This Week in M&A Issue #54

The Ad Cyborg Model: How Entrepreneurs and Machines Will Run PPC Advertising in 2023

10-second takeaway 🥡
A new expert panelist report reveals the future of PPC advertising... you can no longer rely on ad platform controls like budget, bids, and audiences; AI will be used for creative optimization; CPC will go up but your prices need to go down.

Advertisers who know how to feed the machines will win

22 PPC experts identified the key areas that are going to evolve in 2023 and how advertisers should adapt.

Automation
The ability to see nitty-gritty details like search queries and ad unit placement is going away—algorithms and automations are handling these now.

Advertisers will need to learn to work with bid strategies such as Max Conversions, Target CPA, and Target ROAS bidding as opposed to manually bidding for clicks; find a way to manage the systems and garner actual insights.

Using Your Human Super Powers
In the early days of PPC, you could get away with not knowing much about your audience because the technical controls we had for ad optimization were just so good.

As those controls and transparency go away, messaging and offers crafted specifically for your audience will drastically outperform a “guess and check” approach—machines will control the data, humans will feed consciousness and creativity.

Reprogramming to Adapt to a Low Economy
Inflation in CPC is real. How it's being calculated by the search engines is unclear, but since April 2022, CPCs have been rising dramatically. When you forecast 2023 budgets, instead of doing the standard 2-3% growth in CPCs, use a larger number (one expert recommends closer to 4-7%).

Advertisers will also need to design campaigns with a focus on price-conscious product lines, promos, and messaging with measurable benefits to account for low consumer spending.

AI is Getting Creative
AI use will likely expand beyond text ads and ad extensions. We already see AI-generated voiceovers in video advertising, and Google’s urging of Ad account managers to adopt more and more automated features will increase.

As you can see, the cyborg ad model is being formed. Advertisers are becoming aware of the strengths of the ad machines, their own human strengths, and how the two can work together.

Neuroscientific FACT: Even the Smartest Academics Buy Things On Emotion, Not Logic... Just Like Everone Else

Even Neil deGrasse Tyson probably couldn't tell you the reason he last bought something. He'll be able to construct a debate-winning logical argument that walks you through his exact thought process, but there's so many factors that influence how humans make decisions, he'd probably be quite a bit off the truth.

We'd think he'd be right, though. That's why when we launch an offer, we assume everyone is going to read through all of the practical details and make an informed decision to buy.

But when we understand the neuroscience behind why people really make decisions, we discover that this most often isn't the case.

Here's a quick marketing quiz to illustrate this point.

The 3 tested marketing hooks below were for a data curation software promotion. Which do you think won?:

1. "We unlock the data for you" - talked about how the software works.
2. "Your data is hidden and you're gonna make a mistake" - talked about emotional fear of making a mistake.
3. "The Antacid for a Diet of Tough Decisions" - talked about what it feels like to have to make decisions without all of the data. The pains of the responsibility of decision-making and second-guessing yourself.

Number 3 won with 13% more purchase intent.

Even though the marketer was selling B2B, they were still marketing to a human who makes decisions, has feelings, career ambitions, a personality, a family to feed... all human traits.

This week's guest, Nancy Harhut is the co-founder of a behavioral-science-based marketing agency. In this episode, she shares findings from experiments like the one above, including one that got a 20% uptick in business by planting the word "small" in the copy.

Listing #64437 - $311,277.00

service, amazon associates, display advertising | digital media, art | 41X

Created in January 2021, the business offers a service around media restoration. It generates revenue from multiple sources, drives the majority of its traffic organically, comes with a sizable email list, and requires minimal time to maintain.

We’re highlighting this business this week because of its following strengths:

• Diversity: services (89.57%), Associates (7.84%), and advertising (2.59%)
• Growth: in traffic and revenue since the business was founded 
• Team: customer service manager, 11 freelancers, 3 VAs

Learn More >

Ex-Ecommerce Entrepreneur and Self-Taught Coder Builds a 6-Figure SaaS Business

He was selling technology products and encountered a problem—finding suppliers for his type of product.

Identifying this area as an underserved niche, he decided to build a straightforward marketplace that connects businesses and suppliers on PhPFox, even though he had minimal coding experience.

He built the software well. It didn't require much maintenance. AWS and alarms would notify him of any bugs on the site and he'd inform the third-party development team to fix them.

From the start, he built the business to be hands-off. He invested in assets that generated revenue, but that didn't require time, including an SEO content team and a user-generated content (UGC) production system.

He built the software as most successful SaaS entrepreneurs do—using feedback and direction in social media groups right from the mouth of the target customer. He continually upgraded the software based on feedback to keep customers happy.

To maintain growth, he ran Google and Facebook ads on the front end and email campaigns to the 31K email list on the backend to increase ROI and customer LTV.

This story is a great example of how any entrepreneur can transfer their entrepreneurial skills into a new market and succeed. And now with no-code and low-code platforms, plus all of the coding education available, even the lucrative world of SaaS is accessible to all.

A Change to USPS Forms is Coming

From March 2023, online merchants will have to be more specific when filling out USPS customs forms on packages they send to Europe. Noncompliance could result in fines, penalties, and delivery delays.

You can find out more about the EU’s guidance on acceptable terms on the Europa.eu website. The USPS also provided its own chart with example descriptions (shown above).

4 Amazon Product Listing Attributes to be Mandatory in December

Amazon recently announced that from December 1, 2022, new and existing product listings for certain product types must have updated attributes:

• Color name: SHIRT, SWEATSHIRT, SPORTING_GOODS, PANTS, COAT, SWIMWEAR, SWEATER, VEST, SHORTS
• Size name: SHIRT, SWEATSHIRT, COAT, PANTS
• Product description: HOME, CURTAIN, RUG, BLANKET, HOBBIES, TOOLS, SPORTING_GOODS, CELLULAR_PHONE_CASE, BED_LINEN_SET, AUTO_ACCESSORY, HEALTH_PERSONAL_CARE, DRINKING_CUP, HOME_BED_AND_BATH, POWERSPORTS_VEHICLE_PART, PLANT_SEED, CONSUMER_ELECTRONICS, KITCHEN_TOOLS, OUTDOOR_LIVING
• Department name: BACKPACK

All new listings for affected product types will require a valid value for each of these four attributes or the product won’t be added to the catalog.

🪙 Bitcoin hits 2-year low: FTX fallout

🗄️ Google allows custom dimensions in GA4 reports: combine GA and non-GA data

📺 YouTube launches live co-streaming feature: Go Live Together

🐦 Elon's first email to Twitter employees released: "no more remote work."

"Backlinks Won't Be Such a Big Factor in the Future" - Trends Analyst at Google

"... I think already, that’s something that’s been changing quite a bit.” - John Mueller, Trends Analyst at Google.

As Google becomes more adept at understanding how content fits in with the rest of the web, Mueller suggests Google’s algorithm won’t have to rely so much on inbound links.

However, suggesting backlinks are only helpful for understanding content disregards all the other information they communicate.

A backlink profile can tell you so much more about a website, such as the extent to which it’s trusted by others, who it’s trusted by, and how authoritative the site is in its particular niche.

"To some extent, links will always be something that we care about because we have to find pages somehow. It’s like how do you find a page on the web without some reference to it?” - Mueller.

How important do you think backlinks will be in the future?..

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