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Peter Mahoney: [00:00:00] The next CMO podcast explores topics that are on the minds of forward-thinking marketing executives from leadership and strategy to emerging technologies. And we bring these topics to life by interviewing leading experts in their fields. The next CMO is sponsored by Plannuh makers of the world’s first AI based marketing leadership platform.
And hosted by me, Peter Mahoney, the former CEO of Plannuh along with my cohost Kelsey Krapf.
This week, Kelsey and I speak to Mike Rhodes, the founder and CEO of web savvy, an award-winning agency based in Australia. And one of the leading experts on the management and optimization of Google ads. Mike is an international keynote speaker in the coauthor of the ultimate guide to Google ads with Perry Marshall.
In this podcast, we discuss digital marketing and how it’s going to change in 2021. How AI is going to take over the world and where it isn’t. And we have a broad ranging and exciting conversation. I’m sure you’re going to enjoy it.
Kelsey Krapf: [00:01:12] Welcome to the show. Mike, super happy to have you. I would love to learn a little bit about you and web savvy.
Mike Rhodes: [00:01:19]
Thanks Kelsey. It’s a pleasure to be here. I most importantly, I guess I’m a husband and dad. I I love the business of business. I have been doing this for quite a while. I always knew that I wouldn’t go into the corporate world.
I think we decided as nine-year-old or anything it’d be just like our parents or the opposite of our parents. I went the opposite route. I was a snowboard bum, traveled the world in my twenties, learned to fly helicopters, had a fantastic time and then woke up one day. And yeah, I should probably learn some some skills and go earn some cash
now moved to Australia when I was about 30, a while ago now, as you can tell from the grays
Peter Mahoney: [00:01:53] that they can’t see the gray on audio, but now thank you for filling in through, in the voice though. There you go. It’s the credibility that comes through Mike.
Mike Rhodes: [00:02:00] I built my first business on the back of a couple of books that your audience may have heard of the E-Myth by Michael Gerber, a bit dated now, but it was the Bible of small business in the nineties and the cashflow quadrant by Robert Kiyosaki, which was the how to go with Gerber’s why.
And. Long long story short, but I, through a bizarre set of circumstances, ended up becoming a eMyth consultant and coach working with all these small businesses off the back of my success of one little business, thinking that I was going to come into these businesses and change their world and systemize their businesses.
And I sucked at it because all they wanted to do was get new customers and I’m like, yeah, but it’s Gerber. It’s a system and seven modules and mate. I just need a few more customers. When do we get to more customers? That’s module five. Don’t worry. We’ve got it. Covered. Module five. It’s awesome. When did we get to module five?
I just want module five. Just sell me module five. I can’t. It’s Gerber, but it’s a system we have. When did we get to module five? Is it tight day? Five week five are usually about month 10 get out.
Peter Mahoney: [00:03:00] So you should have built a company called module five.
Mike Rhodes: [00:03:04] Yeah. if I’d been that smart and I was paying Gerber an awful lot of cash to license the name and use the system.
And nobody wanted the system. Everybody just wanted more customers. Then I saw this guy at Perry Marshall talk in Australia back in 2004. So very early days in the Google ads or Google ad words, it was back then. And he was talking about this new thing called Google ad words and how you could only show ads to the people that were searching for exactly what you had to sell and only pay if they were interested
Enough to click on your ad and come through to your website? Of course, back then it was all five and 10 cent clicks. It was very easy to do this profitably. But I saw that presentation and Oh my God, this is what they all want and need. So I stopped paying Gerber, lots of cash and pretty much.
Pretty much set off the agent, set up the agency off the back of that. Pretty quickly after that.
Peter Mahoney: [00:03:57] That’s amazing. It’s great to see that a lot of businesses start because you recognize a need like that. You see something going on in the market and you’re right, that I know from the marketers that I talk to all the time, that the idea of
growth is the most important thing for most people and in growth solves a lot of problems. Obviously, if things aren’t working perfectly, you can grow through some of the issues as long as you’ve got that. And if you don’t have growth, then then the alternative is just driving efficiency and cutting a bunch of costs and it’s much more fun to grow, frankly.
Oh, fun. Yeah, it is. And I saw one of the things that you do, we employed a similar strategy. Mike, is that we we wrote a book. Called the next CMO, a guide to operational marketing excellence. And and you did something similar. I think we must have copied you though, because you’ve done it.
You, you did it a while ago. You wrote the ultimate guide to Google ads. So tell us a little bit about the book, what inspired you to do it and and what you can learn from reading it?
Mike Rhodes: [00:04:59] Full credit here, it goes to my co-authors Perry Marshall and Brian Todd. So Perry was the guy that I saw back in 2004.
We had a chance to reconnect in Maui in 2010. And from that, I ended up training his tribe. So he has, I don’t know, maybe half a million people. He’s the godfather of Google ads it’s been around forever. And he had all these people that were following him, wanting to know how to do this stuff.
He had started teaching this stuff way back in 2007. So I came along and started training all the people in his arena and doing courses and. And that led to the book, but then the book came out or w we sent the manuscript to the publishers and three weeks later, Google made this major change that we’d had to scramble and grab the manuscript back and rewrite three chapters, send it back again.
We made it. And then of course, two months later, Google make another massive change and then another massive change. And I realized that. As soon as the book came out. So I came along with the fourth edition. It was already the world’s best-selling book in Google. Ad-words when I came along. So very lucky as an author.
And I use quote marks for that because I don’t really consider myself a writer or an author, but I know my shit really well. I know Google ads inside and out, and I love teaching it. I have discovered over the journey that I am a teacher at heart. So it was perfect for me. I had a wonderful editor in Brian who would take my stuff and make it more interesting to read it because I think my stuff was a bit dry.
Perry’s got some fantastic stories and is quite philosophical. And then I supplied all the technical bits. So together we’re a good team and yes, the sixth edition just came out a couple of months ago. So we’re going to start out. I believe it’s still the world’s best selling book on Google ads, which is a nice thing to have on your CV.
Peter Mahoney: [00:06:46] Fantastic. And we’ll make sure, by the way, in our show notes, we’ll have a link to where you can get the book and that, but I’d love to know since you’ve done this for so long. I’d imagine that a pretty significant percentage of people who are running ads on Google are not doing it that well.
So what’s your sense of what percentage of the overall number of ad campaigns that are going on are actually really done? You’re getting your full potential.
Mike Rhodes: [00:07:15] So I’m a massive believer in the 80 20 rule and the 80 20 of the 80 20. I heard a stat from a Google once, which probably isn’t common knowledge.
And I don’t know if I’m allowed to share it between friends. We won’t tell anyone,
Peter Mahoney: [00:07:28] They invested in my company. So rather than have it’s okay. I’ll get special dispensation, go for
Mike Rhodes: [00:07:33] it. Something like 50% of accounts nobody had logged into for more than 12 months. That’s not how you do Google ads.
Google ads is not set and forget it. It’s not like the old yellow pages of sit around and think about this for a bit. Stick it in there and leave it for 12 months. Oh. And don’t track it. This just hope that it works and do it next month or next year, because the rep is a strong arming, you into signing up again and saying if you don’t, you can bet it as well.
Google ads is a very iterative thing. It needs a lot of optimization. It needs a lot of work, ongoing work to squeeze the best out of it. So my sense of who’s doing it well would be certainly less than 20%. Who’s doing it really well. The 20% of the 20% I would imagine and that the spend would be the same.
You would have, as with everything, 1% of advertisers who are probably responsible for half of Google’s revenue from ads, and then this huge long tail that they don’t really care about, that they want to make it easier for those tiny businesses that want to spend 500 bucks to grand a month.
Our sweet spot is people that want to spend between probably 20 grand to half a mil a month. They know that it works for their business. They know that it can be profitable. They know they don’t want to try and hire that expertise. In-house because typical tenure of that person is 18 months and they’re going to learn a lot and disappear.
And there’s a lot of different skills involved. It’s very rare that you get all the skills you need inside one brain, you really don’t want to have to be trying to hire that unicorn in your business. You need someone that can work with pivot tables can put code on websites, can write persuasive copy and do all of those very different tasks.
So it’s a fun tool.
Peter Mahoney: [00:09:17] If you were to say the handful of fundamental things, that anyone who’s advertising on Google should be doing, what do you think they are?
Mike Rhodes: [00:09:30] Yeah let’s go back to basics. What is advertising should have the right message to the right person at the right time.
And I would add to that doing so profitably. So I always talk about the pyramid of Google ads. There’s bidding, targeting messaging. So bidding at the bottom of the pyramid and targeting in the middle and then messaging at the top, the whole thing based on data. So we’ve got four levels really bidding targeting messaging, and then data.
That’s the let’s start with data because we get to track everything that makes marketers lazy. That makes beginners to Google ads believe that they quote unquote know what’s going on inside their account. They don’t maybe really understand attribution. They certainly don’t understand incremental cost of incremental revenue.
But if this thing says it only costs me $5 63 for a lead, then it must be right. Let’s tip more money into that channel. But data is what makes the whole thing work in that fast feedback loop of being able to make a change and see sometimes within hours, but certainly within days and weeks see the impact of that very quickly, very clearly. That makes the game of playing your guides really quite addictive. That’s what got me into it. In 2004, it was a bit like day trading. You make a little change, you see what happens, all let’s do more of that, less of that. So then bidding targeting messaging, and the reason I draw it that way, or to explain it that way is because the robots are coming up from the bottom for the robots to do the bidding piece. 2021,
we’re pretty much there. That’s just a big math game and robots are pretty good at math. Then targeting. That’s the interesting bit, because Facebook it’s targeting audiences, a lot of marketing, right? We’re trying to figure out where is this target market hanging out? Google has this unique thing that no other platform has of keywords.
And the intent behind what we type into Google is, so revealing, we tell Google things that we wouldn’t tell our business partner or our spouse or our kids. Yeah. Google knows an incredible amount about us. We can come back to that too, and what they know and how they know it. So being able to target based on the things that people are typing into Google, but then also combining that with audience data.
So your own first party data Google’s data around, who is in the market. If you’re selling washing machines, Google knows who are in the market for washing machines right now, based on their recent searching and browsing activity, over the past seven to 14 days. They used to read your email. They don’t do that anymore, but based on what you’ve just typed into Google, the videos you’ve watched on YouTube, the websites you’ve been to, how long you spent there, which products maybe you looked out there.
They don’t just know that you’re in the market for washing machines. They know that you’re looking at that three to four grand Miele washing machine, and they know which ads to put in front of you next that are most likely to convert. And then at the top of our pyramid, we’ve got messaging. Google have tried getting the machine to write ads a couple of years ago, a bit of a disaster, pretty bad ads, pretty bad copy, but I’m sure your audience is familiar with GPT-3 and the.
The cherry picked examples of what a machine can now ride, bear in mind, the only ones you’re gonna see on Twitter are the best of the best examples. Now that with 99 junk examples for that one that was like, Oh my God, this thing writes a poem like Dr. Zeus, this is amazing. Yeah. Go look at the other 99.
It’s not perfect, but this is just GPT-3. The charts are still going up into the right GPT-4, GPT-5, GPT-20, what will it be able to do? There are heaps of AI firms out there that are within a little niche, doing incredible things in terms of writing copy, maybe just email, subject lines, but they’re really good at that one little thing.
And they’ll do it in the voice of your brand if you give it enough data. So those are the main levers that we have inside of Google. The machines are doing more and more, but we still need humans in the loop. We still need someone to, to think sensibly to use sparse data. When something happens, that’s a bit unusual, maybe like COVID. We need smart people that, that understand the context of that and are looking across different domains and thinking about the rest of your marketing, not just this essentially big spreadsheet that Google ads is.
That’s lovely, but it doesn’t have the context of what your competitors are doing, how that offer performed. The fact that you’re doing this completely new thing in your business, that somebody upstairs says, Oh, let’s throw another million dollars at this and get this out. And it’s completely different to everything you’ve ever done.
Things like that confused machines. So the future is smart people working with smart machines, I believe.
Peter Mahoney: [00:14:22] Yeah. That’s very well said. And I think the, this. This framework that you’ve built around bidding targeting messaging is, first of all it’s very logical of course, that the thing that you hit on a little bit toward the end, there is obviously something beyond what optimizing your Google ads can do, but it’s the offer.
And I find that the last mile there is really often the offer. So of course there are a couple things within the offer there’s in, in Google ads, of course, you have to, once you engage with the ad, you land on something and you’re going to land on a landing page and the, you can have the world’s best landing page in the world, but fundamentally, if your offer isn’t compelling, it’s just not going to convert.
Mike Rhodes: [00:15:13] Thank you. Yeah, and I see so many people spend so much time fiddling inside the machine and the best targeting in the world is not going to fix a crappy offer, but nobody ever tests the offer. They might, there may be test new creative but the number of advertisers that would throw maybe 10 different YouTube videos at a campaign to find out which creative works for that particular audience.
A few will do that, but almost everybody sends yes, all that traffic through to the same lander, the same offer. And they never test the offer because they just. Believe that my offer is fantastic.
Peter Mahoney: [00:15:51] Of course your baby, their baby is beautiful. Of course, baby is ugly. So you mentioned COVID and that obviously has had a pretty significant impact on everything.
But one thing that it’s done of course, is it really accelerated this shift to digital for a lot of people and. I have some theories about what that did and what the ultimate impact it is, but I’d love your sense on what did that do to the whole competitiveness and the effectiveness of the Google ad space.
When all of a sudden there was this rush of demand to doing everything digital, when all these budgets for events went away in some of it started flooding in what was the net effect of that shift.
Mike Rhodes: [00:16:40] Great question. Yes, the great accelerator for sure. I, if you picture that that typical curve that we see, I think about the analogy of the hollowing out of the middle class, right?
That curve gets pushed down towards the bottom, right quadrant. It goes flatter for longer. And then hockey sticks up the side. It’s not bottom left up to top right anymore. It gets pushed further and further down. That means from a Google ads point of view, that the. Less sophisticated advertiser gets pushed down, gets smashed.
They’re being commoditized. It becomes a race to the bottom. They often a lot of these new players, a lot of the new money coming in. They really don’t know what they don’t know. They’re often not willing to invest either in education or a good set up a good setup, so critical. If you start badly in Google ads.
It doesn’t matter how much tweaking and optimization you’re going to do. You’re not going to recover from that. If you’ve got fundamentally the wrong keywords, the wrong copy and the wrong offer to your point, no matter how good you are, optimizing and fiddling with knobs and things in there, it’s just not going to happen at the other end of the market.
We had one of our clients do 5x, the business that they’d done the year before. They ended up having to turn ads off for a while because they were so busy and just couldn’t keep up with demand. So for the sophisticated advertiser that understands their market, that understands how to change the tone of their ads in a crisis that understands that their offer may need to change it and is empathetic to their audience.
It’s for some businesses. Yeah. It’s been fantastic. It’s I hate to use that word because I realized that it, many people in less privileged positions to us that aren’t able to sit on zoom and work from home and have their whole team disappear and work from home at one day’s notice and everything, and carry on.
There’s a whole lot of people losing livelihoods, losing jobs and losing lives. So you need to put that in perspective, but yes, a whole lot of businesses have done really well out of this, the ones that were a bit more prepared. So I think we have to then think about how important thinking time is, how important as a business owner to carve some time out of your week and sit down and nobody could have predicted what happened in 2020, but start to think about what else is going to happen.
What trends from 2030 just got pulled forward 10 years. How. How will AI affect might not if AI happens and how might it, but how will AI affect my entire industry? How will it affect my business? What data do I need to start thinking about collecting now? Because I might use it in two or three years time.
We need to spend more time on that contingency planning and looking further ahead,
Peter Mahoney: [00:19:26] And there was this huge, of course. Acceleration as well as amplification event going on at the same time. And that really created an interesting dynamic for, some companies, it meant a lot of bad things in the short-term even some really good well-run companies.
So I look at some companies that I know around Boston. So Lola travel locally here is a great company founded by the guys who built kayak, a really great power travel. And it’s a business travel application and owned as business travel anymore. And they’re the smartest people I know. And second smarts behind you.
Mike and there. And they just were randomly impacted by this and it was like a meteor hitting the dinosaurs and in, so that they were stuck now, they ended up really pivoting their business and they focused on a really creative cash and spend management solution based on some of their core technology.
So that’s the kind of strategic thinking you say. And at the same time, as you mentioned, some people who happened to have the right offer at the right time, whether you were. Selling masks or medical supplies, or you were selling bread making kits, because that was the thing for a long time people. Yeah.
Mike Rhodes: [00:20:41] Shopify setups or,
Peter Mahoney: [00:20:42] you know exactly. One thing I’ve seen, that’s been really interesting. And I don’t know if you’ve seen this too, because you follow, especially on the small to medium-sized business space. They’re all these really creative, innovative businesses that are popping up from nowhere.
And it’s like a creative Renaissance in business in a way where there’s businesses being created. There’s art being created, there’s music being created now. And and I find it really fascinating that in these really dark times, there’s actually some small development of really creative, interesting new things.
I don’t know if you’ve seen the same.
Mike Rhodes: [00:21:19] Yeah, absolutely. It’s fascinating and wonderful that all of that creativity then gets to bubble to the surface. Imagine if this pandemic had happened 10 years earlier before zoom, before Google docs, before we were able to just work from home at a moment’s notice, it would have been utterly devastating as it has been for, the bottom 50% of most countries in the world.
But if you are able to feed your family and. Your business has disappeared. What is that Darwin quote about, the ability to adapt. We have learnt how fast we can adapt and those that climb out from under the rock and, okay, bye. Put the bottle of pills in the bottle of whiskey down or whatever it is.
That’s trying to dull, some of that pain and okay. What can we do? How do we. Asking those questions and what could we do? How could we, pivot, why did we get into this business in the first place? What, why do we serve this audience? Who do we want to be a hero to? What can we do for them right now?
Some amazing businesses have. Popped up. I agree.
Peter Mahoney: [00:22:27] If I bring it back to down to the mundane again, the the, and I promise I will let Kelsey ask a question because I’m hogging up the time now I feel badly already, but in that context of all this new creativity that’s going on right now, and people try new things with established companies, they’re trying new businesses, they’re trying new messages.
What are the kinds of things, that someone who’s really trying to leverage what the Google ads platform can do. What are the kinds of things they can do to set up and run experiments so they can discover the next new thing, the next new message, things like that. Do you have any thoughts on that, Mike?
Mike Rhodes: [00:23:06] Yeah, that’s a good question. First is mindset. I think it’s having that mindset of experimentation. Everything is a test at this point. There are no knowns that are absolutely certain. Google has some incredible data. For your e-com listeners. Okay. So if you already have a Google account, you have this thing called a Google merchant center, and it’s what sits in between your store and your Google ads account.
It’s the halfway house for data. It’s where Google checks all of your data to make sure that what your product feed is saying, this product sells for $20. That’s where it makes sure that matches your website. Because if your website says you sell it for 30, then they don’t want to show that ad.
So inside Google merchant center inside all of the interesting data. Google a fairly recently created this tool in there where they will tell you mind blowing amount of data in here, but they will tell you the best seller or the list of sellers, rather in every single one of their categories, because they’ve categorized every product out there for sale.
There’s a list of about 5500 at five and a half thousand categories. And you can go look at any category. In any one of about 14 or so countries around the world and see what’s selling right now, what’s trending. What’s the best seller. How do other products compare to that? What price range are people selling that for?
What other products does that brand sell? What a related. It is a huge treasure trove of information. So if you are thinking, ah, I really just don’t know what our market might like. Google wants to give you that information. It’s all there for a second. It’s all completely free. Yes, you do need to have a Google merchant center, but if you have one, then.
Go down and look down the left-hand side, find that little growth tool and then best sellers within that and go explore. I did a video training on it recently for our group. And people were just blown away. The number of Shopify stores that you could create just from that the data in there. But then experimenting.
So your point testing messaging, because if you haven’t changed an ad in a while, your ads are probably tone deaf trying new forms of targeting. Google wants to automate everything they want to take control away from you because they want to make it easier for people to get started. Be careful with that.
I often. We’ll teach people to learn the fundamentals first, and I’ve got a fundamentals course more than happy to make that available to your audience if you want. Yeah, we can. Yeah,
Peter Mahoney: [00:25:45] that’d be great. But I can add a
little
Mike Rhodes: [00:25:46] link here. Yeah. Just to cover the fundamentals of get the basics, or use it as a quick check to go through what you’re doing and make sure you’ve got the fundamentals covered is there’s so much data there.
As long as you’re willing, I’ll come back to mindset as long as you’re willing to be wrong. As long as you’re willing to try things that you don’t yet know the answer to that really is the crux of it all.
Peter Mahoney: [00:26:08] Yeah, we’re going to go back to, I promise. I’m going to let you talk sometime Kelsey. I know she’s saying I can see her on zoom.
She’s ready to go and then chomping at the bit, but she probably knows where I’m going to go with this is that one, one of my favorite principles is that marketers need to be more like scientists than promoters and they need to actually believe that, they the idea of running experiments and finding the truth is incredibly important and valuable to them because sometimes in fact, an experiment that leads to a negative result is super valuable because it, it gives you information about what, what doesn’t work and as long as you’re willing to learn.
Yeah, exactly. So that’s really it. So I’m going to shut up and let Kelsey asks something. So wait a minute. I know you’re going to say something. I know it’s going to be insightful. But let’s just leave a little bit of oxygen left for Kelsey. Go ahead, Kelsey. All right.
Mike Rhodes: [00:27:01] Last
Kelsey Krapf: [00:27:02] question. What advice would you give to current and aspiring CMOs?
Anything from Google ads to what you’ve learned about fundamentals, free range here.
Mike Rhodes: [00:27:13] Wow. Big, broad question. Thanks to the nice easy. Just layup there. Yeah, we usually let
Peter Mahoney: [00:27:18] her do the layups. Yeah.
Mike Rhodes: [00:27:19] AI is real it’s coming it’s here. Start thinking about how that affects your business. Yes. The Gartner hype curve.
Yes. We’re probably just past the peak of that and heading towards the trough of doom or whatever they call it. Yes. AI has been over-hyped, but it is going to make a big impact on your business. From a Google ads. Point of view. I believe everything. Google tell you they want to their profit, not yours. So go in eyes wide, open.
And make sure that I know this sounds incredibly self-serving to say this as an agency, but make sure you get good help, at least with getting everything set up the right way and get educated about all of those new things, because they are innovating at a rate despite the whole of Google being worked from home.
Now they are still pushing a whole lot of new things, but they will say. Just trust the machine, give us your credit card, turn it on. Walk away. Don’t do that. Please. Don’t do that. That’s a great way to melt a credit card. Anytime you hear the word smart from Google, insert the words, not so in front of it.
So don’t use that. Not so smart campaigns. The smart bidding is pretty good these days. It was pretty horrible two years ago, but their AI. They are the best in the world. I think at AI, their AI is doubling in power every four months. So that curve, that exponential curve goes up pretty quickly.
That means you get 30,000 times better every five years. So if you tried some of the AI a couple of years ago, even a year ago, and you went, Oh, this is no good. I can do it better. I will never be beaten by the cold hard machine. Yeah. That’s what Gary Kasparov said back in 97. That’s what Lisa doll said, playing go back in 2016.
We will get beaten by cold, hard machines in certain areas. I don’t believe that AI takes away all of the jobs. I don’t believe it’s that dystopian. I think it’s much more hopeful. Maybe this is a good place to wrap things up, but I think it’s much more hopeful than that. I think the machines take away a number of tasks.
We have to be very conscious and think hard about. Which tasks will they take first? Which tasks do we want the machines to take quite frankly, to free us up for that more strategic, more creative thinking about offers to your point, Peter. Yeah. Get rid of all the mundane crap. Fabulous. We shouldn’t be sitting in spreadsheets, tweaking numbers anyway, that computers are really good at doing that really quickly.
Let them, and let’s all come up levels and starting to think a bit more strategically and synthesize data across. A range of domains. That’s what humans are really good at. And computers are pretty bad at this point is joining the dots with very little data. Computers need a lot of data. And our total, I can tell you that’s a cat after seeing a cat about five times, the machine still needs 10,000 examples.
So let’s do what humans are really good at.
Peter Mahoney: [00:30:13] Excellent. With that doing, with doing what humans are really good at Mike I feel like we just scratched the surface of this discussion and I’ve learned a ton, which is great. It’s one of the best things about doing a podcast is you learn stuff all the time.
And I encourage people who are. Interested in learning more to check out Mike’s book, the ultimate guide to Google ads to check out web savvy. We’ll have all Linky things in our description so that you can check that stuff out really appreciated your time today. And I think Kelsey, it’s time to take this out.
Thank you so much for your time today. Mike, make sure to follow the next CMO and Plannuh on Twitter and LinkedIn. And if you have any ideas for topics or guests, you can visit our website or email them to thenextCMO@plannuh.com. Thanks Mike, have a great day,
everyone.
Mike Rhodes: [00:31:03] Thank you.