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Mastering Facebook Ad Scaling: Spend More, Earn More! — Transcript

by Professor Charley T · 2,907 words · 413 segments · language en · Watch on YouTube

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0:00I had one brand we were spending 3,000 a
0:02day at a 60 after about 9 months we were
0:05spending 50,000 a day at a 15 we had
0:10legitimately increased the spend by
0:13nearly
0:1520x and the CPA went down 75% as a
0:20result now why do your CPAs go up on
0:22Facebook when you spend more money
0:24there's a very simple reason and I don't
0:26see just about anybody teaching this so
0:29I'm going to do it right right now your
0:31ad isn't designed to reach more people
0:33I'm going to draw you a quick little
0:35circle this is the lookalike audience
0:38that your ad has made remember every ad
0:42makes its own audience because every
0:44post ID understands who that ad should
0:46be shown to because every organic post
0:49and every ad has engagement Facebook
0:52finds out who's most likely to see that
0:54ad who's likely to respond positively to
0:56it and then creates an audience of
0:58people that should see it that's why
1:00maybe your Instagram real gets 1,000
1:02views even though you only have 20
1:03followers now here's the point this is
1:06the available audience for your ad now
1:08maybe that is a great audience for you
1:10to spend 500 a day now what happens when
1:13you try to spend a th000 a
1:15day is that ad begins to reach out to an
1:20audience
1:22outside of the best available
1:26inventory this is where you're getting
1:28people for the goal but once you start
1:30to spend out into all of this universe
1:32because you're spending more money than
1:34this ad can actually handle what happens
1:37you force a lower quality experience on
1:40users which increases your
1:43cpms and because now you're reaching
1:46newer people who are lower qualified
1:48that are Facebook is trying to start a
1:50journey with in ultimately converting to
1:52your product what happens it's less
1:54efficient at driving a sale so your CPA
1:58goes up how do we over come that issue
2:01well very simple we make several
2:05ads now if we have five ads there's a
2:09lot of people that these ads can go to
2:12each one of them theoretically can
2:14handle a little bit of spend but
2:17combined there's some overlap and these
2:20people were going to convert super easy
2:22which is why when you run broad
2:23retargeting happens anyway and that's a
2:26good thing why first time impression
2:28rate is not a guy damn thing you should
2:30be worried about and anybody that says
2:32so is dead wrong because what we're
2:35actually looking for is this ad hit
2:36somebody and that ad hit somebody and
2:38that ad hits somebody and they're in
2:39this little crossover section right here
2:40and look at that they converted for
2:41super cheap that's a great thing not a
2:44bad thing again anybody whining about
2:47first time impression rate is dead wrong
2:50now what this ultimately means is as we
2:52try to increase spend each one of these
2:55ads will start to do a bit more work now
2:59there's going to be an efficiency
3:01Improvement as these ads all go cuz
3:04Facebook's going to find how do we get
3:06this ad and this ad and this ad to
3:08somebody to convert this group of people
3:11right how do we make that happen right
3:14so ultimately we get really good sales
3:16here we get some really good sales here
3:18right in these two sections and now boom
3:22and boom we got some amazing efficiency
3:24what happens when we spend more money we
3:25get more data our CPA goes down cuz
3:29Facebook is better and better at finding
3:32these people and our cpms go down
3:34because we're able to better match good
3:36ads to reach more individuals this is
3:39five ads in a broad ad set there's going
3:41to be retargeting there might be some
3:43first time impression ratio nonsense
3:45going on but you know what the more
3:47money we spend the more stable this is
3:49going to be and over time our cost of
3:52advertising is going to come down that's
3:55how machine learning works that's how
3:57data works that is one of the biggest
4:00things that I see almost every expert
4:02out there
4:04completely missing and for the record
4:06this isn't Theory this has been
4:08confirmed with over $1 million in case
4:12studies spend that I've done with
4:13measurement and the product team at
4:15Facebook for machine learning for the
4:17auction and delivery team this is how
4:19Facebook works and here's the other
4:21thing that's not a secret Facebook's
4:23been telling us this for years so here's
4:27the big thing why does CPA go up because
4:30you're forcing your ad to reach new
4:31people here's the other thing that
4:33increase in CPA isn't permanent once
4:36Facebook understands how to convert
4:38these other people or you get a few ads
4:40that can touch the same person your
4:41first- time impression ratio whatever
4:43you're going to get better which is why
4:45we don't need to worry about retargeting
4:46which is why we should also focus on one
4:48specific offer which is why we should
4:50only have one campaign which is why we
4:52should have just one or two primary ad
4:55sets where our best ads are going after
4:57people because then Facebook is able to
5:00map out the customer Journey the user
5:02experience of somebody on Facebook to
5:04ultimately get them to drive that
5:07ultimate action because Facebook isn't
5:09trying to make every impression make a
5:11sale Facebook is trying to condition and
5:13prime the user to want to take that
5:15action the way that they've told
5:17Facebook they behave over the last
5:19decade maybe you have told Facebook for
5:22the last 10 years then when it comes
5:24around time for Valentine's Day when you
5:26start to see videos of happy people
5:29around the 1st of February and then you
5:31see some good static images a week out
5:34with a sale on that 10th or that 15th
5:38impression and that third click you're
5:40you got a 90% chance of actually making
5:43a purchase well now because I've done
5:45this to you for a decade I know how to
5:49condition you to make a sale because
5:52Facebook is trying to deliver intent
5:55right and trying to do market research
5:56and ultimately Facebook's trying to give
5:58the end user a positive experience the
6:01point here is this is how Facebook works
6:03and we're trying to scale spend we need
6:06to scale into that margin one of the
6:08easiest ways of establishing that margin
6:09is by giving a few options for Facebook
6:12to make and then we do testing to try to
6:14improve the quality of those options
6:16absolutely and then you get to the point
6:19where when you spend more money you
6:20might get a small increase in CPA
6:22immediately and then it levels off and
6:24then it starts to come back down I've
6:26done this repeatedly for years the most
6:28extreme case of this was I had one brand
6:31we were spending 3,000 a day at a 60
6:34after about 9 months we were spending
6:3650,000 a day out of 15 we had
6:40legitimately increased the spend by
6:43nearly
6:4520x and the CPA went down 75% as a
6:50result of it this is what I'm talking
6:52about you can absolutely do this and by
6:53the way I've done that dozens and dozens
6:55and dozens of times more data is a good
6:59thing
7:00sometimes the biggest mistake
7:01advertisers make is they pull back and
7:03spend when results are bad they say hey
7:05Facebook you don't have enough data to
7:06be successful right now so what I'm
7:08going to do is I'm going to give you
7:09less data they say well you know
7:12Facebook's costs are going up and my
7:14email and Google are really good so I'm
7:15going to try to spend more money at
7:17email and Google what happens you see a
7:19great lift you pull back and spend and
7:21then 7 to 10 day Days Later email and
7:24Google just drops entirely why because
7:26you completely saturated your entire
7:28High intent pool that was May going to
7:29convert anyway you didn't feed that
7:32bucket anymore you basically drain the
7:34entire bucket Dro no more water in you
7:36let all the blood from the stone and
7:38you're complaining when it doesn't print
7:39money anymore whose fault is that it's
7:41not Facebook so here's the last point
7:42that I want to get to you have to
7:45understand Omni Channel targets and this
7:48is the big big thing your Facebook CPA a
7:53lot of people are saying well I'm
7:55running different campaigns I'm doing X
7:56Y and Z the Facebook CPA attribution
7:58doesn't work you know all this other
8:00stuff iOS 14 excuses excuses excuses
8:02none of that is relevant here's the
8:04point when you're seeing good results
8:05for a week multiple weeks when you have
8:08some good weeks some bad weeks what does
8:09your media mix model look like what
8:12percentage of spend is going to Facebook
8:14and what is the CPA of Facebook for your
8:16Flagship offer if you can recreate that
8:18situation How likely are you to again
8:21recreate good outcomes I'm going to give
8:23you a hint it's extremely likely it
8:25becomes a situation of not trying to
8:28chase the dragon and burn the House
8:30Down in Flames by throwing all the money
8:32at the thing that works and then
8:33complaining when it doesn't work anymore
8:35it's about creating an environment that
8:37is going to continually deliver you the
8:39optimal situation for success and then
8:42improving the volume of that opportunity
8:45for success and it really comes down
8:47again to the primary equation that is of
8:50absolute most importance in growth
8:53marketing and acquisition CPA plus cogs
8:57parenthesis divided by LTV how much does
8:59it cost for you to acquire a customer
9:02plus produce the goods or services
9:04versus how much is that customer worth
9:05to you now remember every sale is not
9:08necessarily acquiring a customer and
9:10then some people say well we're just
9:11focusing on new customer CPA great
9:14you're solving for onethird of the
9:16equation that's wonderful but you're
9:18probably ignoring a lot more important
9:20things and let's be honest if you were
9:23good at all of that other stuff that's
9:25great but very very few people have
9:27anything close to 100% % Reby rate if
9:30you're getting 20% of customers to come
9:32back and do what come back and spend
9:34more money you're doing pretty good so
9:36why not spend more money to get 25 or 30
9:39why say that if a customer buys from you
9:41and they don't buy again is that a
9:43really good business model do you think
9:46McDonald's got successful because they
9:48said once you buy a Big Mac we never
9:50need to Market to you again of course
9:53not ludicrous but that's also one of if
9:57not the most popular line of thinking
9:59I've seen forever that well we're going
10:00to exclude purchasers and we're going to
10:03focus on new customer acquisition costs
10:05and we're going to focus all these
10:06people down the funnel because we got
10:08them once we got them we don't need to
10:09Market to get them again that's
10:12and here's the other thing that's really
10:13important Facebook knows what it is that
10:16you're trying to do right because
10:17Facebook understands what you're trying
10:19to ultimately accomplish is drive a
10:21conversion well where are we getting the
10:22most efficiently and if that person is
10:25likely to convert on their own great but
10:27Facebook also knows how often is
10:29somebody likely to buy how do they know
10:31that maybe they have a decade of your
10:33purchase behavior and your engagement
10:35behavior and understanding how often you
10:38do things if you buy a pair of sneakers
10:40by clicking on a Facebook ad do you
10:42think Facebook's now going to smash you
10:43with a ton of other ads for shoes
10:45wouldn't that give you a really
10:47experience on the platform have you ever
10:48noticed that once you buy things you do
10:51see some ads from really bad Brands but
10:53all the good brands Those ads just seem
10:55to disappear now the first idea might be
10:58well they're excluding purchasers right
11:00Adidas ads aren't being shown in your
11:03feed because you bought a a New Balance
11:05sneaker and Adidas is excluding you from
11:08that purchase conversion pool no
11:10Facebook knows that you've completed a
11:13purchase objective with a whole ton of
11:15metadata on that product and over the
11:17last decade it's taking you at least 6
11:19months to two years to be interested in
11:21that product again now there are some
11:23products we can buy it over and over
11:24again right especially cpg especially
11:26some a lot of clothing stuff like shirts
11:28and whatnot so you might see those ads
11:29all the time but you have to remember
11:31Facebook's number one objective is the
11:33end user experience so we're looking at
11:36Omni Channel targets we have to
11:38ultimately see how do recreate really
11:41good situations for Success what is the
11:44balance of investment across all of our
11:47channels to acquire that success and
11:49then how do we use uh that information
11:52to amplify that success and really the
11:55way that we do that is we see spend
11:57volume and Revenue by Channel with that
12:01Channel's reporting yeah I use platform
12:03data 100% why because that's the
12:05information the platform has Why Try to
12:07outsmart the platform by using
12:09information it's not privy to that isn't
12:11how it's deciding to make decisions and
12:13then try to amplify you're undermining
12:15your tool of success which kind of
12:17sounds like hacking Facebook which kind
12:19of sounds like something we know doesn't
12:20work which kind of sounds like the same
12:23thing that everybody's complaining about
12:25for years which also kind of sounds like
12:27the thing that most really successful
12:28Brands don't bother with so here's the
12:30ultimate goal here's the big picture you
12:33need to establish a margin on CPA for
12:37your Flagship product you need to drop
12:40the distractions of three or four offers
12:43and a bunch of audiences and retargeting
12:45and all of this other nonsense remember
12:48retargeting is completely unnecessary
12:50because every impression is retargeting
12:52even the very first impression on cold
12:54prospecting is being shown to somebody
12:56because Facebook has determined that
12:57that person is already up to want to
12:59respond to it if you have advanced
13:00matching your cold audience first
13:03impression might very well be the 20th
13:06ad somebody sees over the week for that
13:08type of product because they're seeing
13:09it from Nike from New Balance from rebok
13:12from Sani and from Converse you're not
13:14special but you can absolutely maximize
13:17on the investment that other people have
13:19made so we need to understand what our
13:20margin is and then spend into it
13:22realizing that as we spend into it while
13:25we might not get a sale directly from
13:27the platform which is probably also to
13:29we're going to see a lift in search
13:31volume in direct traffic in organic
13:34reach because hey more people know about
13:35us more people responding positively to
13:37us and more people going to respond
13:39positively to our messaging we're going
13:40to get higher open rates and more email
13:43addresses because again we're driving
13:45positive perception of the brand if your
13:47ads are good by the way by the way if
13:49your ads are bad you're just trying to
13:50make a sale all the time you're going to
13:52set your entire business on fire right
13:54every conversion ad is also a brand
13:56awareness ad because ultimately we're
13:58trying to do is make people feel good
14:00about our advertising and want to deal
14:01with us as a brand this goes back
14:03hundreds of years the real issue here
14:06was there was a point in time where
14:09online marketing wasn't sophisticated
14:11enough to take this in and there are
14:13extremely popular channels like email
14:16and search and others where they don't
14:19have that sophistication or their
14:21business model isn't about the end user
14:23experience for Google they want you off
14:26of Google as fast as possible they're
14:28goal is that you land on Google and 5
14:30seconds later you leave if Facebook had
14:32every user log on to Facebook CN ad and
14:34leave in 5 seconds they'd be out of
14:36business align your goals with theirs
14:39and you're going to be really good so
14:41establish that margin remember why your
14:43CPA are growing solve for that and
14:47ultimately measure your Omni Channel
14:49effects of spending make targets for
14:52those and truly begin to establish test
14:55and plan for incremental lift you solve
14:58for that problem and instead of trying
15:00to find the next audience or the next
15:03hack or running 50 60 100 creatives a
15:06week to try to just maintain your spend
15:08you're going to be seeing consistent
15:10projectable growth week over week month
15:14over month year-over year which is going
15:15to be the big difference between you
15:17struggling in your six and seven figure
15:19brand and you talking to investment
15:20bankers about an exit strategy in three
15:22years is your business a paycheck or a
15:25retirement plan think about it YouTube
15:28say might like some of these things go
15:29ahead and give me a sub I think it's
15:30over this way anyway I hope you all have
15:32a lot of fun I know this was a helpful I
15:35had a great time I'll see you on the
15:37internet bye

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