The Future of Google Ads Agencies & How to Survive AI

Okay, I have Nathan, by the way. This is the first time I've ever done this type of video where I'm talking or interviewing someone. But Nathan had me on his channel a week ago and so I'm like, hey, we, you got to come on mine now. So Nathan is an owner of Blue Sense Digital and by the way, he's got an incredible YouTube channel. He goes super high level on e commerce topics. And so I'm, I'm a huge fan of his channel. And in this video I wanted to discuss with Nathan, you know, the hot topic of AI and how AI is about to wipe out, you know, 80% of the Google Ads specialists out there. Or maybe not, right? I actually have no idea what Nathan's thoughts are. And so we're coming into this pretty cold. I'm assuming we're going to line on some things and maybe we'll disagree on some things. I don't know. Our last video, we agreed on everything though, so maybe this will be like that too. We'll find out. But Nathan, thanks for, you know, first off having me on your channel a week ago and, and I appreciate you, you know, talking to me again, being on Grow My Ads channel now.

Thanks for having me. I'm looking forward to it.

Okay, those who don't know me, my name is Austin LeClaire, I'm co founder of Grow My Ads. So Blue Sense Digital is a seven figure agency. Grow My Ads is a seven figure agency. So I thought this was a cool topic to discuss amongst two seven figure agency owners because obviously there's a lot of doom and gloom in regards to AI and how it's going to continue to advance and evolve and you know, I've heard things such as it's going to wipe out all white collar jobs or information jobs or you know, marketing specialists will no longer be needed. AI can do all marketing in the future. And I, so I, I've heard it all right? And it does make for a hot topic and I have my opinions on it. But Nathan, I think let's just dive right into it. And also we're going to talk about if you are a Google Ads specialist, which I'm assuming you are if you're watching this video or maybe you're a student, right? You're at, you're looking at the career of getting into digital marketing and you might be like frightened. You're like, maybe this career won't exist any longer. Right? So you know, whether you're the student, whether you're working in house for a company as A Google Ad specialist or like a media buyer, whether you're a freelancer or an agency owner, we all have these thoughts. And so we're also going to talk about how do you not fade away? How do you, how do you make sure you are still an asset in this industry and how you can make sure you'll have a career, in my opinion, for the foreseeable future. So we'll talk about some of those topics. But first, Nathan, I guess AI, the evolution of AI and IT wiping out Google Ads Specialist, give me your high level thoughts.

High level thoughts are that I think AI is an amplifier, just like money is, right? You've probably heard that saying, which is that when people get money, their personality amplifies. So if they're a bad person to start with, they just become an even worse person. And I think AI does the same thing in terms of if you are a really good Google Ad specialist or E commerce specialist or whatever the niche is within digital marketing as a whole. I think AI really amplifies it because it should take out all of the tedious tasks that are very low leverage and then it moves you into just doing high leverage tasks majority of the time. But if you aren't competent and you really are just a button clicker, I would be incredibly concerned. I think you would agree with that, that all of the medial tasks are going to be automated quite quickly. Like a really good example of this is campaign creation. And whether this is Facebook or Google, it's the same thing. You could take ChatGPT's operator, which is the model that can click around and use a website and you can just drop it an image, drop it some headlines and say make a search campaign and it will be able to go through and actually create that campaign end to end. Now, was any of the strategy pulled out? Not really. Because you've still indicated we want these settings, we want these assets, we want them typed like this. There was still all of the strategy component, but just the execution of actually going and clicking the buttons and wasting 20 minutes putting it all together has been automated. And so you just get moved up to these higher leverage tasks, which I think is what people should really be considering within the role that they're currently in at the agency that they're currently working at. Are you just clicking buttons or are you developing strategy? And that I think will always exist across Legion Ecom, no matter what it is because there needs to be arbitrage and opportunity within, within the market. And so a really good example of this in Legion IS 101 Legion if you want to crush it is the most valuable lead magnet possible to the end consumer that is free, that perfectly overlaps with the target demographic that you're looking at and that requires you to be incredibly thoughtful in what that lead magnet actually is. You can go and throw it in ChatGPT and say here's the website, here's our target demo, come up with some lead magnets and it will come up with a couple but then everyone will do it. And so the opportunity gets arbitraged out because all the large language models are trained on the same data set and they're just going to give you a subset of lead magnet like opportunities. And so you have to be really thoughtful and strategical to go outside the bounds of the suggestions that they're going to give you and actually pull something that's going to have cutthroat. And so I think that the strategy component is just going to accept, accelerate in importance and anyone who's really strategical at the moment across these platforms and really thoughtful, big winning time to be you. But if you're in the day to day of clicking buttons, changing bids like the old days, which I hope people aren't doing anymore, I would be concerned but I'm keen to hear your thoughts.

Yeah, no, I think I would agree mainly on that. There is, you know, I, I do have a bit of fear that eventually and again we're going to talk about some of these topics too. So. Yes, but if you're just a button clicker, you're, you're, you're gone. But you probably should have been gone anyways already by now. I can tell you. We don't, I don't hire button clickers at grow my ads.

Right.

Like we, you know, I call them our team. They're called strategists and they're called strategists for a reason. So you know, we're using the channel predominantly Google Ads as a way of new customer acquisition. But I'm actually agnostic to what channels being used. Like I could, I don't care about Google, right? Like Google is a corp. If they go under, fine. Something that means something disrupted them and got better. Maybe that is chat, GPT and search totally evolves into people using LLMs. I'm not sure, I mean that there's an entire AI race. We don't even know who's going to win that. Right. Like there's this entire race right now happening between several companies and if you look back to search engines, you know, Google was Not the first search engine, right? And so it's still, we don't know. And you've got all this VC money like flowing like insane money. No one ultimately knows what, what, what the future of all of this even looks like and who the winner is. And all of these companies are operating pretty unprofitably right now. Like you know I, not many people per, like us tech nerd people who are in the industry, we probably all have a chat GPT subscription, right? Or I like, I still use Claude a lot and I know the operators like next level for chat JPT right now. But you know, go on this, go out of your office or wherever you're at and go walk around on the street and just talk to random people and, and ask if they have a chat GPT subscription. The answer is a lot of them, no. They don't like, they don't care about chat. They're not going to be 20 bucks right now for Chad GPT. They're unless you're like us, you know, you're in the industry. So we live in a bit of a tech bubble and so we think everyone's using it, everyone's on it. That's not the case yet. Now it's disrupting, right? I mean you're even seeing how search is changing in regards to Google and what that could look like in the future. Who knows. But even they're kind of cannibalizing their own search page now by implementing AI answers there. And so it's still so unknown and it's very, very noisy. But when it comes to what we provide as a service to clients, right, Ultimately what are we there to do? We're, we're, we're there to help them make more money from their ads. Ads on probably never go away, right? Like chat GPT at some point, even though it's a subscription based model right now they don't even know who knows what the monetization model's actually going to look like. I'm telling you, $20 subscriptions is not it for them, right? So this is just them getting some revenue in as they figure out where this is all going. And they continue to need, you know, billions of dollars to actually even operate and continue to evolve their technology. But it's not 20 subscriptions. So who knows, eventually there could be ads baked into even Most of these LLMs that we'll be using in the future. But when I look at it from you know, disrupting the industry, it's, it's an absolute, it's a tool Right now, I mean it's a tool potentially always, right. Unless like AGI actually becomes a reality. And so like, like all tools, like use that to your advantage. And I think those who are like nerding out on AI and really learning to use it, and I'll be honest, I'm probably behind the curve on that. I just don't have enough time. There's so many AI tools for this and that. It's really like I've even kind of tuned a lot of it out myself. I'm relying on smarter people to me to just kind of tell me what to do aside from you know, using like a ChatGPT or like a Claude. But use these, you know, use the tools to your advantage. And as you said, that I think is going to accelerate those who are smart people already and they can now use these AI tools. So that means button clickers. Yeah, I think are, they should be gone already. They probably still exist. But if, if all you're doing is like banking off the fact that your client doesn't know how to operate Google Ads and like you're just like, this company is like, yeah, we can set up a Google Ads campaign for you because we know how to actually do the button clicking to do that. But that's as kind of far as you go. And they still exist predominantly brand companies is where I still see this like anytime I do an audit and they're like, well, we work with a branding firm that does our digital marketing. Like, oh, okay, here we go. So they, there's a lot of button clicking there. That's all it is. It's just like a setup. Right. That will go away. Absolutely. Because again as Nathan mentioned, setting these campaigns up will become absolutely. Probably just a click of a button at some point. And really it comes down to the strategy. Now there's a fear a little bit in my mind Will like even the strategy piece, like how much of that could ultimately still be ran by AI in the future? Because I don't know what I think anyone who claims they know what five or 10 years looks like with, with AI, they're, I mean they're just kidding themselves. Right. So who knows what that even could look like? I'm not sure. But I do believe that a smart person, a human being is still going to be involved as a strategic advisor using these tools ultimately to try to help grow businesses or acquire customers through. I don't think Google Ads is going anywhere either in the next five to 10 years. I think ultimately that's still going to be around and so yes, I do believe the smart, strategic people will still be around and button clickers completely gone now as, you know, as you start seeing search sort of evolve. Nathan, like do you have any thoughts there? Because I, you, you know, again, I, I guess I don't really quite know but I get asked this a lot like, well, you know, why would we even need, you know, ads in the future if Google's just going to give you the answers now? My answer to that is like, how many of you are using LLMs to like make a commercial intent purchase? But maybe, maybe that data is out there that I don't know that shows that. But I, I can tell you I don't use, I use chat, GBT or Claude for a lot of research stuff but, but I don't, I've never used it to like try to figure out, you know, a product to go purchase yet. You have thoughts on that?

Yeah, there's a really interesting point here which is that Claude, ChatGPT, all of them recently rolled out deep research functionality which is where you can, you can essentially ask it to go and research something and it'll scan a hundred different articles and then query itself hundreds of times and then come back to you with a paper that answers your question. So it might be like, should I take Omega 3? Here's, here's my recent blood test and it will go and figure it out. But people are doing that with product choices so they're going, hey, I need snow boots. And then it will prompt you and go, what kind? What are you after? Where are you going to use it? And then you give it all the information and it goes out and looks at hundreds and comes back to you with like three to four options. And so that's kind of compelling, particularly if you're making like high ticket purchasing decisions. I think on low ticket that's really ridiculous. Like who's going and asking for the best dog collar. You're just going to go to Google shopping and try to try to find what you want. So I think it's weird, I think there will be potentially this introduction of ad space on the LLMs at some point. But the issue is the LLMs are completely reliant on organic real ranking websites. And so it's kind of this, is it the egg or the chicken first? Right? Because the only way that you can get an answer within an LLM is is that the raw content has to exist on the Internet to start with. And so people have to still put up content on websites and on blogs and have to put products up for the LLMs to even go and find them and then link out to them. So I'm not entirely sure. I think like another component of this discussion is around. Well, rather than five to ten years down the line, what about the next year where Google has had this heavy push into demand gen and performance max, because that's really them trying to move in this position of let's try to simplify the platform down and make it one click to where it's super accessible. And there's a low barrier to entry to everyone because historically, five to 10 years ago, really high barrier to entry just to even set up a Google account, which is why agencies exist. I wish, I wish I had an agency 10 years ago. It would have been the glory days because you literally just need to know how to set up a search campaign and you can just generate infinite clients with the. No one knows how to do it because the platform's so complex. And then over the last 10 years, they've been bringing these barriers down so that it's become easier and easier to functionally use the platform and actually put it back in the business owner's hands. So a restaurant down the street can open up a Google account and click, play on an ad. The issue I see there is that we're slowly giving control over to Google to the point in which they are essentially deciding what your cost per acquisition, your cost per lead, or your return on ad spend is because there's such little control over the actual deliverable. And so that's where, once again, it's kind of this stepping out of the platform and thinking outside of Google Ads, which I think is really going to separate agencies. It's a big shift that we made a year and a half ago. Two years ago, we started realizing with clients that, hey, they would come to us and go, hey, we haven't grown in six months. And we would go, yeah, because you have an increased ad spend. And they would go, why would we increase ad spend? And we went, oh, okay. There's like clearly a disconnect here, even in just your understanding of how to grow a business and then operating Google Ads. We were over here doing Google Ads, but we didn't realize that you didn't understand the importance of scaling up spend, understanding your gross margin, and then building a roadmap to growth in the future. And so we started going, okay, we need to kind of figure this stuff out ourselves. So I went and used all of my finance knowledge from uni and started putting together my calculations on if you spend this amount more, you will make this amount more profit. And that started working and clients were like, oh, okay, I get it now. We spend an extra 4k, we get 12k in revenue. That means this amount of profit and I can plan accordingly. And then we started just slowly shifting the entire agency into this strategical position where majority of the work now is done outside of the platforms and it's building roadmaps for scale, it's helping clients on the website, it's helping clients across their product portfolio when they're considering either adding more products or removing products. Because we have such good insights into the actual platform and we can see what's working, we can go and translate them into the actual business and start to provide business level advice. And so that's why I really think Google Ads agencies, meta ads agencies, digital marketing agencies, the best ones, I'm not talking about all of them, but I'm saying like the top 5 to 10% are going to become really strategical advisors on businesses. They know how to grow businesses. And I think that's like a nice tagline that people are starting to adopt is that we grow businesses, not we are a digital marketing agency. Because a digital marketing agency in my eyes is someone that knows how to set up a Facebook and Google account. Someone that knows how to grow a business can step back, look holistically. Yes, we just do the deliverable on Google. Yes, we just do the deliverable on Facebook. But we can consult on all of this other stuff, which really makes the difference.

Yeah, I agree. Sometimes I'm like, am I going to kick myself because my company's name is grow my Ads. So one day, you know, but I mean ads are always going to be a component though of the growth. And so I think I'll be okay. But yeah, I. So, you know, and this is why I thought this was a great conversation piece between or to have with you, you know, for those that don't know, I mean Nathan's agency is very successful. If you can't tell by his accent, he's out of Australia. So I think you predominantly do a lot of business over there. But you, you do stuff in the States too, and probably worldwide. But you know, he's one of those guys that as soon as I saw one of his videos I'm like, okay, he gets it. And then if just looking at his agency and the way you guys positioned yourself, you know, you specialize with e commerce companies but it's not like the typical in your face, we're going to grow your ROAS 10x etc. Kind of what you might see from grow Mads a little bit on our are some of our marketing collateral. But I have been in this industry now for over a decade. So I have seen like, I remember I used to have to like sell clients on why they should use Google Ads. Like I was, you know, almost a salesperson for Google Ads. Like some of, some clients just were like google that doesn't work. No one clicks those ads. People used to say no one clicks those ads. To me it's, it's pretty wild. Uh, and I remember we had one client, uh, he's still a client today. And this was eight, eight or nine years ago. And he told me Google Ads doesn't work. And I'm like just gimme five grand, like give me five grand a month. And, and, and this is an e commerce business and this guy was spending money on yellow book ads, like the yellow book for phone books.

Okay.

And I'm like just, just give me a little of that money, all right? And let me see what I can do with it. And today, you know, he spends six figures per month and he's generated millions and millions of dollars from, from ads online. So I, you know, but like this is a guy who I, I could, I mean this is going to blow up for you man. Just like let's, let's plug in some money and let's get this thing going. I had to kind of sell him on that right now. Thankfully it's turned into a very long term client for us. But you know, the early days, and that's why I do, I wish I would have had a YouTube channel 10 years ago and had some of the exposure I have today. But I was, you know, building an agency, kind of doing it the old school style, traveling around with a partnership we had back then. So I used to travel around and do face to face meetings and do all this stuff. But back then it was as simple as like people didn't really understand it and those that kind of understood it just were doing it like incorrectly. They worked with a really bad provider and like ad accounts were just terrible. And back then we had more control. Fast forward today. As you've mentioned, Google's trying to like pretty much take all of that control away now. There's still, I mean, watch some of my videos on here. Listen. There's still things you can do to kind of like go against what Google's trying to make you do and save yourself money and make yourself more money doing it. So I do still Think that will still exist for a while but I don't know what, you know, the next five years looks like. Google's ultimately always trying to how maximize their revenue. And how do they maximize their revenue? Well it's, it's off of you, right you as the advertiser. So. But I do believe they're going to have to innovate a bit. So I am interested to see what Google ultimately is doing. I honestly I really, and this probably won't happen but I do hope this comes back. They used to be amazing to advertisers. They used to like, you know, the Google reps were incredible. Like I, I actually enjoyed speaking to reps back then and then that turned slowly into aggressive sales organization essentially with reps. And Google like basically just started instead of innovating. I always said they just started, you know, basically squeezing. So they just were like hey, instead of innovating we're going to optimize for increased revenue based off of the current like advertisers that we have. I think that's what they've done over the last probably five years it feels like and I'm so, I'm happy to see actually the AI sort of companies put Google up against the coals a little bit because they have to go back to innovating as an organization which I just do not believe. Like, think what has Google really produced in the last five years? Like, like it's not Google plus, remember the social media platform they tried creating and all that? Like they've got like I just, they haven't done a lot of innovating. So I'm, I do hope that we see some further innovation from them and I do hope you know, most of their revenue is coming from advertisers. So I do hope that there's a little bit of, of give back to some of the advertisers. I don't think that will be the case but there's like a slight, slight chance that it could happen as they realize the positioning that they're in and, and where maybe the next five years looks for them. Because I mean Chat GPT if they are the winner and we still don't know if Chat GBT will be the winner in the AI race and there's probably going to be obviously a couple major players there but if they start taking, I think right now I saw I could be wrong here. So don't take any of this to, to heart. I'm pretty sure though that that chat GPC might have like 4% of like the search market now. So Google still controls like 85% of that. I, I think chat GPT has 4% of the market now. Now I would probably assume most of that's like you know, not commercial intent searches and still more because I don't, I really don't have any clients that I've seen like significant decreases due to what we would attribute to like you know, LLMs that have come out. So it's like oh, we lost 30 year over year because of Chad GBT. No, any of the decreases I'm seeing are generally it's a competitor thing right now or CPC increases from Google squeezing or a macro economic thing that's taking place. But I don't, maybe there's a small percent you could attribute to it. But I, I'm not seeing like massive, you know, layoffs within my clients because like Chad GPT went and took all the search traffic away from them. So you, I'm not, I'm not quite seeing that yet. But I do think like what you're doing Nathan, is exactly. If, if, if someone is, if you're watching this today and you're someone who's trying to learn or you're already in this industry and you know, you can't sit down and speak to a business owner at a high level strategically in regards to how they actually grow their company. Not just talking about nerdy click through rates and conversion rates but like hey, you know, let's take a step back here and what are we ultimately trying to do, right? Because I talk to a lot of companies, they just, they're stuck on roas and as like they still have these stupid high roas goals and then they're just mad at Google, right? Well we can't grow anymore. CPCs are growing up mad at Google. I'm like, guys, you're still killing it. So let's take a step back, let's look what, like you said, what are your margins, right? What are you doing on the back end to increase ltv? What are you doing to increase aov? What are you doing to get bumps from, you know, the time they purchase in three to six months from now? How are you getting to come back to make another purchase? And this is where I think like actually I just made fun of brand agencies earlier in regards to how terrible they are. They are button clickers usually when it comes to Google Ads and digital marketing. But brand building to me is the most important piece of the growth of a company actually. And it's that back end stuff that you know, you're acquiring a customer. So the businesses that usually grow the fastest are those who can acquire more customers the fast fastest. Usually that's not done profitably and they keep the most customers. Right. Because they do provide a good product or service. So those people continue to come back and back. And so for those that are listening, I think when you're afraid of all this AI doom and gloom, you got to take a look at like something like Nathan's doing and, and if you just go watch some of the videos on his channel, you're going to understand what I'm talking about. But it's not, it's not like hey, Nathan's just only talking to his clients about click through rates and average CPCs and like campaign nerdy stuff, right? No, he's, he's diving in with them and strategically advising them how to use meta, how to use Google Ads to ultimately grow their company based off of back end business insights and data. And that, that's the key, like Nathan said, the back end data and using that to help strategically advise. Now that is someone who still has a career five to 10 years from now, someone who can strategically advise a company to utilize these tools, even utilizing AI tools, hey, you should be using these tools right now in your guys processes based off of what we're seeing in our client portfolio, right? This could help you optimize X, Y and Z. So even being the consultant in regards to just like helping them implement some of these AI tools or within their, within their processes. But it's not just like wow, I can set up a Google Ads campaign for you. No one's going to care about that in the future. Now yes, you still have to be able to do that at, hopefully at a high level but it's going to be way easier to be able to do it. It's going to be completely commoditized. And this is coming from a guy who owns a Google Ads agency. But that is how Nathan is working with his clients is how we are working with our clients, how we're training the team and continuing to upskill them is, is you must become a strategic advisor to your clients. So yes, we must be on top of all Google Ads changes. We must be able to operate a Google Ads account at the absolute highest level. That is an asset still today however, my team is continuing to be trained on this high level stuff and upskilling on how to speak to your clients as a strategic growth consultant and not just a Google Ads consultant. So Nathan, when you interact with a client today or a prospect Comes to you because you, you mentioned a lot of things there, so I'm interested there. And I guess I have. I have two questions for you in regards to that. A, have you seen an impact as I made some statements there that I have not seen an impact on my client portfolio. And again, this is why I think this conversation is cool. I've got about like close to 100 clients. I think you got close to 100 clients. So we've got a decent size of client portfolio to speak on. Have you seen an impact on any of your clients from LLM search traffic basically taking over and you know, if. So was it industry specific or you don't know? And then second question is just like how we just rambled on about how to be a strategic advisor. You gave some examples there. But like if someone, if an E commerce business reached out to you today, what does that look like? How. What, what does that even mean, Nathan, how do you actually help them as a strategic sort of advisor to them going beyond just running PMAX campaigns for them?

Yeah. Cool. On the LLM. No, I don't think there's been any cannibalization of Google traffic. Interestingly though, a lot of clients were seeing 1 to 2% of their traffic now coming from ChatGPT. And so there's actually. And the same thing for our website actually. I think we must rank for some kind of prompt of give me a digital marketing agency in Melbourne and then we come in the list and then we get traffic. So that's unknown.

I don't know if you. Yeah, we get it too. I, I just had a lead today and they put LLM as the source of where they found us. I don't know. I don't know if that was Chad, GBT or another one, but. So yeah, we're seeing that as well.

Yeah. I made a LinkedIn post three weeks ago. Maybe you got like no likes because no one's doing it. Which is. I posted like, is anyone starting a LLM SEO agency or does anyone know how to rank in LLMs? Because I think that's going to be probably a point of arbitrage at some point. I don't know if people can figure that stuff out. I'm not an expert on SEO ranking within LLMs because I don't think anyone is. If someone can crack that code, that would be really cool. Cause I would actually pay.

Yeah. It does it to me though. It's pretty. I could be far off, but from the ones I've seen where we were ranking, it almost looks like it's kind of a ripoff of Google's page. Like if I look at who they're saying at number one, it's literally the same sources were kind of number one. Like number one are listed in like at least probably the top 10. And so it looks like just an aggregate of like what Google's top rankings are organically. And a lot of that's going to be like review websites and then like articles and then it's just kind of taking a combination of that, it looks like and then ranking it on their response back to you. So it's like they just almost took what Google provides and they just packaged it up differently on their results. So at least that's what I'm seeing. I could be wrong.

Yeah, that's interesting. On the strategic advisor front, this is where being, being specialized in EECOM makes it a little bit more easy for us because we can just go really deep on eecom. When we do audits, we pull, I've put together a bunch of consulting models internally and so we pull all their Shopify data, we get their gross margin, we get their shipping and fulfillment phase, we then get all their platform data and we pull it all together to just get a wide overview of what the business looks like. And we aggregate all the data in and I look at their P and L and so it automatically generates into their P and L. We look at their cohorts over time, how many customers they've been acquiring, has it been profitable over time? What does their retention lift look like? So we're getting a quick overview of, okay, are these guys profitable? How profitable are they? Um, do they have strong repeat purchasing? What do they unit economics look like roughly? Like we're not going to get a really accurate idea at this stage. But we want to know are they a 20% gross margin business or are they an 80%? Because that's two very different businesses.

They give you the P and L, they give you their P and L.

As long as they give us gross margin, you can figure out and we know marketing costs, we can go all the way down to contribution profit. So we won't get to net, but we can get to right above net, which is good enough. It's like there's, there's some crazy examples. We have case studies on the YouTube channel. So I'd recommend having a look at just some of the case studies we've put out. But there are examples of clients that have come to us or prospects that have come to us and they've gone. We're so unprofitable, we're losing money. And I look at their ad accounts and I'm like, I don't know how you're sitting at 15 roas on the, on this Google campaign, seemingly cold on, on meta. You're crushing it. Eight row. It's like what are we, what are we looking at? I have no idea what's going on. And so then I asked them for their P and L and I say like I actually need to see how you were physically losing money. And we have a look and they're at $150,000 business and they're spending $80,000 a month on operating expenses. And you go oh, why do you have two offices? Why do you have a marketing manager? Why do you have like the other day I saw someone with $17,000 a month in software expenses is a 100k a month business. And I went, this is the issue. But because these particularly early seven figure stage E commerce businesses, they don't get into E Comm for finance, they get into ecom for product. These people like product and so they make some product and then they want to sell the product and then the finances are kind of, I don't know what's going on. The marketing, I don't know what's going on. These aren't things that I want to do. And, and so both of them get let down within the business. And then often it's very easy for a business owner to blame an agency when profitability isn't where it should be or when they can't pull cash out of the business. But it actually has nothing to do with the agency and it actually has to do with this disconnect between financial operations and the business. And so like I'm not even saying that people watching this video need to go and understand finances to the level that I do. Like it's, it's probably a little bit over the top and unnecessary in most cases, but even just getting an understanding of gross margin, even operating expenses and then what that actually does to a business in terms of their ROAS targets and in terms of like what that actually trails through into profit gives you a major advantage on 99% of any other Google admitter out there because you can immediately now set roas targets or MER targets that are aligned with their gross margins or if they have like really high operating expenses, you have the capability to have that discussion of hey, by the way, we have similar clients. This, any, any performance marketer watching. This is a little account management hack. You always reference Another client. So you go, we have other clients that they only have five to $10,000 in operating expenses at your size, but you have 20. And so that I think is where there's a bit of a disconnect at the moment. And you need to actually bring those down. And then you'll actually see churn improve. You won't lose accounts, you'll become a strategic advisor in the eyes of the client. Because you can have those discussions that seemingly are a little bit outside of the platform, but they're actually helping you in the platform because now you can actually scale and you can put more attention there and you can get credit for the actual good results that you're delivering over there. So that's when I say like building strategic advisory. I think, I think the first step is for E Commerce specifically getting an understanding of gross margin and just being able to talk around profitability rather than ROAS numbers. Like how much profit are these ads actually driving and how do we get that up? And then when it comes to lead gen, I would say consulting across the full funnel and so understanding close rates, not just, hey, we generated a hundred leads, cool. But how many of those hundred are qualified? And then what are the close rates looking like off the back so you can broaden the discussion through the entire sales process?

Yeah, there's a lot there, a few things. So the, you know, like your clients are they, what's like, what does an ongoing relationship look like then? So in the beginning, it's almost like a financial audit that you're, you're doing to help them sort of bring clarity to their business holistically and then how that relates back to their customer action acquisition, which again it. You hear me say customer acquisition, new customer acquisition. I think a lot of companies forget, especially for whatever reason E commerce businesses that you're using, you're using these channels to acquire new customers. And the goal, it depends on your business. Like I obviously, you know, I work with some companies. It's. You're not going to get repeat because it's like sectional sofas. Right. So you better make some money on the upfront there. But like your, your goal is to bring these people into your world and make them raving fans and they come back and buy and buy and buy. Right? Like that is the, that's the goal. Right? And then a lot of them are just trying to like, they continue to try to think of as like, this is all my business is, is just running ads and making money right now. And like they don't think of Anything else but that. And this is such a limited mindset. And I think, I think we talked about this maybe a little bit on yours. I think those companies are going to like, be hurting quite a bit over the next several years because we just got out of this, like, basically. Well, we've had some weird cycles in the economy, but it's been like an easy ride for a lot of people over the last decade. I think, like, we've just, it's just growth, growth, growth and then you're, you're, you're riding the wave of like basically online advertising. If you're E commerce and you can just kind of like, all right, we're going to continue to grow, grow, grow, pump money, pump money. That ride seems to be over for a lot of the companies that have been on it for a while. Obviously if you're newer and you're just getting going, you're, you're at a different stage in your business. But it's harder. Like, like you said, like some of these businesses, like, I don't know how to grow anymore and you're looking, you're looking at their account like, well, it looks pretty good. And some of them truly are capped in regards to like, all right, your goal is this inside of Google Ads and you're trying to grow, but you can't really get more because as soon as you do, you get the diminishing return. Right? And so now, hey, let's start looking at that back end for you. But like on a monthly basis because this is going to lead to my next question. On a monthly basis, what are you, Are you like continuing to consult with your clients then on the whole business, or do you actually start siloing your attention more, more on just the ad piece?

It depends what's required really. For some it's, it's continuous consulting, zooming out and consulting across the business. For others, it is as simple as identifying something that's missing or something that's broken within the business functionally at the moment, putting a roadmap together to work towards fixing that. And then once it is fixed, we can really just focus on the ad pace. It's really going to be case by case, which is where it becomes hard to systematize consulting, which is why people don't like consulting, generally speaking, because it's really hard to scale. It ends up being a really large training piece internally. But the new customer acquisition focus that you just had there, like, I can't stress that enough and you've probably seen this in pieces in my Content, which is that the purpose of paid media is to drive new customers, it is not to drive returning customers. And I push this point home so aggressively because I have never seen good data that is showcased spending on paid media resulting in an increase in returning customer revenue. It just doesn't happen. And we've run these tests internally where we've taken incredibly large businesses doing tens and tens of millions a year and we've gone and taken their spend on meta, spend on Google, on returning customers. We've bumped it up because we want to go if we can spend more on returning customers and we get more returning customer revenue, it's a good ROI for the business. Never works, never happens. Because returning customers don't come from paid media. They come from direct messaging channels like email and sms and they come from the product portfolio and the way that it's expanding or churning over. And so a really good example of a recurring business model is fashion because you have consistent new pieces dropping every two to four weeks and you have old pieces of clothing going out. And so because of that you end up having really good returning customers as long as your clothes are actually any good and you have good branding, not because of paid media. And yes, you want a little bit of paid media presence on those new products, I understand that, to return to old customers, but it's going to come through email, SMS and really loyal customers checking your website consistently and looking at those new drops. And so we've taken on a few eight and nine figure brands over the course of the last few months. And particularly when you get to that scale, the ability for Google and Meta to overspend on returning customers is something I've never seen before. It's crazy because Google and Meta can attribute really easily if they go after those existing customers because existing customers are going to buy. And so Facebook can just serve them an ad claim of you through conversion. On Google, it'll just serve them a brand search, it'll claim the conversion and because of that you end up with 80 to 90% of your Google Ad account just spending on brand or on meta, you end up with 80 to 90% just spending on retargeting. But you don't really see it if you're just looking. If you just step back and you look at the platform, you're like, ah, it seems okay, that campaign's at a six row as that's at a five, it seems to be doing a good job. But you look a layer deeper and you go, wow, this entire account is an incremental and We've completely gutted accounts and just completely shrunk down the allocation to brand search, put all that money into new customer acquisition and literally like doubled new customer acquisition overnight just by having that grounding philosophy of you are spending on ads to get new customers, you are not spending on ads to get existing customers. So minimize down your spend on existing customers as much as you can can. That's like one of the easiest wins the majority of brands can take.

How are you finding that data? Is. Are you using like a wicked report or something.

On Meta this is. This is the attribution conversation which is.

Interesting which we don't have to go down that rabbit hole.

But yeah yeah in short there's just a few quick wins that you can do on the platforms to pretty quickly gear away from existing customers. On Google it's literally just looking at the search term data and going when I'm running a pmax is a placing on brand if it is negative it out potentially use the new customer setting which we could argue about. I don't know if it really works or not but yeah, yeah I don't know if it works. And then on meta if anyone watching this video does do matter it's using seven day click rather than seven day click or one day view. One day View scoops a bunch of over attribution and having heavy audience exclusions on website visitors and existing customers. If you don't do those two things matter will just go after existing customers particularly as you start to ramp budgets up.

So 7 click no 11 day view turn 1 day view attribution off and exclude remarketing audiences essentially correct and that'll.

Do 80% of the heavy lifting.

Yeah, yeah that's good. I am a fan of we Wicked reports out of I've tested like some like North Beam it's way too enterprise and then like Wicked reports seems to simplify it a little bit. It still confuses people for sure but it seems to tell a story a little bit. I'm no expert at it but I'm trying to steer more and more clients to like a Wicked reports in regard and I've had some actually where it just didn't really give us anything new that we didn't know. So we're like okay we'll just turn it off and rely on what we were seeing in the ad platforms. But and that was just mainly for the NCAC new customer acquisition. Right. Knowing where that's coming from. Okay. The reason I asked that was not to go down you know like strategies now and things like that. Even though I'm, I'm, I'm. I want to ask a million questions there now. But we have to stick to the topic today. But how? Because this is going to relate to like, hey, how do I, what do I have to do to survive? Right? Like, how do, what do I have to start learning and becoming. So how are you hiring in training? Because this, someone could be watching this and like, yeah, what are agencies going to be looking for? What are companies going to be looking for as a skill set that will be valuable for the next, you know, decade. Right. So you're obviously not hiring button clickers. Who are you hiring and how are you training them? Because what you're talking about is, in my opinion of doing a lot of hiring, hard to find. You don't just find someone off the street who can talk to an E commerce business owner about marketing and finances. Like, first off, marketing people very, for the most part, don't understand finances. Finances people don't really understand marketing. I think that's been a gap forever in business. Right. So it's a unicorn person to know finance and marketing and be able to speak both at a high level. So what are you, who are you looking for? Who are you hiring? How are you training?

It's a great question. We have a massive hack, which is that we get inbound interviews consistently of people who have watched every single video on our YouTube channel. And so YouTube is possibly the best hiring source for people that are out there in the world looking at. Really? Because if, if you watch any of my content, it's not easy content to digest. I'm.

No, I don't hold back.

I'll go as technical and deep as I want. And if you're into that kind of content and you're watching it, it generally means, okay, you, you probably have an interest in finance and marketing and bridging this gap and going to the consulting level. And so that's been a fantastic advantage that we've had over the last four to five months. It's being relatively new because the channel's kind of new. Prior to that, it's almost impossible to hire for that role, at least from what I've found. And so it requires an incredible amount of allocation of resources to training. And so we do, I would argue that we probably do more training internally than like any agency I've ever heard of. We do weekly sessions with the entire team. On top of that, there's one hour of custom content every week internally with a quiz on the back of it. And an action item. On top of that, we have a 30 hour onboarding training course across Google, Facebook, Finances, growth, account management, there's a couple others in there. And then on top of all of that, we do some additional things as well. Some technical one on ones with everyone on the team every week. The list goes on and on. It's, it's insane how much training we put in place just because. Trying to train finances, even just a basic financial literacy in conjunction with marketing and then trying to understand how do we actually bridge the gap here. How do we, how do we, okay, we get marketing, we get the P and L, but how does the P and L relate to marketing? Like why are we talking about these two things? That is, that takes some time, that takes a while. And so to kind of instill confidence in anyone watching this video that might be early in their, in their Google Ads journey or their performance marketing journey, you will not become a strategic advisor that can link finance marketing and talk to the business at a high level in the next two months. Like this is going to be a one year journey where you're really, you're learning a really complex skill and you're becoming a top 1% operator within this particular niche. And so to do that it's just consistently chipping away and applying everything that you learn. And so if you've learned anything from this video, which I hope you have, take that and then actually try to apply it on a client next week. Okay, I learned about gross margins. Let me get that from a client. Oh, the client said why do you need my gross margin? I didn't know. Okay, we'll go watch one of my videos on why you need gross margin from a client and use that argument. And so slowly chip away and get these things in place, start building some Excel sheets, start getting an understanding and within one to two years you'll become excellent and you'll be like an incredible strategic advisor across these, across these components. And majority of our team has about one to two years experience in the company. And so that's why we have like really large competency at the moment across the team and then all future talent that we're hiring, we're lucky enough that we, the YouTube channel is doing some heavy lifting there, which is, which is one of the reasons why I put those YouTube videos out is to attract really, really good talent out there.

There you go, guys. So if you want to upskill and save your career, you just have to watch Nathan's YouTube videos. But I do, I do think anyone should go Especially if they're in the e commerce space. You have a, do you have a course? I swear I saw like something maybe of a course as well.

Yeah, we've, we've got a course. We gave it away for free for the first five people and now we're charging for it. So apologies for anyone watching, but if you do want the course, obviously, always, always reach out and we can, we can send you the link.

Cool. All right, There you go. Reach out to him on his channel. I, I want, I want to buy the course from you too. I want to see what you got. So you're gonna have to give me access now.

I will, I will.

Okay. Yeah, no, I think so. I think you've made a lot of really good points there. Obviously you guys are, in my opinion, a top 1% agency that's operating. This is. And so listen, you're not going to become this crazy like strategic consultant right away, especially if you're just coming out of school. But the, the challenge is, this is like my challenge. If you're like, just, if you're green, let's say you just got out of school or maybe not school, right? Like, I don't have a colle degree. I was just a hustler and got into this. So, you know, if you're just getting into the world though, the goal is not just to focus on Google Ads. You've got to know Google Ads at a high level or meta ads or whatever, right? But you need to start learning business in general, right? You have to think like a business owner and that could, that could mean several things. There's. You're not going to learn everything and you're not going to become an expert at everything. But like Nathan's really, really good with E commerce finance and then tying that back into the marketing side, right? And so now his people are being trained there and maybe that's what you're into. But I think you have to find multiple skill sets within an industry. So this is why for, for students or someone who's learning, I think you just got to figure out what maybe like your passion lies and then start, you know, what if it's E commerce doing kind of what Nathan's doing, learning more about unit economics and how E commerce companies actually grow and how they are supposed to operate on the finance side, right? You can find all of this information and just can start learning and testing, right? If, if you work for an agency or working house already, then maybe it's like lead generation, but maybe it's like, I like Lead generation for dentists or something. Okay. I think the future. And it's weird because I don't actually, this is something that I debate for the future of. Grow my ads. Because Grow my ads. If you looked at our portfolio, you know, we're kind of like we were. We've been a Google Ads specialist agency for many years and we're obviously really good at it. If you look at my portfolio, it's 50% Legion, 50% E Commerce. And you know, my heart. I, I prefer E commerce. I really do like E commerce a lot, but I've never wanted to just go niche into it. But. And I still don't know what I want to do because like I, you know, we do millions, right? And my goal's now eight figures and, and so I'm like, do I have to. I don't know. But if I'm talking. So that's my own little journey I have to go on, right? And what we're going to end up doing, if I were to start over and this is what I, you know, talk to people about who ask questions and agency mentorship who are just starting out, whether it's freelancers or like agencies under a hundred K a month, I think the future is very, very bright for those that go deep, deep into a niche. So you're going to be a Nathan on E commerce, but you're not just in E commerce, you're digital marketing agency. Like yeah, we do meta and we do Google and we do. No, no, no, no, no. We're gonna literally look at your P L and give you an entire roadmap for your company and how that relates back to the strategy of your ads. Okay, that's really deep, right? And not many, not many people, not many agencies can provide that. Or maybe it's legion. Maybe you're like, you are the B2B SaaS king. You understand every aspect of B2B SaaS and how to grow B2B SaaS with ads and not just the ad part, but the back end. And hey, here, here are the, the, the call to actions that work the best and here's how to get your salespeople to upsell and blow up like so all of that, right? Or maybe it's you are the dentist legion king, right? So you know exactly how to tackle markets for, for those dentists and how to get them the highest quality leads and how to make sure they're converting at the highest and what to train their staff to say and how to follow up correctly and building out those follow up processes. So it's the whole funnel, like Nathan mentioned earlier in this. And I think those who just dig super, super deep and become more than just the ad expert there, but like literally the entire growth expert for them, they will continue to have tremendous, tremendous success not only with like their own marketing as an agency, but like the success of the clients that they serve. It's funny because like I'm almost trying to build the specialties of both end for E Commerce and Legion and that's really, really hard to do and scale. But it's because I'm afraid to probably choose a path right now. And I could tell you my salespeople right now are talking to E Commerce businesses and Legion businesses and we're able to help both. And so I'm, I'm in a stuck position. But if I were to tell someone who's, who's under 100k a month or who's just starting out, find, find the industry you enjoy working with or you've had some success with, go unbelievably deep and become the absolute expert within that. Not just on the ad side, but the full acquisition to fulfillment side of that. And a company will continue to always pay. Pay you money. Okay, did we miss, I know we're about an hour into this thing. Did we, did we miss anything or is that, is 80% of, it's 80% of the workforce in Google Ads going to disappear in five years?

No.

Okay, I think we're good.

Well, okay, well I think, I think Google Ads Specialist, maybe that title, maybe that title thing.

So my whole agency is going to disappear? No, no, because I, I grow. My ads is like if you go to our website right now, it's like, you know, we're the number one Google Ads agency. I don't think that's our actual title, but it's like top Google Ads Agency or something. And so obviously we've been able to make a really good, you know, business and living from being really, really good at Google Ads. But our agency and my entire channel is just about Google Ads, right? And my goal, I think I told you this, I want to start, I want to actually start my, my, my channel's a lot of like the fundamental stuff and I go framework that out for people. But you know, my goal is to start dripping more high level stuff because I do ultimately like talking about them. That's why I've enjoyed my conversations with you and I think it's going to serve most of our, my actual target audience for clients a little better as well. But yeah, like, our, our company is definitely like, our brand positioning is going to have to evolve and that's something we'll be working on because, you know, we're not just, yes, we're in. We're some of the best you're going to find when it comes to managing a Google Ads account. But my entire team is built not to just do that. Like, we're, we're built to literally help you as a company continue to grow. And we're going to, hopefully it, it's, it's weird having your team, like, those who haven't done it, start asking some of those uncomfortable questions. And it feels uncomfortable to them. Probably not to you, but like asking for a P and L from a business owner who, like, who are you? Like, who are you to. To take a look at my piano, right? You're not my accountant, you're not the irs. So it's, you know, there's just this leveling up of being able to like, hey, you are an authority. You all, you understand this. You're going to be able to help them because you're a strategic consultant, not just this Google Ads person. And so being able to have those conversations at a high level with a cmo, director of marketing or business owner is something people just have to get comfortable with. But that is. Your training sounds incredible. So I could have asked a thousand questions there internally. I know we do a lot of internal training as well. I don't do quizzes though, so maybe I should start quizzing my team. Maybe that's the next step. So I agree though I don't think, and by the way, even like what we're talking about, I don't think 80, I don't even think those who can't do what Nathan's doing or what we're doing in regards to like having these strategic conversations and going really deep with clients, not just on the ad side. I don't think even that's all that's going to be left, you know, five years from now. Right. Like, let's be honest, there's a lot of hype, a lot of noise within AI and it is unbelievably powerful. But it's still noisy, it's still hypey. I don't even know who the clear winner is going to be yet. I don't. VCS don't even know who the clear winners are going to be yet. And that's why they're just pumping billions at all these different companies. We're going to see what happens. But there is a race. We do know AI is going to continue to get better. We do know AI is going to be a part of, of our processes and we must adapt to this. We must learn how to use this to our advantage to help accelerate us within our career and how we serve our clients. But I'm five years from now, there's still going to be plenty of people who aren't even good at doing any of that, who will have jobs, who will still make money in this industry. But I think if you truly want to become at the top percent and you, you want to make sure you'll never lose your job or you'll never lose the, the prospects willing to pay you money, the business owner willing to pay you money, then I think you should challenge yourself to go beyond just reading and watching Google Ad videos and learning how to like build campaigns and go deeper into helping businesses grow and businesses understand growth. Right. And becoming that true strategic growth partner. Any last words, Nathan?

No. Maybe, maybe just breaking the third wall. Repositioning an agency into a strategic advisor position is very difficult. So good luck because it's, it's really hard to take like yeah, we're Google Ads experts, but we also do understand the larger component of the business. Like how do you position that? How do you message it correctly? It's something we struggled with for years. And so if there's any agencies watching this as well, it's hard, but I think you can pull it off and I think content really helps.

Maybe I'll talk to you about that later. Yeah, we're doing it through our basically sales process. It's basically like as you, as you work, as you enter our world of like getting an audit and like it's just how we're communicating to you and the value that we can provide is there. It's not, not what you're going to find on our website and then so but that's, there's some heavy lifting there. Now obviously, you know, the YouTube channel provides a lot like people once they kind of see even I'm not going crazy like you. I'm not doing P L breakdowns or anything, but I, I do framework out a lot of what I'm talking about with Google Ads, which I think might be a bit unique compared to some of the other guys that are doing Google Ad videos or not, I don't know. But it seems to resonate with some people and that has brought in, you know, companies who we do want to work with. Not always. I mean we get a lot of leads. We don't want that aren't a fit for us either. But I do believe yeah, if you're an agency or a freelancer, how you position your content and messaging will, you know, ultimately be how you are able to grow and scale. And it will be so much easier if your content is really attracting the ideal client for your business. So don't get caught up in vanity metrics of like views and subs. It's really like who is viewing your content. And if you're able to attract sort of that ideal client for yourself through your content, it makes everything so much easier. The sales process to the fulfillment process and everything else. So I don't know, we'll see what's, what's grow my ads will turn into in the future. In regards to our agency, I think we're pretty, we're pretty good right now. It's more just like how I actually want to position the messaging but. And I don't know if we'll fully just go into one niche at this point. I don't, I don't know if that gets me to 10 million or, or maybe it does and I'm never going to get to 10 million. So I guess we'll find out.

You will, I'll con.

I'll consult with you on it at some point.

Let's talk about it after.

Okay, cool. All right, guys, check out if you've made it this long, go check out Nathan's channel. I'll have it in the description below. Reach out to the man if you want to learn more, you want to upskill, go buy the guy's course. I don't know how much it is, but, you know, say you came from grow my ads channel. Maybe he'll give you a discount.

Absolutely.

Nathan, appreciate you being on the channel, man.

Thank you for having me.