Your first lead is your cheapest lead, and your last lead is your most expensive lead. This principal is vital if you want to reduce wasted marketing spend.

Most business owners don’t understand this simple truth about marketing economics. They think if they can get one lead for £10, they can get ten leads for £100. But that’s not how it works.

If you can have one lead for £10, you probably can’t get two for £20. It would probably be closer to £22 for two, three for £35, five leads for £60, and it tends to deteriorate the further you go up. It’s a sliding scale, not a linear progression.

This fundamental principle shapes everything about how digital marketing actually works, yet most agencies would rather you didn’t know about it.

Why Marketing Costs Don’t Scale Linearly

When you start marketing in any channel, you’re going after the easiest opportunities first. You’re targeting the people most likely to convert, using the keywords with the best combination of search volume and low competition, reaching the audience segments that are actively looking for what you offer.

But once you’ve exhausted those opportunities, the next lead becomes harder to acquire. And the one after that, harder still. All of a sudden, you’re overbidding and looking to reduce wasted marketing spend.

Take Google Ads as an example. When you first start bidding on keywords, you might target specific, less competitive terms that directly relate to your business. But as you scale up your spend, you’re forced to bid on more obvious keywords where competition is fierce. The most obvious terms that link really strongly to your business are super competitive, and you’re not actually going to be able to rank for them without spending significantly more.

You have a lot of situations where a client has tried it themselves and thrown a thousand quid at Google and it’s gone, and they have absolutely no idea what happened. All they know is their money’s gone and Google said thank you very much.

Those thousand pounds get fragmented across multiple channels and keywords, diluted to the point where they can’t make a meaningful impact anywhere. The budget that seemed substantial suddenly becomes insufficient to compete effectively.

The Competitive Keyword Problem

The economics get even more challenging when you’re a smaller business competing against larger players. If you turn over a million in a certain space and you’re bidding on keywords that your competitors who are top of the space are bidding on, they’re turning over 20 million and they’re bidding on those same keywords. That’s not a sustainable way to reduce wasted marketing spend.

Your competitors with bigger budgets can afford to pay more per click because their larger operation allows them to extract more value from each customer. They’ve got economies of scale working in their favour. You’re fighting a losing battle trying to outbid them on the most obvious, competitive terms.

The smarter approach is finding keywords that are more niche or specific to you, which still have the traffic, but not just picking the most obvious keywords you think of straight away. It’s important to know what your goals are as a business. Find some slightly more targeted keywords, bid on those and grow a bit, because otherwise you waste your whole marketing budget, don’t grow, and just get flushed out by your competitors again.

Why Agencies Benefit From You Not Knowing This

Here’s an uncomfortable truth about the agency business model. Most people, if they get a channel of marketing activity that really works for them, one of the things they often do is just scale it and say, well okay, if I spend ten times the amount on that, I’m going to get ten times the results.

And it doesn’t happen.

Agencies know this. But many won’t tell you because clients benefit from small and often, whilst agencies benefit from big and infrequent. The incentives are misaligned, especially if you’re trying to reduce wasted marketing spend.

When you commit to a large budget upfront, the agency gets its revenue locked in. Whether that budget delivers proportional results or not becomes almost secondary. They optimise for their own revenue model rather than your actual returns.

This is why bulk discounting in agency services often works against the client’s best interests. Yes, you might get a discount for committing to a larger contract, but if that larger spend doesn’t deliver proportionally better results because of the non-linear economics we’ve just discussed, you’ve actually made your situation worse, not better.

What This Means For Your Marketing Strategy

Understanding the non-linear economics of marketing acquisition should fundamentally change how you approach growth and your strategy to reduce wasted marketing spend.

First, it means you need to test and learn before scaling. Don’t assume that what works at £1,000 a month will work at £10,000 a month. The dynamics change completely as you scale up or reduce wasted marketing spend.

Second, it means you need genuine expertise to identify where the opportunities are. Finding those less competitive keywords, those underserved audience segments, those emerging channels where costs haven’t been bid up yet requires skill and experience. This is where having someone who actually knows what they’re doing becomes essential.

Third, it means you need transparent reporting that shows you the actual cost per lead at different spending levels, not just aggregate numbers that hide the deteriorating economics as you scale.

Fourth, it means you should be deeply sceptical of agencies that push you to dramatically increase budgets without demonstrating that the economics still work at that level. If they can’t show you that your tenth lead will cost roughly the same as your fifth lead, you’re probably about to waste money. We recommend first asking these questions if you want to reduce wasted marketing spend.

The First Purchase Economics

This principle doesn’t just apply to lead generation. It applies to customer acquisition as well.

With previous clients, we’ve seen that the first purchase is often the cheapest. In fact, sometimes you’re even losing money on that first purchase. But if you have the data on how many times people order on average, whether their second orders are usually bigger, their third orders usually bigger, and you know what type of customer and where they’re from, orders the most, you can make that initial acquisition cost make sense.

This is why having someone handle your marketing, your CRM, and your website together is so valuable. They can give you that actionable data throughout the process. If you’ve got lots of agencies working on different bits, they’re all going to possibly blame each other for why this metric is less or why this is more.

Reduce Wasted Marketing Spend and Make Better Decisions

The reality is that marketing doesn’t scale linearly, and it never will. Your first leads are your cheapest leads and your last leads are your most expensive leads. This is just the economics of how markets work.

But knowing this allows you to make smarter decisions. It allows you to question agency recommendations. It allows you to understand why those thousand pounds disappeared without a trace. It allows you to test at smaller scales before committing to larger budgets. It allows you to recognise when you’re hitting diminishing returns and need to look at different channels or approaches.

Most importantly, it allows you to work with agencies that are willing to have honest conversations about these realities rather than those who obscure them to maximise their own revenue.

The best marketing strategy isn’t about spending more. It’s about spending smarter, understanding the economics, and working with partners who’ll tell you the truth even when it’s not in their immediate financial interest to do so. It takes two to effectively reduce wasted marketing spend, so choose wisely.

If you want to reduce wasted marketing spend, you need to first gauge if the marketing spend is actually wasted. Do this by finding your cost per conversion. And always remember, your first lead is your cheapest lead!

How many LinkedIn posts do you see claiming SEO is dead? It’s becoming tiresome. Every few months, someone declares the end of search engine optimisation, usually with a screenshot showing how Google’s AI overview answered their query without them clicking a single link.

Here’s the uncomfortable truth: SEO as it existed five or ten years ago is dying. But SEO itself? It’s just changing. And if you understand how it’s changing, you can adapt your strategy rather than abandon it entirely.

How Search Results Have Changed

Think back to how Google looked a decade ago. You’d search for something, and the top organic result would often appear right at the top of the page. There might be one or two ads above it, depending on your industry and how competitive the keyword was. That world is gone.

Google added more ads, so now you might see three or more paid results before you reach organic listings. Then came schema markup for frequently asked questions, those expandable boxes you can click to see answers. Product schemas arrived for e-commerce searches, showing images with prices and titles. Suddenly, that top organic result you worked so hard to achieve was pushed down the page. You had to scroll to see it.

The last few years have amplified this trend dramatically. Now we have AI snippets as well. That’s probably the biggest change, and it’s the one causing all the panic.

Why AI Affects Different Businesses Differently

But here’s where most people get it wrong. They assume AI snippets affect every business equally. They don’t.

If your entire website exists as a blog that thrives on traffic because you link to other people’s websites and earn income that way, you’ve got a problem. Lots of people now turn to AI for informational answers. They ask ChatGPT or look at Google’s AI overview, get their answer, and never click through to your site. If you’re in the affiliate marketing or content publishing business, this is genuinely challenging.

But if you’re selling a product? People searching on Google aren’t necessarily interested in looking at Gemini’s AI overview. They’re looking for a product. They scroll past the AI snippet because it doesn’t help them make a purchase decision. They want to see options, compare prices, read reviews, and click through to buy.

The reality is that SEO strategy needs to be tailored to what industry you’re in. When someone searches on Google for a product and you’re an e-commerce company, you’ll have product snippets. You don’t need to worry as much about AI listings because people are likely to click on one of the product listings or the Google Ads rather than read Gemini’s description of the products they searched for. That doesn’t make sense for their intent.

However, if you’re a B2B business, people probably aren’t looking to make a purchase or spend money immediately. They might be comparing options and gathering information. There won’t be product snippets. So you might need to look more into optimising for AI or for question and answer features. Good modern SEO is very tailored to the client’s industry, their existing ranking strengths, and the seasonality of their business.

The Numbers Tell a More Complex Story

The traffic mix is changing, and the data reflects this shift. According to recent industry research, brands now allocate about 72% of their total marketing budget to digital channels, with organic search remaining a significant component of that investment.

Purely organic traffic from traditional search terms has drifted downwards overall. For some of our clients who get a few thousand visits a month, if we can keep traffic at that level whilst knowing it’s on a very gentle decline, that’s actually a good result. It’s still very profitable when you compare it to paid advertising. It’s worth investing in.

Research shows that more than half of UK shoppers routinely research products or services online before making a purchase. They’re still searching. They’re just encountering more options about where to find their answers, and the path from search to website has become more complex.

Redefining What SEO Means

AI is starting to take a greater share of that traffic. But when you look at the overall stats, particularly because Google has integrated AI into its results, Google is still the dominant force. The question shouldn’t be “is SEO dying?” When you think about it, search engine optimisation includes all of the above. It’s local listings, organic listings, shopping listings, and ad listings. It’s about being present at the top of search results for the keywords that matter for your business and having the right messages there.

We want to get a strong number of impressions on the relevant keyword phrases and searches, particularly on Google. Obviously we don’t want to ignore Bing and ChatGPT and others. We want clients to have the lion’s share of opportunity when it comes to visits to their site, regardless of where those searches happen.

The mix of where your traffic comes from will continue to change. More possibilities exist for ads now. You’ve got shopping ads, display ads sometimes on the sides, your local business profile on the right, and then Google Ads search results at the top. Traffic from traditional organic rankings has gone down, but it’s not dead.

We’ve had some success helping clients create content that ranks well for organic search but also performs well in AI results. It’s about making content that works across multiple formats. Sometimes it means repurposing really good content they already have but making it function better for their business rankings.

Who Will Thrive and Who Will Struggle

The businesses that will struggle most are those that treat this as an all or nothing situation. Either they panic and stop investing in SEO entirely, or they refuse to acknowledge anything has changed and wonder why their results are declining.

The businesses that will thrive are those willing to have honest conversations about what’s working and what isn’t. They’ll adapt their content strategy based on their specific industry and customer behaviour. They’ll understand that maintaining traffic can sometimes be the win when the overall market is declining. And they’ll recognise that search engine optimisation now means something broader than it did five years ago.

SEO isn’t dying. It’s evolving into something more complex, more fragmented, and more dependent on understanding user intent across multiple platforms. The question isn’t whether to invest in it. The question is whether you’re adapting your approach to match how people actually search today.

Is Your SEO Strategy Keeping Up?

If you’re unsure whether your SEO approach is adapted for today’s search landscape, we can help. We offer a straightforward SEO audit that assesses how your website performs across traditional search, AI platforms, and the various SERP features that now compete for visibility.

Get in touch to discuss how your SEO strategy needs to evolve for your specific industry and business goals.

Google Shopping used to be a goldmine. Now it’s a perfectly engineered money drain.

While the business world was still celebrating Amazon’s recent decision to pull back from Google Shopping ads, we’d already been having uncomfortable conversations with our clients for months. The kind of conversations that make agencies squirm but that businesses need to hear.

Google Shopping isn’t working anymore. And it hasn’t been for a while.

When Free Lunch Became an Expensive Dinner

Remember when Google Shopping listings were free? Those were the days when showing up meant something, when relevance mattered more than budget size, and when a well-optimised product feed could compete with anyone.

Then Google got greedy.

First came the shift to paid listings only. Fair enough – Google needs to make money. But what followed was a masterclass in how to systematically destroy a profitable advertising channel through pure avarice.

The cost spiral began immediately. Click costs that once hovered around 20-30p suddenly jumped to £1.50, then £2.00, then higher still. Google’s algorithm, once focused on matching relevant products to searchers, shifted to extracting maximum revenue per search.

But high costs were just the beginning.

Death by a Thousand Micromanagement Cuts

Google’s platform engineers seemed determined to make Google Shopping as cumbersome as possible. What was once a streamlined system became buried under layers of checks, approvals, and compliance requirements.

• Product feeds that previously updated smoothly now require constant monitoring
• Policy violations appeared seemingly at random, often for products that had been running successfully for months
• Campaigns that ran themselves now demanded daily intervention
• Simple changes triggered review processes that could last weeks

The administrative overhead became unsustainable. Our team was spending more time managing Google Shopping campaigns than managing entire integrated marketing strategies for other clients.

But the real killer wasn’t the complexity – it was the results.

When “Shopping” Became “Browsing”

Google’s algorithm changes turned Shopping into a discovery channel rather than a purchasing channel. Searches that once showed precisely relevant products began displaying increasingly tangential results.

The quality collapse was systematic:

• Specific product searches showed generic category results
• Brand searches displayed competitor products first
• Long-tail, high-intent searches triggered broad, low-relevance listings

Then came the new tab behaviour. Every Google Shopping click now opens in a new window, disrupting the customer journey and fragmenting the browsing experience. It’s as if Google decided that user experience was less important than keeping people trapped in their ecosystem.

The conversion rates spoke for themselves. What had been profitable campaigns became expensive traffic generation exercises with steadily declining returns.

While Others Chased Fool’s Gold, We Found Real Opportunities

Amazon’s recent pullback from Google Shopping validates what we’d been telling clients for over a year: the economics don’t work anymore.

But here’s what Amazon and most other businesses missed – while fixating on Google Shopping: there are better ways to access shopping traffic with superior returns.

We shifted our clients to approaches that actually work:

• Direct marketplace optimisation that connects with buyers at the moment of purchase intent
• Integrated search strategies that capture traffic before it gets filtered through Google’s money extraction system
• Platform-specific approaches that work with algorithms designed to complete transactions, not just generate clicks

The results speak for themselves. Clients who moved away from Google Shopping dependency saw their cost per acquisition drop by 40-60% while maintaining or increasing sales volume.

The Uncomfortable Truth About Google Shopping

Google Shopping has become what every performance marketer fears: a vanity metric generator. It produces impressive-looking traffic numbers while quietly eroding profit margins.

The platform is designed to maximise revenue for advertisers while providing minimal value to shoppers. The increased complexity isn’t about improving results – it’s about creating enough confusion that businesses don’t realise they’re paying more for less.

Most agencies won’t disclose this information because Google Shopping generates recurring revenue. Keeping clients tied to underperforming channels is more profitable than finding better alternatives that require less management.

We prefer a different approach.

Just Ask

If you’re spending money on Google Shopping and wondering why your returns keep shrinking while your management overhead keeps growing, we should talk.

We’ve developed specific methodologies for accessing shopping traffic that actually convert – approaches that work with consumer behaviour instead of against it.

The conversation costs nothing. The continued reliance on Google Shopping costs everything.

Do you find that paying for software licences is akin to being levied a tax on your success? Then, when you add more persons on your licence, as a result of your business growing, it increases your costs substantially. You’re not the only ones fed up with this approach.

There is a better way to engage SaaS these days, and that’s by finding a good open source solution. Open source software, as it sounds, is open and free to use, without any licensing costs – all one needs, is to adapt for your own particular circumstances and you are good to go!

You may be familiar with Open Source through well known applications like WordPress or Magento. For the software producer it’s a great way of getting the product out to the wider world quickly and allowing the market to improve, develop and add value to the product. That’s not to say that open source products are half finished – quite the opposite as most developers of open source are very fastidious about their quality control before exposing their baby to the scrutiny of their peers.

So, it’s no wonder that a lot of companies and business leaders are getting used to the advantages of Open Source and all that it offers.

Getting ‘match ready’ for the future

There’s another really important reason why Open Source software makes more sense for growing companies, and that’s to do with its transportability. Acquiring something via this route enables you to have a degree of flexibility that you wouldn’t nominally have with a licenced piece of software – because you have full ownership over your digital services and are not at the mercy of your software vendor. 

Often, customers of licensed software, having invested so much money in developing and adapting the system to their needs over the years are really loathed to walk away, even when the advantages the system gave them initially, have dissipated.

Organisations will often justify continuing to pay money out hand over fist, even when the software is not providing an ideal solution. We call this scenario ‘The Golden Shackles’ and is akin to holding on to a large helium balloon which is taking your further and further away from the earth. At what point do you decide to let go and fall back down to earth with a bump? When do you decide that the spiraling costs and limitations aren’t worth the candle, and you are much better off going to an open source supplier?

That’s a difficult one and one that only you could possibly answer, but let us outline some of the benefits you will find from open source software which might benefit a growing and ambitious business:

• The quality of software produced by the Open Source community sometimes exceeds that produced by purely commercial organisations
• It is suggested by some authors that open source is more robust, more reliable, less complicated and more error free than their equivalent commercial counterparts, as they are subject to much more collaboration throughout their lifespans and are developed by developers with strong technical skills and extensive peer connections
• With the more popular softwares, there exists an extensive community of developers creating plugins and extensions which adds automatically to the range and scope of the software

So, we’d recommend you took a closer look at Open Source for your business growth plans. We have!

Ergo Digital’s own open source software Omny Link, has already been used by a wide range of businesses to improve their marketing and performance. And, unlike a commercially funded product, it doesn’t hobble your ambitions nor tax you on your success: the price you see is what you pay from the start to the end of your licence.

We can setup a free trial for you so you can give it a go for yourselves – just call the team on 01962 605 000 to discuss in more detail.