Charley is an industry disrupting results-driven strategic & creative problem solver with a diverse advertising experience, and a focus in strategy and performance media. An idea person who specializes in consistent improvement of performance, solving puzzles and finding opportunities.
Then a half an hour after that, I'm like, Hey, by the way, I hope you enjoy all this and join our Facebook group. And that basically community was over 300,000 people because I had to joined the community on every single app. I basically said, here's our product. We don't believe it's going to space for community to check it out. So you have a whole ton of people joining the Facebook community to see how it's going. And inside of that Facebook community, where maybe 20 to 50, like diehard actual fans of the product. And we incentivize them with a 10% off. If they just went in there and basically said positive things about everything that we did. And then we had a separate Facebook group just for them. But we dropped in every ad that we were going to run and they just dropped like 10, 15 positive comments.
So every ad that went out the door had amazing social proof. And my estimated action rate is through the roof because for $0, I already got 15 positive comments. I'm like 20 foot. This is a great ecosystem that builds long-term value. So, so it builds your Facebook community for free people pay for the right to join your Facebook community. They join your CRM list where even if you don't convert them, then you're getting hit them up for, in perpetuity until your email person says, like, I'm not going to hit this person anymore. They're paying you for that opportunity. You're effectively breaking even at the top of it because you're actually still putting in a link to the website. So somebody can make a purchase. Even if they don't want the boat, even if they're like, this thing, but that looks good. I'll try and do it right.
You're listening to the rich add poor ed podcast, where we break down the financial principles that rich advertisers are deploying today to turn advertising into profit and get tons of traffic to their websites without killing their cash. These advertisers agencies, affiliates brands are responsible for managing over a billion dollars a year in ad spend. You'll hear about what's working for them today. They're rich ads and we'll roast their Epic failures and crappy ads on the internet with core ads. Let's get into it. All right, everybody. We're back in action. With another episode of the rich dad, poor dad podcast. We've got your host, Dylan, Zach in the house, Zach mans is going to be a fun one. You ready? Yeah, man. I don't think I can hang with today's guests. I'm going to be fun.
Nice. And I hope you,
I hope you're ready to throw some shade done. Cause we're going to be is going to be a heated one, but to make a nice intro, we have an actual Facebook disruptor here. This guy has managed well over a hundred million dollars in ads. He's the definer of best practices. He calls people out for their flaws and he gives away a ton of good free information. He's been booted out of so many Facebook groups are providing that good information, but he's an interesting guy and I can call him a friend. I've known him for a couple of years, but Charlie,
Hey buddy, how you doing? Yeah. All of those things are true. It's funny. You and I, I think met in person at a conference a couple of years ago, we were sitting around some other guy that is also like trying to like a mind meld thing, like his whole thing, which is awesome. And then we were chatting and then all of a sudden this as we're chatting and he goes like, you're that guy? But things like whatever. Cause my Facebook like a video profile video thing. And he pegged me as funny because we just basically found me getting booted from like cat house things in it. Jack reports thing to Tim Burton's thing. And eventually I had to start my own because no guru would let me in their group because I was providing too much value, undermining their and like, uh, like dealing with some of the O G folks from Austin that got me in that they inspired me to basically build my own thing. And now I've got like 12,000 people. So
No problem, man. Hey, sexy Facebook tactics, man. He is the way, the way you phrase it was just a gold mine. But yeah, I remember all that value. And then all of a sudden you didn't hear from Charlie in those groups and it turns out you got kicked out.
Yeah. Every one of those people, which is hilarious because almost every one of them is in my group. And almost every one of them is a followup for me on Twitter now because I started going a new Twitter. Cause I was like, it. I should get on Twitter. Like, uh, I should probably have been on DTC Twitter like five years ago, but whatever I'm on there now and now they're all following me. And then it's funny, like a chat with them all. You'll never like I see them at like conferences in the company like, Hey man, how's it going? And then like, I'm like, Hey, I feel like I'm blocking me. And then we'll snap, man. Give everybody an idea of who you
Are and kind of what you're getting into. Some people have some context
Juror. So, uh, first off he calls me at Facebook disruptor, which is actually the term. So Facebook has a thing that they called the disruptive group, but just the top 130 advertisers on the platform. And it's people from all over different verticals that have a whole bunch of different things. And the, basically what they do is the Facebook disruptors or when they have a new product. And when they have a new strategy or a new thing, the engineering team, the measurement team, whatever come up with, they bring it to Facebook disruptors. And basically where are the people? They see things before and an alpha that can kind of come in and be like, Oh good. This is how you could use it. This is what we can be doing. And then after basically, as he goes through development from alpha to beta to full release or the people, when you see like, Oh, this is a case study, this is the best practice. When your rep teaches you how to use a new tool. It's because they're quoting the work that our Facebook, that Facebook disruptive group did. So like I'm lucky enough to be in 30, there's 130 of them. There's 130 of them. We should see,
We can get on the, on the podcast that would be like hilarious
About, about a hundred of them are students of mine. So like for what it's worth, I'm a very loud number in that group. Uh, and uh, they, they all know me, which is great. Uh, there are some people in there they're absolute brilliant. I would say, um, everybody's got everybody in that group is sorta like, Oh, super specialist in something. Right. And there's a few people that have overlaps in the and like, so yeah, there's some people that are great and, and, and, and deployment of things. And some people that are great in testing and things, some people that are great in ideation and measurement and all sorts of things and like where my specialty really lies is, is an experimentation, um, appropriation of tools. And then also just automation and workflow scaling like efficiency and spend. So basically like I'm a business objectives guide, right?
So like there are other people that are going to be really a lot better at like, you know, there's their creative folks, right? Or there's copywriter folks, or there's like people that are really awesome at doing the back end development piece. I'm a terrible copywriter. I'm a horrible coder. The last time I really was programming was when a program, my TA 83 to cheat my way through a calculus in high school. Like, uh, but like, you know, so you gotta know what your strengths are and your weaknesses are. And so one thing is, I think nobody will disagree with is when, when I come to the table, my primary focus is how do we automate all of your workflow and increase business objectives and get you out of the bubble of day-to-day thinking so that you can use what Facebook does best and get out of your own way.
I'm a huge believer. My biggest thing is utilize the tools and train the platform because it's a machine learning. It's a slow learning dog. Just teach it the outside and you'll make a ton of money. Everybody that's trying to hack this thing. They're spending a lot of time working against the best practices, basically saying, I understand that Facebook is the greatest tool ever devised by man degenerate intent, but I think they're wrong and like 20 different ideas. So let me chase my tail and work 20 hours a day to not do as well as this other person that says, if I spend more than an hour on my Facebook campaign account on a daily basis, I'm wasting my pump, which is my position. I think if you spent, honestly more than 90 minutes on Facebook, you'd better be building ads for 45 minutes, but you know, that's me and you know, for what it's worth, I'm going to beat out the people that are working their off. What kind
Of brands are you working with these days? Is it products
Kind of curious there? Yeah. So product services, opportunities. I mean, across the verticals, you know, back in the day, I can drop big names that I used to work with. And I won't necessarily mention the people I'm working with now, but like I was like supervisor for Nissan supervisor for CVS. I was working with the Levi's team Activision team. Um, I man, there was a point in time where at the same time I was at an ad agency, I was a senior there and I was managing a Domino's, uh, pizza hut, which is a complete conflict of interest, but whatever. Uh, also, uh, Jack in the box and Disney movie Disney movie club, uh, MGM hotels, some of these brands spend like CBS are spending a million dollars a day, like
Get that on ad card by the way.
Seriously. Right. Can we just, can we just get off of Facebook and credit cards? Like if they get to the point where they're doing lines of credit, right. I mean, they're doing insertion orders again. It's like, and it sounds fancy, but honestly it's an insertion order on a reach and frequency campaign where you just drop in a lot of zeros and then you just cover your. Yeah.
Can you imagine making two, two and a half percent on a million a day? Like on just card, like MasterCard would call me like,
Yeah, no, it's, it's insane. It's absolutely insane. And that's also like show launches and stuff like that. For instance, like I did the launch for Stephen Colbert when he went, took over the late show. Right. Um, and then like, I think I did code black and super girl. I did like sweeps week for like a, a wheel of fortune and jeopardy and all of these things. And during those times they just want everything right. And that's why I love it. When people talk about like, Oh, I've saturated my audience, or I have creative fatigue. I'm like, I spent a million dollars against the United States and I got a 70% saturation rate. you. You're never going to hit.
Speaker 3 (09:34):
I'm already. This is like even better.
I do all the time. By the way, I got a weekly live. I do every Saturday, I'm Periscoping it. And then also it's on my Facebook group and I got a fun show them doing with another guy from Austin Raba. Who's been a long time group member and we got to show up on the court and it's basically like best practices and literature. And then I got a segment there, which I'm trying to really kind of take on, which is just as I called guru busters. When I find some on Twitter who is like 20 to 50,000 fires. And I was just like, last week was the second night call. It was from a ad account or Twitter account called ads Alchemist. And it's just a lot of good stuff, but I, I, they were saying, yeah, make lookalike audiences off of like video views and issue and add the cards.
I'm like, don't, it's stupid. And you're gonna be chasing your tail. And here's 10 minutes. Why it's too long. Didn't read, uh, only make audiences and optimized towards things you actually want to happen. An add to cart is somebody that abandoned cart nine or, you know, nine times out of 10, 19 out of 20, like, do I really want to make a lookalike audience of people were one out of 21 is actually going to give a who I am, no that that's against broad. Once you get enough actions, then you know, make a look alike or something like that. But there's all these people that try to massively overthink things and overly complicated. And the honest truth is it's a machine learning automate you. Like you can assist it with automation and spend the most amount of money in the fewest places so that you can actually scale your efficiency.
It's not about scaling spend it's about scaling efficiency. It's far easier and better for your bottom line to go from a $20 CPA to a 19 or $20 to an 18, getting a 10% increase in efficiency is far better for your bottom line. Then keeping the same efficiency and increasing your spend by 10% because there's costs of goods, there's operating costs. There's a million things there's interest on your credit, a million other things that go into it. And if you scale your efficiency by 10%, maybe you can double your spend because yes, you will lose efficiency once you increase your budget, but it's estimated action rate times your budget. If you get a higher estimated action rate, you can increase your budget to maintain the same bid and automated setting. So increase your efficiency, ramp up at the bottom of the funnel, building an amazing system, and then just feed that bit. And that's so much easier
Speaker 3 (11:45):
Than like, Oh, like lookalike
Audience testing and going after interest groups and trying to compete with billion dollar companies that are spending a million. Like when I was working with new balance, they'd spent $50,000 a day on interest testing. So they could do market research. They didn't give a about your bottom line. They just wanted to know what women this age or people interested in this, or like whatever it was. They're doing customer surveys that basically through Facebook target, you're competing with that
Speaker 4 (12:13):
Thousand. Other of I'm trying to like more of my CPMs. Aren't like,
So anyway, fun stuff. I'm super excited about this ad that I sent to you guys, because I've been trying to go over it. And I got into this chat bot thing cause it's black Friday cyber Monday. And like, I see so many people making the mistake of like trying to compete with Jeff Bezos with like, I'm going to prospect in the black Friday. It's like, you, you already lost. And then they're like, Oh, well, I'm going to make my product. I'm 40% like, you. That's stupid. Why pay people more money to take more of your profit? Like if you're going to sell something for a hundred bucks a night, I only sell for 60. And instead of making this up for 20 bucks, cause it's black Friday, now it costs you 40. You just completely cut your profit margin by like everything. And people were always bragging about these ridiculous Facebook ROI numbers.
And it's like, well, what are your costs of goods sold? What is everything else on top of your business? Like how much are you spending for a year to pay your email staff? What is your delivery costs on things? Well, how much are you spending on Google branded search? How many times that one conversion? How many places are you getting credit for it? So when somebody, like, I just saw this other thing from comments, I collected that some new person's like, well, black Friday delayed. Attribution's the highest in the year. And I said, well, that's absolute. I'm like, well, no, well here's our report. And I'm like, yeah, but how much more are you spending and brand awareness and how much you smash these people in emails, how much like, yeah, your delayed lift goes up 20%, but also what your duplicitous like conversion.
If you put up the conversion value of every single channel on that first day, how much over like say your Shopify says you made a thousand bucks, but your email says it made 800. Google says it made 500 Facebook says it made 800. Like clearly you didn't make two grand. So like quit lying to yourself. Right. And so like I had to explain that to them and Taylor didn't quite believe me. And so I was like, Oh, I messed up. Okay. Uh, so anyway, this chat bot thing was just like, why compete with people in a high intensity marketplace? Like understand people, the theory behind the like lead build up your retargeting pools and get traffic and all that stuff, and then capitalize on the black Friday. Makes sense. Totally makes sense. But understand like when you see somebody dropping some Facebook thing with like a 28 ROI on a link click campaign, cause they sent it to some website it's like, yeah, that did that.
That drove like a hundred thousand dollars in sales. But you also had to pay a team of email people to get there. You had to use some Google stuff and you're giving Facebook credit for a sale. And somebody that clicked 27 days ago that can they open 12 emails and search it doesn't times like, yes, Facebook drove that, that, but it's not incremental to your business model. Right. And it's super expensive and super low conversion rate. Right? So say it cost me $2 to get a click, right? That's a dollar book. Let's be stupid. Let's say it takes 25 cents a click. Right. And you get a 4% conversion rate, right? Like on an open rate at 4% open rate and it, and like a template, the bottom line is it might cost you a hundred
Speaker 3 (14:52):
To $150 on a link click campaign to drive one sale. Now say your AOV is a hundred bucks. Your link click campaign costs cost you 50 cents, $50 a customer. So yeah, you might hit a 28 X when you lost money on every single that came into your system. Cause that's stupid. So instead when I was showing you guys was like this, uh, Facebook, everybody knows we're going to go ahead and put them into the rich ad segment and we're going to talk about chocolate. So, so like it, by the way, I used to work in black talk radio. I was a Sirius XM radio host before this and the touring musician. So like I can talk to a bare wall for four hours later and take a breath. So like, uh, so, so the point of this chat bot thing is bottom line.
Speaker 3 (15:40):
First off chat bot, open rates, 80 90% conversion rate on chat bot because somebody shows an intent to opt in 80 to 90%. Right? And I think the example I showed you is that 90% open rate, 83% conversion rate of those that open, right? Those are in that wheelhouse, not better than average, not worse than average, right. In the wheelhouse of things. Right. And I think the number is, let me double check on it. Cause I did message you before, but like we spend about $15,000 on growing people into the Shopbop right. And out of that $15,000, we got about 2,700 people that opted in with about 2200 sales. Okay. So it's an 80, roughly an 83% conversion rate VOB was $72. So let's do a quick math, that's $160,000 on $15,000 ad spend. Now that's a 10 X, which I would love to take credit for, but that was also a month long campaign.
Speaker 3 (16:28):
And there was probably three or four people that are getting paid 80 grand a year to do email stuff, but still so, so the margin above costs is still about four to five X, right? Because of, because of everything else. Right? And then you have your cogs, which is about one third of that. So let's take that down to truly, it's about a two and a half X at the end of the day, every dollar you gave me, I gave you two and a half dollars back in a system where I grew the CRM base for that. That's the first purchase. Now, if I can get them, that person to make a second or third or fourth purchase because they're in my CRM database and roughly 20% of those customers have an LTV over $200. The lifetime value of that is probably about five X-Wing my initial costs.
Speaker 3 (17:05):
Right? And so that's a system that's far easier to maintain far more profitable than an email campaign. We have to make a lead gen page, you doing a late click to some page, we set up a flow and then you're testing your different flow. Some of them work, some of them don't. And then I have those emails. Half of them are real half of them aren't and then those people get an email from me like three weeks later. And you have to give something away just to get that email, right? So we're not even talking about like the dirt bike. The common thread collected is getting away to get your email address. There's another like 10 grand or five grand or whatever, plus paying the influencer talent to do it. So that's going to be another five or 10 grade you're in the whole $20,000 before you spend a penny on getting these splits, which what's called 25 cents a click, you're going to lose 50 cents on the dollar just to get to that ecosystem.
Speaker 3 (17:48):
Right. And if that's a purchase, your Facebook number is gonna look right and you're gonna sell the out of the course to people that don't know any better, but you're running a terrible business. So my point to this is this chat bot flow tap up flow is super low friction. There's a there's info to chat bot, especially in many chat, which I think we met at the mini chat conference. If I remember correctly and I've been using it ever since, and I know the Alexa and all these people. So like they have a growth tool that's called comment to opt in right now. You can't tell. But now that they add that I did send you guys, does it comment in the text, but then Facebook has now penalize you for saying that and they won't flag it, but it will make you like a two to three times X on, on your CPMs because it's a low quality ad because you're trying to inspire some conversation.
Speaker 3 (18:31):
Okay. Now, when we break this thing out, it costs roughly about $4 to get a comment, which you might think, well, like that's crazy, but I'm running on a conversion objective. So it's $4 to get a comment from somebody who's likely to make a purchase. And there's a link click to the website inside of the ad. So this ad actually got a 0.8 on its own. So while we're talking about the $160,000, it's everybody from the chat flow. That's not including the like 12,000 and $13,000 that we made immediately from it on a one day post-click off of the link, like inside of the ad before somebody even opened the floor. Right? So like we basically broke even getting lead gen that we then tenants, right? And then it's actual five. That's the include LTV plus cogs, overhead, you know, uh, paying people to do the work, all that.
Speaker 3 (19:20):
Right? So the idea here with this is the overall layout is if you have an ad, what we did was I think it was called a a hundred thousand dollars giveaway. Okay. So we basically said, we're going to give away a hundred grand. All right. I got your attention. All right. Now, inside the video, pretty girl saying, Hey comment below to get your like free money. Awesome. I'm going to comment below pretty girl telling me what to do. You also says, Hey, these are my favorite ways to spend the money. So I'm already incentivizing you. I'm keying you into the products. Now what we did was these are all what we did was we made a 10,000, uh, we made 10,000, um, $10 gift cards inside of them. Like an Excel spreadsheet, right? To use those, they have to spend X amount. Or is it, you got it in order to use it.
Speaker 3 (20:06):
You have to spend 75 bucks. Our products are $65. Hell yeah. Yeah. Oh. That's great. I'm going to say 65 bucks. Oh, I can't use the thing, but we want free shipping and 10% off, I got jumped another 30, 40 bucks. And every, also like so many of these people will drop an extra $40 for free shipping, which is stupid. You're paying for the shipping, right? So the point is now I'm inspiring an AOV. I said, this AOV was 62 bucks on the purchase, right? So that's, if you have to spend at least 75 to get the discount. And so people are going in there buying the $65 product with the markup was maybe like two X, but then they were adding like low budget products. Like this cup is like a dollar, right? And the manufacturing costs suggested retail value, 15 bucks add one of these you're $65.
Speaker 3 (20:49):
And you're a little over seven plus tax. I 14, 15 X, my cogs on this. I'll sell a thousand of these at $15 a pop and that's 14 grand profit. Okay. So that's a, what we call perceived value. You definitely got to throw those things in so many people don't understand the value of that. I was talking to somebody before, like, uh, there's a million ways of doing that, but find some auxiliary product to your, to your brand that you can throw in for nothing. An e-book is a great way. It's a $20 ebook. You get it for free, just spend a hundred dollars plus free shipping on something that be $30 cost of goods delivered to your front door. 50 bucks. I two X, the thing I'm giving you a 20% discount because you're getting a PDF. You know what I'm saying?
Speaker 3 (21:32):
So like the point of this is pretty girl telling you do this thing. Now it's a 10, it's a hundred thousand dollars giveaway. So we have 10,000 cards. We only got 3000 subscribers. So we still had 7,000. So we only gave away theoretically 30 grand. But what we're doing is we're incentivizing the person on which products to buy that we do make a ridiculous markup on. And then we say, we have to spend a specific amount, but that amount just happens to be a slightly over what our normal cost products are. So now you have to add things to your cart in addition to that. So you're giving you, basically we break even on giving you permission to pay us, to join our CRM list, where I'm going to three X, you on two and a half back to you on lifetime value. So you're paying for the opportunity for me to make a ton of money off of you.
Speaker 3 (22:21):
And I'm giving you a hundred grand of which basically up there spend like $750,000 to like receive. So all of this is super simple. There's the add the comment to opt in. And then you reply to that is just basically when somebody opts in, I think one of the biggest failures is people inside of chatbots will make this like huge elaborate flow of all this crazy. It's like, you don't need any of that. Don't, don't make it hard for somebody to whip out the credit card and pay you. Like the whole thing should happen in 10 minutes, five minutes and last three clicks. And I'm done. So you comment on the thing that the page pains you, and it says, Hey, reply with this keyword in this card, maybe a gift card, right. To get your, to get your free money. And they're like, all right, that's awesome.
Speaker 3 (23:05):
So then they do that. Then there's a flow that says, Oh, is this your email address? Or is there one that you'd prefer us to send it to? Right. So then it automatically pops in. So the person can opt in once by writing back and then getting that second up thing is you need a double opt in for chatbots is they confirm their email address of where they want the gift card to be sent to them. Now they're going to give you a real email address because they actually want to receive this gift card. And by the time somebody clicks that their conversion rate is so high, it's like 80, 90% because they're trying to buy something. You're literally saying you can't buy yet. You have to do this thing. And they're like, Holy. Because give me the thing so I can save the money so I can go, you know, spend the money.
Speaker 3 (23:40):
Right. So your conversion rates are astronomical with astronomical, uh, open rates. I it's called astronomical, but it's really just email 28, you know, 20 years ago. Um, and so then the flow is just basically like, okay, great. Here's your thing, by the way, here's your gift card. Uh, you can also see an email click this link and we've automatically applied it to your cart. Here are the products that you can buy that it, that it applies to. Now, I'm sending you to a catalog page of like half a dozen different options. All of which are just a little bit under. And let me see. And then we do a poster and Jacksonville upsells to suggest like, Hey, look, if you want to use your gift card, you have to spend that to my money. And as many checks, then here's like the $15 $20 items, uh, that can get you above the things.
Speaker 3 (24:21):
You can use the gift card. And you're like, well, I'm getting this product. I need this exhilarated product is going, gonna provide more value for me. Sure. I'll do that thing. I mean, it's basically free. It's a $12 thing and they give me $10 off and I get free shipping. I'll do it right now. I've already hooked you. I've already up sold you. And I know that I'm going to probably get two and a half sales off of you later. So, and when you click on that button, it brings you to the checkout page with the discount code already applied with your cart already. 90% of the way to getting that discount. In addition afterwards, not 10 minutes later, I say like, Hey or half an hour later, Hey, if you haven't used your card yet, uh, like go to this page, check it out.
Speaker 3 (25:01):
Here's other products you can buy. So now even if you made a purchase, I'm pinging you again later to check out the suite of other, uh, uh, other offerings, then a half an hour after that, I'm like, Hey, by the way, I hope you enjoy all of this things. Join our Facebook group. And that based the community was over 300,000 people because I had a joined the community on every single ad. I basically said, here's our product. We don't believe it's going to space, but community to check it out. So you have a whole ton of people joining the Facebook community to see how it's going. And inside of that Facebook community, where maybe 20 to 50, like diehard actual fans of the product. And we incentivize them with a 10% off. If they just went in there and basically said positive things about everything that we did.
Speaker 3 (25:40):
And then we had a separate Facebook group just for them. But we dropped in every ad that we were going to run and they just dropped like 10, 15 positive comments. So every ad that went out the door had amazing social proof. And my estimated action rate is through the roof because per $0, I already got 15 positive comments and like 20 clicks. So this is a great ecosystem that builds long-term value. To me, it chills your Facebook community for free people, pay for the right to join your Facebook community. They join your CRM list, where even if you don't convert them, then you're getting hit them up for, in perpetuity until your email person says, like, I'm not going to hit this person anymore. They're paying you for that opportunity. You're effectively breaking even at the top of it, because you're actually still putting in a link to the website.
Speaker 3 (26:22):
So somebody can make a purchase. Even if they don't want the code, even if they're like, this thing, but that looks good. I'll try and do it right. And then you're giving a gift card where somebody has to give you effectively 30 to $50 profit over cost of goods sold because they have to cross that threshold. And you're basically offering them the deep discount plus something you marked up 20% like 20 X or in this case, 15 X. So your acquisition costs is covered in like, if it costs me $4, say it cost me 20 bucks to get a sale 15. And that's paid for by you upcharging to this thing. So now it costs me $5, right? Like that's crazy math. And so like my point to it is you can use this on black Friday, cyber Monday, just basically saying like, Hey look, do you want your black Friday gift card?
Speaker 3 (27:07):
You want your black Friday code. Like you have black Friday and you're going to have those opportunities and those products available for purchase right now. You should. But what you can do is basically say like, Hey, do you want the code to use for the black Friday sale today? Comment below. And everybody would be like, well, yeah, I want to do that. And you just shape. We target everybody that's ever engaged anybody. That's been your site. Anybody that has shown intent to buy that doesn't purchase and maybe look alike to buyers and bought audiences. But you use that with a link to the store. So if you can even break, even on that, you're sending people a discount code. So they can, if they spend a certain amount of money, she can get the black Friday discount. And then on black Friday, you're not somebody that likes losing money. So instead of offering deep discounts on your product, you're offering upsell bundles. You don't sell, you don't sell this product for 15 bucks and they might be down to 10. You say this thing's 15, buy two, get one free. Now I got $30 out of me that costs me three bucks to me. And I'm, you're paying me for the right to save that money.
Speaker 3 (28:04):
Do you, um, did you say you use gift cards or do you use discount codes for, we call it a gift card because people like that, but, and then the gift card is literally just like a, an image that we would send to people. And it was like, Hey Zach, here's your gift card. And it was like, whatever. And it was a, it was like a, it was an image of a card with a code on it, right? Like here's your tech pretend bucks or whatever it is. But it was also a non-dynamic code that was like, you know, save $10. There's a stupid thing. Right. And nobody knows them through it. You get an email it's personalized. So we had a generic code and then we had a personalized code that, and that personalized code reference in Google spreadsheet that we, or some Excel spreadsheet that talked into the Shopify.
Speaker 3 (28:49):
So it was like a discount because I'm not a developer. Somebody figured that part out. But with one is we can then track how many people came in through before the sale went live. So, so maybe the sale goes live Thursday, you know, at 6:00 PM before black Friday, but we offer this for like three weeks moving up to it so we can see how many people took the sale to this non indexed page. Cause we had a, like a black Friday sale, paid a non index page on Google. How many people went to that page and use the discount code. Those are all the sales that come from the chat bot before the opportunity. Then we can see everybody that used the gift card because they actually use that gift card code. Right? So then we can see the incremental value of this chat bot on our overall ecosystem.
Speaker 3 (29:27):
And if we're doing this on top of everything, if you are running a successful ecosystem, as it is, then this is purely incremental to that. And then when black Friday comes, you turn off all your prospecting. You do, what's called a broadcast where you can send out a message to everybody that's on your chat bot and your broadcast. And you can have them opt into a one-time broadcast and you broadcast based. And it says like, Hey, this sale is live, go to the page. And now I just hit 3000 people that are ready to purchase without having to spend a penny on prospecting. They paid me for the right to be a part of that email blast. Ooh, for that chat bot broadcast just retargeting everybody that comes in the end. And those are all the people that are already shown interest plus all of their friends and everything else.
Speaker 3 (30:08):
So now I'm just retargeting everybody for the first 48 hours of black Friday when everybody else is paying $50 CPMs at like was super low conversion rate. I'm just retargeting the that weren't ready to buy two weeks ago. They're onboard now. And they're going to pay inflated prices. Cause yeah, the thing that I was doing buy two, get one free for 15 bucks. It's not buy two, get one free for 20. Cause I, you know, like why the not right? Like what's what's what does that give? That was going around. I was like four 99 TV. And then on black Friday, six 99 marked down to four 99, like yeah, that's great. And really that adds, we have four 99 TV and on black Friday, it's eight 99 for two, right? Like that's the hat, you know what I'm saying? Or like, or like a thousand dollars or two of them made a $40 and a 40% discount. And then you put something up.
Speaker 5 (30:57):
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Speaker 3 (32:13):
Work. Check it email@example.com. This is frickin gold right here, and it's almost too good. I want to hear it too bad right now, Charlie, Charlie's not, let's dive into this poor Charlotte. We used to do our poor ed segment was a roast where we were just like, we were just on poor lads. Um, and then like we switched it up, uh, because we just felt like
We were mean. Um, but I feel like we should do a tribute to our previous like core ad roast here. Cause I feel like Charlie.
Speaker 3 (32:54):
Yeah. I had to showcase. What's a ad. You've seen recently.
Speaker 3 (32:59):
There's a bunch of ads that I've seen and I will, I will preface this so many times the ad makes all the money, but like let me preface. This is every media buyer will tell you like, okay, well we had 20 ads. Two of them were dog, but like whatever we ran them and those are the ones that float everything like, like, and I would say this, my favorite bad ads are typos where the image is sideways. I, Oh dude, let me tell you about this bad ad. That was at an absolute crusher. I mean, can I, can I flip it for a second? Terrible ad, absolute crusher. I was doing an audit for this guy and it was like an energy drink company. Right? Uh, um, and uh, I, he's not 70% of this, but whatever.
Speaker 3 (33:47):
Uh, he's not going to be 30 minutes into this thing. I don't know. I disciples. I love every word that he said. So forgive me, fella. Uh, I already told you is a great idea and that I was going to use it. So hopefully we're okay. Bottom line, barring this one person, whatever. It went up to like a million people. I'm not like, you know, giving away golden nugget secrets. Right? So what he did was during the election, when they were having like fat checked ads, right? Like back checks, it's like, this thing is, whatever he said, Hey, we're doing a giveaway. And the ad was written in a way that it was covered. It's like back check. And then the bottom of it was like click this thing to see like what the was. Right. So it was built like an election ad of Donald Trump lying to you and then conversion objective campaigns.
Speaker 3 (34:36):
I won't give away his numbers, but let's just say he was getting a ton of clicks for a dollar because everybody want to know what the was going on. Right. So they weren't buying. They were just like, Oh, this is. What is it like? They're just, so this conversion rate is dog. When he was getting clicks for probably one 20th, one 50th of what the rest of us. Okay. And it was a misspelled. I think it was misspelled had the thing that was like, this is misleading information click to find out like the fact-check garbage ad that talked about his company crushed, absolutely crushed. So perfect time. Perfect place. Is that, is that
Against policy that kind of got cloak the ads so they can look like that as the sunlight.
Speaker 3 (35:23):
I mean, none of his got rejected. I don't know if it's against the policy to like, I mean, it didn't, it's not like on YouTube where you can't put a play button, you know what I'm saying? It's not like he was mocking like a to action. It was literally like, Oh, this is. And then the headline was like, you know, checker, blah, blah, blah. But whatever it was, it was built specifically as though it was somebody trolling you and lying to you in Facebook as community and be like, actually they're full of. But this button to see why now maybe one out of 50 people actually was interested in the product. But the fact is you went to that thing and you got to see about it. And it was like this long form, like affiliate style landing page, where you got an email and get all this, like all this, like, you know, the gray hat that we've all been through, whether you're selling SIU, Berry juice or trying to hack your CBD ads or whatever the things are.
Speaker 3 (36:17):
Right. And it Crow not only was getting super clean clicks, but because the action rate was so high on the bid was nothing. I mean, the CPMs were one third of the rest of his ad. His conversion rate was dog. But because like one out of 10 people clicked on the ad or whatever, whatever. I mean there's models one out of 10, let me not lie. Like a hyperbolic amount of clickers. Right. The click through rate on it was like in the thirties, like, you know what I'm saying? Like insane numbers. So dog ad calling the company a liar, sending you to a site that's like, this is how they're full of on a giveaway. And I will say that the man dead, that was probably his best effort in a company. That's definitely profitable, man.
That's amazing. That's like, there's so many things wrong with that. Like in my mind, as a marketer, I'm just like, you're breaking like so many bad rules.
Speaker 3 (37:20):
Oh yeah. It's great. And then like, I mean, and then you see other brands that kind of do something similar, like liquid depths ads are amazing. I love those guys. And like, they've been, they've been sponsoring my band for like a long time. I always get like free cans from them and stuff, which is great. Um, cause they're friends with my fiance because like she was a bartender here in LA and those guys, you know, it's just, it's a small scene. Right. Uh, but their ads are like this, this, this tastes, this, there says no flavor. Like you haven't seen the liquid death ads go in abandoned cart on some liquid death pages. And just, they're hilarious. They're like back when taco bell, you should just troll on Twitter. Like that's what the ads are like, this is garbage. Like it's just every negative review possible. And you're just like, Oh that guy. I'm cooking on that. Like you're already emotionally bought in. Cause you're like, well, yeah, it's not whatever, you know what I'm saying? Like you're already emotionally bought in on the brand side. So like they're getting you in to dig it and they're selling water in a cane.
I was like, do you get pulled over with that man? You better? It'd be very obvious.
Speaker 3 (38:26):
Yeah. No, absolutely like liquid Springwater from Austria. That's a good probably chop that somewhere right in there. I'm curious. We're going to take this next one. So where we love to SAB, you know, financial tips, financial principles, what kind of financial tips are the world to Charlie? You could got kind of go off based off your expertise based off what you're getting into these days. I mean the one thing that I, uh, I mean, if I were to do something, here we go. I got this out. Cause this is my Facebook live from last week or my, my, my life. Okay. This is, I want to explain to you why a super high ROAS on Facebook is terrible for your business and how 90% of marketers that are bragging about their. Either a don't understand business economics or two or knowingly bullshitting. You sell you some course on some work that I did with my, one of the disruptors did two years ago is already out of date before they finish their course.
Speaker 3 (39:23):
But fun fact, by the way, side note, those that can't do teach for what it's worth. All right. So if somebody, if somebody is on stage preaching courses, it's because they can't do their job. I don't have time to sell courses cause I'm too busy, actually being good at this. Okay? So like that's why people are like, why don't you make courses? I'm like, well, because of best practices, this month might be completely opposite gating, three months, six months a year from now. If I spend all this time doing things I'm not good at the sell some courses, somebody, maybe I'll 10 X my money, but I'm going to lose all of my opportunity costs to give up actually being good at this thing to sell somebody, something is out of date. It's bad for business for me. So my, my mortgage is being paid by me actually being good at my job. I don't need to go out there like a door to door salesman, my vacuum cleaners, trying to scam, one, one person at a time. So anyway, there's what we call an ecosystem ROAS. All right, it's going to be super simple. And I don't know if this is reversed and whatnot, but we'll figure it out.
Speaker 3 (40:24):
This is literally done on a sticky note. All right, now these are numbers, but it is this simple for you. All right. We've got Shopify orders. We've got Shopify dollars on that. Shopify revenue dollar sign equals money. All right. Why it's on green? Because it's money. We got Facebook orders and we have Facebook spent. Okay. So this is how you can understand your contribution to the margin by platform for Facebook. Now this in the business world is known as a profit and loss statement, right? And this is a contribution to margin. This is master's level business courses. And I'm going to teach you three months of masters courses in the next five minutes. All right. So here's what you do to understand what is the contribution to your margin from Facebook now? When I was lighting up Taylor, when he was talking about blue, the latency from, uh, from common third collected about the latency over November is so huge.
Speaker 3 (41:18):
You should spend into it and why it was because he doesn't understand this principle or he doesn't understand it. And he's selling anyway, either way, it's irresponsible. Um, so here's where we're going to go. This is month by month. All right. And this is an example. This is absolutely nobody I've worked with. I literally just this thing live on camera on Saturday month, 100 orders on Shopify and we made a thousand bucks. I have products like an AOV of a hundred dollars or 10 bucks. I did that math to keep it stupid, simple. Okay. Now on Facebook, Facebook, one day click says, Oh, we got 82 orders. Now, mind you, I'm using one day click because I'm doing real data. I'm not doing like vanity metrics.
Speaker 3 (42:00):
Now Facebook spend was 500 bucks. Okay. Now Facebook spend with that 82 orders is a good number. I'm somewhere I'm probably hitting like, you know, 1.7 or something w whatever the math is, right? Like I'm okay, but I'm happy with it. Uh, but you know, whatever, but because I actually made a hundred orders at a thousand dollars revenue. My month for this line item say, that's July, is it two X row ads? So my Facebook contribution to the margin was 82% of my sales and Facebook spend. Now, maybe Facebook's the only place you're spending money, but you have like a strong like email team and you can drop into here. What's my, what's my like, pause. What am I paying a monthly salary to my email team. Now you can bake in all these costs. It's a very simple equation, but you can do this like 20 line items, lot more wide.
Speaker 3 (42:52):
And every financial person at your company is already doing this thing for you to understand what success looks like for your business. All right. Purpose of this conversation. You're an idiot. You're not running a Google branded search you and you don't. And you've got some email customer service team, whatever that that's the me, that's the meaning. You're not an idiot. You just don't understand. You're starting off on a small budget and you're getting there. Right? Okay. Fair enough. So month one, you've two X your ecosystem, but Facebook says you only got like a 1.7 or whatever the math is. If you want to do, you know, 80 to $120 off of 500 spent, okay, month two, you got 120 orders and you made $1,200 in revenue, right? And your Facebook order says, Oh, I got 102. So it's still about 70, 80% of your, of your, of your orders.
Speaker 3 (43:43):
And you spent 600 bucks, right? So again, 600 out of the 1200, your base, your overall ecosystem is at a two X, but now you spend 600 to get 102 orders. So you're still not even at a two Exxon on Facebook, but you're, you've, you've scaled your spend by 100, but you've scaled your revenue by 200. But because of the ratio, right, they're both basically scaled about 20%. Now, what happens the next month is you get 150 orders. Maybe somebody came back, maybe people are hearing about the brands. They got the product. They're telling their friends for whatever reason. So you got $1,500 in revenue this month. But out of those orders, only 128 came from Facebook and you spend $700. So now your Facebook's actually getting less efficient, right? Your Facebook went from like a high one, eight to a low one, eight or high one seven, but it's also taking up a smaller percentage of your overall contribution to your margin, right?
Speaker 3 (44:38):
So your expenses this month was only 700, but your revenue this month was 15. So now you're at a 2.1 X ROAS for your business, but your Facebook got worse. Then what happens the next month? You have 200 or Facebook's one 50. We've now gone from an 82% of your revenue to 75%. And you went up another a hundred bucks and your spend, but your revenue went up 500. Now. You're like, you're at a 2.5. So when I'm looking at this system, I'm seeing what I'm scaling my Facebook spend by roughly a hundred bucks. But I'm actually probably getting a little bit less efficient because I'm raising my budget. So my bids are getting a bit higher. I'm losing some of the, you know, the optimization, all of that stuff. But my overall Shopify ecosystem is growing each month. If some customers are coming back, some people get product until your friends is organic.
Speaker 3 (45:28):
There's all sorts of stuff. The bottom line is when people say, well, my Facebook is wanting. Somebody says, Oh, I want to spend a hundred grand, but I need to do it at a three X on Facebook. My question is, do you need a three X on Facebook? Or they need a three, a two year business. And then my question is, how much of your business comes from Facebook? And then my question is, have you tested turning Facebook off? Cause you're like, well, I can spend a quarter million dollars a month on Google branded search. Like yeah, what happens when you shut off Facebook? They're like, Oh, I don't know. And I'm like, yeah, I can spend 30 grand on non-branded search. You gonna lose your app. You're probably gonna be more profitable though, because you're not wasting money on branded search of somebody who's going to buy from you anyway. But the point here, this is the simple math that I did on a napkin that I explained to you in 10 minutes, this is several courses in a master's level class. But the point of this is if you can understand the contribution to your margin. Now, when I do this, I'll actually have Facebook percentage of orders, right? And I'll have a CPA in the row ads, right? So I'll add it on a couple other columns to this.
Speaker 3 (46:33):
But when you look at this, you can start to look at your actual business objectives. You no longer Facebook, a media buyer, you're an asset to the company. That's worried about the financials. And you're actually like a director of acquisition because you weren't in the Facebook side, you could actually have a conversation with the finance team. You can have a conversation with the CEO of the company where you know his financials better than he does or she does. Right? So the point of it is, if you can understand this piece, you have to be able to have the conversation that says, well, yes, we went from a three X on Facebook to a two, and here's why it's better for your business. And the conversation for that is simple three points, or I guess for one, did you get more customers this month and last month?
Speaker 3 (47:15):
Yes or yes. Awesome. So you got more people that could potentially buy again, is the LTD on that customer higher this month projected than it was last one is your LTD rising month over month because you're getting better at your email team, your, your upsells, your retention, maybe you're getting two purchases after the fact, instead of one, like they're getting better at customer service. So you're getting more money from your customer. You're actually running a business, not just front, ending on Facebook. Yes. Um, as a business, we're getting better respecting our customers and we're getting more customers. Then the bottom line is, are you getting more revenue? Did your revenue grow at a percentage basis higher than your Facebook media spend? If the answers to those three questions are yes, then you're not spending enough on Facebook. And that might mean that you're running a three X on Facebook.
Speaker 3 (48:03):
And let me, let me too long. Didn't read the quote, my buddy, Robert, who might be watching this or not. Let me make this really simple. Would you rather three X 500 a day or 1.5 X 30 grand a day 30 K. Yeah. I was running business. I've won 30,000, $50,000 a day at a 0.8. Why? Because my new customers every month was increasing. The LTB was increasing your job on Facebook. Isn't to make a business work. Your job on Facebook is provide enough opportunity for your CRM team, your product development and your customer service to generate revenue. And you do it in a way where you pay for your salary. Everything after that is money, you're leaving on the table. And if somebody in a business owner doesn't understand that you break it down simple, here's your revenue last month. Here's your Facebook spend.
Speaker 3 (49:02):
If I had spent an extra $500 on Facebook a day, an extra thousand over the month, this is how much more revenue you could have had. And your LTV went up two bucks, a customer, but you didn't let me get you an extra thousand customers. So you just lost two grand on each customer, right? So that is that's the math you need to be talking about. And so I'm just bringing that up because Facebook media buyers, our job is going to be replaced. I mean, honestly, you should just run a dynamic creative campaign at broad, take out the losers and then automate your account. And you honestly wouldn't have to spend 45 minutes, maybe an hour, a day on a Facebook account. They're spending more than that. You're not working smarter. So you got to figure out some other reasons that some ask them should pay you because your job is being replaced by a machine. And it's far better than you do your job. Isn't to buy media. Your job is to be an asset to the business. If you can talk to a business owner about his bottom line about he's going to be able to hire more people because he needs to satisfy a greater customer base. You are going to be able to ask for more money, and you're never going to lose that client
Speaker 6 (50:11):
Business one Oh one right here.
Speaker 3 (50:14):
No, I do have an MBA. I do. I do have an MBA. And hold on a second. Wait a minute.
Speaker 6 (50:20):
I really did the first rich ed part guests with MBS that, Hey, well, let's get, Hey, give
Speaker 3 (50:28):
Everybody an idea, man. How could people cut again? Touch what's clicking over there. Yeah. So for me, uh, nothing. I have a Twitter handle at CT, the disruptor, I've got a Facebook group, uh, sexy tips, tricks and tactics, um, which you can find on Facebook, uh, just Google sexy tips and tricks and tactics, Facebook, whatever it should be there or ask your friends that want to make money. And somebody will tell you, um, and then, uh, outside of a Patrion where like you can pay 20 bucks to get access to like all my eBooks and I'd drop a new book about every two, three months. Um, and that 20 bucks is like the lowest cost. It's like, it's basically just like, look, I get an improved for the record. Yes, it's pay Gabby. And I was just railing on Google pay, getting every week in my life, I give homework.
Speaker 3 (51:19):
Like this was the homework for this week was literally like in five minutes, understand how much money you're not making, because you're worried about Facebook grower, right? This is a 10 minute exercise. I did it on the back of a a post-it. Okay. My point is in the lives, you do the homework, you get anything from a, on, for free, it's only paying eight. If you want to skip the line, or if you're like, Hey, look, uh, I appreciate what you're doing. Can I just say, thank you. Right? And so the, the Patrion is like that. And so I've got 20 bucks a month to join that. And then I do have like a Slack channel where people do come to me and like, we do actually share, like, they'd like take screenshots of the business where like things, they don't want it in the public.
Speaker 3 (52:06):
And if you want more of a one-on-one kind of relationship, you don't want to pay me for my time on an hourly rate. And again, if you do the homework, that's 50% off. So like my main focus is to help as many people as I can because the more people I talk to that are good at this, the more problems I solve, like it's sharpening my sore. I'm not sitting around on some lesson. I learned five years ago, trying to say that I'm any good at Facebook. I'm solving front end problems every day for as many people as possible, which makes me good at my job. Right? Most of the stuff that I know have come from somebody asking what they thought was a dumb question, and I didn't have a good enough answer for them. Like for instance, two years ago, I had this like growth hack on how to scale your business using engage shoppers.
Speaker 3 (52:55):
And that came from some 16 year old drop-shipper kid in Germany. That was like, Hey, what about this thing? And I didn't have a good answer for them. Right in my, and the response back then was literally like, take all your, all your control campaigns, duplicate them, uh, ads and just layer on engaged shoppers and sweet and money, 50 50, and then spend up where you're getting better success. And at the time engaged shoppers is an under priced a bit of attention, by the way, if you're not using it, engage shoppers, get on board. It's people that it's a, it's a second, it's a behavior. People that like to click on a Facebook ad and then spend money. So like if you're running Facebook ads and want people to spend money, marketing hate shopping. So like, uh, it's simple, but it, at some point in time, so it's like the HOV lane that's back the up while the regular highways, why the open?
Speaker 3 (53:38):
So like understand that, like while it's a fun hack, the idea of it being this unfair advantage in the marketplace is kind of behind us, which is, which is fair. Right? So I love talking to people I'm also egocentric and whatever. I, I love getting attention and money. So like, I'm glad to help people out because talking to other people makes me better at my job. The more I explain something to somebody, the better I get at explaining it and makes it more useful when somebody asks me that question later, like, this is the fourth time I've explained that sticky note from Saturday. And I got it done in about half the time that I did on Saturday. Right. So like I'm getting better and better at it. And the more I explained to him, our findings mistake to myself. So I like to talk to people so I can stay good at my job.
Speaker 3 (54:27):
I don't sell. I got to eat food. Yeah. So, so let me wrap this up. You can find me on Twitter at CC, the disruptor. I got to show that I do with a buddy of my name, Robert called at the porch online. I'm trying to get onto all the shows, anything that I can do with anybody. I want to be as much help as possible. Um, I highly recommend the DTC newsletter. Uh, you guys had Eric on board. I, I, I I've known that guy for years. Um, and I met him actually at a conference in Vegas and it was one of those things where like Josh and snow and Nick, all these, all these like pros were on stage, like talking about stuff. And they're like, Hey, raise your hand and send me a thousand bucks a day. Or like, all right, great.
Speaker 3 (55:02):
Now everybody had everybody stand up and then like, just sit down. And you're spending, if you skied, standing for spending 5,000 a day at 10,000 days. And some point it was like, I was the only in the room still standing. And they're like, well, how much are you spending a day? And I'm like, well, I'm cleared about a million a month on this one brand. And everybody just like immediately turned around and started looking at me. And it's funny when I walked in there, multiple people were like, Oh, Hey Charlie, are you here to speak today? And I'm like, no, no, no, no. These assets don't want me anywhere near their. I'm just here just to like, see what the going on. So bottom line, um, I love to talk to anybody about anything. If you got a thing, thank you guys so much for having me on board with this.
Speaker 3 (55:39):
I really appreciate it. Come find me. Uh, and if you ever catch me, find a pay gate, some, or going back on what I say, call me the out on it, but I can be a man of my word. And if I go against something that I'm teaching, I got to know that I go home. You got to go and update that because the world changes. Bruce Lee said, when it gotta be like water, right. Catch me on my, please. I love writing people up. Cause now there's an army of out there trying to catch me slipping. And every time they do, they do it before a client does. And now my customers are dissatisfied with me because some on the internet bounce before that guy did, [inaudible] absolutely. I'm sorry. You guys only got like eight words in, but like, this is a conversation with me is like
Speaker 5 (56:34):
Awesome, man. We'll definitely have you back on, this has been killer. Thank you so much.
Speaker 7 (56:44):
Speaker 5 (56:44):
Thanks so much for listening to another episode of the rich add more ed podcast. If you're like me and listen to podcasts on the go, go ahead and subscribe on Apple podcasts, Spotify, YouTube, and rich ed [inaudible] dot com slash podcast. And if you absolutely love the show, go ahead and leave a review and a comment share with a friend. If you do take a copy screenshot of it, email me firstname.lastname@example.org. Show me you left a review. I'll give you a free copy of the rich ad or ad book to learn more about the book. Go to rich ed for a.com to leave a review that a rich ed or at.com/review. Thanks again.
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Jason Hornung is the founder and Creative Director at JH Media LLC, the world’s #1 direct response advertising agency focusing exclusively on the Facebook ads platform. Jason’s proprietary methods for ad creation, audience selection and scaling are responsible for producing $20 million + of profitable sales for his clients EVERY YEAR