Discussing PPC (Specifically Google PPC) With Frederick Vallaeys

Andy Splichal 0:00

Welcome to the Make Each Click Count podcast. This is your host, Andy Splichal. We are happy to welcome this week's guest to discuss today's topic, which is discussing PPC, and specifically Google PPC. Today's guest is the co founder and CEO of Optmyzr, a leading and award winning PPC management firm. He is also Silicon Valley entrepreneur, author and thought leader in Pay Per Click Search Marketing. As an AdWords evangelist, he helped pioneer the PPC marketing is one of Google's initial 500 workers. A big welcome to Fred Vallaeys. Hi, Fred.

Fred Vallaeys 0:35

Hey, Andy. Thanks for having me on.

Andy Splichal 0:37

You know, we're excited. We're excited to have you. Now, let me start here as an ad word evangelist. What is that? And what was the initiation process? Like?

Fred Vallaeys 0:48

What was the initiation? So it was actually interesting. I joined Google quite early on. I played roller hockey with Sergey in the parking lot. wasn't that big of a deal back then. But I was working on Google ads for a long time. And I actually started advertising on Google while I was an employee at Google. Because all of a sudden, it dawned on me that there was this fantastic mechanism for finding customers, PPC, and I was like, wow, I know all the ins and outs, like I should really start to make some money from this. So I became an affiliate, I started running affiliate ads. And it was interesting, because now I was working inside of Google. But I was also running Google ads. So I was in that unique position where I understood what the engineers were trying to build, but then also understood how customers were actually using that and putting it together.

Andy Splichal 1:34

Yeah, that's That's great. Almost seems not fair when you're running ads, and no one know what it's supposed to happen, right?

Fred Vallaeys 1:42

Yeah, well, exactly. And I didn't have access to anything, you know, on the back end that others didn't have access to. But it was sort of that knowledge, right. And back in the day, Google Ads wasn't even that big of a thing. And it all kind of came together when I was the biggest affiliate for eBay in the Netherlands. I'm originally from Belgium, so I speak Dutch. So that was kind of my market. And then the people from eBay, Netherlands were like, Hey, we're having this conference. Can you come and speak to our team about how to do PPC, right? Because you seem to really know it. And again, this was a big company in the day eBay, and they didn't really do PPC that well. So I go up to Sheryl Sandberg. She was my boss at the time. And I was like, hey, this, this is potentially a tricky situation, right? Like, because like you just said, are they going to perceive that as a negative thing? And Cheryl was like, No, this is fantastic. Like, you're living example that this works. So well, if you do it right, if you put two and two together, so why don't you go out there and give that speech. And that was kind of my that was, I guess, the initiation into becoming an evangelist, it was me going up on stage and kind of giving the Google Talk, but also knowing then how, where the rubber meets the road and being able to give specific advice that was really helping advertisers get to that next level with their ads. And then I learned a ton of stuff at these events, right? People would be giving me feedback about like, this doesn't work. That doesn't work. Like, why is Google going down that path. So I take all of that feedback back to the product teams, to make sure that the next version of the product was addressing some of those issues. So it's a really fun role.

Andy Splichal 3:14

Now, I wanted to say like, I typically don't have guests on that offer the same service as my agency, specifically, PPC, Google management, but I read through your bio, and I couldn't help but extend an invitation. So so let's talk about what you're offering.

Fred Vallaeys 3:28

Yeah, so I don't think we're competitors anymore. Maybe I was your competitor about 10 years ago, and the one year between leaving Google and starting optimizer. But you know, I saw I was doing consulting work, right. And very quickly, it dawned on me that it's it takes a very skilled person and very dedicated person to provide those services, because a lot of what you want to do and and a lot of the best practices are really quite tedious. Right? And so

Andy Splichal 3:28

Oh, you don't have to tell me.

Fred Vallaeys 3:32

Exactly. Preaching to the choir here. Right. But, but then I was like, Yeah, I do have some technical skills. So why don't I try to write some scripts, and scripts at the time, were brand new from Google, not many people were using them. But I was like, okay, maybe I can write a script or two. And I can actually automate, calculating your account level of quality score. Or I can put together five or six scripts. And I can actually have them automate a lot of the account maintenance process, a lot of the basic things that you'd want to do, but then they go into more complex stuff. Like, if you're running shopping ads, and you have a catalogue of 10,000 products. How do you split that into product groups, so you can set the right bids at each level. I actually did this for a client of mine when I was a consultant 10 years ago. It took me literally all week to do and I was like, oh my god, this is just so painful. There's got to be a better way. So then I teamed up with my co founders at Optmyzr, and we started building API solutions to make those things very easy. So now what I took one week to do manually you can do in less than five minutes in our software. And the whole goal is like Listen, there's these best practices, they've got to be easy so that people like you, who have brilliant thoughts on how PPC should be done, aren't wasting hours like pushing the buttons, but actually spending time, that same time on strategies that are going to give you an unfair advantage over the competitors who don't have access to people like you and me.

Andy Splichal 5:20

So let's talk about Google's AI. What type of Google's automated bid strategies, automated anything do you recommend to advertisers use and why?

Fred Vallaeys 5:35

Now thinking when it comes to AI, it's really important for people to understand, first of all that, you know, whether you choose to use a certain type of bid strategy, AI is touching your account hundreds of times a day, whether you choose it or not. So one of the themes that I was on a Google was the quality score team. And this was probably 20 years ago now. But we, we were building a system that was doing a prediction of the click through rate of any ad on the page. And based on that, that was the quality score combined that with the bid that you put in, that was your ad rank, right. And that would determine how many times your ad would show and how much you would pay better, you'd get a discount compared to someone who hadn't focused quite as much on quality score. But this was aI at work in the background, and AI is making all these decisions today. And then of course, you have some levers as well, in terms of bidding, and so I mean, obviously, I like value based bidding. So I like Target row as fitting because it's the most sophisticated of the options out there. It's the one that you can also nudge towards your actual business goals. And here's a simple example. Right? So if you're a legion advertiser, you could go in and you could say, Listen, I'm willing to pay $25 per lead $25 cost per acquisition goal. But that acquisition, or that conversion, is somebody filling out a lead gen form on your landing page. And then what happens afterwards, right? Some of those leads will actually talk to your sales team, some of those leads will turn into customers that pay you money, and a good portion of those leads will lead to nothing, then nothing will happen. So even if you're doing lead gen and you always think in terms of cost per acquisition, to challenge nowadays, and what's really going to help you do better, is take it to that next level, like look beyond the initial conversion, and start to report value. So someone who fills out the lead gen form and does nothing. Well, is that really worth $25? Or was that worth closer to zero than someone who actually then went and purchased, maybe that was closer to a $500 value, if you can start reporting those values to the Google system, with T Rowe as you can actually now nudge you towards getting more of those types of leads, conversions that will eventually pan out for you and become customers.

Andy Splichal 7:51

Now, you know, you have some some interesting insight, even though I know it's been a while since you worked there. But Google is really audit, you know, automating this automating that they have reps that reach out all the time. And when the when the reps reach out, the reps want you to automate, right? It leaves people wondering, and maybe you can answer this? And I don't know, maybe the answer is both. But with automations. Does Google have the advertisers best interest in mind? Or do they have Google's?

Fred Vallaeys 8:24

Well, they have to have both in mind, right? So I think it's an ecosystem. And the ecosystem is your publishers, which Google is one. But there's also the publishers in the Search Network and the Display Network, and as your advertisers and consumers, and somehow, Google has to make all three parties happy. And that's why I think the whole quality score system, and deploying machine learning and AI to kind of balance the interests of those three parties is so critical. And that's actually the thing that made Google the advertiser success that it is today, you know, hundreds of billions of dollars in revenue being driven from this. But the only reason they can do it is because advertisers keep putting more money in right. And and they know very well that if they push too hard towards benefiting themselves. Well, sure, maybe they'll make a little bit more money in the next quarter. But advertisers are going to get pissed, and they're going to start leaving. So it's a balancing act. So I don't think there's one party that they necessarily prioritize. And if you actually speak to them, and you say, Who do you care about the most? They'll probably say to consumer user, right, because some advertisers go away, but at least you have to use are still using Google while they'll figure out a new monetization model. But But I think it's really all three.

Andy Splichal 9:39

Well, of course, you know, as an agency, my biggest one is the advertisers. So my next follow up question would be, what are the top three mistakes you see advertisers making when they're using the Google ads platform?

Fred Vallaeys 9:53

And I think that story has evolved over the years. So nowadays, I would say with automation Some advertisers day to hear oh, you can automate bids great let me set my target cost per acquisition target return on adspend. And then like be done and walk away for a couple of weeks.

So set it and forget it

Set it and forget it right? It's and set it and forget, it actually works a lot better than it used to. But it's not gonna give you the best results and think about it this way, right? Like, return on adspend. Like, that's usually not a business school cost per acquisition, that's usually not a business goal, your business goal is more profit, more revenue, right? And then CPA and row as are levers to help you achieve that. But those levers are really just one level up from CPC, because the whole point of target cost per acquisition is so that Google knows, what is the CPC you can afford for every single auction that runs every single search that happens. And right but but now you're gonna have a sale next weekend or your your phonebank team is on vacation or like half the staff is out because they have COVID like that that's a business impact, right? So do you want to keep your cost per acquisition targets to where they are? Or do you have to temporarily change them to account for something that's changing in your business or your industry? And that's kind of one of the levers that people should continue to pull more than they probably do?

So let me let me ask real quick. So if you are running fully automated Google ads, you know, the example is Google's new performance max is coming out with Google Shopping, but how are you going to do better than your competitors if they're also running automated campaigns?

That's actually a really common question. It's kind of the reason I wrote my second book, too. So I give these speeches about automation and how great it is and how the humans can still work together with automation. But then the question will always come up. Okay, so now we got two competitors, they're both using smart bidding, or maybe both on target return on adspend. So how do you win? Well, keep in mind that Google's automating the bidding based off of the predicted conversion rate, but the conversion rate and the conversion value that's actually reported by the advertiser. Right, so one lever that you certainly have is, What do I call a conversion? And if I say that I converted a bid a certain value, is that the amount of the sale of that one basket? Or is that accounting for some lifetime value? Or is that looking deeper? Right. And so these are levers that you still have that still distinguish you from others? And then quality score, like fundamentally like, Are you writing a better ad, that just, you know, gets people to click it, but then also gets people to the right landing page that has high quality that that entices them to convert? All of those things are still levers, right? So it's not like you're going in with the same bids and Google just bidding one up versus the other, there's a lot of stuff you still control.

Now, do you have a favorite success story, you could share one of your clients?

Yeah, I mean, I think one that I really liked early on, was this advertiser, and they had written, they basically had the most complicated matrix that I'd ever seen, it was a lead gen scenario. And they had a long sales cycle, a high value item that they were selling. And they basically had to do predictions ahead of time of what was going to convert and sort of look at their own data to inform the bidding model. And back in the day, they were doing this, it was all still automated, sorry, manual bidding. But we were able to go in and basically take something that took that client a full day each week. And this was a really important client to them, right. So they weren't getting paid enough to do this. But they were spending a full day a week, running this model, putting stuff in a matrix and then updating the bids. As a result, we were able to go in and we gave them what we call the rule engine. It's a piece of optimizer. And so they it's kind of think of it like codeless programming or a way to do scripting without having to write a single line of code. But they did put in their conditions. They said if this condition and that condition, then do this house, if these conditions then take that action, right. So they wrote a really long list. And overnight, it went from day week spent on this customer to, you know, monitoring that things were going right and thinking about strategies that would help them to get to the next level. And that's the type of stuff that I'm really happy with. We're basically giving people back their weekends.

Now, Google Ads it for a long time was was the best way to grow your business whether your E comm or doing lead generation. Then Facebook came along. Facebook became you know, the new shiny object, the new the new way to to drive, drive revenue. And now with some of the privacy issues with Facebook and Apple, things seem to be going back to our Google, where are you with Google as a market name channel, do you still think it's the best one out there? And why?

Yeah, for me, it's still the favorite. And when we went in and built optimizer, we basically looked at how can we make the biggest impact on our customers or advertisers or our in house management teams, PPC management teams, and it was literally whereas most of the money spent. And if we can have even a small impact on a large amount of money that's worth more than having a big impact on a small channel. Absolutely. Still, Google and like you said, money that left Google for social is now coming back. Because you know, with all this privacy, they're just getting harder and harder to get the same results out of Facebook. Now, we actually help you with Facebook management and reporting as well. So we do see people coming back. And then depending on what market you're in Microsoft ads is obviously a pretty easy add on, you don't even have to actively manage it, you can basically copy and paste it from your Google Ads account and just get access to a different audience there. And then, the other thing that, you know, maybe a little bit of heresy here to a PPC crowd, but personally, I really believe in branding. Branding is often really hard to measure. But we're getting into a more competitive situation every day on Google, right? So I mean, how many people are you competing against, and what ultimately gets that consumer to decide to go with you versus someone else? Well, number one is usually price, but brand and trust is huge, as well. So if they recognize you, if they recognize your brand, and they've heard good things about it, that's that's a huge leg up. And that means you can oftentimes bid less than a competitor and still capture that customer. And so investing in brand through having so in my personal case, that's going on podcasts like this, that's writing books that's writing what I think are the right things to do in PPC. And it's not SEO focused, right? It's not like, Hey, I gotta be number one on the keyword PPC or whatever. But it's like if I can get 100 people to read a great bidding blog that I wrote, and they believe, and they're with me on like, that's the right way to do it. And then we actually see success stories from it. I believe that's the part of branding. That takes a long time. But eventually it does pay off.

So it's no no secret that Google is always changing. But if you had could see the future, next 12 to 18 months, I had to guess, where would you see Google going?

More and more automation, that's for sure. I think keyword match types are going to continue to evolve. So exact already not being exact match anymore, I think we're going to continue down that path a bit more. One thing, so I was lucky enough to be at a Google Marketing live event in person on the Google campus a few weeks ago. But one thing that I was selling the product managers and the engineers that I met was, you know, as we go into these automated campaign types, and you provide us with insights, make those insights actionable. And also make sure you're not just relying on bidding to fix problems in an account. And here's the example. Right? So Performance, Max, will tell you that you're doing great with a certain audience. It's like, that's fantastic. Now I can go to my boss, and I can tell them oh, look, we're doing really great with this audience segment people who are in market for an SUV. And maybe not surprising, but if I'm selling cars, well, okay, we're doing great with that audience. But tell me the bad stuff, right? Like telling me that in New York, I'm not doing that well, compared to in San Francisco for whatever reason, right? Because now I can go and look at that. And I can say, Oh, well, what happened in New York? Is there something in the weather? Is there something in the economy? Are people not going back to the office in the same numbers in these different cities is that's impacting what's happening for me, but I want to know, what's the bad stuff so that I can use my business mind to go and figure out what's the answer? Should I...

You know, without a doubt, I think the automation, one of the biggest issues with it is the lack of transparency for for advertisers.

Exactly. But here's an interesting thing. So read this into what Wall Street Journal, they've done studies that say, is it better to expose what the machine or how it came to make a decision. And when researchers found that that actually wasn't quite as helpful, we consumers of that artificial intelligence, as opposed to just seeing consistently good results? So and that's the thing, right? I don't want the machine to explain why it made a decision. But I still want the machine. I mean, obviously, the machine has to drive consistently good results, then I'll keep using it. But I also wanted to point out anomalies. And what's nice is that you don't really truly need machine learning to tell you that like machine learning can handle the bidding. But if I have a good analytical system like Google Analytics But tells me Hey, there's an anomaly in this city or with this demographic. Now, the machine doesn't have to explain why that happened. But I can go and look into it. And I can take action on it.

Yeah, no, that's a great point. Now, if somebody is listening, what is a piece of actionable advice? Oh, of course, people are listening. But somebody who's listening who's running Google ads, what's a piece of actionable advice you would give those listeners to see some quick results?

Yeah, for quick results, I mean, so we do free trials of Optmyzr. And generally, the first place that we go into is looking at search terms, reports and looking at placement reports. And you wouldn't believe how often we look at somebody's accounts or like, right there is $60,000, that you've spent on a placement for the past year that has literally given you a zero conversions. Like cut that out and spend that money elsewhere. It's just overlooked way too much. And so $60,000 with a bigger account, but even if you run a smaller account, like will find you hundreds of dollars of savings, right on the spot that you can apply to something much more useful.

Yeah, I mean, the search terms report is awesome for weeding out and getting better results. But what if you're using a smart shopping campaign or Performance Max where that's not available?

Yeah. And so if you're doing so shopping, then it is tricky, right. But performance Max, one thing that people sometimes overlook is that account level negatives will still work. So then the placement strict would actually apply. So you would just set up an account level negative placement list that includes some of those wasteful, wasteful placements.

But how do you see those placements?

So that's a good question as well. So that's where you have to kind of go back and forth between your existing campaign types. And and one thing that optimizer does is we look across the 4 billion have spent that we manage, and we will actually tell you, so from display campaigns that other people are running in these verticals, here's a bunch of money wasting placements. And so even if you don't have that data in your own account, we can still tell you that that is likely a place where your ad is showing up and and blocked out for you

Got it. Now, personally, are there any business books out there that you could attribute to your journey as an entrepreneur?

Yeah, I mean, so this is like my third startup and the first one that's successful. So, but what kind of got me into this was Losing my Virginity, not the act, but the book by Richard Branson. And so that's always been really inspirational, just how that man went from nothing to something and did it in different industries and sort of that attitude. So that was that was a really meaningful book to me. Recently, I read an interesting book called the Loop. And it's talking about how artificial intelligence and machine learning is potentially dangerous, because it keeps us in a cycle, where we can't escape from what the machine is teaching us and the machine looks at what we've been doing. And then it recommends what we should do next, based on what we've been doing. But if you kind of put that into a closed loop, like in Netflix recommendations, while everybody's watching kind of the same thing, because Netflix is more and more recommending the same things that are popular to more people, and then more people watch that. And then by default, that's more popular. So becomes another recommendation to someone who hasn't watched it yet. Right. And I think the same applies in PPC is responsive search, as I think a really good example, but the ad strength indicator of responsive search ads is basically just looking at what's the history of all the RSA is that anyone's run and what's worked well. Well, great. But if I have Nikes creative team, and I just came up with the slogan, just do it. And I'm going to put that into a responsive search ad, while the machine is going to tell me that you're stupid for putting that in, like put a keyword and instead, put meanwhile, like, here's the one of the greatest marketing slogans ever. And because it's not been tried, the machine has no data on it. So it tells you not to do that. Right. So step outside the loop, and try something new, because you as a human actually have that insight. And you can connect the dots outside of the system that Google may be looking at nothing that's bigger than him personally Wall Street Journal. I mean, business news and things in PPC and search moves so fast that reading a book, it's I mean, I've got two books, right. So I'm kind of undercutting myself here, but by the time I read it, it's outdated.

That's, ya know, that's a problem with find votes, as well. Right? Is that you were always going back and updating but still it the, you know, the thought behind it doesn't get outdated is quick. But the actual screenshots are where, where things are changing. Hey, so let's talk about Optmyzr a bit. What what is it? And who is it for?

Yeah, so optimizer is a PPC management software suite. That's obviously online so you don't have to install any salt Third, nobody does that anymore. But, but yeah, so we take a couple of 100 things that your typical PPC Manager will do, and we make them easier. So anything from reporting, to finding insights and explaining why an account may be shifting one way or another, to full on optimization, so we'll look at the data from your accountable suggests some low hanging fruit of quick optimizations you can do. But we can also go really, really deep and do pretty massive optimizations that again, like I said before, could have taken you a full day to do through Excel. Now we do it in a few minutes for you. So it's kind of think of it as a tool box for a professional account manager to do to make their lives easier when they're managing PPC.

And who is the perfect client for your service, they're listening, they should check you guys out.

If you want to recoup some of your time that you spend managing PPC, then this is a great tool is generally a better tool. If you know what you're doing in PPC and you know, the best practice you want to deploy, you just want to be able to do it faster, then we're really good. We do have a new solution. It's called Optmyzr light, it's actually free for anyone that's spending less than 10,000 a month on a single Ads account. And that one is a bit more prescriptive. So even if you don't have a lot of experience, it'll just say, well, here's five things you could do to kind of nudge yourself in the best direction and then you can come back a week later and do sort of the same thing. But like our bread and butter is really the PPC expert, someone who knows exactly where they want to go. They just want a better toolset to do it for them.

And how does your fee structure work?

So it's based on how many accounts you've got connected and how much spend is going through those accounts. But it basically starts at about $224 a month. If you are spending a little bit less than doing a prepay for the whole year. We have discounts for like a six month and a 12 month prepay. But one of the nice things about our tool is that even on those prepays I mean you can always cancel, right. And we don't have that many people canceling but we don't want to lock you in. It's always frustrating when somebody tries a new tool. And, you know, we talk to people all the time. And they're like, Well, you know, we'd love to use Optmyzr, but we'll do it in six months, because we're still stuck in a contract from that vendor. And that's not how we operate. I mean, we understand. And actually, it's funny because when I worked at Google, one of the principles and one of the things they said about why is Google such a great company, is that if Google doesn't give you good search results, all you got to do is go in your browser type in a different search engine. And if you think that one gives you better results, well, then you go with that, like there's no lock in on Google, right? So that forces the engineers and the product teams to just always be working to keep the search engine fantastic. And that's kind of the principle we want to have with optimizer too, as we got to build the best products, because every month we got to earn your business. And have you be willing to pay for it and think that's a good value.

Now, I also see you have a book, can you tell us more? Tell us more about the book? Yeah, so

I wrote Unlevel the Playing Field, the biggest shift in digital marketing came out in January of this year. And so it's a follow on book to my first one, which was digital marketing in an AI world. And it's really talking about in this landscape where the machines are doing more and more of the work that we used to do. How can we as humans still be relevant? And so if you love your job in PPC and digital marketing, it's a great book, because it just sort of explains how you combine your skills with the machine to get better results.

And those are available on Amazon, I assume.

Yeah, they're on Amazon and the audio book. If it's not available, by the time people listen, it is in the works and should be out in time for the beach this summer.

That's great. Is there anything else you'd like to add before we wrap it up today?

Yeah, I mean, I think this is a super exciting space, PPC and always changing. And if you love that pace of change, then this is a fantastic field. But if you if you feel threatened by it, you know, you're just going to become more and more threatened. So, again, that's why the subtitle of that new book is the biggest mind shift in PPC history. I think there's fantastic things that advertisers can do to to set themselves apart and get better results for their client for their boss. And I find that stuff fun. But but it does take a little bit of re education on an ongoing basis. But yeah, so I'm excited for the future of PPC.

Oh, great. Well, we are too. So thank you again for joining us today.

My pleasure, Andy. Thanks everyone for listening.

For listeners. Remember if you liked this episode, please go to Apple podcasts and leave us an honest review. And if you're looking for more information regarding Fred or optimizer, you'll find the links in the show notes below. In addition, if you're looking for more information on growing your business, check out our all new podcasts Resource Center available at www.makeeach click count.com. We have compiled all our different past guests by show topic including each other your contact information in case you would like more information any of the services I've discussed during previous episodes Well that's it for today remember to stay safe keep healthy and happy marketing and I will talk to you in the next episode.