspective and bidding with that in mind. It's not go, not going to be as scalable because you'll win less of the time, but you'll win where it's most effective in, your business."

". Yeah. One, 100%. Agreed. Agreed. Who was the, who's the person that said the he or she who can afford to pay the most to acquire a customer? Wins. I don't know who it was. Probably Warren Buffet. I don't know. that, I guarantee you it's, not Warren Buffet, but yeah. . But Yeah. Honestly I, feel like if Warren Buffet was a marketer, he might have said that , but this was somebody else. Yeah. Some, ClickFunnels related person, I'm sure. Yeah. Who said that? But, anyways the, concept there is, yeah, if you have a higher revenue per lead, you have a higher roi, always. And other people have to have low cost and you don't have to Yep. You can afford to outbid them."

"Yep. Yeah. And I also think it has implications on the tiered structure. When we do these tiered structures, we do it based on revenue. Here's an area where we expect to have this spread. There's an area where we expect to have that spread. So we spend a lot more time looking at like, how's our spread gonna vary by area? How is our clothes rate gonna vary by area? Is there more competition in that area than another area? Do we have a higher likelihood of dispositioning in one area versus another? We spend a lot more time looking at all that stuff than we do. What is our cost per lead in this area or our cost per lead in that area? Because we can make those whatever we want them. . Yeah. And we just want it's, really, it's almost like the, actual numbers don't matter. It's the ratio of the numbers. It's knowing that this area is twice as high revenue per lead as that area. It just tells us we have to bid twice as much how much we bid. You don't have to know at the beginning. You just have to know that we're going to basically put the bids as low as we can put them while still spending our budget, and we're always gonna bid twice as much in that one area as we'll get in that other area. I wonder if I, don't know if I just lost everybody, but I think if, anyone is lost just do a deep analysis on cost and demand and supply and demand, and that's the, basic nuts and bolts of, ppc. I took lots of, classes in school, in economics, but I've learned much more about it doing PPC than I ever did in school. So it's definitely a, masterclass in economic. Supply demand and margins. Yeah. It's crazy. You're, yeah. It's, exactly like an economic model."

"Yeah. Plus the weird lack of transparency from the economy overlord of Google that just also just puts the asterisk. And also we could do whatever we want on top of whatever the model is. Exactly. So, fun. So there's a little bit of maybe you could say, Tyranny in, this economic model of ppc. But yeah our, loved tyrant Google, right?"

"Yes. We love to hate 'em but, they pay the bills, so we keep 'em around. Yep. Yeah."

"I think that I think that wraps up things for today. Thank you everybody for, joining us. And I'll see you next time."

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