He Managed $100M+ in PPC Ad Spend (Here's What He Learned) | With Derek Peterson

Hello and welcome back to another episode of the Collective Glitz podcast. This is your host Brandon Baitman and today I'm joined by Derek Peterson.

A little bit of background on Derek. Derek is a newer member of the Baitman Collective team. We we just brought him on after he's spent how many years, Derek, managing PPC? Oh gosh, it's been over 12 now, I think. Yeah, 12 12 years in all kinds of different settings and stuff. We were just kind of tallying up the numbers together before this. Derek's managed personally 40 to $50 million in PPC ad spend historically. And when you count the fact that he's also led teams of PPC marketers in the past, those people managing their own budgets, it really pushes those numbers north of hund00 million. So, as far as like people who I really trust in the world of PBC, Derek's like way up there. There's a reason that we brought him in here.

And we want to talk a little bit about how do you solve this problem of needing to get the best results out of PPC. There's a lot of different ways that you can go about it. We're going to talk like fairly objectively through what are what are the different options. Why would you choose one versus another? And we're gonna keep it as as like objective as we can, especially with Derek just coming in as as a third party that's kind of newer to to our processes, newer to what we do as a company. Although I will admit some bias because the way that we do things, I have I have like contributed to making those the way they are. And also Derek didn't choose to work here because he thought that everything we do is stupid. He chose to work here because he thinks many of the things we do are smart. So take it for for what you want. We're going to talk about some of the common misconceptions people have when they're looking at these different options between hiring a house. I'm looking at a agencies and I'm going to make sure that I keep things really really honest today about like what would I actually do if I were an investor if I were in your shoes.

So anyways looking at different options that you have. I mean what are they Derek? Basically, if you have to get PPC managed, your your options are do it in house, hire an agency. You could maybe say there's some like subsets of that, right? Like agency, you could do an agency versus a freelancer. Some people want to go with just, you know, somebody somebody that's like a solo guy versus a big agency can be like a really different experience. And then in house, I think sometimes when people say that they mean I the investor, the owner of the company, I am going to learn PPC. And then sometimes they they mean something more along the lines of I'm going to hire somebody in-house or I'm going to add it to the responsibilities of somebody else who's already in my company. So there's there's different ways to get this done, but let's let's talk first about in-house versus outsourced. And and you've done both in your career. Yeah. Yep. How do you think about that decision? And and a little clarity for for everybody listening here, Derek is actually our our leader over revenue as a as a company now. So he's actually sitting in this seat of the person responsible for the marketing of Bayman Collective, right? He's making these exact kind of decisions. His his last role was exactly the same thing for for a different company, right? So So he's actually made a lot of those types of decisions in in the last few years. Yeah.

I mean, yeah. And and across, you know, between agency and in-house, I've pretty evenly split time, right? Pretty close. A little bit heavier on the agency side. Yeah. like the the the decision between hiring in-house and versus outsourcing really it it it comes down a lot to like at least I think about it in terms of of how much how much you're wanting to spend because you want you want your spend to produce as much as possible and you want obviously the highest return that's a duh and so if if so much of your spend is tied up in labor it's going to be a lot harder to to generate that return like you have to you have to kind of view it as that and so you So, if you're if you're if you're only spending $5,000 a month and then you're also hiring somebody who's moderately good at this, you're going to be spending at least $5,000 a month hiring somebody in-house. That's not including taxes and benefits and whatever the heck else you do. That's actually like I mean, you said moderately good. I don't know anywhere that you can hire like moderately good marketers for five grand a month. Right. Right. 60,000 because you might be thinking about from like an agency perspective because agencies can sometimes hire people at that rate. They plug them into existing processes that are built to produce particular outcomes, right? If you want like an independent thinker like can build the strategy from scratch kind of person your experience is you're Yeah. Yeah. Yeah. 100%. Yep. Yep. Yeah. Totally. And and so, you know, you really want to spend more more on labor than you do on your ad spend. Like, that's silly. And so, you might say, okay, well, no, I'm actually planning on spending $60,000 a month. Okay, maybe now we're talking, right? Maybe maybe the split between labor and ad spend, productive ad spend, is it makes a little bit more sense. But I also think that something that something I think a lot of people don't take into account is actually like software costs. There's a number of things that like that an an in-house marketer is going to need to to make you successful. Whether that's landing page software, automation software, lead handling, CRM, whatever the heck else, like they've got their set their tech stack that's going to come with them that that also adds to that labor cost. And so you have to be thinking way past just the what's the salary of this person that they're bringing in house. So, you really have to think like, do I really want to devote like half of my capital to labor? And if and if I do, this person needs to be really freaking good. Like, they need to like you have to you kind of think of like marginal benefit, right? So, so does the marginal benefit of can this person really manage my ad spend so much better like twice as good as the ad spend is itself? Does that make sense? Like if I just spent ad spend with somebody that kind of sucks, I'm going to get some results. I'm going to get some return. Does the marginal is my marginal return going to double if I add labor costs equal to my ad spend? Like most of the time probably not unless you're getting zero results like probably not, right? And I do think that there is a crossover. There's certainly a crossover. And so I don't mean to say like hiring house is is dumb. I've I'm al I'm honestly currently working in house and I have for the past several years and so so there's a there's a crossover point there. Yeah. That that's how I like to think about it anyway.

And and that's not even that's not even including like we've all hired people before and like even the best hiring folks like I don't know what 50% success rate that that's in hiring like that's generous right like well I mean that's generous especially if you're jumping into hiring somebody for something that you personally don't know a ton about. Yes. That's that's a hard like like we have as a company more than a 50% success rate, but that's built on the back of like making probably at least 20 failed PPC marketer hires. Right. Right. So, we had to like we had to learn those things in order to to get that higher that better hiring rate. I also want to point something out here too. Like yes, you're right that it's that it's that you're working in house, but let's talk about how Baitman Collective does its own PPC. So I, the founder of Baitman Collective, am a somewhat intelligent PPC marketer. I know about this stuff somewhat. Yeah, I have chosen to hire Derek to lead my revenue team. Derek is a very intelligent PPC marketer. And Derek, with all of his wisdom and the fact that he already works in house, he already spends however many hours a week he does working on on building revenue for this company has chosen to hire an agency. So why if if I have that skill and you have that skill and not to mention we employ 30 other people who have that skill, why don't we use an agency?

Yeah. I mean, Yeah. Yeah, I mean it it really is the it's the it's the cost it's the cost versus revenue trade-off, right? I mean, we can we can hire an agency for for way less than a than a new hire that, you know, that we've betted thoroughly because we're intelligent marketers and we can kind of sniff out a good versus a bad agency. And we're paying, you know, way way less than we would with an in-house hire. Obviously, we have to babysit them a little bit. They're an agency. We have to talk to them. we have to, you know, we have to communicate and and adjust strategy and that sort of thing, but but like the the cost trading is is significant and we get good management and I just don't have to like think about it and I can spend my time on a lot more valuable efforts to drive revenue and like that's the big thing right there. It's it's what can you spend your time on because you outsource this, right? Because does Derek have the skill? Is Derek capable of managing this? Absolutely. He's also the only person we have internally who can do a bunch of things that are on his list of things that he's getting done and and one of the ones that we can easily outsource is PBC management. Now, it's helpful that he has the skill because then he can make sure that it's getting done right and if something weren't going well with agency and we can choose the best agency because we can understand exactly what we're choosing. But there's just value to someone hiring somebody who's just doing that all day every day because they're going to do it way more efficiently. When when people hire in house for stuff, it just gets wildly inefficient. Like you could get the same results with an in-house person and then that person if they were working with for 10 companies could get the same results for 10 companies because there's like PPC is is 90% knowing which button to press and then 10% the fact that it takes a long time to press that button. That's why it's something that I think naturally naturally does a good job in agencies. In fact, we find a lot of the in-house marketers that we interview and stuff, we just can't hire them because they like an in-house marketer with 15 years experience is the same thing as somebody who worked at an agency with like three years experience because you just don't learn in house. You aren't exposed to enough things, right? And it's that exposure and that breadth of experience that's that's actually really valuable. Now, it might be different if we were like a custom agency and we had a whole bunch of like custom marketers in house. It'd be different, right? because we could just treat ourselves like one of our clients. But all of our products just built so specifically for the real estate invest investing vertical. If we were to take anybody on our team and have them like choose to focus on our own marketing, it would just be like throwing a wrench in the process of what they're really good at because everything's different for for us versus for our clients.

Yeah, 100%. And two things came to mind when you were saying that. The first is that you know one one thing that you find in terms of the specialization aspect you were talking about. One thing that a lot of in-house people find is like oh actually like I'm spending you know even if I'm spending 50 grand a month on PPC like there's not enough for my PPC guy to fill his time with 40 hours a week. There just isn't. So I'm going to have him do some other things. And you keep adding things and keep adding things and you end up diluting the guy that you hired to do the thing. You know you're like I'm hiring this guy so he can focus on PPC. And then you dilute him and you just like got rid of the impact that you were trying to produce by hiring the dude because there's not enough to like fill his time with, you know, and so you end up producing the the the exact opposite effect that you were that you were you were trying to achieve in the first place.

One more hard truth. Yeah. I have one more hard truth I want to share with with investors about this. So we talked about how like yes, it could go well. The conditions in which this would go well are you have a massive amount of ad spend. Therefore, it makes sense for you to hire someone in-house. You have to like it's at least a six-figure hire by the time you're paying for benefits, taxes, all that kind of stuff. You're looking at probably and bonus potential like 150 plus for the kind of person who can like independently run this kind of thing, right? That doesn't mean everybody who works at any agency ever is making that amount of money to but to have somebody who can like build the stuff from scratch and not just follow an existing process, you need a different level of person. It's like when you hire like your only salesperson in your company, you don't have any sales training, anything like that. Like you need a sales leader basically in that kind of scenario versus if you're then you then have 15 sales reps and you're bringing new ones in. Like you might be able to pull that guy off the street and turn him into a great salesperson because you built a structure. Here's here's the secret. So you got to find that person. The sad truth is that that person doesn't want to work for you. You take a qualified PPC marketer and you tell me, Derek, I mean, you used to be like an in-house PPC marketer, like how attractive is the idea of working for a real estate investor somewhere as their in-house PPC marketer where they're spending 50 grand a month. Could you imagine a job with less job security or Yeah, that's terrifying. Yeah, it's I mean you have to like give them equity or something to really make them interested in this sort of play because there's so many companies kind of companies that are hiring in-house marketers for managing their own PPC like there's like they're spending millions a month and they're everywhere and like that level of talent doesn't want like they can work there so why are they going to work for you? Yes. Yeah. And I'll tell you two things that our marketers are looking for in that regard, right? There's two things that marketers are looking for. The first is, you know, especially if you had agency experience, you know, the fact of the matter is at an agency, I've got, you know, a number of clients. If one of them cancels, I don't lose my job. If I'm working in house and my one client cancels, that means I'm fired. And so and so if I if I'm fired then and so when I'm looking to move inhouse, I'm looking for a company that like has enough ad spend, has enough track record of success and and and not so much volatility that I'm like, okay, I don't think I'm going to lose this client. But if I'm working for a real estate investor who's like buying houses in four markets, I'm like like that's a little bit little bit scary for me like as like to take that leap like I could probably make this work but like maybe not especially if I especially if I don't have any experience in the real estate investing space. The other thing marketers are looking for honestly is like a lot of budget to have fun with. If you're looking to move in in-house like I want to do some cool stuff. I don't want to like, you know, spend on branded and like maybe one what you one one mid midfunnel campaign. Like I want to I want to do some cool stuff. I want to run some cool videos. I want to do, you know, and so the the places with the big big budgets are snapping up all the marketers because the marketers like cool, I get to spend like $500,000 just like running TV ads. Cool. you know, like, you know, and so marketers are looking for for a couple of things that I mean, it's hard for a real estate investor, especially a smaller real estate investor kind of organization to to offer. And there are some companies in the space who can offer some of those things, right? So, it's like% it depends on your size, right? So, if it makes sense at any point, it's basically you have to like I think a good benchmark to look at it is you probably got to be spending at at least a million dollars a year. So you can pay that guy 150 grand and have it be a reasonable percentage of of your spend. And you've got to I mean and if you're at that level, you've probably figured out how to build like that vision that's big enough so that everybody else's vision can kind of fit within that. There's got to be that vision for that person. And you just have to recognize that your job is just really not very interesting to whoever is coming into it uh compared to other options that they have available to them. The person who's going to be like, "Yeah, I want to do that." like they're probably not the person you want to hire and and the person who's who's really really like not interested is probably the person you need. So, you just have to find a way to make that like really incredibly interesting for them. If you can pull that off, then you can have the right person. Yes, it it can it can work well and there is value to to doing that. I think some of the like I I used to work with a client that in my opinion had the best in-house managed campaigns I've ever seen. They're just incredible, but they were spending $5 million a month on PPC. They had a team of like a dozen people that managed their PPC in house and I was like the consultant helping build the strategy of the some of the things that they were going to test and stuff like that. And like I saw that and I like dang you can really do a good job with this. But yes, you know, when you're spending five million bucks a month, you can do stuff that you can't do when you're spending 20 grand a month like like a typical real estate investor. So So there's there's a there's a time and a place for that.

We talked a lot about hiring that person. Something that is is actually surprising to me that's more common than not in this industry is self-managing PPC like the entrepreneur themselves doing it. And we don't have to talk about it for long. I think I don't I honestly don't know exactly why people do it to be completely honest because I think everybody like I could I could tell you the argument against it which is the simple like there's so many other things you can be doing in your business. Why are you mastering some like technical skill when you could like it's a step backwards for most business owners to say like I am now like the PPC expert like you you want to be the person who's bringing those resources together, right? Who's able to find and identify those people and build the right growth paths for them so they're excited and get the best performance out of it and orchestrate the different parts of the machine so you can grow and and all that kind of stuff. But I think everybody knows it but they still do it anyways. So, I honestly don't know exactly how to speak to that because it's not clear in my mind like why anybody does that other than just like distrust of agencies. Like there's a lot of people out there who just like they've worked with agencies and it doesn't work out and they're like I must be able to do it better myself. And some of that come to hiring the wrong agencies and some of it comes down to the wrong expectations. It it goes both ways.

Yeah, I think that's accurate. I I also am like I don't understand especially real estate investor like you I I've watched real estate investors now like they you guys are like these guys are like they're wheeling and dealing like they can generate more money with a single text than like most humans can. It's like crazy, you know, and like and so if you compare your the usage of your time to like call somebody to wheel and deal versus like I'm going to go like dig into my search terms and see what's garbage and sounds like that's terrible use of your time cuz like the the the return on a use of your time to dig through your cell your your search terms and like clean them out. You're going to get, you know, maybe a handful more leads per per week doing that. and maybe half of a lead per week turns into an actual deal versus like you could have just called 20 people in that same amount of time and probably closed two or three deals. I I you know what I mean? Like I you know I don't know what your exact Yeah. conversion rate is, but you know what I'm saying? Like I say, you make more money with a single text sometimes than just digging into your search. I don't understand the time trade there. I really don't.

Yeah. Let me share a story. Something that just happened in the office yesterday. So we or or I just heard it yesterday. It happened before that. So, so we have we have an issue where our Facebook account gets hacked. With our Facebook account being hacked, it's like it's like one of the worst things that could ever happen. These like, you know, people from who knows where on the other side of the world start like infiltrating the accounts, kicking out everybody in our team, and then they're they're going and they they start like running a bunch of ads to our client ads accounts, uh, spending a bunch of money on their credit cards, advertising their own stuff. This this happened months ago and and we got it all cleaned up and and all is well now, but it like really sucked. Anyways, right after this happened, the average investor was like, "I need my money back." And we were like, "Yeah, you need your money back." So, we're we're working to get the money back. We're trying to like work through Facebook refunds, all that kind of stuff. And then we have one client and this guy's just like, "How much did they spend?" We tell him 10 grand. Just leave it. I don't want you want to try to get my money back. I just want to move on and focus on the stuff that's going to generate revenue in my business. Guess who has one of the best close rates of any of our clients? That guy. Now, do we still work to get the money back? Absolutely. But what he understands is like, if I fight with this, if I focus on this, I'm going to potentially make $10,000, get back those $10,000. But what are all the other things that I could be doing? This is a guy who has multiple sales trainings with his team every single day. one of our best close rates just pulled out five contracts in like the single hardest hardest county in the United States to do marketing for 10 grand in ad spend because of that like relentless focus on the stuff that's going to move the needle, right? There's there's something to be said for that. Now, am I an advocate of like, you know, don't spend the time sending the email to Facebook so you can get $10,000 back? Like I'm not necessarily an advocate for for sure, but there's something about like that mindset of just like focusing on the next the next right thing that is the most high leverage, the single thing that if you fix that, it it it erases all the other mistakes. There's there's there's a lot of value to that.

So let's talk about let's talk about agencies if if we are going to work with an agency because it sounds like for for like most small businesses that's going to be the play. For really large businesses, they have optionality, right? And does Nike still choose to work with ad agencies despite the fact that they can whatever talent that they possibly would want to recruit? Despite the fact that they have virtually unlimited budgets, all those things, do they still work with agencies? They do. Why would they do that? Well, probably because there's some value to that that that can be brought to the table, right? So, so looking at agencies, what are the things that we want to look for that are good and what are some red flags that we want to be careful of? And this is I'm asking from your experience and a little bit of of clarity here like Derek's worked for for agencies in house and he's worked for good agencies like you you've had people like some of our clients look at the you know $3,000 we might charge to manage their ad spend at a certain level and they're like oh that's so expensive. Like some company somewhere chose to hire some agency where Derek was like the guy behind the curtain and they were willing to spend $100,000 a month on that agency just to have Derek there. Right. Yeah. So that was my story. When you talk about Yeah. Yeah. Yeah. Exactly. So when you talk about like like high, you know, high level talent agency and stuff like why do they hire? Why do people spend this money? It's usually to get to somebody like Derek. So I want to know like in your opinion, Derek, like why are they willing to spend that money? And when you've seen like the good agency, the bad agencies, how do we even sniff that out?

Yeah. I mean, it's it it's it really is tricky, especially if you don't have a lot of marketing experience. Personally, I I can see like why it's so daunting and why there's a low level of trust cuz even now the digital marketing space is kind of the wild wild west. Like it it really still is. Like it has not been tamed to a great degree. Yeah. Somebody told me that there was like some there was like some survey data kind of showing how much how much do people trust different categories of people. It turned out marketers fall below politicians on the list of who gets trusted the most. Unfortunately. Yeah, that doesn't surprise me. Yeah. I mean I I've got a couple of thoughts and there's like we should we should also make, you know, if we have some time, we can make a distinction between like the different types of agencies too because or even the different types of of outsourcing because you know you've got your freelancers and you've got your kind of custom agencies and you've got your cookie cutter agencies and and then you've got your kind of unicorns that are a little bit of both, right? we can talk about those and and I think like even regardless of there's a few red flags that are that apply across all of those and so you know it's worth talking about those red flags and and I may ruffle some feathers with some of my opinions on this because I I have this experience right I've worked at I've worked as an agency account manager kind of type strategist you know three different a four different agencies now and and so I've worked with I've worked with four of them that are all types and I've you know we've won deals from all the other competitor agencies. So, I kind of have an idea of what, you know, what to look out for. But, but one of the things that I would that I would really highlight is like is picking an agency that can demonstrate their strategic process, whether it's a custom shop or maybe a cookie cutter solution. you know, a lot of and I shouldn't I have to be careful about this because I don't mean to de-emphasize the value of like getting the right talent through the door because that's certainly a part of it, but like but there's a lot of agencies that like we have the guy, you know, or we have we hired this big dude and he's he worked for Google and by the way Google doesn't tell their employees like anything of value. So, like if you think he knows the algorithm, he doesn't. Anyway, but like we hired the dude versus we have a process that is repeatable and we've had success with a gazillion clients. Like that's what you want to look for. What is your how do you guys approach strategy? How do you approach finding results for me? How do you appro approach, you know, pivoting and tweaking your strategy along the way versus we have the dude? Because guess what? The dude changes jobs. The dude h moves. the dude has a bad week, whatever, right? Like people are people and and and so you you want to be able to rely back on an actual process that that has that is repeatable that an agency has found success with.

Biggest red flag to one of the biggest I shouldn't say the biggest but one of the biggest like the dude I would say if I could just expand anything on that I'd say there there's a inability that humans have to like learn things understand things right so the dude is managing the campaigns learning, oh, this market's good, that market's bad, this way of targeting is good, that way of targeting is bad. And and all those are good insights, right? But usually the way that agencies operate is like we have people, those people are learning things, and then when the people change, then we have all kinds of massive issues. That's where we get people coming to us and they're like, I've been working with this agency and my account manager changed and then now my results suck, right? It's a really, really tough place to be in where you're like relying on people. I think the the best agencies can do a really good job of relying on data. So as that person would be learning that thing also our system is learning that thing. We're building processes around that thing. And it's actually like this is a better way to do marketing. It when when I first got into the digital marketing field I had like this chip on my shoulder. I was like I'm so new to this field. All around me are people who've been doing this way longer than me. They're probably way smarter than me. And when I first did like some audits to see like the level of digital marketing work, me as like some guy who's been doing this for six months, that's when I realized like we're in an industry full of what looks like idiots basically. Like nobody's using data to make decisions. It's all just like, oh look, that keyword performs better than that one. Let's just like dial it up a little bit. Okay, by how much, when, what are the criteria we're looking for to know that it's worked or not? Is there a way we could test this as an experiment? like all these types of questions of just like so using data like this is like the weirdest field ever because what I'm looking at is just people using data to make emotional decisions. That's pretty much the dumbest way to do marketing and everybody does it right. So the the standard that we have as a company is one where like most marketers like will not like they just they just cannot hit because it's it's so unusual to think about things the way that we're thinking about things. But also it's the only way that makes sense. It doesn't make any sense to make emotional decisions based on data and then have some person who repeatedly makes emotional decisions based on data and then learns through that process be your like secret to how you get success. there's so many better ways to do it, right? And and and that it's comforting because you're no matter what agency you're going to work at, you're or freelancer, you're always going to shift account managers. Like you you always just are. And so to have confidence that that an agency has an actual like data data informed process that like every account manager follows. And so you can switch names 57 and a half times and they're going to get you the same results because they they have a process that's proven. And so and and this is, you know, as we talk about like the subcategories of agencies like this the guy problem is a huge problem with custom shops. Now custom shops have some advantages, but that's like a huge problem with custom shops is it's just a bunch of the guys, you know, you know, because you've been the guy 100%. Yeah. Yeah, I was the guy. And like And you screwed over those clients when you left your job. Yes, I did. I They were calling me months and weeks after I left because because they're like crap like Gary's mad what do we do you know or like what did you do to solve this problem and and honestly our internal processes we had like a threemonth account transition process because it was so like anxietyinducing to change account managers like the company built like this robust ridiculous process it took seven years to transition any account not seven years I'm exaggerating but like it took a long time to transition accounts because of such a Yeah, fair enough. Cool. So, so the guy we want to focus on a quality process, a quality strategy that adapts with data, not necessarily people because people change, people make mistakes, etc. Although people are a huge part of building that, right? We don't want to deemphasize the role of really good people in an agency. It's critical. But quality people with a quality process. Like you would take a quality person without a quality process they don't they just don't produce what they could with a quality process with the level of consistency that you need. So right and vice versa, right? You could take somebody that's, you know, learning with a really good process and they they'll knock it out of the park. Yeah. 100%.

Okay. What's next? Well, the other piece I think this and I think this happens with a lot of folks who who maybe are less familiar with with marketing, but and this is kind of maybe a less like passionate point of mine, but like look for an agency that speaks your language, the language of your industry, not just can throw a bunch of like acronyms and marketing jargon at you. Like, oh well, it looks like your CPMs are a little high, which is causing your CPL to look good and your CAC is really high. It's like, shut up. Speak my language. You know what I mean? you know, like it's a because we can get impressed and you know this like like in real estate investors I think know this too like you can tell a rookie real estate investor because they're like using all the jargon and acronyms and like like hello fellow kids kind of you know like they're they're they're trying to be cool and fit in. Huge red flag like super easy red flag on a marketing agency if they just throw a bunch of jargon marketing jargon at you and you're like whoa these guys really know their stuff like probably they don't. If they're really talented marketers, they will speak your language and they'll be able to adapt the marketing concepts into your into your paradigm. That's a really good sign that like that that you're going to have good account managers that can understand your business. A good marketer understands businesses, not marketing, if that makes sense. So, again, one of the smaller points, but like it's a really good it's a really like good litmus test. Like, are you just throwing a bunch of acronyms at me or are you actually talking to me like you understand my business?

I can tell you the big frustration point that a lot of people in this industry have with this is they're like I'm sick of talking to that agency. All they do is talk about impressions and clicks or leads. It's like I don't want leads. I don't make money off leads. I'd love to make money off of leads but I don't make money off leads. Make my money off of deals. Right. So that's yeah that's a that's a big piece like you got to make sure they they don't they a good marketer like just like you said they understand business not necessarily marketing right. So they should be able to translate all that stuff to how it impacts your business. Now that said, I will give some caveat here that that doesn't mean that those things aren't important, right? You as the client need to seek to understand how impressions, how clicks, how leads, things like that matter in terms of getting to your results because if the results are great or bad, part of why they're great or bad is going to be some of those other marketing related metrics. They're going to help tell the story. They're going to help us understand how we can shift things. But it all has to be pointed down towards the success of the business. That's we have to be able to connect that, right? And if we and if a marketer understands on a really high level, they'll be able to communicate that really simply. It's it's there's like this curve of like when you start to learn stuff, you can start to communicate in a way that nobody understands. And then as you like become a true expert in things, you can make five-year-olds understand what's happening with a marketing campaign. And that's like a good market if they can like that. And that's a true mark of an expert in any field, right? Like if you can make all ages understand what you're saying, that's mastery, right? Yeah. Totally. So it's actually a really good litmus test. Yeah. Even though it's kind of, you know, this kind of silly thing, it it's a really good limit test.

Cool. All right. What's next? My other thought is probably my most controversial thought. Yeah. For anybody like not familiar with this, Dererick's like arcane of hot takes internally. But when you really think about it, you're like every time he's right. But this guy's got a lot of hot takes. I do. And I try to keep them to myself a lot of the time, but I don't succeed very often. I I actually think a huge red flag is guarantees and these like don't pay until you see what we can do for you sort of sort of deals that people sling and on their face they actually sound really good. And I think I actually think the guarantee thing is dying in the digital marketing space a little bit because like it it has become such a red flag. people guarantee results. Like everybody knows in marketing you can't guarantee results. Like I think that's pretty widespread knowledge now. So that one's dying. It's funny because real estate investing just like it it lags like five five years behind every other Yeah. industry, right? So you know here we're still we're still doing direct mail and we still think marketing guarantees are cool. But yeah like Yeah. Everybody else will catch out. Yeah. But I mean I mean direct mail works in this industry. So you can't you can't like you can't marketing. Yeah. But the the marketing guarantee thing. Sorry. Continue. Why? Because on the face of it, it is like well I want confidence in a marketer, right? So this guy's willing to put his money where his mouth is. This other guy is not willing to put their money where their mouth is. Who am I going to bleed more? Yeah. Yeah. Totally. And it does it does look really good on his face. And and the other thing that's like confounding about it is that sometimes you land a win. Like sometimes the person offers this and they are actually good. But the problem is so there's there's a couple problems. The part of the problem is that that's the reason they have to remove the barrier to entry is because there's huge risk. If if there was less risk, they wouldn't have to remove that barrier to entry to actually close the deal. People that remove barriers to entry are people who are having a hard time closing deals, having a hard time closing clients, getting clients for for their whether it's a a freelancer or their agency. They're having a hard time because they don't have any other proof of success that they can offer other than like I'll give it to you for free and then you can see. So like it it devalues again. Sometimes some percentage of the time, some very small percentage of the time, you'll probably land a win and you're like, "Sweet. I'm so glad I went with that guy. But like when you're factoring in that free that that free offering to like offer you services, are you considering that first of all, your ad spend isn't free. So are you willing to take a risk with your ad spend being managed by somebody who is likely subpar at best or it could be a complete you know, at worst. You're still risking your ad spend. And how many months are you going to risk that for before you're like, "Yeah, this guy sucks because my, you know, I it's hard, but like maybe 1% of of people that do that type of thing are actually good." And so, are you willing to take like a risk on that 1% to find the guy? And like, do you really think that you are the one that's going to find that guy? Like, in all likelihood, probably not. And I know we all like to think we're special and like I No, I understand people like I can read people. It's like, yeah, no. You can't. And really nice guys are really bad at marketing and really big jerks are really good at marketing sometimes. Like it it's just like it's just such a you don't factor in the risk calculation like you would in a financial situation, right? You in any other financial situation whether it's investing or real estate like you factor in the risk as part of the equation. But when you're hiring an agency you're like a sweet no risk. It's like no actually there is risk. You're spending ad spend. You're spending time. you're you're you're putting your brand out there in maybe a subpar way for a 1% chance of success. Like, do you want to do that? Is that the trade you want to make? Seems like a silly trade to me. And I'll tell you this other thing, too. I kind of, you know, I kind of made up this analogy the other day to kind of demonstrate this. Like Patrick Mahomes, okay, now good. He's good. He's good. I think that's I won't like claim he's the best or whatever because I'm gonna cause some controversy that I'm not prepared to back up, but he's good. He's a good football player, okay? And he's a good quarterback. And do you think Patrick Mahomes like went to the Kansas City Chiefs and was like, "Hey, look, coach, I'm really good. I promise I will give you one season free just to see what I can do." No, he didn't do that. He said, "Hey, I'm Patrick Mahomes. I'm freaking good. Pay me a gazillion dollars." And they're like, "Cool. Happy to do that. you know, like they didn't they probably didn't bo at at whatever he wanted to be paid, right? That's because every he's he has proven track record of success. He we know he's good. He knows he's good. The Kansas City Chiefs knows he's good. Like, and they're willing to pay. They're like, "Yep, we want the best 100%." Now, could some guy walk up to, you know, Andy Reid and say, "Look, I'm a knucklehead and I have no proven track record, but look, I'll give you a season free. I promise you I'm the best tight end that you've ever seen." Maybe he is the best tight end that you've ever seen, but probably not. There's a reason why they don't like take walk-ons in the NFL, right? They want the best. And so, do you want a walk-on agency that might be okay, or do you just want to pay to get it done right? You know, I I don't know. I I don't Maybe I have less patience than the average individual. Like, I just don't want to dink around. Let's just get it done right the first time.

Yeah, that's that's a super fair point. I I want to to approach this from from a slightly different angle and just kind of talk about the the economics of an agency, like how an agency works and how how a guarantee has to work in an

agency. So, just to paint a picture, you spend $100,000 on ads. You're going to spend on an agency probably $15,000. That $15,000 is going to go to the agency, and then they're going to end up with a 10 to 20% profit margin. These are like proven profit margin numbers for an agency, right? And what's the reason for that? It's it's basically that they have it's a service business, right? So, it's not the highest margin of businesses. So under $100,000 now you have like 2% of that that basically ends up going into the pocket of the person who owns the agency that you work with.

So if you think some agency out there is just saying like, "If we don't get you results, then we'll give you your money back." There's there's a few different ways that that can go. Way number one is they're not actually giving people their money back. Usually, there's all kinds of like strict criteria around those guarantees, and it's virtually a useless guarantee. And in fact, in my opinion, worse than useless because it's dishonest, right? And it tells you the character of the people that you're dealing with, which is like, "Oh yeah, we'll give you your money back." "Oh, but you didn't, like, you know, hit this exact piece of the fine print, which was that you have to close one in 10 leads." "Well, I can't close one in 10 leads because your leads suck." "Oh, well, you know, you still didn't close them, so that's on you. Sorry. Tough luck." Yeah, tough luck. Yeah, that's how a lot of this stuff goes. So that's option number one is like, we don't actually give refunds.

Option number two, we do give refunds. Okay, what's that going to look like? Well, they're now guaranteeing you something that is not actually in their control. And yes, if they do a better job of doing their job, then it's going to be more likely that you achieve that outcome, but they're going to work with tons of real estate investors that are just going to suck at sales and they're not actually going to hit those returns that they're trying to hit, right? So now I take like of your money, this 1 or 2% that was like left over the profit margin, and I'm going to say I'm going to be refunding somewhere between like 20 and 50, hopefully not like 70 or 80% of my clients. And they're going to try to convince you, "Oh, we're so good, so we don't have to do that. That's how we're able to do this because we're just an agency that gets results all the time." Again, think if somebody's guaranteeing you something that they do not control, is that realistic or is that not realistic?

So, so then what happens? I have this, I have this one or two percent that's left. Yet I'm refunding of my revenue at least 20%. I am literally upside down as a company. So how does that work? Well, either I go out of business, or I do what 99% of these agencies end up doing, which is I build a mediocre product with a premium price. So I start charging as if I'm a good agency, yet I start delivering the bare minimum for every single client. Yes. What happens when I do that? Well, I realize as a marketer, I can work really hard to get a client 10% better results, and that's going to be worth it financially for them to pay me to do that. But it's actually better if I just kind of, you know, do the 10% of work that I could do that's going to get them like a good chunk of the results that they could get, and then I have room for those refunds and stuff like that. So what ends up happening is you have agencies out there who might charge, like, just as a simple example, maybe they're charging two grand a month. And then the premium product that's really good would charge four grand a month. Well, now you have them selling for four grand a month the thing that's worth what you would buy for the two grand a month because they're accounting for the fact that they have to refund 50%. And when you look at the whole, like the whole, like ecosystem of economics here, everybody would be better off if they actually just paid marketers the right amount of money to work harder, produce more results so that we can actually accomplish what we're looking to accomplish on the agency side and on the business side. But people are really attracted to these guarantee offers, which causes them like this, this like break in like the natural economic ecosystem where now you have this like this predator in the ecosystem that kind of screws things up because it's not supposed to be there, and it just doesn't end up working that way. So that's that's kind of like some basic economics. So you said the picture like when you're talking about a low margin business that's willing to refund a gigantic portion of their customers, how are they going to pull that off? It's the same thing as like performance marketing agencies have have existed since like the beginning of time, and all these major companies in the world, they don't use performance marketing agencies. Why don't they? Well, you think like, "Oh, you only pay them if you get results." But the problem is every agency knows that a certain percentage of their clients are just going to take off with minimal effort, and a certain percentage of their clients are going to be possible to get there if they work hard, and then some of them are just never going to get there. They just ignore the ones that are possible to get there, ignore the ones that aren't going to get there, and then just take the easy wins from the ones that are going to get there quickly, but then they 10x their number of clients going through that system. And it's basically just like, you know, skimming the low-hanging fruit. And I would consider a mismanagement of funds because you pay the agency to be a steward over your money. They should be treating your business as if it were their own business, making decisions as if they were you, the owner of that company. And those kinds of companies are forced by the economics of how things work. They're just naturally forced to provide really, really bad service, and it still for half their clients works. That's right. But that's not a good, it's not a good bet. And in the cases where it works, it could work significantly better if there was more effort put towards those campaigns. So sorry, I was there, that was a long soapbox. But no, it was good.

Well, and and I think you highlighted the point. The reason why this is a red flag. The key reason why this is a red flag is because what you're saying is what what the maybe boiled down version of what you're saying is this, this is a signal. These guarantees are these like pay until we get you results or whatever. They don't control the results. Therefore, they have to rely on luck and the law of averages to play out in their favor. Therefore, they're not relying on strategy, processes, data. So the reason why it's a red flag and that you can use it upfront is be like, "Oh, I see. This agency is operating on the law of averages. They know they're going to get lucky with a certain percentage of accounts. So they increase the price of their product and they they're okay with churning because they've increased the price of their product so high that that the churn actually nets out positive to them, which means they're relying on luck. They're not relying on a quality strategy, good process, whatever. So that's why that's why it's like an upfront litmus red flag. Don't want to work with them." Yeah. Yeah. Fair enough.

All right, let's let's before before we leave here, let's talk about breaking out the different types of agencies and how they can work because I think this is a useful thing. And and I'm going to let's talk about how you and I met, Derek. This this might actually be this might be a good a good segue into this. So, so Derek and I are both part of a community of marketers. And I saw Derek post something in that community that told me with only needing to see a few sentences that Derek is a genius person. So, I messaged him and I said, "Derek, are you recruitable?" Uh, and you responded something like, "No." And then we ended up like getting in touch some some other way like like pretty pretty soon after that. Anyways, we end up we end up on this phone call and and you're basically telling me, "Hey, Brandon, I I mean, I've worked with agencies in the past. I'm not sure I want to work with another agency." So, I proceeded to tell you kind of like this analogy, right? So, I said, "Let's just say, Derek, you want to buy a house and you want to build it, right? You don't just want to buy an existing house. You You basically have three options. Option number one, two main options. Let's talk about the two options first, right? Option number one is you're going to go find a track home. A track home is going to be a home that's built in bulk. It's a type of production builder. And you know what? It's not going to be quite what you want, but it's probably going to be good enough for the price range that you're looking for. And that's going to be fine, right? So you can get your cookie cutter house and all is well. If you really want the kind of home that you that you really want, then you could go build a custom home. The way that works is you're going to spend like probably 18 months to two years going back and forth to this general contractor. You're going to hate him by the end of this period. He's going to hate you by the end of this period. Uh, and then you're going to end up with some house like perfectly built for you. And it probably honestly ends up with some weird quirks of things. Like I don't know if you've seen like a lot of custom houses just have like the weirdest stuff where you're like, if they had ever built a house exactly like this before, they would have realized that this just ends up in a really dumb way. Like that door that like opens that like covers the hallway or like something like that. Right. So you end up with like some quirks there that nobody would have foreseen until it all came to fruition. Yeah.

So, so what I explained is that I said most agencies fall in one of these two buckets. You have the custom agency. That's the agency that Derek's worked for in the past where like, I bring my vision, we're going to work together, you're going to build me the house exactly like I want the house built, and it's going to be long. It's going to be expensive. It's going to be painful, and we're going to end up with a good house, right? Or it's like it's a cookie cutter thing. It's probably going to be lower quality, not exactly what I want, but you know, it's going to be cheaper and easier and faster, right? The cookie cutter agency usually focuses on just a specific niche. Goodness, the cookie cutter agency that don't focus on a niche is like the worst marketing you will ever find like in your life. Like absolutely terrifying. Like I like it's like a disservice to the world that those companies exist. But take that out of the picture. Yeah. Seriously. So that's generous to be federation honestly. So, so usually like if it's going to be half decent, it's going to be like some type of niche specific agency, this like copying and pasting marketing strategy from client to client to client, and and you know, that's that's fine.

So, what what drove me crazy though when I was just like in this in this digital marketing world getting started is I looked at the work because we're I'm just doing audits like all the time for for different companies and stuff. I noticed it's these cookie cutter agencies that in theory, they're specific to a niche. They should know the niche really well. And every time I look at their marketing strategies, they're like worse than the custom agencies that knew nothing about the niche and then just built like quality campaigns. And like, why is it that the companies that are niche and specific to to an industry actually always do a worse job than the ones that are the than the ones that aren't? And I I decided I was going to create like a third type of agency. The third type of agency, I'd say, is most similar to a spec. So here's the caveat. Imagine somebody was building a spec home and they were building that spec home like a luxury really nice spec home for somebody who has the exact family that you have. The same age of people, the same kids, that are the same number of kids, the ages of kids, the genders of kids. Let's just say they know all your hobbies, your interests, what you spend your time doing, how you use your living room. Like they just didn't know all the things about you because like they're building for like this particular avatar of person and they went and build you a spec home. Well, if they did that, then what would happen is you could end up with the quality of a custom home, but the price could actually be lower because they don't have to deal with all that headache associated with the back and forth. And also, if they knew that there were another couple hundred of you out there that they could build these homes for, they could probably build them pretty similar to each other. But the fact that they're similar doesn't mean that they're cookie cutter. It just means it's like a really, really quality home that just happens to be manufactured a bunch of times. And because of that, it's going to be really high quality, but it's also going to be lower in cost.

So here's the problem that real estate investors deal with is that they cannot access quality marketing talent because the kind of budgets that we work with in this industry are the kind of agency fees that custom agencies take. Right? But the average real estate investor might be spending $10,000 on PPC. And the average custom agency that's actually worth anything might have a $10,000 minimum management fee. Yeah. Which it's just a it's a tricky place to be in because you can't pay that custom agency $10,000 to manage $10,000 in ad spend. So, so the whole vision of what we're doing here, and this is what you know got Derek interested enough to say like, you know what, maybe I would jump into an agency is that idea of like, look, that that kind of service that you're providing to other people before where they were paying $100,000 a month in agency fees to get Derek, I'm going to get people that same level of service, that same level of digital marketing strategy, that same like advancement in the types of campaigns, that same level of talent that we have internally working on campaigns. But what we're going to do is we're going to make it $3,000 a month instead of the $10,000. And the way that we're going to pull that off is we're going to work with a bunch of companies that are almost the same. Therefore, a lot of the stuff that we do is duplicatable from one to the next. So, we're going to actually create like that incredible luxury spec home, but we're just going to manufacture a bunch of them, and it's going to be really well worth it. So that's that's kind of the the business model that's in between that I think actually serves real estate investors because you you could be served well by a custom agency, but they just you just cannot get a good one at the price that you are able to pay reasonably. But the cookie cutter agencies in the space just don't really do the quality of work that is necessary. So, a lot of this stuff we're doing, and and I invite you if you haven't if you haven't if you're listening to this and you haven't explored these strategies when Derek talked about how it's important to work with an agency that has their strategies really well like defined and it's not just like the guy. There is no company in the space that is more documented and shared publicly exactly their strategies and built content around how they do marketing than us, right? You can go check out our PPC essentials course that we've done, and it's literally like eight hours of content just talking about how we manage PPC campaigns and all of the stuff that you'll find in there. Like the way that we're doing conversion rate optimization, the way that we're doing ad testing, the way that we're doing offline conversions, which is basically like pulling in data from your CRM so we can optimize toward what gets us deals, not what gets us leads. This is the kind of strategies that Derek was running, and people were paying $100,000 a month management fees to have a guy like Derek able to run those things, yet we're able to bring those things to real estate investors because we're doing them a lot over and over and over again, which makes us really efficient. So that's that's the game. Anything you add to that, Derek?

Yeah, that's awesome. Yeah, it's exactly right. And I would say the other thing is just B when you have that the level of spend we're talking about $10,000 a month, having enough data to really make decisions quickly. This doesn't happen. Like it takes you six months to get enough data to make it to make adjustments. But one of the benefits of working with the proverbial spec home agency, right, is that you're benefiting from hundreds of thousands, if not millions of data points that you wouldn't have just running your own spend at either a custom or a computer agency. So there's a huge benefit because of the way that we've structured our data usage internally and our tech internally. Yeah, those things. Yeah. Yeah, I mean, you could you could go hire that agency and pay them a h 100 grand so you can a month so you can access Derek, and Derek would just sit there behind the computer like, "I don't know what to do with this because like I just started a split test. Like, yeah, I have I have a split testing roadmap of 25 more tests, but it's going to take six months to do each one. What am I supposed to do?" Like that's what would end up happening because you just don't have that data. Meanwhile, if you look at how we're running our product, we can run like a landing page split test, which I mean, Derek, you used to do CRO. What did you charge a month for CRO services? Oh, our base was like our base was like $7,500 a month. Yeah. So, minimum $7,500 a month. That's to have a guy like Derek out there testing your landing page and then spending who knows how long to actually figure out which variant is working better. Meanwhile, something that we do that a lot of our clients don't even know that we do is we're changing things constantly in our landing page for clients. And we could do a split test and aggregate that data across all our clients and get the answer to is A or B better literally in two days because we have 200 times more data than what you would have in just your account alone, right? And we can still have the guy who would be behind that $7,500 a month CRO service at a different agency still managing those tests and everything, right? So, if you just think about the way that this functions, you you actually get a better result than you would get going and paying some agency a whole bunch of money. Um, and it just it actually is possible, right? Because I don't think anybody in this industry is out paying $100,000 a month management fee to any agency for their $10,000 a month in ad spend. It's just not happening, right? So, so our like if you look at options compared to, you know, where we are for for ad spend, we're usually one of the more expensive options that you can work with. So we're not like our our game isn't like cheap stuff. Yeah. It's just at the price that it makes sense to pay for that level for for the amount of ad spend that you have. Let's bring those techniques that are used by some of the biggest companies in the digital marketing space and just bring that to you on a level where it can benefit you where you just normally wouldn't be able to access it. So that's yeah, if if I were looking for an agency, that's exactly what I would look for. Likewise. Yep. It's it's a no-brainer. The value the value trade-off there is is a no-brainer in my opinion.

Okay. Well, we we got I think I think still objective at the end, right? This is coming from like my heart, but yeah, definitely like maybe some room for bios there about the way that we built and why we built them that way. I mean, I'm new to Baitman. Like I said, I I think maybe I can evaluate. I came to Baitman for that reason. I was like, this is these guys are doing something cool. So, like the most objective we can get is the fact that I'm I'm new to Baitman and and that's what attracted me. So. Sure. Fair enough. All right. So, so if you're listening to this and and you haven't already, highly encourage you to talk to our team, do a strategy consult. And and yeah, outside of that, continue to listen to the content. Like I said, we have more content out there about how we do our strategies than any other company. So, I encourage you like, it's one of those things where if you're looking at us and you're looking at another agency and you're like, I just I just don't know which one's better. I guarantee you the gap between you knowing which one is better or not is literally your own education. And if you're willing to fill that gap and you're willing to research. There's different companies that have different effects. Some are the type where the more time you spend with them, the more uncertain you become about them. And then the other are the types where the more you learn, the more the evidence suggests that they truly are the best. I could tell you we're absolutely that type. And if you don't actually believe that we're the best, then you might just need to do like more and more research and and just seek to understand it more and more because when we talk to like true experts, which happened in our sales process sometimes that we, you know, we have like that in-house marketer that specialized in PPC that's that's now a marketing manager for one of our clients. They choose to work with us because they understand how it works and and they see the value in what we're doing. And that's why we do all this education, just so that you can learn, so that you can you can you can see the value of what we do. So, thank you for for spending your time with us today and I'll see you next week.