Alex Morales: There's one word and it's authenticity, Homeowners will not trust a business promoting AI ads over a business that's promoting like I wouldn't say hard, but easy to make content compared to AI, I would say. the reason why is because homeowners want to buy from someone they trust, not from an AI.
Eric Mollerup: in which cases can ads fail? what are some major things to avoid that if you saw, you would be you'd be shocked. You'd be like, guys, we gotta redo this immediately. Welcome back to the Builder Backstage podcast, everyone. I have a very special guest on here with us today. A little bit different, Alex Morales, not a home builder, but definitely someone who has a lot to say about the industry. Welcome, Alex.
Alex Morales: Thank you, thank you for having me.
Eric Mollerup: Absolutely. Alex, we'll get right into it. I guess, you know, tell me a little bit about what you do. Tell the audience about what you do, kind of your background and how you're even in this industry to begin with.
Alex Morales: Yeah, so for the past three years I've been basically running ads for different types of construction businesses. We started in the roofing kind of industry and we kind of expanded into remodeling. And now we also have ads running for ADU companies. That's kind of our bread and butter is contractors, general contractors, but that have or go after those luxury high-ticket projects. So we've kind of have a unique angle when it comes to how to run ads, how to build out funnels, how to really convert leads from social media. for those high ticket luxury builders and that's kind of the the space that I've been in for the past three years.
Eric Mollerup: I love it. Yeah. There's a lot of controversy, call it. It's a big topic. Do ads work? Do ads not work? Do they work for high-end luxury projects? Whether it's a five hundred thousand dollar ADU, a million dollar remodel, or even a five million dollar custom home. we're gonna get into that. We're gonna get into all the nitty gritty. Before we do that, what you know what what specifically is your take in a in a simple sentence. Do ads work? Do ads not work? Clearly you're doing something right for the guys that you work with.
Alex Morales: Yeah, I think just a basic principle of of business and marketing is if you're not advertising, you're not growing. So I think regardless of what niche, what business you do, if you're not advertising your business through some sort of paid channel, like you're not investing in the business or growing it. in that sense, right? So in that in that sense, I think ads across the board work. Do ads work for contractors is a different question. I think that simple answer to that question is yes, of course, if you have a brand that's established or built out. or that you're trying to grow on social media instead of running an ad with no pictures on your profile or just AI like images, right? So I think ads do convert if you have somewhat of a brand at least that homeowners can kind of review, see if they trust or not. but I think basic principle of business if you're not advertising, you're really growing. So ads you have to be investing in across the board.
Eric Mollerup: Tell me, tell me if I'm just starting out, I mean, let's say I'm a general contractor and let's say I I built a few beautiful projects, beautiful homes. If I don't really have a brand, if I don't really have a presence, maybe my website is bad, should I still be running ads or should I get some foundations in place first?
Alex Morales: Are we just talking like meta ads? Because I'll give an example, right? We have two neighbors on my on my block that they are brand new, like general contractors, they've probably been in business for three to six months. So brand new. They have a website, they have a couple of photos on their Instagram, but right now they're not running any Instagram or Facebook ads. Why? Because they're running ads on Angie's list and Yelp, which are the most two common channels people are running ads and why? Because they're easy. That's where everyone goes, they just post a couple of photos, have a couple of reviews. And they rely on those channels because the channels that they're investing in tend to work pretty well for them. For social media, it's like kind of the opposite. You need to have an established brand. You need to look trustworthy at homeowners if you want it to convert because it's a different channel, right? There's innate trust built in with homeowners going to Yelp and Angie's list and other platforms like that, whereas social media is a whole different kind of beast, right? You need your content, your your kind of the stuff you're posting to represent your company, represent the quality of the work that you want to be promoting, right? So A lot of the times companies or beginner contractors don't have the time or effort they want to put into the brand building aspect of marketing. But I think that's the the foundation that any builder or contractor needs to have if they want to be successful on meta, which is Facebook and Instagram ad specifically.
Eric Mollerup: Yeah, and and we'll get into the more of the technical side in a bit here. You know, what kind of ads to run, how much you should be spending, you know, video versus image, all of that we'll talk about. I know you have a lot to say. But Alex, help me help me break the belief that ads don't work. Because I think it's one thing There's a lot of builders out there who've maybe tried. They've worked with an agency or company, or maybe they've tried on their own. They've boosted a few posts. It didn't go anywhere. So help me with that belief for everyone listening. And maybe help me with some confidence. Let's say I've never I've never tried this and I'm a builder. Why, why should I trust you, Alex?
Alex Morales: Well, this is hard because I I can't tell you're trying to tell me to sell you on ads or sell on working with me, because the majority of companies in the construction space, this is why agencies have a bad rap. Probably one in three companies in the construction space has worked with an agency before and has had a bad experience of people over promising with the typical like agencies that say, like, we'll get you 90 leads in 30 days or you don't pay, stuff like that, right? So very scammy association with agencies in general. And agencies have been the main mechanism that most companies have used to get leads from social media. But what I see really a lot right now, especially with younger general contractors, is they're all doing marketing on social media, they're all running ads on social media and they're doing it themselves. They're not doing it with agencies. So the fact that smaller companies can beat you on this platform and they're doing it themselves and show you that yes, ads are working. It's helping younger companies scale faster because they're breaking into a new channel. So that's kind of my selling pitch is there's people younger than you. With less experience beating you because they've mastered that channel and they've adjusted their sales process to that channel. Whereas most contractors today think that they can still close 70% like just through referrals, but when you run social media ads, it might be like a smaller closing percentage, right? Industry standards, 15 to 20% if you're lucky and good and on social media like leads and channels. So like the best companies are doing it and they've mastered it, which is why they're beating you. So that's kind of my sales page of yes, ads work. You just have to either have the brand ready to start running ads from or adjust your sales process to get the best returns on investment. Long winded pitch, but that's how I kind of see it. Younger guys are beating older guys and it's all because of social media marketing. So they have to be doing something right.
Eric Mollerup: Yeah, and what you're saying, it just it w it's proved by the fact that you can have a company who has been in business for ten years, twenty years, fifty years, but and and they build outstanding homes. Maybe, you know, they remodel outstanding homes, they build beautiful homes. But they don't really get any kind of online attention. They wait on a on a referral to come to them, which is fine. Referrals are great. It means you're doing something right. But then you can have another company who's been in business for two years or five years, but from the very beginning they pushed social media, they got on camera, they filmed videos, and those guys are where all of the attention is going to because everyone knows who they are. Nobody knows who Bob Jones is when you know Bob is nowhere to be found online, on Google, on Meta, on Instagram, all these all these channels, right? I think that's that's important is is realizing that. And I do think what you said about, you know, not to discourage anyone, but the younger generation definitely has an edge. But but why? Like why does tell me why does the younger generation of contractors and builders have an edge? Is it is there a specific reason for that?
Alex Morales: I think it's just they did the put in the effort to fail faster on that channel. Like most contractors like like we've talked about or experienced work with one agency, it didn't work for them and they gave up. They went to a different channel, right? Whereas these guys they kind of stuck through content, they struck through organic marketing, and they kind of just did it for the fun of doing it and they started loving it and incorporated into their brand. So I think that's the difference is they just chose to double down on the channel and learn from it. because once they got their first sale from social media, they're like, this works. So then once they got their first like proof of concept, let's use that word, then they just doubled down on it and got better at it. And those are the guys that are crushing right now and they're in their twenty six, twenty sevens, competing against guys like four times their age in the industry.
Eric Mollerup: Yeah. Yeah, absolutely. Alex, let's talk let's let's talk technical things. Now let let's talk okay, I have some homes I've built. I don't really have a a large presence. Yeah, I have a couple videos online. I have some nice images. My website is okay, but it's not amazing. I have a thousand dollars to spend. Is a thousand dollars enough on ads? Yes or no?
Alex Morales: No, and it's a very easy answer why. I talk about this a lot. The bigger companies that have big budgets that spend the typical three to five percent on their revenue into back into marketing, those companies are moving from Google and like those paid channels like Yelp, Angelus, and they're bringing those budgets to Meta, to Instagram and Facebook. So you have to think about when you're in the market against other big builders, right? And they're all out spending you, let's just say a hundred to one. No one's saying it's not worth it to invest a thousand dollars, but we're just saying you can probably find a better return on investment on a different platform that doesn't require you to have as much of a brand built up. Why? Because the companies that are also competing in that same market with you running ads have more videos, have better brands, have bigger followings. So I don't think you're necessarily going to win on that channel compared to those guys bringing all their money into that channel where you might get better returns on like House or Yelp or those smaller platforms that are more niche and local.
Eric Mollerup: So for for for those that don't know a whole lot about Google ads versus meta ads, what's the main difference and why are some of these larger builders and contractors shifting from Google to meta?
Alex Morales: So question number one difference between Google and Meta. Google is a platform that's more search or intent based, which means let's say I I'm looking for a custom home builder and I go to Google and search up custom home builder near me. That's search based. So you're getting a lead that's inquiring about your service, right? And then just ranks you on the top like three circ search ranks if you're like spending a lot of money. If you're not, you're probably like tenth, ten to one in the in that range. Whereas meta ads, what you're doing is more direct to response. So you're sending an ad out into the meta universe and you're trying to get a cold home buyer or someone that's interested in in buying a custom home to get into your funnel. Not convert, but maybe get them an appointment, get them a free consultation, take the initial action of like your sales process, right? So the difference is Google is very easy because you're trying to find people that are active looking for your service. Whereas meta requires a little more creativity to get that person into your ecosystem or funnel. And it's very I would say rely on the c the content you're putting out, but more important, the creative. Right? Is a creative a simple image ad that's AI generated? Or is it a video of the founder talking about why they built their business, who they serve, and what why they're passionate about building custom homes in that market? Right. So there's a two different types of marketing where Meta, which is our department, requires a lot more creativity and strategy when it comes to the ads that want to actually book appointments and and actual projects for these types of businesses.
Eric Mollerup: Exactly. And I I guess, you know, not all leads are treated the same. Like a lead from Google, like you just said, they're actively in the market, they're searching. So I mean theoretically it's a higher intent lead, yes, but why would someone then, you know, look to Meta where they can put images or videos if Google is quote unquote higher intent? Don't we all want higher intent leads?
Alex Morales: The thing I'll say about Google is it's kind of very similar to other platforms where that lead is not custom to you, right? The same way you're that lead is gonna fill out 12 other ads they see on Meta, they're gonna also fill out three other Google ads that they see for other types of businesses in your market. So I wouldn't necessarily say it's higher intent. I think the the actual what's the word I'm looking for? The benefit of running social media ads is the give the customer more time to go through your social media to look at your past projects, look at your customer testimonials. So from social media ads, you actually have a better ability to kind of retarget them with other pieces of content, other long form video assets, or like direct them to their website. So I think with social media ads, the benefit of running them is you can trap them in your ecosystem, fill them with more content, whereas Google, they just rely on like a simple price. They call you, you give them a price, and then the price determines the rest, right? So I think that's the main difference where social media gives the advantage to Kind of just nurture them, right? Build trust with them over a long period of time through the content you have. whereas Google is just kind of more price based shopping, I would say.
Eric Mollerup: Yeah, and it's it's it's a click, right? And there's no like you're you're paying for a click and like you said, I mean we're not we're we're selling luxury homes or luxury remodels or luxury ADUs. And the this person isn't buying a a plumbing service where you're fixing their toilet, right? And so I'd say yeah, like I agree with you a hundred percent. The the trust factor with Google can't really be built up the same way as it can, like you said, by indoctrinating them with content and showing them who you are and what you do and why you're different. And that kind of leads me to my next point, which is with meta ads. We we we say this a lot over here, but on Google, if you don't capture that lead, that's it. Like they move on to the next guy. With Meta, as you said, you can continuously show ads to them. You can we call it retarget them with other ads. And I wanna ask you, how how do you How do you choose should we run image ads or should we run video ads? We get asked this so much, and I think there's so much debate on this, and we'll talk about how AI is influencing this as well. What's your take, Alex?
Alex Morales: it's a it's a two-parted question. I'll say the first part, I think always video ads perform better than image ads. So we all of our our ads for our clients are all videos. We we barely touch image ads. we do if we have to. but the easiest way that we can justify that or say why we do that is because if you want to be a luxury builder in your market, you should be putting out luxury type of ads that promote you as the authority at least, or showcase your projects at a high quality, right? So That's why image ads can only do your business so much justice, whereas video ads, you have more creativity to kind of represent your company the way you want to on social media. The key word there is it has to be creative though. And a lot of times people don't want to put in that extra effort, you know? Whether they're running their ads themselves or even working with agencies that don't want to do that for them either. that's like the one drawback I'm seeing with a lot of newer companies coming to the space. we're already seeing all of our meta-ad campaigns, all of our meta-ads. that we're seeing from different contractors running AI ads and it it hurts my brain because on the one hand it's like, damn, like now anyone can get into the ad space and run basic trash ads like this. But on the other hand, it's like, now it's so much easier to stand out with the ads that we film for our clients because the majority of people are doing this. You know, so that's kind of a double edged sword of if you're a little more creative, you can win with ads now. but the bad part is that now everyone can run ads with a thousand dollars, let's say But it's not really doing your brand just if it's running that type of creative, you know? So key word is creativity with video ads always helps your brand convert more leads and more projects than basic image ads will ever.
Eric Mollerup: Alex, I'm shocked by the amount of AI, we call it AI slop that's being put out there.
Alex Morales: It hurts. It hurts my hand.
Eric Mollerup: And like you said, the barrier to end the you know, the barrier to entry is so low that, you know, a a 10 year old, if they wanted to, could call themselves a home builder and start running some some AI generated ad v ads. And not just AI generated images, but now you can do AI generated videos. That is something that I want to ask you about. How do you how do you create a good video ad? And how like why do you need to manually film an ad when I can go to any AI platform and say, Hi, I build X, Y, and Z, make me a video of a finished home.
Alex Morales: There's one word and it's authenticity, right? Homeowners will not trust a business promoting AI ads over a business that's promoting like I wouldn't say hard, but easy to make content compared to AI, I would say. the reason why is because homeowners want to buy from someone they trust, not from an AI. So a lot of companies we're seeing right now, they have like the the new AI logo or person of their company is now like the face of their all their content. And I see those and like, that actually hurts your brand in long term because no one's gonna trust that. Whereas they will trust the whatever your the Bob Jones guy, the original guy you named at the beginning of this, just random guy example. if he makes good content, talks about testimonials he has with other clients, showcases his projects, that's more authentic and trustworthy than any AI will be. and that's something that we're seeing people kind of go the opposite direction, turning to AI instead of doubling down on just being and making authentic content.
Eric Mollerup: With with the AI, would you say that there's any place for it? Would you say that if you know, and I I I think that it shouldn't be an exc like time should not be an excuse when it comes to marketing, because if you are spending on marketing, you may as well spend on the right thing. If I don't really have time and I don't really want to get on camera, I'm shy, I don't want to I just I just I wanna stay private. Is there a time and a place where AI can work?
Alex Morales: I think some AI image ads that I've seen would convert me. So I think there is a place for AI image ads. I wouldn't say for video. I'll give you an example, right? In video, we work with some real estate partners and agencies that they do a lot of AI like showcasing a build from the ground up, just like AI, right? Little edits like that do make sense to have in ads or in type in pieces of content to let like people's imagination kind of show them what they can build. But using it in ads to like sell a transformation or complete a project is a big no no. That's like misrepresenting your company completely. So there is a place for it, but there's also like red lines, I think, of when you should use AI. And we're starting to see those lines blur a little bit, especially in the real estate space. And I think it's gonna happen in the construction space as well, with people over like AI editing their like houses or their showcasings and then it's like completely different than when someone walks in person and sees it. So That's the one thing I don't want to see happen in the construction space. But unfortunately, trends tend to move different niches. So don't be surprised if in the next couple months we see people like using AI to showcase completely ridiculous builds and trying to pass them off as kind of their completed projects. Big no-no on our part, we don't do that, but we have tested AI with like little videos of like an ADU going from like semi-uh built to like built, but just for an ad purpose. but last thing I'll see here is. Majority of our ads in general just showcase completed projects. That's the the key of why our ads convert so well is because we sell completed projects. We only film out completed projects. So we have like complete proof and authority behind us of we're just showcasing a little tour video of our completed project and that's how we bring a lot of projects through our different type of clients.
Eric Mollerup: Moral of the story, don't just rely on AI. If you're going to use AI, do it in in discretion with a grain of salt and definitely don't just do AI. Don't just put out AI slop as we called it already.
Alex Morales: And an easy way to think about it is whatever you see other people doing, do the opposite. Like don't do what other people do. Don't copy that 'cause you wanna like separate yourself and your company, right? So don't just try to copy AI stuff you're seeing other people do 'cause it's not gonna separate you from different types of companies in your market.
Eric Mollerup: Alex, something you talk about a lot in your own content for your own company is not just filming a completed project, but somebody being you know, a real human being in that video, ideally the owner of the company or somebody who's very much front-facing. Is it important for the owner to get on camera?
Alex Morales: So it varies across different niches, but generally you want your best salesperson or the person that hops on that initial sales discovery call, whatever you call it, with that client or customer to be in the ad. The reason why is if I see the ad, right, and I go through the opt-in form or I go to your landing page and I complete and book an appointment, it makes more sense to have the person in your ad be the actual person hopping on the sales call. Why? Because you have instant trust and authority. you're the guy from the ad. Easy icebreaker to start the conversation. So a lot of the times we've tested this with either having the owner or the best salesperson in it. But the best time we see more appointments actually being booked and actually turning into projects is when the person in the ad is that one on the first initial sales call. So that's key. It doesn't have to be the owner all the time, but the best salesperson that can describe a project the best should be the one in the ad.
Eric Mollerup: And that's because of trust and just remembering, hey, I saw this person in the ad, now I'm on the phone with them. And I guess also almost as if they're a bit of a local celebrity, right? You and I, we both
Alex Morales: Yeah.
Eric Mollerup: use that term. You're a local celebrity. Everyone knows who you are. They they see your face every time they go on their cell phone. This goes back to we were talking about Google versus Meta. That's something you simply cannot do with Google. Right.
Alex Morales: Hundred percent, yeah.
Eric Mollerup: Yeah. if I know that if I wanted to Build a a a home or fully renovate my existing home. And I continuously see this one guy, he keeps popping up. He keeps telling me about who he is. I keep seeing his face. Maybe I should reach out to him. So do you see that your clients get some leads that are not just from the ads specifically? Do you sometimes see that people will contact
Alex Morales: yeah.
Eric Mollerup: them indirectly from the ads?
Alex Morales: So the benefit of building a brand on social media, so organic marketing and multiplying that with ads is you grow a following, right? And what we've seen, we talked to a lot of different marketing agents about this, especially in the LA market. Most of the time for luxury builders, if a lead comes from social media or organically, they tend to be following you for five months before they reach out. So that's just like purely organic referrals, if you will, or organic leads. What we see on top of that is from paid ads, that s sales cycle tends to be about the same, if not more. The reason why is because they don't have those like five months of building trust with you. Right. So to answer your question, I think we do see a lot of the times if you bring a lead from social media or from ads, they might not convert right away, but they're gonna join your following. Right. And from your following, you continue to post your work, continue to post testimonials, and maybe three months down the line, they're gonna convert again and then maybe move forward with that project. So that's the game of social media is a lot of the times you're organic leads or even ad leads will not convert right away. But the idea of putting out more organic content is you can keep hitting them with more reasons to trust you, more reasons to love your brand and love your work, and then kind of come back and book that reconnotation or that move that project forward. Right. So that's the benefit of ads and content together is it's a system that works in your favor and brings momentum to your business, helps you grow. Whereas if you just focus on one or the other, it's kind of just stuck on that trap of like organic referrals, if you will, if that makes sense.
Eric Mollerup: Yeah, they they go hand in hand, right? They go hand and it's it's one to many, as you're
Alex Morales: Yeah.
Eric Mollerup: saying, w with the content, over time you build up authority and and a brand. And while you're sleeping, there's people out there who are interested in your services that are seeing you on online, right? And something you know, you said earlier how how you know there's no reason for ads not to work. If you have the proper system in place and the proper team behind you, whether that's you and your own team or whether that's a company that you hire, in what in which cases can ads fail? I know there's a lot of ways to answer this question, but what are some major things to avoid that if you saw, you would be you'd be shocked. You'd be like, guys, we gotta we gotta redo this immediately.
Alex Morales: That's a that's a good question. I would say I'm gonna say that question for myself too. there's a lot of different reasons to be honest. Let's just give a couple. Number one is your company didn't do enough market research in your local market to understand like the types of projects you want to go after, the marketing you're required to go after them. So a great example of that is running like promotion or discount offers in a market that doesn't make sense to do that. Or running specific offers or creatives in markets that don't make sense. So for example, we work a lot of ADU companies. Some cities, such as say LA, for example, have different ADU regulations and laws. So if I showcase like a twelve hundred square foot project from Long Beach and Lakewood and I try running that in a different market, not what do you call it? Not permit friendly to those types of projects and builds, then there's like a misalignment with the offer and the creative running and the market. Right. So a lot of the times we see a lot of newer companies, especially like They have overpromises that they can't deliver on. and the reason why is because they didn't do market research in the first place to understand what works and doesn't work. A key part of there, too, is not being different from other companies. A lot of times, if you look at every real estate video, what do they all have in common? The text in the back, like it's the same formats, right? And a lot of times in the ad space, we see the same thing: people copying the same script, copying the same editing from other videos. And again, it doesn't separate you from everything else that people are seeing. So two instant things that can affect your account is not doing market research and not doing enough effort on the creative that separates your business. Those are two basic ones. Other ones are like you get your meta ad account banned, you know, and the agency has their hands tied because like it's all up in meta hands now you can't really do much at that point besides create another ad account or like do some back end things. so technical things but most of the time it's just creative and market research. If you get those two things right you should get good results with meta. If you Put your card down and let the ads run. Don't give up the first week, the first two weeks, the first month. Like let the ads work. Our clients see results minimum, like the first seven days. Initially, it's like the first two or three days our ads start like converting pretty well. But if they don't convert for you those cup first couple of two weeks, like double down on them. Don't give up because they will work. but you have to kind of be consistent and disciplined about ads in any other case of marketing, the same thing.
Eric Mollerup: Yeah, and that and that's something that you guys are known for, right? You're known for is taking that time with everyone that you work with to actually do market research to actually figure out what will people respond to. Because a builder in LA, for example, needs a very different message than a builder in Miami, right? Because it's an entirely different landscape. For a you know, for let's say there's a a a company out there. who wants to do this all in-house, they should ideally have a good understanding of their own market. Would you still recommend that they still do some market research and how, from a technical standpoint, can they find out what their competitors are doing?
Alex Morales: Hmm. So that's a good question. There's two parts. So the first thing you do to do market research is you go to Facebook Ads Library, which is basically the the center console, if you will. You can see everyone running ads. You can search them up by business even if you wanted to. So you want to like search up two or three competitors. We do a minimum of five competitors in your market to see if if they're running ads, what type of ads they're running, more specifically, what funnels they're running. So funnels are the most important part. Because it's how you actually qualify in the lead instead of just capturing their phone number and email and then, they're a magic lead now. So we actually focus on qualifying leads. so the second part of that is how are other companies qualifying leads and do we want to do the same approach or do we want to do something different? Right. So instead of like running a DM ad, which is like DM us to wear this and doing sales over DMs, which doesn't make sense for contractors, thinking about the funnel and looking at what works with other companies should be your first step. Step number two is looking at not only the people in your market. But find the biggest advertiser, biggest company you know spending in your niche. So for example, when we got into the ADU market, we went to find the biggest California company that built ADUs statewide. Not just in the city, but statewide because they're spending massive amounts of money on ads. So I wanted to go pull data from like, okay, what are their ads? What are the funnels they're running? They were doing like webinars, they were doing lead forms, they're doing like 20 different funnels because they're spending six figures a month on ads. So I mentioned that a little long story short. Because you want to find the biggest company spending on ads and kind of not copy, but build off of what works. So you don't want to build something brand new and test it. If you can go pull something that's proven, make it better, and then like start off with momentum instead of start off guessing. So that's kind of our approach to market research, which has helped us very well and helped our clients get good results because we go after bigger companies. So we wanna go see who's spending the most and then build off of that. That's what has made our campaign successful.
Eric Mollerup: It's such a simple strategy, but it makes sense. And it's I love how simple it is because anybody can do it. Like you said, all ads are public on on Facebook, Facebook ads library. So if you know, you know, you have a builder down the road from you that you know is running ads and you want to see what they're doing, it's easy. You can go and check for yourself. Obviously, you don't copy them exactly, but you can see what they're doing at least. That'll give you an idea of what you should be doing, right? Yeah.
Alex Morales: Hundred percent, yeah.
Eric Mollerup: Alex, one question that I get asked weekly, I would say, and I'm sure you get asked as well, is what are the most important metrics? Let's say we're now running ads. Okay, I launched some ads, I got on camera, I listened to Alex and Eric, I did what they told me. Now, how do I know if the ads are working? Right? How do I know if anything is happening? Maybe I'm getting a few leads coming in. What kind of numbers and what kind of KPIs should I be looking at?
Alex Morales: This is my this is my favorite question because the main way agencies sell you is, especially newer agencies, is we get you the lowest cost per lead and we get you a hundred leads in X amount of days. That's the main offer that every company construction contractors have heard before. The key that you want to think about is actually reverse engineering your marketing from the cost acquire customer. That's the basic core KPI that you need to know if you want to be successful with any form of marketing. So that's how we think about it. Your cost to acquired customer might take you three months to figure out if you're a luxury builder. Cause that might take you, that might take you 90 days to close a deal you get from ads, right? So you don't really know that number off the bat. What you can track though is after your cost to acquire customer, how much did it cost you to send out a bid? How much did it cost you to send or get a qualified appointment? How much did it cost you to get a lead? More importantly, in in between there is a cost per qualified opportunity. That's when we hopped on a call hopped on a call with you, said that we're interested. You give them their price and they said, Okay, we're gonna think about it, something like that, right? So you don't care about cost per lead, that's the lowest KPI on the on the scale. You kind of want to reverse engineer from the numbers I just said and from those key KPIs, because that's what actually matters. And once you know your cost acquired customer, even your cost per bid, I would say start ramping up your your ad spend, because then you can reverse engineer everything around that number and bringing that number down, which will make everything across the board more successful and scale faster.
Eric Mollerup: Alex, you you need you need to say it louder because there are a lot of companies that need to hear this because and it's sad unfortunately, but there's all these these offers that you just mentioned we'll get you 90 leads in 10 days guaranteed, right? And it just sets the wrong expectation. And again, it's a volume play.
Alex Morales: Yeah, yeah.
Eric Mollerup: Tell me why 90 leads are better than one lead in you know, 30 days, but that lead ends up closing, right? Who who cares how many leads you got? It's a vanity metric. Now, that being said, more leads give you more at bats, right? They do give you more, you know, from a number standpoint, more chances to to get in the reps. Let's say you're brand new to ads. Maybe it's a good thing that you have more leads at first. You can have more conversations, but I 100% agree with you that that's not what you should be looking at. You should be looking at your Cost to acquire a customer, or your cost per closed deal, or your cost per signed contract, those are all sort of the same thing at the end of the day. and leading off of that, if my cost per lead is in my mind way too high, should I start changing things? Should I start adjusting? Like I, you know, I know it's hard to say because every market is different, but let's say I look at my ad account and I'm freaking out because my lead cost is ridiculous. What what do I do? You know, what what do I do?
Alex Morales: So it really depends on what you think is too high. Like you said, it depends on every niche in market. What you want to think about just in terms of like tactically and data analytically, whatever the word is, you want to at least get 30 minimum conversions from your ads a month. That's minimum. Just to give meta enough information to help you grow and get bigger returns on investment from your ad spend. So if you don't get 30 conversions in that month with whatever ad spend you're putting, I I I want to be careful how I say that because if you spend like a thousand and you expect like thirty high quality leads, it probably's not the budget, but let's say you put two thousand, right? And you get thirty leads. Well that puts your cost plead for around what? I can't do math.
Eric Mollerup: We're we're marketers. We should
Alex Morales: Yeah, not gonna math. Two hundred. So that's around a $6 lead, which is which is not what you expect in the construction space. But regardless, that's like the tactical way I say I can say it. If you don't get 30 conversions the first month of running your campaign with a minimum of a thousand, let's just say that, then there is an issue with your creatives or with your funnel, which is making less people convert. Because if your creative is good and your funnel is good, you should get a minimum of 30. That's like meta's recommended. Like minimum bar is 30 conversions a month. 30 days to get. That's
Eric Mollerup: This this is according to meta directly.
Alex Morales: according to like meta and like how they they help your campaigns grow. That's like learn learning limited, right? You need to get 30 conversions. what you consider high cost plead it it varies, but if you have a high cost plead, simple answer is more creatives, better funnel. those are the only two things you need to change. Everything else should be set up correctly. If if not, I would talk to whoever is running it. But creative is normally the the main issue. with accounts that have high cost per per leads. It means your message or your ad is not resonating with the market. So you need to put out more videos, more creatives, more ads that can hit a different angle, hit a different pain point that will actually convert them into your funnel, into your ecosystem and into learning more about your brand or business.
Eric Mollerup: Yeah, absolutely. Guys, if you are if you are selling a custom home for two point five million dollars, I mean even one point five million dollars, right? Call it even a million dollars. Let's say a one million dollar custom home, which in many markets these days is on the lower end in in the United States. Why should it matter if you had to spend five grand, ten grand to acquire that? contract, right? At the end of the day, we we want to look at things from a ROI perspective and not so much from just the numbers right in front of you, right? We need to look at things as a whole. And I think Alex, that's exactly what you're saying here is don't just look at the metrics that are immediately in front of your face. You need to look at the full picture. You need to look at the story. The numbers tell the story, but don't just look at what's in your ad account. Look at what's happening after and outside of the ad account. What kind of conversations are your sales reps having? you know, the leads themselves, when you're meeting them on site, for example, what how are the conversations there? Eventually, when you close that contract, right, look at how much you had to spend to acquire that contract. And if it makes sense for you, everyone has different margins, but if it makes sense for you, why not just replicate it? Why not double your ad spend? Right. So Alex, I a hundred percent agree with you. I want to
Alex Morales: I'll add one more thing to that, because you you brought up sales process. Something that we I touched on like very early on the conversation was there's a big misconception we see a lot of contractors, especially luxury builders have with ads, is they expect the leads to close the same percentage as the organic referrals. So most contractors, general contractors, they close at 60 to 75% organic referral. Great closing rate, right? Why? 'Cause they're referrals. They they know someone that trusts you enough to to recommend you, right? With Meta ads, we see those conversions being around 15 to 20 percent. If you're 25%, like you're freaking killing it. but a lot of the times we've seen a lot of successful contractors, they've had to adjust their sales process slightly to close more meta leads. What that means, they may have to offer free gutters if they're roofers to push that sale over the door. They might have to offer like more urgency in their contracts. Hey, you have 40 days instead of like 60 days to approve this before moving forward, right? So A lot of contractors that we've worked with have had to adjust their sales process. a little different than just closing organically, but that's what makes contractors, even business owners, entrepreneurs better at their craft and sales is by adjusting their sales process to match the lead quality. Right. It means it doesn't mean dropping your price. It just means what else you have to offer to add urgency into the sale. that's what we see working with some contractors running a lot of meta ads right now.
Eric Mollerup: Great point, yeah, great point. And Alex, what you said earlier about, and I'll ask you this question again in a moment, more about the types of ads we should run or that builders should run, but you don't want to sound cheap on your ads. You don't want to be giving discounts, quote unquote. I frankly don't know how you can discount a high-end home, right? But I'm sure you could come up with something. You want to appeal to the types of clients that you actually want to work with, which means your ad has to reflect that. And I think what you said earlier about the messaging and the offer of the ad, if you can just clarify for me again, I don't, I don't want to dis I'm a builder. I don't want
Alex Morales: Yeah, yeah.
Eric Mollerup: to appear cheap. I don't want to appear like we're giving free things, right? Free this, free that. What is an offer that I could run that is still positioning me as The go-to expert and is still an attractive enough offer where we can get people in the door, something that will help us stand out.
Alex Morales: It is for a custom home builder specifically, or in general.
Eric Mollerup: Yeah, specifically for for home builders. We can even call it like full full home remodelers as well, right? Large projects we're talking about.
Alex Morales: So the basic offers that work in that sense is a simple let's just say new build connotation or build connotation. We like to say design and build connotation doesn't mean free design, doesn't mean you're getting design just that's like the one term, right? It's a phrase, design and build to make your company seem like you do design and build, not just the build part, right? 'Cause a lot of luxury builders, they have like the architect, they have the engineers, and they have the the builder, but you want to seem like you're the all-in-one team. So that simple phrase helps you stand out. But a lot of times the best ads we call them authority ads and we call them we have three winning ads authority ads, tour ads, and then testimonial ads. Those are the three types of videos and ads or creatives you need to be running. I'll kind of touch on each one. Authority is basically saying, hey, we are the experts in your market and we have completed X amount of projects. It's pretty much that simple. If you want your free consultation, click the link below, schedule your free consultation with XYZ builders today. So authority is meant to position You as an expert by touching on how many projects you've completed in your market. So that's the authority one. The tour ads are just tours of your completed projects. They can be self-guided tours with this the sales guy, the homeowner, or they can be the actual owner of the business. And testimonial ads are always the owner saying, Hey, we worked with XYZ Builder and had a great experience working with them. Here's the completed project. That's kind of our framework for winning ads. Anything outside of that messaging, feel free to test. But once you get out of that like messaging, you're kind of leaning on other incentives to get people to work with you. And in most cases, most contractors and builders tend to lean on like discounts, promotions, the the basic like we're only taking five other homeowners in the next month. Like all of that salesy, pushy language doesn't really resonate for luxury builds. So that's why we've kind of mastered those three things that we do, which is testimonial authority, and tour ads, and that kind of works with us to keep that messaging high quality, kind of top tier branded, make them seem like more luxury builders instead of the people that can just do anything and everything for the cheapest price.
Eric Mollerup: Absolutely, absolutely. Guys, we're we're not trying to appeal to everyone, right? We're trying to appeal to the tiny pocket of people that we actually want to work with. So Alex, you're 100% correct. I'd say many you know, many builders out there would agree with you. And the way you described it is perfect. It's I don't want to say it's easy, but it's simple. You need the right framework, but get on camera. You know, get on camera, film some ads, they don't have to be perfect. Should they be filmed professionally? I would I would say so, depending on the types of homes you build. But must they, you know, the the first campaign you launch, does it 100% need to be with a you know $10,000 videographer, full production team? I personally don't think so. Alex, you can tell me your opinion. but I'd say that the most important thing is do it. Get on camera. The rest you can figure out as you go, right?
Alex Morales: So you c you kinda introduced me as being controversial, so I'll make a little controversial statement. All you really need to make a good ad is a three hundred dollar videographer and a a hundred dollar Indian editor. And I'm I say that kind of funny because you're an A and C owner, we have a lot of ANC owners in our network and it's funny we make that comic 'cause it's literally that easy to win, that easy to create good ads. And you need a small team, you can do it with a small budget. All you need to understand is like that enough market research and that understanding of what type of ads need to make. The rest is pretty easy. It doesn't take more than an hour to film four good ads if you're kind of good on your feet and good on camera. Other than that, it's not really complicated. Like you said, it's it's simple, not easy. But there's other people younger than you doing it, doing a lot more of it. So it shouldn't stop you. What I would touch on to your question is in terms of quality, you don't need to have like that $10,000 videographer. I don't I don't think you need that. But You want to have high quality content that makes you seem a little more luxury, a little more of a top-tier contractor versus kind of the people still filming on their iPhones and you can see like the blurry images and stuff. So just think about representing your business the same way if you're going on a TV commercial, right? How much would you spend to make good videos if you're gonna put them on TV? Same thing with social media. If you wanna be a little higher tier luxury brand, you gotta put a little more effort into the actual content and quality you're putting out.
Eric Mollerup: Alex, so much value, so so many great insights. There's a lot of golden nuggets in here that, you know, again, whether you build five million dollar luxury custom homes or five hundred thousand dollar ADUs, these strategies will apply to you. They will work for you. Alex, one last question I have for you. Let's say that you could speak to every builder out there who wanted to get started. with some kind of marketing, with some kind of advertising, what is the immediate thing that they can do? Like what is something that they can do today to just get something done, get something launched, right? What what's one thing that you could give everybody out there?
Alex Morales: Oof, that's a tough question. Something that makes them take instant action. Stumble me on this one.
Eric Mollerup: Good one.
Alex Morales: Because with with ads, it's a little harder, right? Because you need a a couple days to get everything built out. But the one thing I can tell you is go look at your companies in your area. Do simple market research and it takes less you tech less than five minutes. All you need to find is the company's Instagram. Take that Instagram handle, put it in Facebook Guys library, and see who's running ads. If more than two people, two of your competitors in your market are running ads, they're stealing your customers. That should be enough motivation to start doing the basic effort of Okay, I know these guys are running ads, they're investing in it. Why is my company not doing it? Why am I not competing at this level? Right? That's the only question you should think about. And if that doesn't force you to take action, then maybe ads aren't the right fit for you, right? It doesn't mean they never will be. It just means it's not the right time. I think a lot of agencies kind of force you to think about you need to do ads now, you need to ads now. For a lot of contractors, it's honestly not the right time. Because you have the expense of the agency at the expense of the actual ad spend, right? So a lot of the times companies, if they don't get results the first month. They stop and quit with you. So my honest advice is take a step back after doing that market research. If you are willing for the next three months to put X amount of investment and commit to that for the next three months, go ahead, find the agency, find that partner to work with. If you can't, then it's not the right time. That's okay. It's not for everyone. Every company grows at different levels, different scales, and different timelines. So that's kind of a honest advice: don't feel pressured to invest in ads. if it's not the right time, it's not the right time. But If you don't get that motivation from looking at, my competitors are doing it, then there's something else to think about.
Eric Mollerup: Alex, thank you so much. Where can people find you?
Alex Morales: that's a good question, let me pull up my Instagram. My Instagram is alex.morales.lc. My YouTube is in my Instagram and my website as well. We have a lot of free YouTube videos on how we actually set up campaigns. So if you guys want to learn how do it yourself, YouTube video shows how. If not, pleasure speaking. Hope you guys got some value and free game from the the call is actually pretty awesome.
Eric Mollerup: Alex, thank you so much. I'll be sure to link your handles down below. Really great episode. Thanks for being here.
Alex Morales: Pleasure. Thanks for having me.
Eric Mollerup: in which cases can ads fail? what are some major things to avoid that if you saw, you would be you'd be shocked. You'd be like, guys, we gotta redo this immediately. Welcome back to the Builder Backstage podcast, everyone. I have a very special guest on here with us today. A little bit different, Alex Morales, not a home builder, but definitely someone who has a lot to say about the industry. Welcome, Alex.
Alex Morales: Thank you, thank you for having me.
Eric Mollerup: Absolutely. Alex, we'll get right into it. I guess, you know, tell me a little bit about what you do. Tell the audience about what you do, kind of your background and how you're even in this industry to begin with.
Alex Morales: Yeah, so for the past three years I've been basically running ads for different types of construction businesses. We started in the roofing kind of industry and we kind of expanded into remodeling. And now we also have ads running for ADU companies. That's kind of our bread and butter is contractors, general contractors, but that have or go after those luxury high-ticket projects. So we've kind of have a unique angle when it comes to how to run ads, how to build out funnels, how to really convert leads from social media. for those high ticket luxury builders and that's kind of the the space that I've been in for the past three years.
Eric Mollerup: I love it. Yeah. There's a lot of controversy, call it. It's a big topic. Do ads work? Do ads not work? Do they work for high-end luxury projects? Whether it's a five hundred thousand dollar ADU, a million dollar remodel, or even a five million dollar custom home. we're gonna get into that. We're gonna get into all the nitty gritty. Before we do that, what you know what what specifically is your take in a in a simple sentence. Do ads work? Do ads not work? Clearly you're doing something right for the guys that you work with.
Alex Morales: Yeah, I think just a basic principle of of business and marketing is if you're not advertising, you're not growing. So I think regardless of what niche, what business you do, if you're not advertising your business through some sort of paid channel, like you're not investing in the business or growing it. in that sense, right? So in that in that sense, I think ads across the board work. Do ads work for contractors is a different question. I think that simple answer to that question is yes, of course, if you have a brand that's established or built out. or that you're trying to grow on social media instead of running an ad with no pictures on your profile or just AI like images, right? So I think ads do convert if you have somewhat of a brand at least that homeowners can kind of review, see if they trust or not. but I think basic principle of business if you're not advertising, you're really growing. So ads you have to be investing in across the board.
Eric Mollerup: Tell me, tell me if I'm just starting out, I mean, let's say I'm a general contractor and let's say I I built a few beautiful projects, beautiful homes. If I don't really have a brand, if I don't really have a presence, maybe my website is bad, should I still be running ads or should I get some foundations in place first?
Alex Morales: Are we just talking like meta ads? Because I'll give an example, right? We have two neighbors on my on my block that they are brand new, like general contractors, they've probably been in business for three to six months. So brand new. They have a website, they have a couple of photos on their Instagram, but right now they're not running any Instagram or Facebook ads. Why? Because they're running ads on Angie's list and Yelp, which are the most two common channels people are running ads and why? Because they're easy. That's where everyone goes, they just post a couple of photos, have a couple of reviews. And they rely on those channels because the channels that they're investing in tend to work pretty well for them. For social media, it's like kind of the opposite. You need to have an established brand. You need to look trustworthy at homeowners if you want it to convert because it's a different channel, right? There's innate trust built in with homeowners going to Yelp and Angie's list and other platforms like that, whereas social media is a whole different kind of beast, right? You need your content, your your kind of the stuff you're posting to represent your company, represent the quality of the work that you want to be promoting, right? So A lot of the times companies or beginner contractors don't have the time or effort they want to put into the brand building aspect of marketing. But I think that's the the foundation that any builder or contractor needs to have if they want to be successful on meta, which is Facebook and Instagram ad specifically.
Eric Mollerup: Yeah, and and we'll get into the more of the technical side in a bit here. You know, what kind of ads to run, how much you should be spending, you know, video versus image, all of that we'll talk about. I know you have a lot to say. But Alex, help me help me break the belief that ads don't work. Because I think it's one thing There's a lot of builders out there who've maybe tried. They've worked with an agency or company, or maybe they've tried on their own. They've boosted a few posts. It didn't go anywhere. So help me with that belief for everyone listening. And maybe help me with some confidence. Let's say I've never I've never tried this and I'm a builder. Why, why should I trust you, Alex?
Alex Morales: Well, this is hard because I I can't tell you're trying to tell me to sell you on ads or sell on working with me, because the majority of companies in the construction space, this is why agencies have a bad rap. Probably one in three companies in the construction space has worked with an agency before and has had a bad experience of people over promising with the typical like agencies that say, like, we'll get you 90 leads in 30 days or you don't pay, stuff like that, right? So very scammy association with agencies in general. And agencies have been the main mechanism that most companies have used to get leads from social media. But what I see really a lot right now, especially with younger general contractors, is they're all doing marketing on social media, they're all running ads on social media and they're doing it themselves. They're not doing it with agencies. So the fact that smaller companies can beat you on this platform and they're doing it themselves and show you that yes, ads are working. It's helping younger companies scale faster because they're breaking into a new channel. So that's kind of my selling pitch is there's people younger than you. With less experience beating you because they've mastered that channel and they've adjusted their sales process to that channel. Whereas most contractors today think that they can still close 70% like just through referrals, but when you run social media ads, it might be like a smaller closing percentage, right? Industry standards, 15 to 20% if you're lucky and good and on social media like leads and channels. So like the best companies are doing it and they've mastered it, which is why they're beating you. So that's kind of my sales page of yes, ads work. You just have to either have the brand ready to start running ads from or adjust your sales process to get the best returns on investment. Long winded pitch, but that's how I kind of see it. Younger guys are beating older guys and it's all because of social media marketing. So they have to be doing something right.
Eric Mollerup: Yeah, and what you're saying, it just it w it's proved by the fact that you can have a company who has been in business for ten years, twenty years, fifty years, but and and they build outstanding homes. Maybe, you know, they remodel outstanding homes, they build beautiful homes. But they don't really get any kind of online attention. They wait on a on a referral to come to them, which is fine. Referrals are great. It means you're doing something right. But then you can have another company who's been in business for two years or five years, but from the very beginning they pushed social media, they got on camera, they filmed videos, and those guys are where all of the attention is going to because everyone knows who they are. Nobody knows who Bob Jones is when you know Bob is nowhere to be found online, on Google, on Meta, on Instagram, all these all these channels, right? I think that's that's important is is realizing that. And I do think what you said about, you know, not to discourage anyone, but the younger generation definitely has an edge. But but why? Like why does tell me why does the younger generation of contractors and builders have an edge? Is it is there a specific reason for that?
Alex Morales: I think it's just they did the put in the effort to fail faster on that channel. Like most contractors like like we've talked about or experienced work with one agency, it didn't work for them and they gave up. They went to a different channel, right? Whereas these guys they kind of stuck through content, they struck through organic marketing, and they kind of just did it for the fun of doing it and they started loving it and incorporated into their brand. So I think that's the difference is they just chose to double down on the channel and learn from it. because once they got their first sale from social media, they're like, this works. So then once they got their first like proof of concept, let's use that word, then they just doubled down on it and got better at it. And those are the guys that are crushing right now and they're in their twenty six, twenty sevens, competing against guys like four times their age in the industry.
Eric Mollerup: Yeah. Yeah, absolutely. Alex, let's talk let's let's talk technical things. Now let let's talk okay, I have some homes I've built. I don't really have a a large presence. Yeah, I have a couple videos online. I have some nice images. My website is okay, but it's not amazing. I have a thousand dollars to spend. Is a thousand dollars enough on ads? Yes or no?
Alex Morales: No, and it's a very easy answer why. I talk about this a lot. The bigger companies that have big budgets that spend the typical three to five percent on their revenue into back into marketing, those companies are moving from Google and like those paid channels like Yelp, Angelus, and they're bringing those budgets to Meta, to Instagram and Facebook. So you have to think about when you're in the market against other big builders, right? And they're all out spending you, let's just say a hundred to one. No one's saying it's not worth it to invest a thousand dollars, but we're just saying you can probably find a better return on investment on a different platform that doesn't require you to have as much of a brand built up. Why? Because the companies that are also competing in that same market with you running ads have more videos, have better brands, have bigger followings. So I don't think you're necessarily going to win on that channel compared to those guys bringing all their money into that channel where you might get better returns on like House or Yelp or those smaller platforms that are more niche and local.
Eric Mollerup: So for for for those that don't know a whole lot about Google ads versus meta ads, what's the main difference and why are some of these larger builders and contractors shifting from Google to meta?
Alex Morales: So question number one difference between Google and Meta. Google is a platform that's more search or intent based, which means let's say I I'm looking for a custom home builder and I go to Google and search up custom home builder near me. That's search based. So you're getting a lead that's inquiring about your service, right? And then just ranks you on the top like three circ search ranks if you're like spending a lot of money. If you're not, you're probably like tenth, ten to one in the in that range. Whereas meta ads, what you're doing is more direct to response. So you're sending an ad out into the meta universe and you're trying to get a cold home buyer or someone that's interested in in buying a custom home to get into your funnel. Not convert, but maybe get them an appointment, get them a free consultation, take the initial action of like your sales process, right? So the difference is Google is very easy because you're trying to find people that are active looking for your service. Whereas meta requires a little more creativity to get that person into your ecosystem or funnel. And it's very I would say rely on the c the content you're putting out, but more important, the creative. Right? Is a creative a simple image ad that's AI generated? Or is it a video of the founder talking about why they built their business, who they serve, and what why they're passionate about building custom homes in that market? Right. So there's a two different types of marketing where Meta, which is our department, requires a lot more creativity and strategy when it comes to the ads that want to actually book appointments and and actual projects for these types of businesses.
Eric Mollerup: Exactly. And I I guess, you know, not all leads are treated the same. Like a lead from Google, like you just said, they're actively in the market, they're searching. So I mean theoretically it's a higher intent lead, yes, but why would someone then, you know, look to Meta where they can put images or videos if Google is quote unquote higher intent? Don't we all want higher intent leads?
Alex Morales: The thing I'll say about Google is it's kind of very similar to other platforms where that lead is not custom to you, right? The same way you're that lead is gonna fill out 12 other ads they see on Meta, they're gonna also fill out three other Google ads that they see for other types of businesses in your market. So I wouldn't necessarily say it's higher intent. I think the the actual what's the word I'm looking for? The benefit of running social media ads is the give the customer more time to go through your social media to look at your past projects, look at your customer testimonials. So from social media ads, you actually have a better ability to kind of retarget them with other pieces of content, other long form video assets, or like direct them to their website. So I think with social media ads, the benefit of running them is you can trap them in your ecosystem, fill them with more content, whereas Google, they just rely on like a simple price. They call you, you give them a price, and then the price determines the rest, right? So I think that's the main difference where social media gives the advantage to Kind of just nurture them, right? Build trust with them over a long period of time through the content you have. whereas Google is just kind of more price based shopping, I would say.
Eric Mollerup: Yeah, and it's it's it's a click, right? And there's no like you're you're paying for a click and like you said, I mean we're not we're we're selling luxury homes or luxury remodels or luxury ADUs. And the this person isn't buying a a plumbing service where you're fixing their toilet, right? And so I'd say yeah, like I agree with you a hundred percent. The the trust factor with Google can't really be built up the same way as it can, like you said, by indoctrinating them with content and showing them who you are and what you do and why you're different. And that kind of leads me to my next point, which is with meta ads. We we we say this a lot over here, but on Google, if you don't capture that lead, that's it. Like they move on to the next guy. With Meta, as you said, you can continuously show ads to them. You can we call it retarget them with other ads. And I wanna ask you, how how do you How do you choose should we run image ads or should we run video ads? We get asked this so much, and I think there's so much debate on this, and we'll talk about how AI is influencing this as well. What's your take, Alex?
Alex Morales: it's a it's a two-parted question. I'll say the first part, I think always video ads perform better than image ads. So we all of our our ads for our clients are all videos. We we barely touch image ads. we do if we have to. but the easiest way that we can justify that or say why we do that is because if you want to be a luxury builder in your market, you should be putting out luxury type of ads that promote you as the authority at least, or showcase your projects at a high quality, right? So That's why image ads can only do your business so much justice, whereas video ads, you have more creativity to kind of represent your company the way you want to on social media. The key word there is it has to be creative though. And a lot of times people don't want to put in that extra effort, you know? Whether they're running their ads themselves or even working with agencies that don't want to do that for them either. that's like the one drawback I'm seeing with a lot of newer companies coming to the space. we're already seeing all of our meta-ad campaigns, all of our meta-ads. that we're seeing from different contractors running AI ads and it it hurts my brain because on the one hand it's like, damn, like now anyone can get into the ad space and run basic trash ads like this. But on the other hand, it's like, now it's so much easier to stand out with the ads that we film for our clients because the majority of people are doing this. You know, so that's kind of a double edged sword of if you're a little more creative, you can win with ads now. but the bad part is that now everyone can run ads with a thousand dollars, let's say But it's not really doing your brand just if it's running that type of creative, you know? So key word is creativity with video ads always helps your brand convert more leads and more projects than basic image ads will ever.
Eric Mollerup: Alex, I'm shocked by the amount of AI, we call it AI slop that's being put out there.
Alex Morales: It hurts. It hurts my hand.
Eric Mollerup: And like you said, the barrier to end the you know, the barrier to entry is so low that, you know, a a 10 year old, if they wanted to, could call themselves a home builder and start running some some AI generated ad v ads. And not just AI generated images, but now you can do AI generated videos. That is something that I want to ask you about. How do you how do you create a good video ad? And how like why do you need to manually film an ad when I can go to any AI platform and say, Hi, I build X, Y, and Z, make me a video of a finished home.
Alex Morales: There's one word and it's authenticity, right? Homeowners will not trust a business promoting AI ads over a business that's promoting like I wouldn't say hard, but easy to make content compared to AI, I would say. the reason why is because homeowners want to buy from someone they trust, not from an AI. So a lot of companies we're seeing right now, they have like the the new AI logo or person of their company is now like the face of their all their content. And I see those and like, that actually hurts your brand in long term because no one's gonna trust that. Whereas they will trust the whatever your the Bob Jones guy, the original guy you named at the beginning of this, just random guy example. if he makes good content, talks about testimonials he has with other clients, showcases his projects, that's more authentic and trustworthy than any AI will be. and that's something that we're seeing people kind of go the opposite direction, turning to AI instead of doubling down on just being and making authentic content.
Eric Mollerup: With with the AI, would you say that there's any place for it? Would you say that if you know, and I I I think that it shouldn't be an exc like time should not be an excuse when it comes to marketing, because if you are spending on marketing, you may as well spend on the right thing. If I don't really have time and I don't really want to get on camera, I'm shy, I don't want to I just I just I wanna stay private. Is there a time and a place where AI can work?
Alex Morales: I think some AI image ads that I've seen would convert me. So I think there is a place for AI image ads. I wouldn't say for video. I'll give you an example, right? In video, we work with some real estate partners and agencies that they do a lot of AI like showcasing a build from the ground up, just like AI, right? Little edits like that do make sense to have in ads or in type in pieces of content to let like people's imagination kind of show them what they can build. But using it in ads to like sell a transformation or complete a project is a big no no. That's like misrepresenting your company completely. So there is a place for it, but there's also like red lines, I think, of when you should use AI. And we're starting to see those lines blur a little bit, especially in the real estate space. And I think it's gonna happen in the construction space as well, with people over like AI editing their like houses or their showcasings and then it's like completely different than when someone walks in person and sees it. So That's the one thing I don't want to see happen in the construction space. But unfortunately, trends tend to move different niches. So don't be surprised if in the next couple months we see people like using AI to showcase completely ridiculous builds and trying to pass them off as kind of their completed projects. Big no-no on our part, we don't do that, but we have tested AI with like little videos of like an ADU going from like semi-uh built to like built, but just for an ad purpose. but last thing I'll see here is. Majority of our ads in general just showcase completed projects. That's the the key of why our ads convert so well is because we sell completed projects. We only film out completed projects. So we have like complete proof and authority behind us of we're just showcasing a little tour video of our completed project and that's how we bring a lot of projects through our different type of clients.
Eric Mollerup: Moral of the story, don't just rely on AI. If you're going to use AI, do it in in discretion with a grain of salt and definitely don't just do AI. Don't just put out AI slop as we called it already.
Alex Morales: And an easy way to think about it is whatever you see other people doing, do the opposite. Like don't do what other people do. Don't copy that 'cause you wanna like separate yourself and your company, right? So don't just try to copy AI stuff you're seeing other people do 'cause it's not gonna separate you from different types of companies in your market.
Eric Mollerup: Alex, something you talk about a lot in your own content for your own company is not just filming a completed project, but somebody being you know, a real human being in that video, ideally the owner of the company or somebody who's very much front-facing. Is it important for the owner to get on camera?
Alex Morales: So it varies across different niches, but generally you want your best salesperson or the person that hops on that initial sales discovery call, whatever you call it, with that client or customer to be in the ad. The reason why is if I see the ad, right, and I go through the opt-in form or I go to your landing page and I complete and book an appointment, it makes more sense to have the person in your ad be the actual person hopping on the sales call. Why? Because you have instant trust and authority. you're the guy from the ad. Easy icebreaker to start the conversation. So a lot of the times we've tested this with either having the owner or the best salesperson in it. But the best time we see more appointments actually being booked and actually turning into projects is when the person in the ad is that one on the first initial sales call. So that's key. It doesn't have to be the owner all the time, but the best salesperson that can describe a project the best should be the one in the ad.
Eric Mollerup: And that's because of trust and just remembering, hey, I saw this person in the ad, now I'm on the phone with them. And I guess also almost as if they're a bit of a local celebrity, right? You and I, we both
Alex Morales: Yeah.
Eric Mollerup: use that term. You're a local celebrity. Everyone knows who you are. They they see your face every time they go on their cell phone. This goes back to we were talking about Google versus Meta. That's something you simply cannot do with Google. Right.
Alex Morales: Hundred percent, yeah.
Eric Mollerup: Yeah. if I know that if I wanted to Build a a a home or fully renovate my existing home. And I continuously see this one guy, he keeps popping up. He keeps telling me about who he is. I keep seeing his face. Maybe I should reach out to him. So do you see that your clients get some leads that are not just from the ads specifically? Do you sometimes see that people will contact
Alex Morales: yeah.
Eric Mollerup: them indirectly from the ads?
Alex Morales: So the benefit of building a brand on social media, so organic marketing and multiplying that with ads is you grow a following, right? And what we've seen, we talked to a lot of different marketing agents about this, especially in the LA market. Most of the time for luxury builders, if a lead comes from social media or organically, they tend to be following you for five months before they reach out. So that's just like purely organic referrals, if you will, or organic leads. What we see on top of that is from paid ads, that s sales cycle tends to be about the same, if not more. The reason why is because they don't have those like five months of building trust with you. Right. So to answer your question, I think we do see a lot of the times if you bring a lead from social media or from ads, they might not convert right away, but they're gonna join your following. Right. And from your following, you continue to post your work, continue to post testimonials, and maybe three months down the line, they're gonna convert again and then maybe move forward with that project. So that's the game of social media is a lot of the times you're organic leads or even ad leads will not convert right away. But the idea of putting out more organic content is you can keep hitting them with more reasons to trust you, more reasons to love your brand and love your work, and then kind of come back and book that reconnotation or that move that project forward. Right. So that's the benefit of ads and content together is it's a system that works in your favor and brings momentum to your business, helps you grow. Whereas if you just focus on one or the other, it's kind of just stuck on that trap of like organic referrals, if you will, if that makes sense.
Eric Mollerup: Yeah, they they go hand in hand, right? They go hand and it's it's one to many, as you're
Alex Morales: Yeah.
Eric Mollerup: saying, w with the content, over time you build up authority and and a brand. And while you're sleeping, there's people out there who are interested in your services that are seeing you on online, right? And something you know, you said earlier how how you know there's no reason for ads not to work. If you have the proper system in place and the proper team behind you, whether that's you and your own team or whether that's a company that you hire, in what in which cases can ads fail? I know there's a lot of ways to answer this question, but what are some major things to avoid that if you saw, you would be you'd be shocked. You'd be like, guys, we gotta we gotta redo this immediately.
Alex Morales: That's a that's a good question. I would say I'm gonna say that question for myself too. there's a lot of different reasons to be honest. Let's just give a couple. Number one is your company didn't do enough market research in your local market to understand like the types of projects you want to go after, the marketing you're required to go after them. So a great example of that is running like promotion or discount offers in a market that doesn't make sense to do that. Or running specific offers or creatives in markets that don't make sense. So for example, we work a lot of ADU companies. Some cities, such as say LA, for example, have different ADU regulations and laws. So if I showcase like a twelve hundred square foot project from Long Beach and Lakewood and I try running that in a different market, not what do you call it? Not permit friendly to those types of projects and builds, then there's like a misalignment with the offer and the creative running and the market. Right. So a lot of the times we see a lot of newer companies, especially like They have overpromises that they can't deliver on. and the reason why is because they didn't do market research in the first place to understand what works and doesn't work. A key part of there, too, is not being different from other companies. A lot of times, if you look at every real estate video, what do they all have in common? The text in the back, like it's the same formats, right? And a lot of times in the ad space, we see the same thing: people copying the same script, copying the same editing from other videos. And again, it doesn't separate you from everything else that people are seeing. So two instant things that can affect your account is not doing market research and not doing enough effort on the creative that separates your business. Those are two basic ones. Other ones are like you get your meta ad account banned, you know, and the agency has their hands tied because like it's all up in meta hands now you can't really do much at that point besides create another ad account or like do some back end things. so technical things but most of the time it's just creative and market research. If you get those two things right you should get good results with meta. If you Put your card down and let the ads run. Don't give up the first week, the first two weeks, the first month. Like let the ads work. Our clients see results minimum, like the first seven days. Initially, it's like the first two or three days our ads start like converting pretty well. But if they don't convert for you those cup first couple of two weeks, like double down on them. Don't give up because they will work. but you have to kind of be consistent and disciplined about ads in any other case of marketing, the same thing.
Eric Mollerup: Yeah, and that and that's something that you guys are known for, right? You're known for is taking that time with everyone that you work with to actually do market research to actually figure out what will people respond to. Because a builder in LA, for example, needs a very different message than a builder in Miami, right? Because it's an entirely different landscape. For a you know, for let's say there's a a a company out there. who wants to do this all in-house, they should ideally have a good understanding of their own market. Would you still recommend that they still do some market research and how, from a technical standpoint, can they find out what their competitors are doing?
Alex Morales: Hmm. So that's a good question. There's two parts. So the first thing you do to do market research is you go to Facebook Ads Library, which is basically the the center console, if you will. You can see everyone running ads. You can search them up by business even if you wanted to. So you want to like search up two or three competitors. We do a minimum of five competitors in your market to see if if they're running ads, what type of ads they're running, more specifically, what funnels they're running. So funnels are the most important part. Because it's how you actually qualify in the lead instead of just capturing their phone number and email and then, they're a magic lead now. So we actually focus on qualifying leads. so the second part of that is how are other companies qualifying leads and do we want to do the same approach or do we want to do something different? Right. So instead of like running a DM ad, which is like DM us to wear this and doing sales over DMs, which doesn't make sense for contractors, thinking about the funnel and looking at what works with other companies should be your first step. Step number two is looking at not only the people in your market. But find the biggest advertiser, biggest company you know spending in your niche. So for example, when we got into the ADU market, we went to find the biggest California company that built ADUs statewide. Not just in the city, but statewide because they're spending massive amounts of money on ads. So I wanted to go pull data from like, okay, what are their ads? What are the funnels they're running? They were doing like webinars, they were doing lead forms, they're doing like 20 different funnels because they're spending six figures a month on ads. So I mentioned that a little long story short. Because you want to find the biggest company spending on ads and kind of not copy, but build off of what works. So you don't want to build something brand new and test it. If you can go pull something that's proven, make it better, and then like start off with momentum instead of start off guessing. So that's kind of our approach to market research, which has helped us very well and helped our clients get good results because we go after bigger companies. So we wanna go see who's spending the most and then build off of that. That's what has made our campaign successful.
Eric Mollerup: It's such a simple strategy, but it makes sense. And it's I love how simple it is because anybody can do it. Like you said, all ads are public on on Facebook, Facebook ads library. So if you know, you know, you have a builder down the road from you that you know is running ads and you want to see what they're doing, it's easy. You can go and check for yourself. Obviously, you don't copy them exactly, but you can see what they're doing at least. That'll give you an idea of what you should be doing, right? Yeah.
Alex Morales: Hundred percent, yeah.
Eric Mollerup: Alex, one question that I get asked weekly, I would say, and I'm sure you get asked as well, is what are the most important metrics? Let's say we're now running ads. Okay, I launched some ads, I got on camera, I listened to Alex and Eric, I did what they told me. Now, how do I know if the ads are working? Right? How do I know if anything is happening? Maybe I'm getting a few leads coming in. What kind of numbers and what kind of KPIs should I be looking at?
Alex Morales: This is my this is my favorite question because the main way agencies sell you is, especially newer agencies, is we get you the lowest cost per lead and we get you a hundred leads in X amount of days. That's the main offer that every company construction contractors have heard before. The key that you want to think about is actually reverse engineering your marketing from the cost acquire customer. That's the basic core KPI that you need to know if you want to be successful with any form of marketing. So that's how we think about it. Your cost to acquired customer might take you three months to figure out if you're a luxury builder. Cause that might take you, that might take you 90 days to close a deal you get from ads, right? So you don't really know that number off the bat. What you can track though is after your cost to acquire customer, how much did it cost you to send out a bid? How much did it cost you to send or get a qualified appointment? How much did it cost you to get a lead? More importantly, in in between there is a cost per qualified opportunity. That's when we hopped on a call hopped on a call with you, said that we're interested. You give them their price and they said, Okay, we're gonna think about it, something like that, right? So you don't care about cost per lead, that's the lowest KPI on the on the scale. You kind of want to reverse engineer from the numbers I just said and from those key KPIs, because that's what actually matters. And once you know your cost acquired customer, even your cost per bid, I would say start ramping up your your ad spend, because then you can reverse engineer everything around that number and bringing that number down, which will make everything across the board more successful and scale faster.
Eric Mollerup: Alex, you you need you need to say it louder because there are a lot of companies that need to hear this because and it's sad unfortunately, but there's all these these offers that you just mentioned we'll get you 90 leads in 10 days guaranteed, right? And it just sets the wrong expectation. And again, it's a volume play.
Alex Morales: Yeah, yeah.
Eric Mollerup: Tell me why 90 leads are better than one lead in you know, 30 days, but that lead ends up closing, right? Who who cares how many leads you got? It's a vanity metric. Now, that being said, more leads give you more at bats, right? They do give you more, you know, from a number standpoint, more chances to to get in the reps. Let's say you're brand new to ads. Maybe it's a good thing that you have more leads at first. You can have more conversations, but I 100% agree with you that that's not what you should be looking at. You should be looking at your Cost to acquire a customer, or your cost per closed deal, or your cost per signed contract, those are all sort of the same thing at the end of the day. and leading off of that, if my cost per lead is in my mind way too high, should I start changing things? Should I start adjusting? Like I, you know, I know it's hard to say because every market is different, but let's say I look at my ad account and I'm freaking out because my lead cost is ridiculous. What what do I do? You know, what what do I do?
Alex Morales: So it really depends on what you think is too high. Like you said, it depends on every niche in market. What you want to think about just in terms of like tactically and data analytically, whatever the word is, you want to at least get 30 minimum conversions from your ads a month. That's minimum. Just to give meta enough information to help you grow and get bigger returns on investment from your ad spend. So if you don't get 30 conversions in that month with whatever ad spend you're putting, I I I want to be careful how I say that because if you spend like a thousand and you expect like thirty high quality leads, it probably's not the budget, but let's say you put two thousand, right? And you get thirty leads. Well that puts your cost plead for around what? I can't do math.
Eric Mollerup: We're we're marketers. We should
Alex Morales: Yeah, not gonna math. Two hundred. So that's around a $6 lead, which is which is not what you expect in the construction space. But regardless, that's like the tactical way I say I can say it. If you don't get 30 conversions the first month of running your campaign with a minimum of a thousand, let's just say that, then there is an issue with your creatives or with your funnel, which is making less people convert. Because if your creative is good and your funnel is good, you should get a minimum of 30. That's like meta's recommended. Like minimum bar is 30 conversions a month. 30 days to get. That's
Eric Mollerup: This this is according to meta directly.
Alex Morales: according to like meta and like how they they help your campaigns grow. That's like learn learning limited, right? You need to get 30 conversions. what you consider high cost plead it it varies, but if you have a high cost plead, simple answer is more creatives, better funnel. those are the only two things you need to change. Everything else should be set up correctly. If if not, I would talk to whoever is running it. But creative is normally the the main issue. with accounts that have high cost per per leads. It means your message or your ad is not resonating with the market. So you need to put out more videos, more creatives, more ads that can hit a different angle, hit a different pain point that will actually convert them into your funnel, into your ecosystem and into learning more about your brand or business.
Eric Mollerup: Yeah, absolutely. Guys, if you are if you are selling a custom home for two point five million dollars, I mean even one point five million dollars, right? Call it even a million dollars. Let's say a one million dollar custom home, which in many markets these days is on the lower end in in the United States. Why should it matter if you had to spend five grand, ten grand to acquire that? contract, right? At the end of the day, we we want to look at things from a ROI perspective and not so much from just the numbers right in front of you, right? We need to look at things as a whole. And I think Alex, that's exactly what you're saying here is don't just look at the metrics that are immediately in front of your face. You need to look at the full picture. You need to look at the story. The numbers tell the story, but don't just look at what's in your ad account. Look at what's happening after and outside of the ad account. What kind of conversations are your sales reps having? you know, the leads themselves, when you're meeting them on site, for example, what how are the conversations there? Eventually, when you close that contract, right, look at how much you had to spend to acquire that contract. And if it makes sense for you, everyone has different margins, but if it makes sense for you, why not just replicate it? Why not double your ad spend? Right. So Alex, I a hundred percent agree with you. I want to
Alex Morales: I'll add one more thing to that, because you you brought up sales process. Something that we I touched on like very early on the conversation was there's a big misconception we see a lot of contractors, especially luxury builders have with ads, is they expect the leads to close the same percentage as the organic referrals. So most contractors, general contractors, they close at 60 to 75% organic referral. Great closing rate, right? Why? 'Cause they're referrals. They they know someone that trusts you enough to to recommend you, right? With Meta ads, we see those conversions being around 15 to 20 percent. If you're 25%, like you're freaking killing it. but a lot of the times we've seen a lot of successful contractors, they've had to adjust their sales process slightly to close more meta leads. What that means, they may have to offer free gutters if they're roofers to push that sale over the door. They might have to offer like more urgency in their contracts. Hey, you have 40 days instead of like 60 days to approve this before moving forward, right? So A lot of contractors that we've worked with have had to adjust their sales process. a little different than just closing organically, but that's what makes contractors, even business owners, entrepreneurs better at their craft and sales is by adjusting their sales process to match the lead quality. Right. It means it doesn't mean dropping your price. It just means what else you have to offer to add urgency into the sale. that's what we see working with some contractors running a lot of meta ads right now.
Eric Mollerup: Great point, yeah, great point. And Alex, what you said earlier about, and I'll ask you this question again in a moment, more about the types of ads we should run or that builders should run, but you don't want to sound cheap on your ads. You don't want to be giving discounts, quote unquote. I frankly don't know how you can discount a high-end home, right? But I'm sure you could come up with something. You want to appeal to the types of clients that you actually want to work with, which means your ad has to reflect that. And I think what you said earlier about the messaging and the offer of the ad, if you can just clarify for me again, I don't, I don't want to dis I'm a builder. I don't want
Alex Morales: Yeah, yeah.
Eric Mollerup: to appear cheap. I don't want to appear like we're giving free things, right? Free this, free that. What is an offer that I could run that is still positioning me as The go-to expert and is still an attractive enough offer where we can get people in the door, something that will help us stand out.
Alex Morales: It is for a custom home builder specifically, or in general.
Eric Mollerup: Yeah, specifically for for home builders. We can even call it like full full home remodelers as well, right? Large projects we're talking about.
Alex Morales: So the basic offers that work in that sense is a simple let's just say new build connotation or build connotation. We like to say design and build connotation doesn't mean free design, doesn't mean you're getting design just that's like the one term, right? It's a phrase, design and build to make your company seem like you do design and build, not just the build part, right? 'Cause a lot of luxury builders, they have like the architect, they have the engineers, and they have the the builder, but you want to seem like you're the all-in-one team. So that simple phrase helps you stand out. But a lot of times the best ads we call them authority ads and we call them we have three winning ads authority ads, tour ads, and then testimonial ads. Those are the three types of videos and ads or creatives you need to be running. I'll kind of touch on each one. Authority is basically saying, hey, we are the experts in your market and we have completed X amount of projects. It's pretty much that simple. If you want your free consultation, click the link below, schedule your free consultation with XYZ builders today. So authority is meant to position You as an expert by touching on how many projects you've completed in your market. So that's the authority one. The tour ads are just tours of your completed projects. They can be self-guided tours with this the sales guy, the homeowner, or they can be the actual owner of the business. And testimonial ads are always the owner saying, Hey, we worked with XYZ Builder and had a great experience working with them. Here's the completed project. That's kind of our framework for winning ads. Anything outside of that messaging, feel free to test. But once you get out of that like messaging, you're kind of leaning on other incentives to get people to work with you. And in most cases, most contractors and builders tend to lean on like discounts, promotions, the the basic like we're only taking five other homeowners in the next month. Like all of that salesy, pushy language doesn't really resonate for luxury builds. So that's why we've kind of mastered those three things that we do, which is testimonial authority, and tour ads, and that kind of works with us to keep that messaging high quality, kind of top tier branded, make them seem like more luxury builders instead of the people that can just do anything and everything for the cheapest price.
Eric Mollerup: Absolutely, absolutely. Guys, we're we're not trying to appeal to everyone, right? We're trying to appeal to the tiny pocket of people that we actually want to work with. So Alex, you're 100% correct. I'd say many you know, many builders out there would agree with you. And the way you described it is perfect. It's I don't want to say it's easy, but it's simple. You need the right framework, but get on camera. You know, get on camera, film some ads, they don't have to be perfect. Should they be filmed professionally? I would I would say so, depending on the types of homes you build. But must they, you know, the the first campaign you launch, does it 100% need to be with a you know $10,000 videographer, full production team? I personally don't think so. Alex, you can tell me your opinion. but I'd say that the most important thing is do it. Get on camera. The rest you can figure out as you go, right?
Alex Morales: So you c you kinda introduced me as being controversial, so I'll make a little controversial statement. All you really need to make a good ad is a three hundred dollar videographer and a a hundred dollar Indian editor. And I'm I say that kind of funny because you're an A and C owner, we have a lot of ANC owners in our network and it's funny we make that comic 'cause it's literally that easy to win, that easy to create good ads. And you need a small team, you can do it with a small budget. All you need to understand is like that enough market research and that understanding of what type of ads need to make. The rest is pretty easy. It doesn't take more than an hour to film four good ads if you're kind of good on your feet and good on camera. Other than that, it's not really complicated. Like you said, it's it's simple, not easy. But there's other people younger than you doing it, doing a lot more of it. So it shouldn't stop you. What I would touch on to your question is in terms of quality, you don't need to have like that $10,000 videographer. I don't I don't think you need that. But You want to have high quality content that makes you seem a little more luxury, a little more of a top-tier contractor versus kind of the people still filming on their iPhones and you can see like the blurry images and stuff. So just think about representing your business the same way if you're going on a TV commercial, right? How much would you spend to make good videos if you're gonna put them on TV? Same thing with social media. If you wanna be a little higher tier luxury brand, you gotta put a little more effort into the actual content and quality you're putting out.
Eric Mollerup: Alex, so much value, so so many great insights. There's a lot of golden nuggets in here that, you know, again, whether you build five million dollar luxury custom homes or five hundred thousand dollar ADUs, these strategies will apply to you. They will work for you. Alex, one last question I have for you. Let's say that you could speak to every builder out there who wanted to get started. with some kind of marketing, with some kind of advertising, what is the immediate thing that they can do? Like what is something that they can do today to just get something done, get something launched, right? What what's one thing that you could give everybody out there?
Alex Morales: Oof, that's a tough question. Something that makes them take instant action. Stumble me on this one.
Eric Mollerup: Good one.
Alex Morales: Because with with ads, it's a little harder, right? Because you need a a couple days to get everything built out. But the one thing I can tell you is go look at your companies in your area. Do simple market research and it takes less you tech less than five minutes. All you need to find is the company's Instagram. Take that Instagram handle, put it in Facebook Guys library, and see who's running ads. If more than two people, two of your competitors in your market are running ads, they're stealing your customers. That should be enough motivation to start doing the basic effort of Okay, I know these guys are running ads, they're investing in it. Why is my company not doing it? Why am I not competing at this level? Right? That's the only question you should think about. And if that doesn't force you to take action, then maybe ads aren't the right fit for you, right? It doesn't mean they never will be. It just means it's not the right time. I think a lot of agencies kind of force you to think about you need to do ads now, you need to ads now. For a lot of contractors, it's honestly not the right time. Because you have the expense of the agency at the expense of the actual ad spend, right? So a lot of the times companies, if they don't get results the first month. They stop and quit with you. So my honest advice is take a step back after doing that market research. If you are willing for the next three months to put X amount of investment and commit to that for the next three months, go ahead, find the agency, find that partner to work with. If you can't, then it's not the right time. That's okay. It's not for everyone. Every company grows at different levels, different scales, and different timelines. So that's kind of a honest advice: don't feel pressured to invest in ads. if it's not the right time, it's not the right time. But If you don't get that motivation from looking at, my competitors are doing it, then there's something else to think about.
Eric Mollerup: Alex, thank you so much. Where can people find you?
Alex Morales: that's a good question, let me pull up my Instagram. My Instagram is alex.morales.lc. My YouTube is in my Instagram and my website as well. We have a lot of free YouTube videos on how we actually set up campaigns. So if you guys want to learn how do it yourself, YouTube video shows how. If not, pleasure speaking. Hope you guys got some value and free game from the the call is actually pretty awesome.
Eric Mollerup: Alex, thank you so much. I'll be sure to link your handles down below. Really great episode. Thanks for being here.
Alex Morales: Pleasure. Thanks for having me.
