You're listening to the “REI Marketing Nerds” podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords Nerds, a high-tech digital agency, focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition, and live a freer, more awesome life. And, now, your host, Dan Barrett.
Dan: Hello, and welcome to this week's episode of the REI Marketing Nerds podcast. As always, this is Daniel Barrett here from AdWordsNerds.com—and, look, if you need help getting more motivated-seller leads and deals online, you know where to go. It's AdWordsNerds.com. Jump on the phone with my team and we will help you out. [01:02.4]
Now, this week, a little bit more philosophical, I am going to tie it directly to the online marketing ecosystems, space, world, whatever you want to call it, so it is going to get practical. But there is a deeper philosophical message here that I want to try to get across and this is something that has come up in my life over and over and over again.
When I say coming up in my life, I mean, in my business life, in the work I do for clients, in my personal life, it is something that has popped up so many times that every time it pops up, I think I really should have learned this lesson by now—and here is the lesson: the lesson is every problem you are seeing more than once needs to be addressed and it's root cause. [02:04.5]
Every problem you see more than once needs to be addressed at its root cause. Now, let's back up for a second and let's give a little context to this little philosophical truism that I'm giving you.
Everything that you see around you, every behavior that your kids show you, every relationship that you're in, the success or failure of your business, the success or failure of the national economy, everything, everything you see is the result of the interaction, the interactions of different systems, right? Systems are groups of interconnected units that interact with each other and interact with the system as a whole, and systems dynamics and system behavior can be incredibly complex. It results in an incredible diversity of outcomes and it is very hard to predict. [03:07.7]
This world that we're living in is both based on cause and effect and inherently chaotic, and it's that way because when you break it down to its simplest pieces, you can understand, hey, Billiard Ball A hits Billiard Ball B, and it's going to move over in that direction, but when you add millions upon trillions of these units interacting with each other, things get very, very hard to predict, and, in fact, impossible to predict—and, in fact, this is known in physics as the three-body problem.
That's because if you have two celestial bodies, units in space, planets, let's say, you can, using our knowledge of physics, predict where they will go, their motion, how they will interact with each other. You can plot it all out using a computer. [04:07.8]
But once you get to three bodies, you add just one more to that problem, so now you're trying to predict the motions and interactions of three celestial bodies. That problem becomes so mathematically intractable that the most powerful computer in the world couldn't figure it out. That's how quickly the complexity of the world around us approaches, essentially, pure chaos, and so people say, Oh, it’s the universe, cause and effect, and there is no such thing as free will, or is it chaotic and is it unpredictable? The truth is it's both.
The truth is it's both.
I said I was going to connect us. We're talking about celestial bodies. I said I'm going to connect this to online marketing and I am. When I say that problems need to be addressed at their root cause, let's think about problems for a second. [05:13.0]
Now, remember I said, look, everything around you, it's the product of the interactions of systems flex. It can be small. It can be simple. They can be complicated, whatever. But they're everywhere. Now, when you see something occur, there's not just one cause for that event, that occurrence. There are, in fact, at least two. There is the proximal cause, the one that is closest to the event, the most obvious, and there is the distal cause, which is far away, the sort of initial cause of it. [05:52.1]
Let me give you an example. There is a glass on a table and I knock it off. The glass shatters on the ground. Now, the proximal cause of the glass shattering is I knocked it off the table, fairly straightforward. The distal cause might be the dog barked and that bark startled me, and because I was startled, I moved my hand in a certain way that knocked the glass off the table. The dog barking might be the distal cause, but, of course, that’s not even the distal cause because something caused the dog to bark and something likely caused that thing to happen that caused the dog to bark and so on and so forth.
Now, the proximal cause knocking the glass off the table, that's something that we can see. It's obvious to us and it's something that we might want to address, and you might say, I'm going to put the glass closer to the middle of the table. That will prevent me from knocking it off. [06:57.3]
But if the distal cause is, in fact, some kind of underlying anxiety, I feel, where every loud noise causes me to violently move my body in an unexpected way, this general class of problem is going to keep occurring until I address that distal or root cause. I can put all the glasses in the middle of the table I want, but unless I address my anxiety about loud noises, I'm not going to get to the root of the problem. I don't really have loud noise anxiety, but you get what I'm saying.
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We as entrepreneurs, as people and relationships, partners with our children, with our friends, we tend to address problems with the most obvious solution, by addressing the most obvious of causes, but unless we address the underlying issues, the steps that are further away in that causal chain, we're going to keep having the problem emerge over and over.
Now, let's give you a marketing example. I run a fair amount of Facebook ads, okay? We do a lot of Facebook advertising and AdWords Nerds for our clients. I also use Facebook advertising for my agency itself, so I use Facebook ads to reach out to real estate investors. In fact, if you are a real estate investor, you may have seen some of my ads on Facebook. [09:01.4]
Facebook for a very long time was our most profitable marketing channel for the agency. For investors, not so much. For our agency, that was our best way of getting clients, and for a long time, I was getting a 15-times return on every single dollar I put into Facebook. That is a pretty good return.
Now, sometime in the middle of this year, those ads started to decline in performance and they started to decline in performance pretty darn rapidly. We went from getting many leads at a relatively low cost to getting very few leads at a relatively high cost. Every number that I care about went in the wrong direction and I spent many months spinning my wheels about this problem.
Is it the ad? We change the ads a bunch.
Is it the targeting? We changed the targeting a bunch. [10:02.3]
Oh, I’ve got to try a different opt-in offer. I offered a calculator and a spreadsheet and the blah-di-blah.
We did a lot of different stuff trying to say, How do I fix the problem? The problem is the ads don't work, so the solution is going to be to fix the ads. The problem here, the issue, is that the ads not working was the proximal, the proximal cause of my business woes. The proximal cause of my business woes. But the distal cause was a shift in how Facebook worked.
See, the shift that was happening was that there is a move in the advertising industry away from cookie-based behavioral tracking, and all you got to understand about that is Facebook relied on cookie-based behavioral tracking to serve my ads to the right investors. [11:08.5]
When that underlying process broke, the Facebook algorithm’s ability to match my ads to the right investors flew out the window, and so no matter how many ads I tested, opt-in offers I tried, targeting methods I experimented with, even if I got an incremental improvement on my current performance, none of those solutions addressed the root cause. In fact, my ultimate conclusion was that I am unable to the root cause, and so now we are looking at other advertising channels. We are replacing Facebook rather than fixing it. [12:02.5]
The reason I bring this up is not because I want you to jump off Facebook, and if Facebook is working for you, amazing, keep doing it. What I'm saying here is the mindset of understanding that the root cause of your problems is often not the closest and most obvious cause of that problem is critical to building a successful business, building a successful real estate investment empire, building successful marriages and relationships with your children. This mindset is critical to living an effective life, and if you are like me, you want to live in effect.
I hope that makes sense. I hope this was useful, as always. Hey, by the way, did you know I have a YouTube channel? I have been posting a bunch of stuff there. I've been working really hard on it. I would love for you to check it out. You can just go on YouTube and type in AdWords Nerds, and you will find it. I would love for you to check it out. Like some of the videos. Subscribe if you like it. I'm posting all sorts of stuff there. I would love for you to visit and let me know what you think. [13:09.7]
As always, this is Daniel Barrett from AdWordsNerds.com signing off, and I will talk next week. Cheers.
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