The 4 Core Concepts of Marketing
1. You are buying leads.
2. You are buying traffic/leads in an auction.
3. The only thing that matters in marketing is cash flow.
4. Do more of what is working and less of what is not working.
For Google Ads, and all of marketing in general, there are four (4) core concepts that are crucial to understand to be good:
1. You are buying leads: This is the easiest concept to grasp as any platform you advertise on you will need to pay. For example, when you run a TV ad you are paying for the “perceived” value of the audience multiplied about the audience size. For Google Ads you are paying to be shown above the search results. This is how Google makes 96% of their revenue. Without Google Ads Google would go out of business.
2. You are buying traffic/leads in an auction: In whatever platform you choose to advertise on their will be competitors and the ‘segment’, ‘slot’, or ‘position’ you are in is determined in an auction. For Google Ads this is a live auction where many different advertisers all go to bid on people’s search terms and whoever wins gets to display their ad to that user.
3. The only thing that matters in marketing is cash flow: What this means in a nutshell is the only thing that matters to business owners is making money and growing their business. The majority of business owners don’t really care about views, likes, or shares unless they lead to that business getting more customers. To understand this concept, think about being very empathic to your client. Running a business isn’t easy and 85% of businesses will go out of business in 3 years. So, all your client wants is to stay in business and expand by getting new customers at a low cost.
4. Do more of what is working and less of what is not working: Once you collect enough data you will want to optimize. For example, if we were selling the beer Budweiser, we would get a higher conversion rate for young males than females or older males because young men are the target market for beer companies like Budweiser. What this means is you would want to bid less on females and older men so that even if you get a lower conversion rate on those two demographics your cost per click/view would be cheaper and therefore you could still end up with a good cost per acquisition (CPA) that generates you positive cashflow.
Those are “The 4 Core Concepts” of Marketing. Whether you run a marketing company or simply want to market your own company yourself use these concepts as they are the backbone of Marketing in whatever platform you choose to market on.