Podcast

Episode 189: Facebook Ads Over Reporting? Tracking and Data Demystified with Praxis Metrics

By February 19, 2019 No Comments

If you’re confused by Facebook Ads Insights, don’t worry—you’re not the only one.

Ralph and Molly chat with AJ Yager and Meaghan Connell from Praxis Metrics about common issues that businesses have when it comes to data and tracking. We discuss the numbers you need to know in your business to buy media at scale and why Facebook data always seems to “over-report”…or does it?

Episode 189: Facebook Ads Over Reporting? Tracking and Data Demystified with Praxis Metrics

IN THIS EPISODE YOU’LL LEARN:

  • The core metrics every business owner must know before delving into their metrics
  • How to know when you are ready for a third-party tracking software
  • Why multi-channel attribution may not be your real tracking problem
  • How to run your business successfully without 100% perfect tracking… and why 80% is good enough

LINKS AND RESOURCES MENTIONED IN THIS EPISODE:

Praxis Metrics
Meghan on LinkedIn
AJ on LinkedIn
Episode 106: How Much Can You Afford to Pay to Acquire a Customer?
Click here to enter the Business Lunch Contest “Meet Richard Branson”

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(NOTE: Need a helping hand with your digital marketing efforts? Or maybe you just want proven, actionable marketing tools, tactics, and templates to implement in your business? Check out the latest deal from DigitalMarketer, and you will be on your way to helping your business grow.)

FULL EPISODE TRANSCRIPT

Darren Clark:                You’re listening to Perpetual Traffic.

Molly Pittman:             Hello everybody, and welcome to episode 189 of Perpetual Traffic. Here today with my awesome cohost, Mr. Ralph Burns. How are you doing, buddy?

Ralph Burns:                 I’m doing great. How are you doing, [inaudible 00:00:20]?

Molly Pittman:             Doing awesome. Happy to be here with you. I think today’s topic is something that hits home for both of us, something that we both struggle with time to time not only for the projects we work on, but also with clients.

Ralph Burns:                 Mm-hmm (affirmative), we’re gonna open up the black box here today for all you Perpetual Traffic listeners. Something we’ve never talked about. I can’t believe we haven’t talked about this, 189 shows. It’s incredible.

Molly Pittman:             Yeah, this is a topic we haven’t talked about a lot, but I know it’s something that lot of you guys struggle with. I hear a lot of questions about tracking and data from you guys when we see you in person at events. So today, I would like to introduce two very special guests to Perpetual Traffic, AJ Yeager, and Megan Connell. These two awesome humans, friends of mine, own a company called Praxis Metrics, and I will let them explain Praxis Metrics here in a minute because I’m not going to do it justice. Praxis, in my eyes, is a company that helps solve data and tracking issues for their clients. What I love about this company is that AJ and Megan, they’ve been in digital marketing for a long time, and they realized that data and tracking was a huge issue that they were having in their own businesses. So, that’s really want started and got them into Praxis Metrics, which is both of their main focuses now. So, I love that your business was founded off of solving a problem, and I can’t wait to demystify some of the issues that we all have around data and tracking as media buyers.

Molly Pittman:             How’s it going, AJ and Megan?

AJ Yager:                      We are doing great.

Meghan Connell:          Yes.

AJ Yager:                      So good to be on with you guys.

Molly Pittman:             Awesome.

Meghan Connell:          Super excited.

AJ Yager:                      Yeah, I love the black box. The black box of data.

Ralph Burns:                 Start opening it up. We’re revealing what’s inside.

AJ Yager:                      Opening the black box of data.

Ralph Burns:                 That’s right. I figured when you open it up, this light shines, like Raiders of the Lost Ark.

Darren Clark:                Hey guys. This is Darren Clark here, the producer of this show and Business Lunch with Roland Frasier. Now, we have an insane opportunity for you to win access to a private gathering with the Sir Richard Branson next week at Traffic and Conversions Summit in San Diego. He’s the keynote speaker next week, and we are paying the $15,000 dollar ticket price, all of which goes to Richard Branson’s foundation, so that one of our listeners can win big and gain access to this meeting of high level entrepreneurs. So seriously, if you win, what would you ask Richard Branson if you had a few moments of his time. Check in the show notes of this episode, or go to BusinessLunchPodcast.com for the details on how to enter this Business Lunch with Roland Frasier contest, and it doesn’t stop there. We’ve also secured an insane deal on tickets for Traffic and Conversion. For those of you who haven’t booked yet, it’s almost the 11th hour, but you can use the promo code lunch for $1,000 dollars off your ticket price. Now that’s a great deal, but enough of me. Let’s get to more of the good stuff with Molly and Ralph.

Molly Pittman:             I love it, and I think that’s a great place to start. I think that most media buyers, that’s really who’s listening right now, people that are buying paid traffic online, most media buyers, they know that they struggle with data because they’re not sure if they’re getting proper data inside of Facebook Ads Manager. They’re not sure how that data actually attributes to purchases that they’re seeing inside of their CRM, and some people out there might even think that they could buy a cheap dashboard tool, or some sort of solution to this data and tracking issue. In your all’s mind, can you guys explain why it is that we all have this problem that your company is solving?

Meghan Connell:          Yeah, that’s a great question. Honestly, I think it’s because we’ve never really had access to data the way that we do today. We think about the last 30 years in digital marketing, and you think about big data, and that’s always been reserved for enterprise level companies. These huge multimillion dollar initiatives, the Amazons and the Googles of the world, to really get into data. So what’s happened, is a lot of people have just completely said, “Well, big data is only for enterprise,” and so they haven’t really taken ownership or taken the opportunity that exists right now in the market, to gather their own data within their business. We have the beautiful ability right now to have data tracking and a lot of different tools. Now, some people are scared by that, but as marketers it’s one of the most valuable things that’s happening right now.

Meghan Connell:          It’s a shift in the market place. It’s a shift in the entire world, and those that are capitalizing on that right now are putting themselves head and shoulders above their competition. It’s like in the early 90s when the dot com boom happened. People who got a website outshone their competitors, and their competitors are no longer in business. It’s the same thing with any online company right now. If you’re not looking at your data, your direct competitor is, and then they’re going to have insights and information that you don’t have, and they’re gonna make different decisions based on that data and information that’s going to help them scale faster than you can.

AJ Yager:                      Yep. Let’s also be real. Not all of us are data scientists. Not all of us got an A.

Molly Pittman:             I am not. Completely.

AJ Yager:                      You can’t be expected to. A lot of your listeners, you may be running an agency, running a business. No matter what, there’s so much that’s already on your mind to grow your company. You don’t have time to be a data scientist. That’s why we exist. That’s why we started saying, “Hey, we want to help these people out,” and it’s about a mindset, and I love saying you don’t actually have to be a mathematician to be more data driven. There’s a certain way to go about this in your business to ask the right questions and get those answers through data.

Molly Pittman:             Yeah, and I think humans are spending more time online than they ever have, and they’re buying more stuff online than they ever have. Therefore us, as digital marketers, we’re taking advantage of that but with this omni-channel approach where we might be running traffic on different traffic platforms, that really presents an issue because I think a lot of our listeners, the need for data comes when they are spending money, and they want to see what their return is. I know that that’s something that you guys solve for people, so could you explain how it works? What do you guys do, and how could someone solve this problem that they have?

Meghan Connell:          What we want to do, is we want to make it attainable for everybody. We work with huge, large corporations and companies, but we also work with the startups who have seen success, and then they want to scale and they want to know what they should be doing, and not just throwing ad revenue everywhere and seeing what sticks. They want to know what’s working and not working, so what we do is we’re an outsourced data team, basically. Up to this point in our business, we’ve been five years. Oh, LinkedIn just told me that. It’s my five year anniversary.

Molly Pittman:             Woo-hoo. We need a cake.

Meghan Connell:          Yeah. Basically, we’ve worked with a lot of large companies over the last five years, building out custom solutions, really helping them understand their data and take action from their data. Through all of those experiences, our team has really treated each individual dashboard or data project that we’ve worked on as research and development. There’s only so many questions you can ask in marketing before you start coming up on the same ones again. So, what we’ve found is these patterns, and the correlations between what the big guys are asking and what the little guys are asking, and it’s all the same thing. It’s what’s working? What’s not working? Where should I spend more money, and where should I spend less money? What should I tweak here? So what we did, is we found there’s also only so many platforms that you use within marketing. There’s only so many ESPs. Only so many, especially, paid media. There’s only so many platforms, and so we started coming up with a lot of the same reusable logic and coding that we were using on big companies.

Meghan Connell:          We said, “Well, why not offer these to smaller companies too? Because, they’re using the same tech stack.” So, that’s what we’ve really done. We do the custom implementations and solve these big, heavy, big problems like multi-channel attribution and all these sexy, different things, but then we also work with small companies with some pre-built metrics and pre-built dashboards to help them have a starting point. Things like lifetime value of their customers. We had a call the other day with a client and we’re like, “Hey, what’s your lifetime value of your customers?” They’re like, “Oh yeah, we’re really good. We know our lifetime.” We’re like, “Great, what is it?” They’re like, “Well, it’s between $60 to $90 dollars.”

Molly Pittman:             Oh wow. Yeah, that’s a shift.

Meghan Connell:          That’s a big gap. Was that $60 dollars last month and $90 dollars this month? Was that $60 dollars in one day LTV, and $90 dollars in a six month LTV? It just leads me to more questions, and so what we do is we basically answer those questions. We help people get more granular rather than just saying, “Oh yeah, I know this one number,” and then they’re done.

AJ Yager:                      Yeah, averages, we don’t really believe in averages do we?

Meghan Connell:          No, averages is dirty.

AJ Yager:                      We became very specific because what’s working on one traffic source isn’t gonna be working on the other. We’ve taken all of this big data stuff, made it simpler, because we really love the smaller and medium sized businesses. We can deliver that value to create hockey stick growth. So basically at the end of the day, we are here. The problem we solve is waste. We help you eliminate wasted time, energy, and money. That’s the big thing we do, and if you can reduce the waste, then optimization gets that much easier. Instead of just focusing on optimizing only the things are working, we’re gonna remove all that waste and then make your job a lot easier. So, that’s what we do.

Molly Pittman:             Love it, and by the way guys, you can work with Praxis. Go to PraxisMetrics.com to check out more. That made me want to work with you guys again, but awesome. Thanks for explaining that. As a media buyer, I’m buying ads on multiple channels. What are the metrics that are most important to look at? I think Ralph and I have our opinion from the media buyer’s side, but I love what you guys said about you solve these really complicated problems for these big businesses, and you’ve found these certain patterns. Could you shed any light there so that our listeners know what they should be looking at?

Meghan Connell:          Yeah, and it does vary business to business.

Molly Pittman:             Of course.

Meghan Connell:          We say that everybody suffers from terminal uniqueness, where the differences and the nuances in your business might be totally different than another. We have seen some really interesting industry specific trends or differences, but overall, we all know there’s a couple key metrics that every single business needs to be tracking. You have to know your ad spend, you have to know your return on ad spend, but those are very, very basic. Then it’s okay, so how about cross platform? I want to know my return on ad spend cross platform, but then a lot of our clients are saying, “Well, ad spend is not my entire business. Can we take into account our cost of goods sold? I want to take that into account. Or, shipping expenses because that varies depending on where people are, and what we’re selling, and how we’re selling it. Then I want to take into account, maybe, my marketing technology spend.”

Meghan Connell:          So really going deeper into, “Hey, I want to know way more depth into actual profitability rather than just return on the ad spend.” That’s something that we’ve seen a lot of people stop and only ask for a ROAS, and not ask those secondary tertiary questions that really give them more detail.

Molly Pittman:             Ralph, I’m just curious. From an agency standpoint, do you guys have to worry about this for customers? When you’re calculating your return on ad spend, are you having to look at cost of goods sold because I’ve never really though of that before.

Ralph Burns:                 It’s a metric that we start off with when we first introduce a customer into the agency. We find as much as we can about their business, and then back out their metrics based upon what their projected profit margin is. So in most cases, we’re shooting towards either a CPA goal or a ROAS goal. A lot of that is secondary to you need to know your numbers in your business, and we’ve actually had a [inaudible 00:12:54] where customers have said, “All right, well, I need a 2X ROAS,” and all of a sudden they’re like, “Wait a second. I’m losing money on that. Now I need a 4X.”

Molly Pittman:             Oh no.

Ralph Burns:                 Yeah, so the fact that you actually had somebody that said, I think it was between $40 and $60, or $30 and $90, it’s sometimes actually better than what we get sometimes because we can’t go into the numbers as deep as we probably want to. Regardless, people need to really know. What is my cost of goods sold? How much can you pay for a customer? What is my long term value of a customer, over what time span? I think that’s this thorny issue that even really mature businesses, I’m still surprised by this, 8, 9 figure businesses struggle with on a daily basis. Then they look back to the platform that we talk about here the most, Facebook, and they oftentimes won’t be able to really decipher how much is that channel paying everything that isn’t attributed inside the ads manager, which might get us into this deep, dark place within the black box here about multi-channel attribution, which is the thing that I wanted to talk to you guys about.

Ralph Burns:                 I mean, maybe at a base level we can talk about attribution itself. If we’re talking about spending money on Facebook and Instagram, what are the metrics that you guys look at? What are customers looking at? What are the problems that you find with those customers with just the platform unto itself? Because, it’s a great platform. We love people based tracking. We don’t really like pixel based tracking quite as much, or cookie based tracking rather. The point is, is that it’s a good platform but it has its limitations. So, what challenges do you see with the businesses that you guys work with?

Meghan Connell:          Every single client we face over attribution. We’ve got all these different platforms that are claiming ownership for, “Hey, I brought you this customer,” and yet the reality is that customer went through seven different touch points. They first clicked on a Google ad, and then they got re-targeted by Facebook, and then they ended up on the auto responder series, and then they followed you on Instagram, and then they click on something, and then they end up purchasing and every single platform says, “That was 100% me.”

Ralph Burns:                 Of course. In your case it’s Facebook and Instagram.

Meghan Connell:          We’ve got Facebook saying, “Hey, I gave you $100,000 dollars worth of revenue this month, and Google is saying, “I gave you $100,000,” and then you look at your bank and you’re like, “I got $125,000. What is happening?”

Molly Pittman:             Yes, and this is the biggest question I get. Why is Facebook over-reporting? Why can’t I trust? I think people lost trust in Facebook because of this, but I think a lot of it has to do with what we’re discussing right now.

Meghan Connell:          And duh, of course Facebook is gonna say that. Of course [crosstalk 00:15:36] is going to say that. This is how they make their money. This is how it’s a free platform, and so people just don’t think about all of the different aspects of it, and so that’s what leads them to just be like, “Oh, all data is dirty,” and they don’t realize that there are opportunities for you to get closer to the real numbers. The problem is a lot of people look at this in such a siloed approach. They just look at Facebook, and then they just look at Google, and then they just look at their bank account. That’s not the client’s experience. They’re bouncing in between platforms and storing little meta-data pieces of information across all of them. So what we do, is we work with the back end of the systems because of course your Facebook dashboard is only gonna show you the ooh la-la pretty highlights. Very high level, they’re not gonna get granular into timestamps, and they’re not gonna get granular into unique user IDs. That lives in the back end. That lives in the API.

Meghan Connell:          So, what we do is we pull the raw data out from the back end of all of these systems. What that allows us to do is A, get more information, and B, it allows us to do something where we are able to cross platform attribute different things to a unique identifier. So for example, if you have Google Tracking turned on, and you have a unique Google ID that’s tracking all of their things there, and then they cross into Facebook and you can see that that’s the same person, we can then on the back end say, “Well, unique identifier GA1234 equals Facebook 1234.” Now all of a sudden you have cross platform identification of the same user’s behavior. That then can tie into your Shopify, your Amazon data, and then we get that full picture.

Meghan Connell:          There’s a lot of tool out there that are filling in pieces, but unfortunately in the market, especially just when you’re looking at it from a marketing perspective, there’s a lot of tools that are like, “Oh, well, we’ll just show you this piece.” “Oh, we’re just gonna look at social,” or, “We’re just gonna look at email metrics,” or, “We’re just gonna look at e-commerce metrics,” and all of these companies that we work with are like, “Well, that’s not my entire business. That is a very fragmented view of the business, and then it’s not connecting to everything else.” When you connect them on the back end through a true database and through ETL, which is extracting, transforming, and loading data into one centralized database, it allows you to get cross platform information and to really link together that entire customer journey. That’s what everybody is looking for. The problem is most people read some sort of article and it’s like, “Oh, you should be doing multi-channel attribution. Last click is the worst and it doesn’t give you this insight.” Then they’re like, “Okay, cool. How do I turn on multi-channel attribution?”

Meghan Connell:          It’s not. It’s not a button. It’s not just [crosstalk 00:18:30].

Molly Pittman:             It’s a lot of work.

Meghan Connell:          Yeah.

AJ Yager:                      There’s no AI that just does this all for you. It’s what we call handcrafted metrics. It takes real work inside of these tools to make it all work on the end. So, it all comes down to tracking. It says your output is only as good as your input. You can make your life a lot easier, and we could have an entire hour and a half or two hours just on tracking better, but it all really comes down to the beginning of this, is tracking.

Molly Pittman:             That’s the biggest reason I wanted to have you guys on. When I met you and I learned about what you did, I had no idea the amount of work that went into handcrafted data like you’re talking about right now, and that to get almost perfect tracking still, in 2019, is a lot of work. It’s like I said earlier. You can’t just buy a $15 dollar little dashboard online that’s going to fix the complexity that is multi-channel attribution. I think what you guys said earlier about this being a mindset, when you are looking at the results of your Facebook ads or Google ads or email, you have to think about this in a customer journey, just like you guys said. I think a lot of issues that people have with data and tracking that are listening, yes, it’s definitely the complexity of it and how do I do it, but it’s also their mindset around it. If you understand the big picture, it can make this a lot easier to digest I think, even when the metrics might not be totally perfect.

AJ Yager:                      Yes, that is so well said. Going back to what Ralph does with your clients, before we build any dashboards, before we go and execute anything, we have got to get clarity upfront. That means the mindset. That means identifying where all this data lies. If it’s in some IT person’s head, if it’s in the owner’s head, if it’s spread out in spreadsheets or Word documents, or wherever the heck this stuff is, we’ve got to get clarity and we use this process called metrics mapping. We help build a roadmap to data success by asking the right questions. We have these seven steps that we’ve proprietarily built and walked companies through, large and small, and once we do that it’s amazing how everything gets clear for us and for our clients.

AJ Yager:                      We do this first. It’s all about data education and that mindset, and then from there with that roadmap we can say, “Okay. Let’s take this in pieces. Let’s not do all of the things. Let’s do the things right now that are gonna move the needle and create a return on investment, and then we can always add in the different elements of your business from sales and marketing, to then inventory, then customer service and finance. It’s a journey. This is not gonna happen overnight.”

Meghan Connell:          Yeah. Going back to what he said, the metrics mapping is really extracting from people’s heads the questions that they’re asking about their business. The things that they’re not getting answers to are the things that it takes so much manual time to go and do. By the time you get it, it’s either outdated or one of your smartest team members just spent three hours a day on it for a week, and then [crosstalk 00:21:33] another question, and they have to go back to it because they didn’t do it by month or whatever. So, it’s extracting from your head. It’s the business questions, it’s the business goals. It’s how are you going to hit those goals, and what would you need to know in order to make that happen? Then digging deeper, and deeper, and deeper so that’s that first piece of it, and then it’s very, very simple.

Meghan Connell:          We just ask a question that’s, “Okay, so if you were to look that up right now, where would it be?” It’s so funny because we’ll have business owners that are like, “I just need to know this one thing, this one metric,” and they were like, “Great. Where would it live?” Then a team member is like, “We’re not tracking that.” It becomes this big, gaping hole and all we do is we uncover, “Hey look. In order to have these awesome insights, you first have to have this in place to gather the information. Without that, it doesn’t matter how beautiful the dashboard is. It’s going to not be valuable. So like AJ said, the output of these dashboards, the output of the answers that we’re getting, is only as good as the tracking that’s in place whether it be in the native systems, whether it be something complex that you’ve built out yourself. So, with clients that are just beginning, a lot of them do not have the opportunity to have multi-channel or multi-touch attribution because they can’t invest in all of these tracking initiatives right now.

Meghan Connell:          That’s okay. You can still make decisions with last click attribution. That will be okay. It’s not gonna be the end of the world. Plenty of other companies have done it and still gotten insights, but then Ralph, going back to what you said, it’s like okay so once people buy, here’s where they came from, how much did they buy? It wasn’t just that first initial purchase, which is what Facebook or Google usually tracks. It’s, “Okay, what did they buy from me 60 days later? What about 6 months later?” Then that allows you to see your allowable cost per customer. The acquisition cost is such a big thing that people aren’t really diving into in a mathematically sound way.

Meghan Connell:          They’re just looking at, “Oh, we had $20 dollars worth of sales on day one. Our cogs are $5 dollars. The media costs X amount, and so that gives us $12 dollars for us to spend.” We’ve had clients, just by doing really granular lifetime value of their customers in one day, 30 day, 60 day, 90 day breakdowns and cohorts, they’re able to scale by 3,000% just by knowing that because they had no idea that their upsale flows, and their auto responder sequences, or their affiliate deals were yielding so much on the back end, and they only had to acquire that customer once. So, with agencies especially, agencies are held accountable to the return on ads spent, but when? If this customer is worth $2,000 dollars in two years, I want to know that.

Ralph Burns:                 Yeah. It’s a longer journey, I think, than most people really want to travel at times. They just want to know that one question. All right, if I spend a dollar more on Facebook or 100% more, or $100,000 dollars more for us on Facebook, will that mean my business will get to X amount? Oftentimes it’s not quite that simple. For a lot of agency customers at Tier 11, Facebook and Instagram is their primary if not their only traffic source. So, if sales go up, sales go down, we can piece things together but there is the 28 day attribution window inside Facebook. There’s advanced measurement, which goes out to 90 days, which is in a beta and soon to be rolled out. So there is data but the point is, is that that’s the central question.

Ralph Burns:                 I think every customer, they probably need to go back to one of our earlier episodes on Perpetual Traffic, which we’ll leave in the show notes, of how much to actually pay for a customer using cost of goods sold. Using, what’s my selling general and administrative? What is my projected profit margin? What’s my return rate? All these simple math things, and then backing that. That’s the first metric that you’ve got to figure out oftentimes. It sounds like when somebody works with you guys, those are the things that you dive into first and then you’re like, “All right, well now we can work with each other.”

Meghan Connell:          Yeah, that’s exactly right. Every client that starts with us, we have a recommended roadmap because a lot of them are doing this stuff manually, and they’re not doing it as granularly as we do, and so even things like ROAS, we can provide a little bit more depth than they typically have because we’re using true data scientists, and actual data tools, instead of just a smart person with a spreadsheet. So, even just giving them those basics can help them scale drastically, and then what we do is we layer in the complexity. How do you eat an elephant? One bite at a time. Let’s start you out with these metrics that are the key components, and then we layer it in.

Meghan Connell:          We layer in the different platform channels, we layer in, “Hey, are you using UTMs? No? You don’t have a UTM hierarchy? Okay, if you were to do that, we would be able to show you all of these numbers based on the granularity of individual ads.” Or, “You have three copywriters writing for you? If you group them all together and give us basically the hierarchy of who’s doing what, we can show you their conversion rates on these ads that they’re doing. We can help you with all these variables.” We have a lot of clients that think that there’s only a certain amount of things that can be tracked. There’s an infinite amount, and people don’t get creative and creativity is what is changing the industry. So for example, somebody tracking manually. Even manually, going through every single ad, and looking at the variables. What are the variables that you’ve done on each of these ads? Is the button on the left, is the button on the right? We do all these split tests and then after 1,000 clicks we say, “Kill that one.”

Meghan Connell:          Has anybody ever gone back to all of this aggregated data that we have on years and years and said, “Okay, let’s actually look at some of the non-tracked data, and let’s go back to it.” So saying, “Did we use an orange button? Did we use a green button? Did we have a picture on it? Was it a meme? Was it this?” Even just a simple spreadsheet that has yeses and nos, that is data, and those types of things can be overlaid with click-through rates, with purchase rates, with all of these different things and lifetime value. We can tie all of it together, and then we start to quantify the non-quantifiable. That is what your competitor is doing that you’re not.

Molly Pittman:             Completely, and I think it solves the problem that a lot of listeners have. It’s not that they can’t trust the Facebook data necessarily. It’s that, how does this data relate to all of my other marketing efforts on other channels? I think you guys explained it great.

Ralph Burns:                 From our listeners’ perspective, at what point in their journey should they consider a third party data tool outside of, let’s say it’s just a Facebook and Instagram advertiser? At what point do I say, “Hmm, Praxis Metrics. These guys sound like they’re pretty smart. Maybe I should go check them out.”

Molly Pittman:             They’re nice.

Ralph Burns:                 But no, at what point? Well, 28 day. If I even know what the 28 day attribution window is for Facebook. Maybe you guys can explain that just a little bit between view-through and click-through, but then at what point do you consider a third party tool, in your opinion?

Meghan Connell:          Yeah, great question. Honestly, it’s whenever you start getting annoyed. That’s the [crosstalk 00:29:29].

AJ Yager:                      Frustration.

Ralph Burns:                 That’s a good answer.

Meghan Connell:          That’s why we started this company, is we were super freaking frustrated because AJ used to run a digital marketing agency, and he had 30 clients at the same time, and his smartest team member was reduced down to freaking report building and logging in, and just manually putting all this stuff in a stupid spreadsheet and then sharing it with clients, and they have another question, and then you’ve got to go back to the spreadsheet, log into these different systems, just to get basic stuff and it’s annoying.

AJ Yager:                      Yeah, so we understand the frustration. We understand the pain and that’s why we doubled down and said, “We want to be world class at helping companies with their data.” So, because we’ve gone all the way to the big companies, we’ve swung back this way out of purpose and impact to help companies, there’s this piece of if you’re under a million dollars in revenue, we’re here to help educate you and teach you what to do. This metrics mapping is phenomenal. It’s a great process. Everybody that comes out of it has clarity, so we have instead of just pushing a platform or a dashboard, that’s not really what we’re here to do. We’re here to protect you, make sure you’re making the right decisions along the way, and escalate you up what we call the roadmap of data mastery. We want to help you grow and we want to grow with you. So, it really depends on where they are in this data maturity.

Meghan Connell:          So, there’s four levels in our mind. Data infants are the newbies. They’re the influencers, they’re the entrepreneurs who haven’t really had a ton of traction, but they’re committed. So, with those types of people, we can do consulting where we just coach them. We’re like, “Hey, have you done this? Have you set up Google Analytics right? Do you have event tracking? Are you using UTMs?” Basic foundational principals that allow them to start collecting data right now, so that in a year or two years when they’re ready to do a BI implementation, they have information rather than, “Oh, we’re ready to go and do this,” and we’re like, “Great. You’ve got jack nothing.” We don’t have anything to work with. So, we start there.

AJ Yager:                      Then there’s Google Analytics. It’s a free, amazing tool. Most people say, “Hey, I’ve got Google Analytics. I’ve got it set up,” but all they’ve done is put the code on the page and left it there and are so scared to log in. They don’t even remember how to log in, but if it’s set up professionally, set up with conversions, if it’s set up with the events, the goals and all that, it’s an invaluable tool to be used and you don’t have to log in and see dashboards there. We can pull that through and visualize it differently later. So, we have an analytics team that helps do Google Analytics audits to make sure, “Hey, these things are working, these things aren’t working. Let’s fix it and let’s get this as a low hanging fruit done for you, then we can move into dashboards later on.”

Meghan Connell:          Yeah, so that’s phase one. Then we get into those people who already have all that stuff. They’ve already got all the tracking. These are the people that are already tracking ROAS, already tracking ROI, already tracking LTV, but they’re doing it manually. Some smart person on their team, or God forbid the business owner, co-founder, or CMO, is actually doing all of this manually. They’re doing, what we said, ETL is extract, transform, and load. You can do that manually, you just log into the system, pull out the number that you think that you want, and then put it in a spreadsheet. Transform it into the business logic, and then load it into a visualization that makes sense to you. So, usually when people are at this phase two, they already have that foundation. They already have really good insights that have gotten them success. It’s gotten them to where they are, and now they’re like, “Okay, we need to scale and what we’ve done that’s gotten us here today will not get us to that next level of $50 million in annual revenue, $150 in annual revenue.”

Meghan Connell:          Those are the people where they’re like, “Okay. I know that my LTV is between $60 to $90, but now I need to know a 30, 60, 90 day. I need to know it by channel. I need to know it by source. I need to know it by ad.” Then that’s where we’re like, “Okay, cool. Now we can help you guys with a lot of these prebuilt dashboards that we’ve already done a million times. Cost effective, it’s really fast time to value.” We can get them things like that in two weeks rather than a six month turnaround time. Then, once they have started using that, and like AJ said, it’s an indoctrination and it is a retraining of their team to be actually data driven. A lot of people say, oh yeah, they’re data driven marketers and it’s not true. They are looking at very, very basic numbers and they’re not asking that secondary tertiary question which is not what is happening in my business, but why? Why am I having these spikes? Why am I having these values, and how specifically should I remove the values and increase the spikes?

Meghan Connell:          Those are the questions that are yielding these clients to have exponential growth, and then those are the clients that we usually work with on the custom dashboards where they’re like, “Okay. We now know all of what’s happening. Now let’s get in the fun stuff. Let’s get into multi-channel attribution. Let’s get into the deep, deep, deep weeds,” and that’s where they’re like, “Okay, this is a big data initiative now.” That clear it up?

Ralph Burns:                 Yeah, yeah. It does and I think also, expectations for the customer. I love the answer of when you start to get frustrated.

Molly Pittman:             Me too.

Ralph Burns:                 That’s when you have to get it. That’s usually the impetus for a lot of things in life, isn’t it? I mean, definitely with this sort of stuff because there’s so much data that’s being thrown at you at any given point in time. Do you ever get it 100% right? You know where exactly every penny is going and where it’s coming out?

Meghan Connell:          Never.

Ralph Burns:                 Is that attainable at any level in human history?

Molly Pittman:             In the world today then.

Ralph Burns:                 Right.

Meghan Connell:          You know why? It’s because we are at the disposal of other companies and their data. Facebook, one day because of Cambridge Analytica, thanks for ruining it for the rest of us, cut off multiple columns and multiple reports from their API. Where we used to be able to have much more granular, and much more impactful, and much more insightful data, it no longer is available to us. Amazon is a perfect example, the jerks. They don’t allow us to see the individual user email address, and so then what it does is it forces the business to have to get creative in tracking and in merging different data together. Like, hey, now we have to merge based on a physical shipping address, if they have a Shopify store and an Amazon store, but then what about apartment complexes?

Meghan Connell:          There’s all these things that you can never have 100% accuracy because you don’t have 100% of the data, but anybody who can get more, and more, and more accurate by getting more, and more data will have an advantage over anybody else.

Molly Pittman:             It’s not that it’s not all there. It’s also that it’s always changing. I mean, there’s new technology coming into the mix. Facebook is changing, Amazon is changing, so I don’t know if it will ever be perfect honestly, and we wouldn’t be evolving, but it can be a lot better than it is right now for a lot of you guys.

Ralph Burns:                 You can make really educated decisions on 80% of data or even 70%. I mean, you’re making a very informed decision, much better than you were let’s say 10 years ago. I mean, think about how far all this has come, too. Let’s keep this in perspective.

Molly Pittman:             Yeah, and also one of the biggest things I learned from AJ and Megan is not necessarily to obsess over the tracking side. You definitely want to make sure it’s as correct as possible, but it’s also how are you thinking about data? What questions do you need to solve in your business, and what number can you use to track that? When I was a digital marketer, we hired Praxis Metrics to build dashboards and I remember we said that we wanted to track churn. You asked a few of us how we track churn because we were having an issue with that, and we were all tracking it in a different way. We were using a different formula. That didn’t even come down to the quality of the data, it’s just are we literally all on the same page? Are we even tracking in the same way? Are we using the same formulas, and what are the best metrics to use to help us achieve our goals? So, I think it’s even so much more than just being able to track online. It’s, how do you actually think about data? How are you using it in your business?

Meghan Connell:          Yeah, and I’m glad you brought that up, because we face that all the time. You have no idea.

Molly Pittman:             Yeah, I remember how hilarious that was.

Meghan Connell:          [crosstalk 00:38:20] even in our department. People don’t communicate these things, and they each have their own little spreadsheet that they’re basing their decisions off of, and they missed a formula here or they did this calculation and they forgot to take this into account, and that happens all the time. It’s a very common thing, and just by having this conversation with this team, one of the biggest things that we preach is data democratization. We want every person in the company, I don’t care if it’s the executive assistant. Every person has a unique perspective and view, and vantage, and history, and background that they can bring to the table and when you democratize this data amongst the team and share it, you’d be surprised at how many awesome ideas get sprung from somebody looking at a number and being like, “Wait a minute. Does that take into account this?”

Meghan Connell:          Then we’re like, “Oh my gosh, no.” Then we find this huge hole or this huge opportunity. So just sharing it amongst the team, having open communication in team meetings, is so, so valuable. Opening up the hood and being like, “What are we using?” Especially as an agency, man. Talking to your clients. We’ve seen this because we’ve been on both sides. We work with agencies and we help them report their numbers to their clients, and then we work with clients who have four separate paid agencies.

Molly Pittman:             Oh gosh.

Meghan Connell:          We’ve seen both sides, and the number one thing that we’ve seen is clients saying, “Oh yeah, but the numbers that they report on are just totally wrong, and we don’t see them like that at all.” The agency is like, “We’re doing awesome,” and the client is like, “They’re lying.” All this is is a communication issue. That’s it, but we’ve seen a lot of agencies get fired too because they had a different number than the client had. Those little variances in calculations make a big difference.

AJ Yager:                      It’s about trusting your data. So, if you don’t trust your data and where it’s coming from, how are you going to have faith in that agency or whoever is reporting that to you?

Meghan Connell:          Yeah, we had a client the other day. I asked for a testimonial and she’s like, “Yeah, I love having these dashboards not for my marketing agency, because everything that they report to me was with rose colored glasses.” No, that’s now what it should be at all. It should be transparency, and it should be, “Hey, here’s what we think success is,” and every person in a company should have a KPI that they’re personally responsible for, that your job is measured based on your impact on this number whether it’s reducing churn, whether it’s reducing the amount of expenses. Whatever it is, having that data across the board is super, super helpful and having everybody agree to the formulas.

Molly Pittman:             Totally.

Ralph Burns:                 Yeah.

Molly Pittman:             Well guys, this has been so awesome. Thank you for enlightening us on data stuff, and you can find AJ and Megan at PraxisMetrics.com if working with them sounds like something you want to do with your business. Ralph, any last comments?

Ralph Burns:                 No, no. I think it’s just been great to have you guys on here. I do think that one of the things that you do in your onboarding is knowing your numbers as a business. I want to redirect everyone back to episode 106 where we actually talk about that very thing. I referred to it a little bit earlier in the episode, and I think without those numbers, you can’t really have that conversation about attribution, about tracking, unless you really do know your numbers in the business. So, that’s episode 106. Go to DigitalMarketer.com/Podcast. This has been episode 189, and we’ll put all these resources in the show notes. So, yeah. Great to have you guys on here today. I think we enlightened the black box. It’s not [crosstalk 00:42:00] anymore.

Molly Pittman:             Yeah. [crosstalk 00:42:01] We’ll have to have you guys on again to further open said box. Awesome, bye guys.

Ralph Burns:                 Bye.

Darren Clark:                You’ve been listening to Perpetual Traffic. For more information and to get the resources mentioned in this episode, visit DigitalMarketer.com/Podcast. Thank you for listening.

Darren Clark:                You’re listening to Perpetual Traffic.

Molly Pittman:             Hello everybody, and welcome to episode 189 of Perpetual Traffic. Here today with my awesome cohost, Mr. Ralph Burns. How are you doing, buddy?

Ralph Burns:                 I’m doing great. How are you doing, [inaudible 00:00:20]?

Molly Pittman:             Doing awesome. Happy to be here with you. I think today’s topic is something that hits home for both of us, something that we both struggle with time to time not only for the projects we work on, but also with clients.

Ralph Burns:                 Mm-hmm (affirmative), we’re gonna open up the black box here today for all you Perpetual Traffic listeners. Something we’ve never talked about. I can’t believe we haven’t talked about this, 189 shows. It’s incredible.

Molly Pittman:             Yeah, this is a topic we haven’t talked about a lot, but I know it’s something that lot of you guys struggle with. I hear a lot of questions about tracking and data from you guys when we see you in person at events. So today, I would like to introduce two very special guests to Perpetual Traffic, AJ Yeager, and Megan Connell. These two awesome humans, friends of mine, own a company called Praxis Metrics, and I will let them explain Praxis Metrics here in a minute because I’m not going to do it justice. Praxis, in my eyes, is a company that helps solve data and tracking issues for their clients. What I love about this company is that AJ and Megan, they’ve been in digital marketing for a long time, and they realized that data and tracking was a huge issue that they were having in their own businesses. So, that’s really want started and got them into Praxis Metrics, which is both of their main focuses now. So, I love that your business was founded off of solving a problem, and I can’t wait to demystify some of the issues that we all have around data and tracking as media buyers.

Molly Pittman:             How’s it going, AJ and Megan?

AJ Yager:                      We are doing great.

Meghan Connell:          Yes.

AJ Yager:                      So good to be on with you guys.

Molly Pittman:             Awesome.

Meghan Connell:          Super excited.

AJ Yager:                      Yeah, I love the black box. The black box of data.

Ralph Burns:                 Start opening it up. We’re revealing what’s inside.

AJ Yager:                      Opening the black box of data.

Ralph Burns:                 That’s right. I figured when you open it up, this light shines, like Raiders of the Lost Ark.

Darren Clark:                Hey guys. This is Darren Clark here, the producer of this show and Business Lunch with Roland Frasier. Now, we have an insane opportunity for you to win access to a private gathering with the Sir Richard Branson next week at Traffic and Conversions Summit in San Diego. He’s the keynote speaker next week, and we are paying the $15,000 dollar ticket price, all of which goes to Richard Branson’s foundation, so that one of our listeners can win big and gain access to this meeting of high level entrepreneurs. So seriously, if you win, what would you ask Richard Branson if you had a few moments of his time. Check in the show notes of this episode, or go to BusinessLunchPodcast.com for the details on how to enter this Business Lunch with Roland Frasier contest, and it doesn’t stop there. We’ve also secured an insane deal on tickets for Traffic and Conversion. For those of you who haven’t booked yet, it’s almost the 11th hour, but you can use the promo code lunch for $1,000 dollars off your ticket price. Now that’s a great deal, but enough of me. Let’s get to more of the good stuff with Molly and Ralph.

Molly Pittman:             I love it, and I think that’s a great place to start. I think that most media buyers, that’s really who’s listening right now, people that are buying paid traffic online, most media buyers, they know that they struggle with data because they’re not sure if they’re getting proper data inside of Facebook Ads Manager. They’re not sure how that data actually attributes to purchases that they’re seeing inside of their CRM, and some people out there might even think that they could buy a cheap dashboard tool, or some sort of solution to this data and tracking issue. In your all’s mind, can you guys explain why it is that we all have this problem that your company is solving?

Meghan Connell:          Yeah, that’s a great question. Honestly, I think it’s because we’ve never really had access to data the way that we do today. We think about the last 30 years in digital marketing, and you think about big data, and that’s always been reserved for enterprise level companies. These huge multimillion dollar initiatives, the Amazons and the Googles of the world, to really get into data. So what’s happened, is a lot of people have just completely said, “Well, big data is only for enterprise,” and so they haven’t really taken ownership or taken the opportunity that exists right now in the market, to gather their own data within their business. We have the beautiful ability right now to have data tracking and a lot of different tools. Now, some people are scared by that, but as marketers it’s one of the most valuable things that’s happening right now.

Meghan Connell:          It’s a shift in the market place. It’s a shift in the entire world, and those that are capitalizing on that right now are putting themselves head and shoulders above their competition. It’s like in the early 90s when the dot com boom happened. People who got a website outshone their competitors, and their competitors are no longer in business. It’s the same thing with any online company right now. If you’re not looking at your data, your direct competitor is, and then they’re going to have insights and information that you don’t have, and they’re gonna make different decisions based on that data and information that’s going to help them scale faster than you can.

AJ Yager:                      Yep. Let’s also be real. Not all of us are data scientists. Not all of us got an A.

Molly Pittman:             I am not. Completely.

AJ Yager:                      You can’t be expected to. A lot of your listeners, you may be running an agency, running a business. No matter what, there’s so much that’s already on your mind to grow your company. You don’t have time to be a data scientist. That’s why we exist. That’s why we started saying, “Hey, we want to help these people out,” and it’s about a mindset, and I love saying you don’t actually have to be a mathematician to be more data driven. There’s a certain way to go about this in your business to ask the right questions and get those answers through data.

Molly Pittman:             Yeah, and I think humans are spending more time online than they ever have, and they’re buying more stuff online than they ever have. Therefore us, as digital marketers, we’re taking advantage of that but with this omni-channel approach where we might be running traffic on different traffic platforms, that really presents an issue because I think a lot of our listeners, the need for data comes when they are spending money, and they want to see what their return is. I know that that’s something that you guys solve for people, so could you explain how it works? What do you guys do, and how could someone solve this problem that they have?

Meghan Connell:          What we want to do, is we want to make it attainable for everybody. We work with huge, large corporations and companies, but we also work with the startups who have seen success, and then they want to scale and they want to know what they should be doing, and not just throwing ad revenue everywhere and seeing what sticks. They want to know what’s working and not working, so what we do is we’re an outsourced data team, basically. Up to this point in our business, we’ve been five years. Oh, LinkedIn just told me that. It’s my five year anniversary.

Molly Pittman:             Woo-hoo. We need a cake.

Meghan Connell:          Yeah. Basically, we’ve worked with a lot of large companies over the last five years, building out custom solutions, really helping them understand their data and take action from their data. Through all of those experiences, our team has really treated each individual dashboard or data project that we’ve worked on as research and development. There’s only so many questions you can ask in marketing before you start coming up on the same ones again. So, what we’ve found is these patterns, and the correlations between what the big guys are asking and what the little guys are asking, and it’s all the same thing. It’s what’s working? What’s not working? Where should I spend more money, and where should I spend less money? What should I tweak here? So what we did, is we found there’s also only so many platforms that you use within marketing. There’s only so many ESPs. Only so many, especially, paid media. There’s only so many platforms, and so we started coming up with a lot of the same reusable logic and coding that we were using on big companies.

Meghan Connell:          We said, “Well, why not offer these to smaller companies too? Because, they’re using the same tech stack.” So, that’s what we’ve really done. We do the custom implementations and solve these big, heavy, big problems like multi-channel attribution and all these sexy, different things, but then we also work with small companies with some pre-built metrics and pre-built dashboards to help them have a starting point. Things like lifetime value of their customers. We had a call the other day with a client and we’re like, “Hey, what’s your lifetime value of your customers?” They’re like, “Oh yeah, we’re really good. We know our lifetime.” We’re like, “Great, what is it?” They’re like, “Well, it’s between $60 to $90 dollars.”

Molly Pittman:             Oh wow. Yeah, that’s a shift.

Meghan Connell:          That’s a big gap. Was that $60 dollars last month and $90 dollars this month? Was that $60 dollars in one day LTV, and $90 dollars in a six month LTV? It just leads me to more questions, and so what we do is we basically answer those questions. We help people get more granular rather than just saying, “Oh yeah, I know this one number,” and then they’re done.

AJ Yager:                      Yeah, averages, we don’t really believe in averages do we?

Meghan Connell:          No, averages is dirty.

AJ Yager:                      We became very specific because what’s working on one traffic source isn’t gonna be working on the other. We’ve taken all of this big data stuff, made it simpler, because we really love the smaller and medium sized businesses. We can deliver that value to create hockey stick growth. So basically at the end of the day, we are here. The problem we solve is waste. We help you eliminate wasted time, energy, and money. That’s the big thing we do, and if you can reduce the waste, then optimization gets that much easier. Instead of just focusing on optimizing only the things are working, we’re gonna remove all that waste and then make your job a lot easier. So, that’s what we do.

Molly Pittman:             Love it, and by the way guys, you can work with Praxis. Go to PraxisMetrics.com to check out more. That made me want to work with you guys again, but awesome. Thanks for explaining that. As a media buyer, I’m buying ads on multiple channels. What are the metrics that are most important to look at? I think Ralph and I have our opinion from the media buyer’s side, but I love what you guys said about you solve these really complicated problems for these big businesses, and you’ve found these certain patterns. Could you shed any light there so that our listeners know what they should be looking at?

Meghan Connell:          Yeah, and it does vary business to business.

Molly Pittman:             Of course.

Meghan Connell:          We say that everybody suffers from terminal uniqueness, where the differences and the nuances in your business might be totally different than another. We have seen some really interesting industry specific trends or differences, but overall, we all know there’s a couple key metrics that every single business needs to be tracking. You have to know your ad spend, you have to know your return on ad spend, but those are very, very basic. Then it’s okay, so how about cross platform? I want to know my return on ad spend cross platform, but then a lot of our clients are saying, “Well, ad spend is not my entire business. Can we take into account our cost of goods sold? I want to take that into account. Or, shipping expenses because that varies depending on where people are, and what we’re selling, and how we’re selling it. Then I want to take into account, maybe, my marketing technology spend.”

Meghan Connell:          So really going deeper into, “Hey, I want to know way more depth into actual profitability rather than just return on the ad spend.” That’s something that we’ve seen a lot of people stop and only ask for a ROAS, and not ask those secondary tertiary questions that really give them more detail.

Molly Pittman:             Ralph, I’m just curious. From an agency standpoint, do you guys have to worry about this for customers? When you’re calculating your return on ad spend, are you having to look at cost of goods sold because I’ve never really though of that before.

Ralph Burns:                 It’s a metric that we start off with when we first introduce a customer into the agency. We find as much as we can about their business, and then back out their metrics based upon what their projected profit margin is. So in most cases, we’re shooting towards either a CPA goal or a ROAS goal. A lot of that is secondary to you need to know your numbers in your business, and we’ve actually had a [inaudible 00:12:54] where customers have said, “All right, well, I need a 2X ROAS,” and all of a sudden they’re like, “Wait a second. I’m losing money on that. Now I need a 4X.”

Molly Pittman:             Oh no.

Ralph Burns:                 Yeah, so the fact that you actually had somebody that said, I think it was between $40 and $60, or $30 and $90, it’s sometimes actually better than what we get sometimes because we can’t go into the numbers as deep as we probably want to. Regardless, people need to really know. What is my cost of goods sold? How much can you pay for a customer? What is my long term value of a customer, over what time span? I think that’s this thorny issue that even really mature businesses, I’m still surprised by this, 8, 9 figure businesses struggle with on a daily basis. Then they look back to the platform that we talk about here the most, Facebook, and they oftentimes won’t be able to really decipher how much is that channel paying everything that isn’t attributed inside the ads manager, which might get us into this deep, dark place within the black box here about multi-channel attribution, which is the thing that I wanted to talk to you guys about.

Ralph Burns:                 I mean, maybe at a base level we can talk about attribution itself. If we’re talking about spending money on Facebook and Instagram, what are the metrics that you guys look at? What are customers looking at? What are the problems that you find with those customers with just the platform unto itself? Because, it’s a great platform. We love people based tracking. We don’t really like pixel based tracking quite as much, or cookie based tracking rather. The point is, is that it’s a good platform but it has its limitations. So, what challenges do you see with the businesses that you guys work with?

Meghan Connell:          Every single client we face over attribution. We’ve got all these different platforms that are claiming ownership for, “Hey, I brought you this customer,” and yet the reality is that customer went through seven different touch points. They first clicked on a Google ad, and then they got re-targeted by Facebook, and then they ended up on the auto responder series, and then they followed you on Instagram, and then they click on something, and then they end up purchasing and every single platform says, “That was 100% me.”

Ralph Burns:                 Of course. In your case it’s Facebook and Instagram.

Meghan Connell:          We’ve got Facebook saying, “Hey, I gave you $100,000 dollars worth of revenue this month, and Google is saying, “I gave you $100,000,” and then you look at your bank and you’re like, “I got $125,000. What is happening?”

Molly Pittman:             Yes, and this is the biggest question I get. Why is Facebook over-reporting? Why can’t I trust? I think people lost trust in Facebook because of this, but I think a lot of it has to do with what we’re discussing right now.

Meghan Connell:          And duh, of course Facebook is gonna say that. Of course [crosstalk 00:15:36] is going to say that. This is how they make their money. This is how it’s a free platform, and so people just don’t think about all of the different aspects of it, and so that’s what leads them to just be like, “Oh, all data is dirty,” and they don’t realize that there are opportunities for you to get closer to the real numbers. The problem is a lot of people look at this in such a siloed approach. They just look at Facebook, and then they just look at Google, and then they just look at their bank account. That’s not the client’s experience. They’re bouncing in between platforms and storing little meta-data pieces of information across all of them. So what we do, is we work with the back end of the systems because of course your Facebook dashboard is only gonna show you the ooh la-la pretty highlights. Very high level, they’re not gonna get granular into timestamps, and they’re not gonna get granular into unique user IDs. That lives in the back end. That lives in the API.

Meghan Connell:          So, what we do is we pull the raw data out from the back end of all of these systems. What that allows us to do is A, get more information, and B, it allows us to do something where we are able to cross platform attribute different things to a unique identifier. So for example, if you have Google Tracking turned on, and you have a unique Google ID that’s tracking all of their things there, and then they cross into Facebook and you can see that that’s the same person, we can then on the back end say, “Well, unique identifier GA1234 equals Facebook 1234.” Now all of a sudden you have cross platform identification of the same user’s behavior. That then can tie into your Shopify, your Amazon data, and then we get that full picture.

Meghan Connell:          There’s a lot of tool out there that are filling in pieces, but unfortunately in the market, especially just when you’re looking at it from a marketing perspective, there’s a lot of tools that are like, “Oh, well, we’ll just show you this piece.” “Oh, we’re just gonna look at social,” or, “We’re just gonna look at email metrics,” or, “We’re just gonna look at e-commerce metrics,” and all of these companies that we work with are like, “Well, that’s not my entire business. That is a very fragmented view of the business, and then it’s not connecting to everything else.” When you connect them on the back end through a true database and through ETL, which is extracting, transforming, and loading data into one centralized database, it allows you to get cross platform information and to really link together that entire customer journey. That’s what everybody is looking for. The problem is most people read some sort of article and it’s like, “Oh, you should be doing multi-channel attribution. Last click is the worst and it doesn’t give you this insight.” Then they’re like, “Okay, cool. How do I turn on multi-channel attribution?”

Meghan Connell:          It’s not. It’s not a button. It’s not just [crosstalk 00:18:30].

Molly Pittman:             It’s a lot of work.

Meghan Connell:          Yeah.

AJ Yager:                      There’s no AI that just does this all for you. It’s what we call handcrafted metrics. It takes real work inside of these tools to make it all work on the end. So, it all comes down to tracking. It says your output is only as good as your input. You can make your life a lot easier, and we could have an entire hour and a half or two hours just on tracking better, but it all really comes down to the beginning of this, is tracking.

Molly Pittman:             That’s the biggest reason I wanted to have you guys on. When I met you and I learned about what you did, I had no idea the amount of work that went into handcrafted data like you’re talking about right now, and that to get almost perfect tracking still, in 2019, is a lot of work. It’s like I said earlier. You can’t just buy a $15 dollar little dashboard online that’s going to fix the complexity that is multi-channel attribution. I think what you guys said earlier about this being a mindset, when you are looking at the results of your Facebook ads or Google ads or email, you have to think about this in a customer journey, just like you guys said. I think a lot of issues that people have with data and tracking that are listening, yes, it’s definitely the complexity of it and how do I do it, but it’s also their mindset around it. If you understand the big picture, it can make this a lot easier to digest I think, even when the metrics might not be totally perfect.

AJ Yager:                      Yes, that is so well said. Going back to what Ralph does with your clients, before we build any dashboards, before we go and execute anything, we have got to get clarity upfront. That means the mindset. That means identifying where all this data lies. If it’s in some IT person’s head, if it’s in the owner’s head, if it’s spread out in spreadsheets or Word documents, or wherever the heck this stuff is, we’ve got to get clarity and we use this process called metrics mapping. We help build a roadmap to data success by asking the right questions. We have these seven steps that we’ve proprietarily built and walked companies through, large and small, and once we do that it’s amazing how everything gets clear for us and for our clients.

AJ Yager:                      We do this first. It’s all about data education and that mindset, and then from there with that roadmap we can say, “Okay. Let’s take this in pieces. Let’s not do all of the things. Let’s do the things right now that are gonna move the needle and create a return on investment, and then we can always add in the different elements of your business from sales and marketing, to then inventory, then customer service and finance. It’s a journey. This is not gonna happen overnight.”

Meghan Connell:          Yeah. Going back to what he said, the metrics mapping is really extracting from people’s heads the questions that they’re asking about their business. The things that they’re not getting answers to are the things that it takes so much manual time to go and do. By the time you get it, it’s either outdated or one of your smartest team members just spent three hours a day on it for a week, and then [crosstalk 00:21:33] another question, and they have to go back to it because they didn’t do it by month or whatever. So, it’s extracting from your head. It’s the business questions, it’s the business goals. It’s how are you going to hit those goals, and what would you need to know in order to make that happen? Then digging deeper, and deeper, and deeper so that’s that first piece of it, and then it’s very, very simple.

Meghan Connell:          We just ask a question that’s, “Okay, so if you were to look that up right now, where would it be?” It’s so funny because we’ll have business owners that are like, “I just need to know this one thing, this one metric,” and they were like, “Great. Where would it live?” Then a team member is like, “We’re not tracking that.” It becomes this big, gaping hole and all we do is we uncover, “Hey look. In order to have these awesome insights, you first have to have this in place to gather the information. Without that, it doesn’t matter how beautiful the dashboard is. It’s going to not be valuable. So like AJ said, the output of these dashboards, the output of the answers that we’re getting, is only as good as the tracking that’s in place whether it be in the native systems, whether it be something complex that you’ve built out yourself. So, with clients that are just beginning, a lot of them do not have the opportunity to have multi-channel or multi-touch attribution because they can’t invest in all of these tracking initiatives right now.

Meghan Connell:          That’s okay. You can still make decisions with last click attribution. That will be okay. It’s not gonna be the end of the world. Plenty of other companies have done it and still gotten insights, but then Ralph, going back to what you said, it’s like okay so once people buy, here’s where they came from, how much did they buy? It wasn’t just that first initial purchase, which is what Facebook or Google usually tracks. It’s, “Okay, what did they buy from me 60 days later? What about 6 months later?” Then that allows you to see your allowable cost per customer. The acquisition cost is such a big thing that people aren’t really diving into in a mathematically sound way.

Meghan Connell:          They’re just looking at, “Oh, we had $20 dollars worth of sales on day one. Our cogs are $5 dollars. The media costs X amount, and so that gives us $12 dollars for us to spend.” We’ve had clients, just by doing really granular lifetime value of their customers in one day, 30 day, 60 day, 90 day breakdowns and cohorts, they’re able to scale by 3,000% just by knowing that because they had no idea that their upsale flows, and their auto responder sequences, or their affiliate deals were yielding so much on the back end, and they only had to acquire that customer once. So, with agencies especially, agencies are held accountable to the return on ads spent, but when? If this customer is worth $2,000 dollars in two years, I want to know that.

Ralph Burns:                 Yeah. It’s a longer journey, I think, than most people really want to travel at times. They just want to know that one question. All right, if I spend a dollar more on Facebook or 100% more, or $100,000 dollars more for us on Facebook, will that mean my business will get to X amount? Oftentimes it’s not quite that simple. For a lot of agency customers at Tier 11, Facebook and Instagram is their primary if not their only traffic source. So, if sales go up, sales go down, we can piece things together but there is the 28 day attribution window inside Facebook. There’s advanced measurement, which goes out to 90 days, which is in a beta and soon to be rolled out. So there is data but the point is, is that that’s the central question.

Ralph Burns:                 I think every customer, they probably need to go back to one of our earlier episodes on Perpetual Traffic, which we’ll leave in the show notes, of how much to actually pay for a customer using cost of goods sold. Using, what’s my selling general and administrative? What is my projected profit margin? What’s my return rate? All these simple math things, and then backing that. That’s the first metric that you’ve got to figure out oftentimes. It sounds like when somebody works with you guys, those are the things that you dive into first and then you’re like, “All right, well now we can work with each other.”

Meghan Connell:          Yeah, that’s exactly right. Every client that starts with us, we have a recommended roadmap because a lot of them are doing this stuff manually, and they’re not doing it as granularly as we do, and so even things like ROAS, we can provide a little bit more depth than they typically have because we’re using true data scientists, and actual data tools, instead of just a smart person with a spreadsheet. So, even just giving them those basics can help them scale drastically, and then what we do is we layer in the complexity. How do you eat an elephant? One bite at a time. Let’s start you out with these metrics that are the key components, and then we layer it in.

Meghan Connell:          We layer in the different platform channels, we layer in, “Hey, are you using UTMs? No? You don’t have a UTM hierarchy? Okay, if you were to do that, we would be able to show you all of these numbers based on the granularity of individual ads.” Or, “You have three copywriters writing for you? If you group them all together and give us basically the hierarchy of who’s doing what, we can show you their conversion rates on these ads that they’re doing. We can help you with all these variables.” We have a lot of clients that think that there’s only a certain amount of things that can be tracked. There’s an infinite amount, and people don’t get creative and creativity is what is changing the industry. So for example, somebody tracking manually. Even manually, going through every single ad, and looking at the variables. What are the variables that you’ve done on each of these ads? Is the button on the left, is the button on the right? We do all these split tests and then after 1,000 clicks we say, “Kill that one.”

Meghan Connell:          Has anybody ever gone back to all of this aggregated data that we have on years and years and said, “Okay, let’s actually look at some of the non-tracked data, and let’s go back to it.” So saying, “Did we use an orange button? Did we use a green button? Did we have a picture on it? Was it a meme? Was it this?” Even just a simple spreadsheet that has yeses and nos, that is data, and those types of things can be overlaid with click-through rates, with purchase rates, with all of these different things and lifetime value. We can tie all of it together, and then we start to quantify the non-quantifiable. That is what your competitor is doing that you’re not.

Molly Pittman:             Completely, and I think it solves the problem that a lot of listeners have. It’s not that they can’t trust the Facebook data necessarily. It’s that, how does this data relate to all of my other marketing efforts on other channels? I think you guys explained it great.

Ralph Burns:                 From our listeners’ perspective, at what point in their journey should they consider a third party data tool outside of, let’s say it’s just a Facebook and Instagram advertiser? At what point do I say, “Hmm, Praxis Metrics. These guys sound like they’re pretty smart. Maybe I should go check them out.”

Molly Pittman:             They’re nice.

Ralph Burns:                 But no, at what point? Well, 28 day. If I even know what the 28 day attribution window is for Facebook. Maybe you guys can explain that just a little bit between view-through and click-through, but then at what point do you consider a third party tool, in your opinion?

Meghan Connell:          Yeah, great question. Honestly, it’s whenever you start getting annoyed. That’s the [crosstalk 00:29:29].

AJ Yager:                      Frustration.

Ralph Burns:                 That’s a good answer.

Meghan Connell:          That’s why we started this company, is we were super freaking frustrated because AJ used to run a digital marketing agency, and he had 30 clients at the same time, and his smartest team member was reduced down to freaking report building and logging in, and just manually putting all this stuff in a stupid spreadsheet and then sharing it with clients, and they have another question, and then you’ve got to go back to the spreadsheet, log into these different systems, just to get basic stuff and it’s annoying.

AJ Yager:                      Yeah, so we understand the frustration. We understand the pain and that’s why we doubled down and said, “We want to be world class at helping companies with their data.” So, because we’ve gone all the way to the big companies, we’ve swung back this way out of purpose and impact to help companies, there’s this piece of if you’re under a million dollars in revenue, we’re here to help educate you and teach you what to do. This metrics mapping is phenomenal. It’s a great process. Everybody that comes out of it has clarity, so we have instead of just pushing a platform or a dashboard, that’s not really what we’re here to do. We’re here to protect you, make sure you’re making the right decisions along the way, and escalate you up what we call the roadmap of data mastery. We want to help you grow and we want to grow with you. So, it really depends on where they are in this data maturity.

Meghan Connell:          So, there’s four levels in our mind. Data infants are the newbies. They’re the influencers, they’re the entrepreneurs who haven’t really had a ton of traction, but they’re committed. So, with those types of people, we can do consulting where we just coach them. We’re like, “Hey, have you done this? Have you set up Google Analytics right? Do you have event tracking? Are you using UTMs?” Basic foundational principals that allow them to start collecting data right now, so that in a year or two years when they’re ready to do a BI implementation, they have information rather than, “Oh, we’re ready to go and do this,” and we’re like, “Great. You’ve got jack nothing.” We don’t have anything to work with. So, we start there.

AJ Yager:                      Then there’s Google Analytics. It’s a free, amazing tool. Most people say, “Hey, I’ve got Google Analytics. I’ve got it set up,” but all they’ve done is put the code on the page and left it there and are so scared to log in. They don’t even remember how to log in, but if it’s set up professionally, set up with conversions, if it’s set up with the events, the goals and all that, it’s an invaluable tool to be used and you don’t have to log in and see dashboards there. We can pull that through and visualize it differently later. So, we have an analytics team that helps do Google Analytics audits to make sure, “Hey, these things are working, these things aren’t working. Let’s fix it and let’s get this as a low hanging fruit done for you, then we can move into dashboards later on.”

Meghan Connell:          Yeah, so that’s phase one. Then we get into those people who already have all that stuff. They’ve already got all the tracking. These are the people that are already tracking ROAS, already tracking ROI, already tracking LTV, but they’re doing it manually. Some smart person on their team, or God forbid the business owner, co-founder, or CMO, is actually doing all of this manually. They’re doing, what we said, ETL is extract, transform, and load. You can do that manually, you just log into the system, pull out the number that you think that you want, and then put it in a spreadsheet. Transform it into the business logic, and then load it into a visualization that makes sense to you. So, usually when people are at this phase two, they already have that foundation. They already have really good insights that have gotten them success. It’s gotten them to where they are, and now they’re like, “Okay, we need to scale and what we’ve done that’s gotten us here today will not get us to that next level of $50 million in annual revenue, $150 in annual revenue.”

Meghan Connell:          Those are the people where they’re like, “Okay. I know that my LTV is between $60 to $90, but now I need to know a 30, 60, 90 day. I need to know it by channel. I need to know it by source. I need to know it by ad.” Then that’s where we’re like, “Okay, cool. Now we can help you guys with a lot of these prebuilt dashboards that we’ve already done a million times. Cost effective, it’s really fast time to value.” We can get them things like that in two weeks rather than a six month turnaround time. Then, once they have started using that, and like AJ said, it’s an indoctrination and it is a retraining of their team to be actually data driven. A lot of people say, oh yeah, they’re data driven marketers and it’s not true. They are looking at very, very basic numbers and they’re not asking that secondary tertiary question which is not what is happening in my business, but why? Why am I having these spikes? Why am I having these values, and how specifically should I remove the values and increase the spikes?

Meghan Connell:          Those are the questions that are yielding these clients to have exponential growth, and then those are the clients that we usually work with on the custom dashboards where they’re like, “Okay. We now know all of what’s happening. Now let’s get in the fun stuff. Let’s get into multi-channel attribution. Let’s get into the deep, deep, deep weeds,” and that’s where they’re like, “Okay, this is a big data initiative now.” That clear it up?

Ralph Burns:                 Yeah, yeah. It does and I think also, expectations for the customer. I love the answer of when you start to get frustrated.

Molly Pittman:             Me too.

Ralph Burns:                 That’s when you have to get it. That’s usually the impetus for a lot of things in life, isn’t it? I mean, definitely with this sort of stuff because there’s so much data that’s being thrown at you at any given point in time. Do you ever get it 100% right? You know where exactly every penny is going and where it’s coming out?

Meghan Connell:          Never.

Ralph Burns:                 Is that attainable at any level in human history?

Molly Pittman:             In the world today then.

Ralph Burns:                 Right.

Meghan Connell:          You know why? It’s because we are at the disposal of other companies and their data. Facebook, one day because of Cambridge Analytica, thanks for ruining it for the rest of us, cut off multiple columns and multiple reports from their API. Where we used to be able to have much more granular, and much more impactful, and much more insightful data, it no longer is available to us. Amazon is a perfect example, the jerks. They don’t allow us to see the individual user email address, and so then what it does is it forces the business to have to get creative in tracking and in merging different data together. Like, hey, now we have to merge based on a physical shipping address, if they have a Shopify store and an Amazon store, but then what about apartment complexes?

Meghan Connell:          There’s all these things that you can never have 100% accuracy because you don’t have 100% of the data, but anybody who can get more, and more, and more accurate by getting more, and more data will have an advantage over anybody else.

Molly Pittman:             It’s not that it’s not all there. It’s also that it’s always changing. I mean, there’s new technology coming into the mix. Facebook is changing, Amazon is changing, so I don’t know if it will ever be perfect honestly, and we wouldn’t be evolving, but it can be a lot better than it is right now for a lot of you guys.

Ralph Burns:                 You can make really educated decisions on 80% of data or even 70%. I mean, you’re making a very informed decision, much better than you were let’s say 10 years ago. I mean, think about how far all this has come, too. Let’s keep this in perspective.

Molly Pittman:             Yeah, and also one of the biggest things I learned from AJ and Megan is not necessarily to obsess over the tracking side. You definitely want to make sure it’s as correct as possible, but it’s also how are you thinking about data? What questions do you need to solve in your business, and what number can you use to track that? When I was a digital marketer, we hired Praxis Metrics to build dashboards and I remember we said that we wanted to track churn. You asked a few of us how we track churn because we were having an issue with that, and we were all tracking it in a different way. We were using a different formula. That didn’t even come down to the quality of the data, it’s just are we literally all on the same page? Are we even tracking in the same way? Are we using the same formulas, and what are the best metrics to use to help us achieve our goals? So, I think it’s even so much more than just being able to track online. It’s, how do you actually think about data? How are you using it in your business?

Meghan Connell:          Yeah, and I’m glad you brought that up, because we face that all the time. You have no idea.

Molly Pittman:             Yeah, I remember how hilarious that was.

Meghan Connell:          [crosstalk 00:38:20] even in our department. People don’t communicate these things, and they each have their own little spreadsheet that they’re basing their decisions off of, and they missed a formula here or they did this calculation and they forgot to take this into account, and that happens all the time. It’s a very common thing, and just by having this conversation with this team, one of the biggest things that we preach is data democratization. We want every person in the company, I don’t care if it’s the executive assistant. Every person has a unique perspective and view, and vantage, and history, and background that they can bring to the table and when you democratize this data amongst the team and share it, you’d be surprised at how many awesome ideas get sprung from somebody looking at a number and being like, “Wait a minute. Does that take into account this?”

Meghan Connell:          Then we’re like, “Oh my gosh, no.” Then we find this huge hole or this huge opportunity. So just sharing it amongst the team, having open communication in team meetings, is so, so valuable. Opening up the hood and being like, “What are we using?” Especially as an agency, man. Talking to your clients. We’ve seen this because we’ve been on both sides. We work with agencies and we help them report their numbers to their clients, and then we work with clients who have four separate paid agencies.

Molly Pittman:             Oh gosh.

Meghan Connell:          We’ve seen both sides, and the number one thing that we’ve seen is clients saying, “Oh yeah, but the numbers that they report on are just totally wrong, and we don’t see them like that at all.” The agency is like, “We’re doing awesome,” and the client is like, “They’re lying.” All this is is a communication issue. That’s it, but we’ve seen a lot of agencies get fired too because they had a different number than the client had. Those little variances in calculations make a big difference.

AJ Yager:                      It’s about trusting your data. So, if you don’t trust your data and where it’s coming from, how are you going to have faith in that agency or whoever is reporting that to you?

Meghan Connell:          Yeah, we had a client the other day. I asked for a testimonial and she’s like, “Yeah, I love having these dashboards not for my marketing agency, because everything that they report to me was with rose colored glasses.” No, that’s now what it should be at all. It should be transparency, and it should be, “Hey, here’s what we think success is,” and every person in a company should have a KPI that they’re personally responsible for, that your job is measured based on your impact on this number whether it’s reducing churn, whether it’s reducing the amount of expenses. Whatever it is, having that data across the board is super, super helpful and having everybody agree to the formulas.

Molly Pittman:             Totally.

Ralph Burns:                 Yeah.

Molly Pittman:             Well guys, this has been so awesome. Thank you for enlightening us on data stuff, and you can find AJ and Megan at PraxisMetrics.com if working with them sounds like something you want to do with your business. Ralph, any last comments?

Ralph Burns:                 No, no. I think it’s just been great to have you guys on here. I do think that one of the things that you do in your onboarding is knowing your numbers as a business. I want to redirect everyone back to episode 106 where we actually talk about that very thing. I referred to it a little bit earlier in the episode, and I think without those numbers, you can’t really have that conversation about attribution, about tracking, unless you really do know your numbers in the business. So, that’s episode 106. Go to DigitalMarketer.com/Podcast. This has been episode 189, and we’ll put all these resources in the show notes. So, yeah. Great to have you guys on here today. I think we enlightened the black box. It’s not [crosstalk 00:42:00] anymore.

Molly Pittman:             Yeah. [crosstalk 00:42:01] We’ll have to have you guys on again to further open said box. Awesome, bye guys.

Ralph Burns:                 Bye.

Darren Clark:                You’ve been listening to Perpetual Traffic. For more information and to get the resources mentioned in this episode, visit DigitalMarketer.com/Podcast. Thank you for listening.

(NOTE: Need a helping hand with your digital marketing efforts? Or maybe you just want proven, actionable marketing tools, tactics, and templates to implement in your business? Check out the latest deal from DigitalMarketer, and you will be on your way to helping your business grow.)

Episode 188: James Schramko on How Businesses Can Work Best With Agencies
Episode 190: How Facebook’s Ad Delivery System Works: Part 1