🤖🚀 WTF are ad costs so high??!?!!?

Read time: 4 mins…

Welcome back folks 🫡

This week’s Hyper Growth Blueprint covers:

• 🤯 Why are ad costs higher in 2024?

• 🏛️ 14 words of ancient stoic wisdom

• 🚀 6 ways we’re capitalising on a big opportunity

• 🤖 Mega-Prompt of the Week

Let’s go… 👇

Last week we had some clients come to our HQ…

The aim was to map out their plans for growth this year.

The enthralling discussion that ensued sparked my inspiration for this newsletter…

We are 23 days into 2024…

…have you been feeling the sting of higher CPL’s, lower ROAS, higher CPA’s?

It seems like a lot of people are.

Let me take you on a journey of data to understand why…

(& more importantly how we can fix it!)

Chart #1 - How are businesses performing?

This chart shows the average Marketing Efficiency Ratio (MER) for an index of businesses over the last 28 days.

MER = Total Marketing Spend / Total Revenue

It shows on averages businesses fluctuate between a 5 & 7 MER…

…which means for every £1 spent on ads they generated £5 or £7 back.

Key Insight: MER is tracking marginally above where it was this time last year…

Which means:

• Overall marketing performance is pretty strong right now

• It’s an indicator of returning or increasing consumer demand

Chart #2 - How are businesses performing at acquiring NEW customers?

This chart shows the Acquisition Marketing Efficiency Ratio (aMER) for the same index of businesses over the same time period.

aMER = Total Spend on New Customers / Total New Customer Revenue

The aMER is a nice measure because it removes all repeat business from the equation.

It shows you precisely how efficient you are at acquiring brand NEW customers.

Key Insight: aMER looks rough!

It’s significantly down y-o-y & trending in a bad direction…

Which means:

• It’s harder & costs on average 16% more to acquire new customers right now…

So what’s causing this? 🧐

• Inflation

• Cost of living

• Supply chain disruptions

• More advertisers competing

• Attention being spread across new platforms

• Privacy regulations impacting ad tracking & optimisation

I could keep going & end up wallowing in self-pity…

(like a lot of people love to)

But that’s not what you read this newsletter for… and frankly it would go against every fibre of my being!

You see, a wise ancient stoic once said…

And taking that philosophy in mind…

…I see these external conditions as an incredible opportunity.

It’s during tough circumstances where it becomes difficult for those doing an average job at marketing to succeed.

But there is still a goldmine waiting for those who are willing to push the boundaries & market themselves with vigor.

So with that in mind…

I want to share my plan for how we are already capitalising on this opportunity…

#1 We’ve increased our CPA targets

We have increased our CPA targets across most our clients this year.

When you factor in the growth of inflation & fulfillment costs…

…it’s almost unreasonable in a lot of cases to expect you can operate & scale at the same CPA.

The market moves, so we move with it.

“But Elliott… I don’t want to increase my CPA… I will be less profitable!”

Not necessarily…

#2 We’re focusing on increasing average order value

If you’ve increase your prices this year… then you’ve already done this!

But we aim to make MORE profit on these higher CPA’s by…

• Increasing gross margin

• Add additional value to your offer & increasing prices further

• Upselling & cross-selling

#3 Break even now, profit later

Most businesses generate a substantial amount of profit from clients who keep repurchasing again & again.

Therefore getting those clients in the first place becomes the most important thing.

Acquiring clients at breakeven or a slight loss and then making big profits when they repurchase is one of the most overlooked & underutilised methods of growth.

But it only works if you have an impeccable product/service that gives you a high-probability of returning…

#4 Having a genuinely good USP…

What’s your unique selling proposition?

This is rudimentary marketing 101…

…but the reason most businesses are struggling with acquisition is their USP is generic, bland & unclear.

Your USP is the nucleus around which you build your success & wealth…

…so we are spending a LOT of time reworking these to do them justice.

#5 We’re hunting for breakthroughs

If you want to achieve an explosive jump in results this year…

…results that put you FAR beyond those your competing with…

…then you can’t do it by following the same strategies they (and you) always have.

Jay Abraham defines breakthroughs as…

All of our groundwork with AI over the last 12-months is setting us up for a plethora of breakthroughs this year.

#6 We’re adding more guarantees

More than ever consumers want one thing…

Certainty of outcome.

The more you can remove risk & guarantee the outcome your ‘thing’ provides…

…the easier it will be sell & get customers.

For example, we are bringing 2 new guarantees to the table in 2024…

Guarantee #1 - 30-Day 100% Money Back Guarantee

An old classic - but very rare in the agency space.

If you’re not completely blown away by the work we do & the relationship we begin to build in those first 30 days we’ll refund ALL your money & wish you the best!

Guarantee #2 - The Double Double Guarantee

We will agree specific campaign targets & a time period with a client…

…and if for any reason we fail to hit them…

…we reduce our fees by 50%

…and increase the amount of resource allocated by 100%

…until things are back on track & targets are being hit!

I encourage you to be bold & incorporate guarantees where you can.

Plus… if you can’t guarantee the thing you are promising…

…should you even be promising it anyway? 🤨

#7 We’re remembering our higher purpose

Yes, money is great.

But I was recently reminded that there is a higher purpose for being in business that goes way beyond making money.

For me that is working with great businesses that do great things and helping them grow & flourish to ultimately enrich the lives of the owner, their team, and their customers.

Unless you understand your higher purpose…

…it will be difficult to take advantage of your full potential.

Especially when external conditions are tough.

That’s all for this week - I hope you found it useful.

Take it easy,

Elliott ✌🏼

P.S. I share more stuff like this on LinkedIn.

Feel free to connect with me here if you want.

Mega-Prompt of the Week 🤖

Create a Ferociously Unique Selling Proposition

This prompt will help you create & refine your USP in a matter of minutes.

It’s really helpful & will get you thinking a lot…

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