Expert Tips & Strategies to Boost ROI with Segmentation and AI Integration

Hey, hi everyone. Welcome to your show E-Coffee with Experts. This is Ranmay, your host for today’s episode. Today we have Nathan Hawkes, who is the President of Arcane Marketing with us. Hey, Nathan.

How are you doing?

All good, yeah. How are you?

Fantastic. I appreciate you taking some time to chat with me.

Great. Nathan, before we move forward, why don’t you let our audiences know what Arcane Marketing is all about how you guys started, what is different about you from all the other agencies out there, and what are your core competencies?

Yeah. So we specialize in just a couple of things. We’re a digital marketing agency. We’re located in Idaho Falls, Idaho. We have some offices in St. George, Utah, and in Orlando, Florida, for anybody who’s in those areas. There are five things specifically that we do, and what the philosophy is behind that is a little bit in my history and some of the other employees that we have or other team members have experienced is that we are not a Jack of all trades company. We have decided to produce Arcane Marketing as a specialist in just a couple of areas. It started in three areas to begin with, which expanded based on what the client desires or asks of us, we have a digital marketing agency. And those asked in our five core competencies are, I think, probably even in this order, SEO. We are fantastic at SEO. That’s a very big focus for us. Paid search, Google ads Bing ads, any of those other search engines, social media ads. We do website development. And inside of website development, just about any platform, but I would say 99 % of the websites we develop are in WordPress.

So, we are WordPress developers at heart. And then the last thing that we do a lot of is videography. We do a lot of videos. You can check out our YouTube channel if you need to see some examples of the things we do, but that’s maybe one-twentieth of the number of videos that we have produced as an agency.

Wonderful. Nathan, as someone who has been in the digital marketing industry for over 17 years now, how do you stay ahead of the curve in terms of all the technologies that we have coming into our industry evolving by the day? What is your approach to continuous learning in this rapidly changing industry of ours?

That’s a good question. I found that there are a lot of people, I think, in their mind have the same mindset that I do, and that is there’s value in community and discussion. What we’ve done personally, and I don’t know if this is the same acumen of what most digital marketing agencies do, I imagine to some degree it is, but first and foremost, I have a handful of blogs that I subscribe to. And when a blog post is written, I just get a notification that’s there, and able to just scan through it and read through it. I make sure that I take 10 or 15 minutes every single day and read through those daily blog posts that come out. And those include but aren’t all exclusive to places like mas.com, Search Engine Land, and Search Engine Roundtable. There are probably five or six others in there, and not everybody produces a blog every day. But it’s fun to see what people discuss. That’s the first thing. The second thing is that we, as an agency, have a handful of subscriptions and tools that we use, and it’s fun to see what the capabilities and updates of some of these tools do.

And I think you’ll learn a lot based on the results and information and data that you can pull from those tools and how to utilize them. And then maybe my favorite, and maybe it’s a small addiction, is I follow quite a few people on TikTok who are digital marketing agencies. And you know who are the or the basic types of info, and some of them talk about a lot more of the advanced technical pieces, and the things that they do are just fantastic, great ideas. And as much as I can, I try to contribute to those. I think this year you’re probably the 12th or 13th podcast interview that I’ve done just to try and be a part of the community. And to be honest, being in the industry for 17 years is fantastic because most of our clients and other people that we deal with, they go, oh, you’ve been in the digital marketing industry for three years. You must know so much. I don’t know if that makes me feel like an OG in the industry. Some people have been around longer than I have.

But interestingly, you have little strategies and things that have been relevant and changed as time goes on based on the behaviours of people the target or the goals that you want to hit, and the type of industry you’re serving. In some cases, social media just makes a ton of sense, but SEO might not. And in other cases, maybe its Google ads make a ton of sense, but social media might not. And knowing when and where to apply those things, I think, is quite valuable. And you get a lot of that through this community. But I also think that simply doing the work and watching and seeing the results that come in from the work that you do is very valuable. I don’t know too many people who just stirred along faking it. I think that after a while, people can see through that. But you’re never going to know unless you have the right tracking pieces in place and know what tracking measures you want. So, it’s not just about driving traffic all the time. It’s not just about getting conversions. It’s not just about one-off pieces. I feel like there is always a facet, several facets to achieving a goal for a client.

And it’s true, the kinds of things that we were doing back in, let’s say, 2018 are a little different than we are doing today, but not by too much. I found that to be the most relevant and good approach to learning things I must learn good core values in the services you offer. I have found that there are companies that have built their companies off of specific types of strategies or packages. Hey, for say, $1,000 a month, you can get X number of links or X number of pages written or whatever parameters are set within these packages. And I’m saying that they’re not beneficial. But for what we do as an agency and the way that we run things, packages just don’t work. And we have found that everything that we do for our clients is very customized to their needs. I think it’s a harsh reality, and some people have a hard time embracing it. The harsh reality is that at some point, the work has to be done. You can’t just use tips and tricks all the way through, expecting to be fully successful when the good, core, solid work isn’t completed.

So, to be honest with you, I think the fringe pieces have all changed dramatically a lot over the last 17 years, but the core pieces of what we should be doing as digital marketers haven’t changed a lot. And if you base everything off of good core beliefs or good core strategies, I think that you’re able to just stay abreast of the latest updates that happen. Anyways, the last, and I would venture to say maybe the most important, is you do the work and then getting feedback from your client matters. So sometimes we learn about what happens and how successful we are based on the feedback we get from the client. In that nature, one of the core values of our company is communication. And so, if communication is rough or it doesn’t happen, it makes the situation a lot more difficult. And maybe you can apply that to all different aspects of your business. But in digital marketing, I think communication is almost paramount. So, when we’re talking, let’s say, with other podcasters, or we’re talking with clients, or we’re talking in our team about the things they’re seeing happening, everybody collectively learns.

And so, if we’re not paying attention, we’re just going through the motions, I don’t know that we get to keep up on it. But that’s one thing I can pridefully say we’ve done well communicating and learning from one another.

Yeah, very valid point there in terms of communication being so important in digital marketing, and even maintaining those client relationships in the long run, transparency, and communication, become so crucial. So, yeah, Nathan, building on your philosophy, which is again an extent of communication, if I were to put it that way, of people to do business with people. Can you elaborate on the importance of client relationships in the digital marketing industry? And how can one nurture and maintain these relationships to foster long-term success?

Yeah, this could be one of the most important questions to answer in the digital marketing period. Here’s why I say that, just from an interesting statistic about our agency. In the digital marketing world, the average client retention length is about five months. Sometimes it’s four months, five months. So that means the average client might be hunting for a new digital marketing agency or what some of them refer to as vendors about every five months. How annoying and how tedious. I think you’d get tired of it and you’d probably even grow grumpy about those types of things because you just start to hear the same old song and dance. Our agency, one of the things that I am probably the proudest of, is that our average client retention rate amongst the hundreds of clients we have is about three years on average. So, we’re far above and beyond that five-month retention rate. The philosophy that I try to, and I should say, I’m myself and my partner drill down into our team is that relationships matter. And internally, that matters. How one team member interacts and works with other team members is so important. We want to keep drama out of the business as much as we can.

And by and large, for the last eight and a half years, it has been great. I can honestly say it’s comfortable to come to work. People just don’t have this taste for other people. We hire the right kinds of people that work in our culture. And so, it is pretty laid back and everybody is genuinely friends. I love that. I genuinely love that. But when it comes to our relationships with our clients, not only do we want to have good internal communication and culture within our team, but we want to have the same relationship with our clients. And it’s not an excuse, Look, we’re not a perfect agency. I would say that we are successful, but that success comes with a pile of failures. We have made mistakes, learned from those mistakes, and then we just don’t do those things anymore, or we’ve figured out what not to do and how to do things better. And we’re far past ever having any clients that are guinea pigs. We’re pretty practised in everything that we do, and we know what the strategy should look like, what the layout looks like, what results to expect, et cetera.

But when we have good relationships with our clients when we’re good at communicating with them when we become friends with them, we’ll become interested in not just being the service provider, but we become interested in what are your goals as your company. How can we help you hit those goals? And not only that but what can we help you with personally to help you either as an owner to expand or maybe you as a manager to get a promotion or to look like a hero, et cetera? And I have found it on those months where we don’t perform as well or haven’t in the past that it feels like we’ve rested on the laurels of a good relationship to the point where clients have gone, hey, it wasn’t a great month, but you know what? We’ll do better next month. It’s not like, hey, we haven’t had a great month. See you later. We’re out. It’s, hey, we get it. We know you guys are working hard. You communicated well. We can tell that you care. Maybe we just didn’t hit things in stride. Here’s how we fix that and move forward.

So, I think it’s a big deal to understand the point that in all of my business relationships that I’ve had, and being in the industry for 17, almost 18 years, is that the best clients I have are also good friends. They’re also fun to talk to. And there is one piece that maybe is an advantage. And it’s an interesting strategy that we have for leads that we’re able to pick up good clients. They’re able to refer clients. And when it warrants it, we visit these people in person. And so, I will fly out to San Antonio, Las Vegas, Seattle, Orlando, wherever it is, and go meet with these clients, shake their hand. Maybe it’s touring their office, getting to know their team, and doing all of those kinds of pieces because that solidifies the relationship. It makes it real. And I remember when I was leaving my first agency to start this agency that we run now Arcane Marketing and the relationships with people and the words that I had, the conversations I had with them wasn’t, hey, sorry to see you leaving your agency. Signed all right. It was, hey, everybody here, your agency now they’re nice, but we don’t have a relationship with them.

We have it with you. So, wherever you go, you should let us know. When the time is appropriate, we’ll make a change and come work with you. In our agency, we have account managers, and the account manager’s job is to help develop the strategy, do the research, and delegate work and assignments to some of our technical teams. But most importantly, to produce reports and have conversations with our clients. Unequivocally, we’ve done studies internally. When clients get communicated to, the relationship just lasts longer and it is a far smoother thing than when we find that there’s maybe a little bit of a rocky situation or a relationship just isn’t as good as it could be. It’s because of the lack of communication internally from us. So that’s the big thing is the clients become acquainted and have relationships with our account managers. It’s not always with me, and the relationship isn’t with Arcane Marketing. It’s within the people that we hire internally and how good of communication we’d be. So, we try to nurture those relationships. And look, we have quite a few clients that have been with us for eight years, and I don’t know if they’ll go anywhere anytime soon.

We have fantastic relationships with them. We performed well for them. But I think that it’s based on the fact that they know what’s happening. We have transparency in the things that we do, but we communicate with them. And I think they believe we’re doing their business far more good than the cost, and that’s why they stick around. Showing up, and shaking hands means a whole lot more than just meeting somebody virtually on the phone, or through email.

Yeah, absolutely. And then talking about client communications and relationships, at times it is so important that you go beyond your contractual obligations and your agreements and paperwork like a lot of partners stick with. If you’re a partner, you call yourself a partner, then you have to deep dive and understand a lot of the exact bottleneck situations in their business beyond the digital obligations that we have. I’d have the phone ring, for example. Our job is to make the phone ring. What is the next step that is happening? Who is answering the call? What happens after that? Is the operational pipeline sorted? The phone might ring, but the business is not going to earn or the revenue is not going to flow in. Sooner or later, we are also out of business. I see a lot of, unfortunately, I see a lot of businesses just operate thinking that my job was to get the phone ring, which they are not wrong, that was their job. Whatever happens beyond that is not my job. Even if, let’s say, you’re not looking at it as, let’s say, your job, if you look at the long-term opportunity, you have to stitch together the entire story versus just looking at your piece in the entire game.

I love the point, where you mentioned, that you have to sit down, understand the core business values, and help them grow, and it goes beyond just doing SEO or PPC for our clients. That very valuable point there, Nathan. Wait. Moving on and talking about PPC marketing, Nathan, what techniques do you use to enhance ad relevance and quality score, ultimately reducing the cost per click and increasing the return on ad spend? Just to add on to that, we can help us understand the strategy for a business that has fewer budgets, while enterprise clients and big-size clients already have their budget sorted? But it is so difficult to fight the battle within a competitive space, in a competitive niche. As a small startup or as someone who does not have the budget to be able to do that, you can throw some light on that, please.

Of course. This is one thing that I’m passionate about. In our agency, we have a lot of paid search clients, and we have a lot of experience. We manage some very large and some very, I’d say minimum budgets. And we try to perform well for everybody, and we have a good track record. But I think that there are a core couple of pieces that I would say are a starting point in the platform of our theory and how paid search management should happen. And one of those things is there’s a single word that we talk about, and if any of my team members watch this, they’ll roll their eyes and smile because they know exactly what word I’m going to say. But in paid search, the number one secret to doing everything the right way is segmentation. And there’s a lot of meaning, it’s a very broad word, but there’s a lot of meaning behind what that is. Even when we take over Google ads or Bing ads accounts from other agencies, we have found that one of the biggest problems is trying to include too much. And I don’t think that anybody genuinely in the industry has tried to scam any of their clients. I think that in every agency I’ve ever come across or an account that we’ve taken over, which is quite a few, in their mind they believe they’re doing the right thing.

Yeah.

So, I don’t discredit anybody or say, oh, these guys are taking advantage of you. I don’t believe that’s the case. I think that they took the actions they did, believing that they were taking the right steps. But I also believe that by and large, most agencies, and it’s a high number, 95 % of other agencies out there believe they’re doing the right thing and they have a style and how they do stuff, and maybe they produce some positive results. I don’t doubt that. But I believe that most of them are ignorant, and it’s because they just don’t know what they don’t know. And it could be from a lack of experience, or it could be just how they were taught. It could be a number of different things. We could go through a whole list of reasons why people just don’t perform well with paid searches. But segmentation is the secret to why we can always pick apart a campaign, that is, let’s say it’s already successful and just make it better. Segmentation helps us to improve quality scores. It helps to reduce the cost per click. It dramatically contributes to the performance of the ads so that our ad rank improves so that the cost per click goes down the cost per conversion goes down, et cetera.

So, what I mean by segmentation is that we follow a rule. Google talked about this in their certifications. They say, hey, you don’t want to build your ad groups or your campaigns too broad. So, when you’re doing your campaigns with your ad groups, I think the rule of thumb in the certifications is to try and keep it at under 15 or under 10 keywords. And that’s a good rule. And even most agencies we deal with, I would say, probably don’t follow that most of the time. They do sometimes, but not most of the time. But I’m saying taking it a step further has made all of a difference in the world. That step further makes it so that we have two keywords for the ad group, not 15 or 20. It’s hard to get a really specific ad about a very specific search term and take them to a very specific landing page, all of that maintains the relevance if you go broad. And I say real broad is 10 keywords. It is. And even if you have a keyword or let’s say the plural version of that keyword or even a different match type, should be in a different ad group.

If we ran a perfect world, a perfect scenario, and I do not discount the amount of effort through strategy and work to execute it, that would be a campaign for an ad group. And in that ad group are one to two keywords. And so that means you probably are left with, depending on what setup you’ve got, maybe that 40 campaigns. But it’s funny that we jump into some of these accounts and they have two campaigns, but each campaign has 10 ad groups, and each ad group has 100 keywords in them. And it’s just so far, so broad. You’re giving a lot of mixed signals, and it’s hard to give you a good drill down on what’s performing and what’s not. There is as much effort needed to find the right keywords and match them up to the right ads as there is to exclude keywords that you shouldn’t be bidding on. And some so many people give me the argument, I shouldn’t tell me, but our team gives us the argument that, hey, this keyword gets a lot of clicks. And we look at it and say, but there are very few conversions, which means we’re spending a ton of money, and we’re not seeing that return on investment or the return on ad spend or anything like that.

In that regard, when we try to do a little bit of an update or a facelift, if you will, or a remodel of somebody’s ads account, it’s to segment it out better. 100 % of the time that we do that, instantly we come out with better results. 100 % of the time it’s not even a question. Even when somebody comes to us, we figure out how can we segment it better. That’s the first place to start. Okay, here’s the second piece I think is important. Well, it’s a theory, and it’s something we spend so much time talking about and said, Let’s work on the keywords that we’re bidding on. Let’s make sure we’ve got the right bid type. Let’s make sure we’re targeting the right areas. We do certain campaign styles, certain campaign types, and targeting types, are we including demographics? All of those things, and they’re all great things, and they’re all important to pay attention to. But 100 % of those things are all done in the ads interface. And everybody spends so much time worrying about how the ad interface is set up and the campaigns are set up.

And the whole point of that ad interface is to earn a click. So, we spend all this time preparing to get a click, and that’s where everybody’s thought ends for the most part.

Yeah.

Okay, so now you get the click. Now what? Everybody forgets that you have to take that traffic that you spent all this time, energy, care, and money to get through your website, and you have to make sure you’re taking them to the right information. So, the landing pages or the destination pages are of equal, if not more importance than the amount of time and energy you spent trying to earn that click. You can’t discount how important it is that you have the right landing pages. So, the rule of thumb is that you always have a landing page that is unique to each ad group that you have created. Do you have 50 ad groups? Ideally, and I recognize the work that goes into it, but ideally, you need 50 different landing pages. Something very specific to the keyword and very specific to the ad. So, when people are clicking on your ad and you’re taking them to a landing page, it is all about what they think they’ve just clicked on. That’s how you increase the quality score. That’s how you decrease the cost per click. That’s how you increase your ad rank.

That’s how you dramatically drop the cost per conversion, et cetera. So, segmentation and making sure you’ve got the right landing pages, and let’s call it conversion optimization on those landing pages.

Brilliant. Yeah, Nathan. It has been a great conversation. But before I let you go, Nathan, I’d like to understand your take on AI. While the dust has now settled in and a lot of us have adopted AI as part of our daily life and routine, how do you look at AI and how do you use it in your agency?

Yeah, great question. I don’t even know that I have the full scope view of all the things that AI can do for us. I think the next few years are going to be exciting as we find ways to take the menial little things or the little data collection pieces and automate them through AI, and it’s going to save us all a ton of time. Fantastic. Those things are being developed over time. And I remember it was roughly about a year ago right now when ChatGPT was launched. And that started the popularity of here’s what AI can do and how fun it was to play around with it. I think two pieces are important to recognize about AI. Number one is that if you’re not using AI or finding a way very soon to get integrated into your business, and I don’t care what business you’re in, you’re going to fall behind. Some people are doing a good job, that’s their focus, and they will be the ones who leave us all in if we don’t. The second thing is understanding how to use AI to make those things happen.

For us, it became an involvement of what is AI and how could we use it to become more proficient at using it. And there are so many different AI tools. And what’s funny is I think I started making a list so that I could keep track, and my list got to in the hundreds, like 350 different tools that do different things. Some of them were the same thing, just different companies. And already today, I would say a third of that list is gone. They’re just not around anymore. Their AI didn’t do what I was supposed to and didn’t catch the popularity needed, whatever the case may be. And so, we’re starting to boil down to the few critical ones and the next generation of what AI turns into. And all that’s happened in 12 months. What is five years from now going to look like? The other piece, so once you’ve figured out how you can utilize AI to help do some of your things for you. It could be just data collection, it could be content writing, it could be in analytics, it could be in making automated changes with certain rules, et cetera.

And I think that’s already been happening. You can set up some scripts in Google Ads to make some automated rules and make some things happen when certain criteria get hit. But if you’re not utilizing those, I think you need to take some time and figure out where you should start and how to utilize those. The second piece is to become better at how to use them to engineer prompts and get the most value out of them. If there are little things that you’re doing that feed information to AI, eventually those things need to become automated so that you’re not doing those that the AI can do better than you can if you instructed correctly.

Brilliant. We also use it day in, and day out in our agency, and it has quite potential in terms of increasing the efficiency of our resources. But yeah, it is not a final product. It still needs human intervention before it goes out. But yeah, if you’re not using it, probably you’re losing out on a lot of stuff that is happening in an industry. So yeah, good point there. Great there, Nathan. But before I finally let you go; I’d like to play a quick rapid-fire with you. I hope you are game for it.

Oh, boy. Shoot.

Yeah, all right. Your last Google search, Nathan.

What was my last Google search?

Yeah.

I think it was a recipe for something we were going to make for dinner last night.

Oh, wonderful. Lovely. Great. Let’s say pick up one of your weirdest habits that you feel that only you possess.

A weird habit? I have, and maybe it’s a little bit of OCD in me a little bit, but I tend to get myself into rhythms and systems, and my daily routine includes that. So, I wake up at a ridiculous hour in the morning, go to the gym, and do my routine of getting ready to go to the gym and mixing up my free workout or any supplements that I take. And then when I get to the gym, the routine that I go through is unique. I’ve talked about it with a few people and they’re like, Dude, yeah, great, but that’s weird.

I could have figured that out the moment we started speaking in the green room. I tell you. Lovely. Okay, moving on now, let’s say if you were to travel back in time, what period would you want to go back to?

I think that I would probably hit myself up in my early teenage years. There are so many things that I feel that I was doing that didn’t serve me well in the future. They were cool at the time, and maybe they pacified me at the time, but are not beneficial today. I could give myself some great advice about, hey, focus on these things. Don’t do these things. Those things don’t matter. Don’t waste your time or energy or emotions on any of this stuff, just to help set myself up a little bit better, that’s probably what I’ve done. I also would have probably reassured myself that, hey, you’re going to end up with a smoking hot wife and you’re going to have a great family and you’re going to do some great things. But here’s the way to get that the best, or set yourself up the best for that situation.

All right. That’s quite a deep analysis here. Lovely. All right, moving on to the last one. I’ll not grill you anymore. What did you do with your first paycheck, Nathan? First paycheck of your life.

I was in high school and I went to work with a friend doing some insurance. He was a property and casualty insurance agent. And he was, at the time, I felt like he was paying me more than fairly, I probably spent it on some golf clubs or golfing somewhere. In high school, I was pretty obsessed with golf and did a lot of it. And I’m guessing that’s where that money went. Or maybe gas for a car, maybe that was another place that it went. Perfect.

You enjoyed that piece, Great. Yeah, Lovely. Thank you, Nathan. It has been a brilliant conversation. I’m sure our audience would love the insights that you have shared today. Thank you. I appreciate it, man.

Yeah, it’s been great. Thank you for the questions.