The founder of Purple Leads, Purple Ad Lab, and Geek Out Education, native advertising expert James Van Elswyk is a digital marketer with 8 years of experience specializing in marketing, media buying, and growth optimization. His agency focuses on media buys across sites like RevContent, Outbrain, and Taboola for the solar and finance sectors, currently spending over $2M/monthon ads. Using his expert analytical and management skills, van Elwyk provides companies with highly-qualified leads, helps extend the reach of their marketing campaigns, and optimizes their internal and external communications – driving millions of dollars in profits.
Today we’re totally going native with Purple Leads co-founder, James van Elwyk who’s a big chief in the world of lead generation and affiliates managing tens of millions of dollars across RevContent, Outbrain, and Taboola as well as Facebook and Instagram.
He’ll tell us why lead gen has died out over the past year (and not totally because of COVID) -- and what he switched over to. Why he doesn’t run any affiliate offer that doesn’t have an edge. How to “translate” failing foreign offers into winners in countries with cheaper CPMs.
How a massive failure opened the door to discovering a whole new way to buy media. His intensive process of selecting clients and partners. Plus what goes into his take-no-prisoners approach to negotiating -- and how he makes sure he ALWAYS gets paid.
Speaker 1 (00:00):
In this episode with James van Elswick, we dive into how he picks winning offers. How much is he willing to actually lose, to test out an offer and open up a new traffic source? Plus, we dive into how he's actually able to negotiate pre payment when it comes to running affiliate offers. It's an amazing episode. Plus you learn about how he's managing tens of millions of dollars on native, uh, networks like Taboola and Outbrain with symphony agency. And we also dive into the amazing events that he's running with, uh, geek out education, enjoy the show.
Speaker 2 (00:34):
You gotta have a sticking point and you cannot become emotional with it, which is what I'm doing right now. You gotta be a lot more rational and you got to consistently pull all-time stats and not daily stats because losing a hundred dollars a day or $300 a day or $500 a day, whatever your tolerance is, it doesn't seem like that bad. [inaudible]
Speaker 1 (01:02):
To the rich and 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. Welcome to another episode of the rich ed. Poor ed podcast is your host sack Johnson. I'm with the one and only DC. Dylan Carpenter. You excited. Hey Dylan. Yeah, man. I'm pumped
Speaker 2 (01:40):
Sneak peak earlier, but I'm kind of get out already.
Speaker 1 (01:44):
Shoot. I feel like dealing. This is like a Dylan is so giddy about today's guests. It's just like, it feels like a little school girl. I am. I just love the grin on Dylan's face about, uh, I feel like we've, uh, Dylan's wanted them on for a while. So, uh, just enjoy doing we'll let you be, uh, just a listener, just so excited. I love it, man. I mean, it's all, it's all super legit because these guests, uh, has really brought in like, gosh, managed tens of millions in media, outside of Google. And, uh, really his expertise is in Legion and a native. He runs an agency symphony agency, which really specializes in native and also, uh, more notably in our community is the co-founder of geek-out education, which runs, uh, some of the most, I would say intense masterminds workshops, Hangouts. I don't even know what you'd call, uh, what they do, but it's so unique in this space. And I think it's, uh, honestly probably the most high level, uh, and elite, um, media-buying education that exists on the market today. And so, yeah, I'm pretty pumped down on today's guest. So without further ado, let's get James on the show, James,
Speaker 2 (03:05):
How you doing? Hello? And thank you for a Dillon. I appreciate your giddiness. That's always a nice welcome once a month, giddy and also the intro, Matt. I really appreciate the, your perception of the geek outs. So that really, uh, that's great. Thank you for having me on to chat with you guys.
Speaker 1 (03:21):
Yeah, man. It's, uh, it's pretty cool. We, you know, we haven't really had anybody on the show that, um, has as much experience in lead gen as you, as well as a, so much emphasis, a focus on native, you know, we've had a ton of Facebook ad buyers and Google ad buyers on the show. So I feel like this'll be, uh, definitely fun, uh, to, to dive in.
Speaker 2 (03:44):
Yeah. I mean, uh, obviously I've always been a big Facebook buyer as well, but just there was so much, there's still so much turmoil all the time that I just didn't feel comfortable with Facebook as a vendor, you know, like as a partner in my business when you're just going to randomly ban me and stuff like that. So we had already been big on natives and then we just focus moving back into it because it's more stable. So I love it over there.
Speaker 1 (04:08):
That's awesome, man. And you guys are managing a pretty, pretty hefty chunk of change in media right now on the agency side, I would say maybe post Q4, you might be hitting 25, 30 million.
Speaker 2 (04:19):
We're over, we're over 2 million month right now. And it's great. The clients that we run have, you know, cash or inventory or desire to do, you know, a couple mill a month. So it's just a matter of us getting them there. Yeah.
Speaker 1 (04:33):
Yeah. Well, that's awesome. And so for, for everybody that's not familiar with you tell everybody a little bit about, uh, symphony agency and geek out education and kind of give them
Speaker 2 (04:43):
Speed on what you're up to. Yeah. Yeah. I mean a symphony agency. I have a partner in media buyers in Israel, and then there's a second component, which is a creative agency in the Ukraine that handles like, uh, all of the dev stuff, videos, images, photo shoots, et cetera. Then the real data portion of things is in Israel. And it's with a real focus on, uh, native ads, whether it be Taboola Outbrain, Yahoo, Gemini, um, geek-out EDU is more fun. I don't think I've ever really made money on it yet, but I've made like an amazing network and building personal brand and just learning a ton. I think that was like the purpose. Like you'd kind of mentioned that geek-out was different and it's because like the, the seed of it, like the original impetus was just to create a community of people that wanted to geek out on this nerdy that our wives or girlfriends or boyfriends just didn't want to hear about.
Speaker 2 (05:40):
Like, nobody wants to hear about clinics. My wife's like, I don't want to hear about clicks and I just want to create a place so that, you know, everybody could hang out and talk about what we love with full passion and it's, it's resonated, you know, people really enjoy coming. It's part learning part hangout. So it's something that I really, really enjoy. We got one this weekend, I think will be one of our best. We're doing totally different format. So there's like minimal PowerPoint presentation. And the majority of it is just the speakers opening up ad accounts and just letting people ask questions, like, why do you do this? How do you do this? What's the purpose of this? And just getting, you know, full transparency and letting like smart people dig into the campaigns of smart people.
Speaker 2 (06:23):
That's amazing. That's amazing. Yeah. I love it, dude. I, I think that gosh, before geek out, I mean, where really could somebody go for that like high level media buyer focus? I like, I honestly, maybe there's like a ton of stuff that's happening out on the outskirts of affiliate world, you know, of like different events. He had to like go like once a year and you know, like not, not really here in the U S that's for sure. And, um, and so, yeah, I just feel like you really carved out a great spot and your events like aren't cheap, you know, it doesn't by design. Well, it's, it's not our events. Aren't for news. And like being a new is cool. Like I'm a new bit, like so many things in my life and I love being a noob and it's just part of the process, but we just figured if we make them expensive, a, the amount of value people get, they more than pay for it, just because like one or two things.
Speaker 2 (07:18):
Like if you want someone to like open up the kimono and show you some gangster and you can apply that and copy and paste that when you get home, if you're already have money in, are already running at scale, you get that back. Right. So that was part of it. The second thing was we just kind of use it as a filter to keep people that aren't already successful out. And even people that can afford it, we interviewed the majority of the attendees before they come to make sure that they are at that level so that when everybody comes, everybody's good and it's not the best. Like I said, we don't make money on these things because of that. Like, it's not the best business technique to turn away people that want to pay. We believe like in the long run, it'll help the community be what we want it to be.
Speaker 2 (08:01):
So we try to price them at a point that makes them a little bit exclusive. Do you have people that, that, uh, let's just say they can more than afford the ticket, but they're not really media buyers or they're really more business owners that are like just one James, just like show the way. Right. So like, how do you, how do you let those folks in? Cause they're, they're not going to provide a ton of value, you know, on the media buying front by opening up accounts. Yeah. You're, you're a smart on this one. So what we did this time was we, because we want the brand owners because you got, you want people to have the business aspects as well, right? Because like being a media buyer or being someone that can afford one of our events, you're obviously also like a pretty good business person or you work for a good business person. So we basically said, look, brand owners and agency owners. We want you there so much so that if you're not the guy pushing the buttons or the dials, just bring your guy like free, like just bring your button pusher so you can hang out and network with everybody and get ideas and do JVs and find out about different vendors, but bring your nerd so he can be in the guts and like take home the information that you're going to miss out on. You know,
Speaker 1 (09:15):
I love that. All right, let's give him this rich ad, man. I want to know what's working for you right now. I want to know, uh, I want to know the copy on or the angle on the offer. I wanna know the creatives. I want to know the affiliate link. I know we're, I don't know where to sign up. I want to know what the payout is on the contact, the email address I want to intro. This is what I want. This is all what I want. So,
Speaker 2 (09:43):
Um, let's see. We are running a lot of financial stuff. A lot of like the Gore financial type offers, which are amazing on one hand because they can afford really high payouts because their business is so well optimized on the backend. So we're able to get paid, you know, 170, $180 for someone to make a $50 purchase. Um, and there's a lot of learning that comes with this and us needing to change our system and kind of maybe I'll kind of segue that into the techniques we're using to make it work. So we have that. And then we're also running for e-commerce products. Some that have VSL, some that don't have VSLs, um, some like just way more traditional e-comm products that are like crushing on Facebook and they want to move over to native ads. So they get more reach or they're more omni-channel.
Speaker 2 (10:32):
So we've been running both of those, I would say right now, mainly lead gen died out for us a lot because of Corona and just the inconsistency of call centers. If they have staffing, a lot of this stuff with lead generation is dependent on people to answer the phone. And it's also geographically dependent. So lead gen kind of was a lot more difficult this last year than I had before. So we switched over to e-commerce also because you have the ability to activate international marketplaces. Um, what we really been working on, especially with something that has a expensive payout, like $150 payout or 200, even we're running an offer right now it's $300 payout per sale is that you just can't afford to optimize campaigns all the way out to a full conversion. So we've kind of created a new system internally to test and, uh, I'll give like basically a secret sauce here and how we do it.
Speaker 2 (11:27):
So you give me a new offer and I'm going to write six angles around that offer, right? So it might be a XXX is furious. It might be thousands of people are doing this. It might be expert sound the alarm about X. It might be founder does this. So I'll take like six broad angles and I will write four headlines per angle and I'll write very, very small two paragraph landing per angle. And then I go through and if I have two ads out of four, so every angle gets four specific headlines. If I have two ads out of four ads hit, then I'll go to step two and start to optimize on that angle. Right? So now I move to step two and now I'm at the landing page part, right? So now I'm going to start to optimize landing pages for that angle.
Speaker 2 (12:16):
And I take a look at the landing page, click through rate and where it gets next level kind of intense is we've started to really optimize by time on page as cheap indicator. Like, because if the indicator that you normally, or the KPI that you normally optimize off of is a $300 conversion. Somebody staying on the page for 15 minutes in theory, worth X. So we basically build correlation between an ultimate conversion and all the steps that come before it. And then we start to optimize on early steps with the anticipation that those early steps will equal a later step. And this has helped us really decrease, um, the amount that we spend in the beginning, just throwing against the wall, like traditional style.
Speaker 1 (13:01):
I feel like your whole, your whole stick James is like, I like pain. I like to make a media buying really difficult. And so I want to pick all the offers that are like better. You know, it's just like, like lead gen is like, I feel like it has its own level of like complicated. Like just, it's so much more complicated, so many more steps. I feel like these higher ticket offers that you're doing, obviously there's like so many more steps along the way. And like most people I meet and are like, what's the cheapest thing I can sell that has the lowest average order value. And like, let me go.
Speaker 2 (13:40):
This is like kind of the, the mistake that people make when picking offers. Right? Like, especially if we're going to talk affiliate side now, right. It's like, there's, there's two ways to look at it. Right? There's if you can take, if we're working on the assumption that we're going to get to a profitability benchmark on a Whitehead offer, let's say 20%. I like the fact that if something has a payout of two 50, my 20% is 50 bucks, right? So like I have a fat cash margin, just not a fat percentage. The downside of this is when optimizing something, especially like, do you want to feed the Facebook algorithm or whatever the cheaper conversions work out better. But for me, I really just look at the EPC. Like I don't really care what the payout is. I just want to know what is going to be my revenue per click.
Speaker 2 (14:23):
If it's a high payout offer, you know, a $300 payout, it's not converting very often. You're looking at like a 1% conversion rate. So it's like, you know, it's for me all about EPC. And when it comes to picking offers in an affiliate, like if I can give any type of advice here, I just don't run anything. I can't find an edge. Like if I don't have some type of inside tip, better pay out on on-ramp geography. Um, I need something that gives me an edge over somebody else. Otherwise I just don't run that offer. And I think that like, I guess year four of my career, I realized like that year I didn't get any better at media buying, but I got better at like my hit rate. I was better able to identify offers that could be profitable than I was before. Like I didn't get better. I just ran easier. And now I can look at it and see, okay, I have an edge and this isn't that hard. If I just do XYZ, I'll take it to another country or whatever. I mean, good business
Speaker 1 (15:24):
Practices, right? Like even if a business at all, that you don't have an unfair advantage on that.
Speaker 2 (15:31):
Exactly. I like to snipe offers and I see running well in the United States. And then I spy and see they're not running well in Europe. And I'm like, okay, no, one's running this in France. I'll take what someone else has done. Take all of their hard work, all their landing page optimization, all their ads, headlines, whatever, translate them and just get the party started in a place that has a cheaper CPM. I think, especially now that the United States is getting while doing the prices are always getting more expensive. But I think that there's two things that are very valuable. One is like super hack, but it's a monster is a targeting in the United States, other languages, but in the U S so like targeting like Spanish speaking browsers running in the United States. Cause there's just like less competition in the auction because no, one's actually bidding on that.
Speaker 2 (16:16):
And it resonates higher with people that speak that language. And then secondly, as I mentioned, taking it to other geos, like France, the cost per CPM and Frances 30%, what is the United States? But the payout is the same, if not more because it's in euros. So after the conversion rate, I could probably get paid more for something that cost me less to make. And the people are more susceptible to modern American style marketing techniques. So I think that that kind of geo stretching or whatever you want to call it activating outside geos is definitely stretching.
Speaker 1 (16:50):
Speaker 2 (16:54):
You know, stretching felt nice that actually had a good ring to it. Yeah.
Speaker 1 (16:57):
We're good. We're rolling with it. We're rolling.
Speaker 2 (17:00):
Now. We're gonna keep that while it's on
Speaker 1 (17:03):
The show. So we get some like credits
Speaker 2 (17:05):
I'm sure I'd add something right now. You own it basically.
Speaker 1 (17:11):
That's awesome, man. So, so coming back full circle, I just took us down this path, this tangent you're testing for time on page for some of these higher ticket offers. Now, are we all talking about this in the context of symphony agency? Or like, do you run all your affiliate stuff through the agency?
Speaker 2 (17:28):
No, it's separate like, no, my affiliate stuff I run is purple ad labs, my, uh, agency stuff. I run a symphony agency and we run probably 50, 50 affiliate and agency basically. Like if an offer seems like super easy, I just pushed to take it as an affiliate. And if it's tough, I'll just run it as an agency. Now I'm just, I actually prefer running as an urgency in a lot of ways because it's like, I feel like there's more learning that I take from my partners that I can bring back to myself. Just, it's a better learning opportunity to work with someone. If you want to learn about a company that's run well, like working with a Gora for example, like it's $1.5 billion a year company, the learnings that I've been able to take away from them of what to do and what not to do have been like, probably worth more than what I've made. You know? So I, I actually prefer the agency side for this, but the affiliate side is fun because it's, you know, it's nice to like eat what you kill type thing, but satisfying. And if the offer's right, you know, then we, then we push it.
Speaker 1 (18:30):
So I'm always curious how people structure their deals and their clients and their partnerships on the agency side. Do you guys run it kind of pretty vanilla take a percentage of spend? Or are you guys getting a little bit more aggressive in terms of upside retainers?
Speaker 2 (18:48):
Yeah, so, um, we do a minimum, uh, spend like a minimum fee regardless of what we spend, which basically goes to us, cover our copywriting. Cause like a lot goes into copywriting, um, and like CRO and dev, like we do a lot more than just by medium because we just don't know how to do it a different way. So like, I'm going to write the copy. I'm going to write the presale pages. I'm going to make the pre-sell page. I'm gonna optimize the presale pages. So I just don't want to do all that. And then I have a partner that's not getting me like a link to a Google drive, but you charge somebody a minimum fee, then they hustle for you. Um, so we do the minimum fee. We do a percentage of spend and then we bake in a performance bonus, which is based on maybe it's, [inaudible] maybe it's CPA goal.
Speaker 2 (19:31):
But the way that the easiest way to describe it is if somebody has a CPA goal, let's say of a hundred bucks and the spend is 50 bucks and my fees are 15%. I basically combined the two and I looked for 50% of the Delta. So if I come in under your goal, after my fees, by 35 bucks, I get a bonus of $17 and 50 cents. So it, it basically was actually built to negate the agency model, which is make your money by spending a lot. Whereas this model is still making me want to just be as profitable as possible for somebody. It doesn't always work because some people are like, look, I want you to max out my CPA. I just want to acquire as many customers as possible. And that's cool too. You know what I'm saying? We do that. Um, but I do like the incentivization on the bonus side. Um, and then on the affiliate side, I don't know if you want to save this for the, for the rich, not the rich add the financial piece of the thing. Um,
Speaker 1 (20:27):
I want to know, but hold that thought a little bit, because I want to know what do you guys typically target for your base retainer, your setups and your percentage of span in terms of
Speaker 2 (20:38):
Out of the gate, 15% spend 5k to 7,500 minimum fees. If you're like a startup, like you've never ran traffic, I'll do like 12 K 15 K minimum fees just because like you said, like I just don't have, I'll do it. But what ends up happening is myself and my team are like super committed to winning and we actually do know what to do to set up an altar from scratch. So what ends up happening is to get to the point where I can even run traffic. I become like an outsource COO partner explaining them, okay, you want to use this software and use this and use that. So I'm trying to kind of discourage, you know, unless the partners are really on it. You know, like if someone's like super on it and hustles hard, I might waive the startup fee. You know what I'm saying? I just can't stand building someone else's business for free.
Speaker 1 (21:29):
And then what's the, w w what do you shoot for, in terms of like minimum level of spend, you know, like, is it a hundred cam on spend or like minimum,
Speaker 2 (21:38):
Or it's not what it is now. It's what it is. Once I get it rocking. Like, if you break, if you can't do a million a month, it's just not like, I only want 10 clients that each do a million a month, as opposed to like 30 clients that do, you know, a hundred grand or 200 grand, just because like, I can only do so much. And I'd rather just go for the juicy stuff and, and a company that's built to scale, et cetera. I'm not saying it like in a snobbish or picky way. It also really, again, depends on the partners and their level of hustle. Like if they're going to hustle as fast as me, where I asked for something and they turn it around the same day, it goes a long way. You know? Whereas normal customers are normal clients that they drag it. You know what I mean? Yeah.
Speaker 1 (22:22):
Yeah. I mean, I think also that's a big lifestyle choice to have when you're running an agency sticking at 10 clients, going deep with those and really having win-win partnerships.
Speaker 2 (22:34):
Yeah. I can't be a. That's the problem. Like, like when I got into the agency thing, I just felt like a waiter. You know what I mean? Like, I, I live in Paris and like, if a client who's paying me wants to have a call with me at a reasonable time, like 12 Pacific, that means I got to talk to him at 10:00 PM, which is like, it's okay, they're paying me, but Hey, I need to get paid well. And B it has to be like, uh, yeah, like just a few people. I can't be everyone's. I don't like being in the service industry. That's why I like being an affiliate. Cause you're like your own boss. I don't like being a waiter. So I just try to keep it capped at the number of clients. So I'm not hustling around for bags, you know, this time.
Speaker 1 (23:18):
All right. All right, moving on. I want to know who wants to hire my agency now, right?
Speaker 2 (23:25):
Pitch for an agency.
Speaker 1 (23:27):
This is your stick that you're like the anti I don't give a about you pitch on everything you do from geek-out symphony agency. I love it. I love it. So this episode is brought to you by funnel Dash's add card, the only charge card exclusively for your digital ad spend in partnership with, and
Speaker 3 (23:46):
If you are an aggressive affiliate dealing with dozens of ad accounts, or you are in gray hat or black hat verticals, such as drop shipping CVD or other verticals where you're dealing with ad accounts, getting shut down, business managers, getting shut down, or even deep platform from platforms like Facebook and Google, then you absolutely need to check out FunnelDash as ad card. We give you unlimited free virtual debit and credit card. So you can have a dedicated card for every single ad account campaign. And you can attach any name and address in the U S you have complete anonymous entity on a card and at the card level. Plus one of my favorite features is that you don't have to pre-fund or even top off like most typical virtual card solutions today. So if this is you and you're operating these verticals, whether you're
Speaker 2 (24:35):
Agency or an advertiser, then check out ad [email protected], walk us through a poor ad, man. What's something that you're really excited about, uh, that, uh, that, that totally bombed. And you might be just slightly embarrassed to share, like every day, all day, we can't be profitable where the I'm going to kill it. I know I should kill it, but I can't get it profitable. Um, I have a campaign that I'm running on to Bula. We're probably like 35, 40 K into it. Um, we had a loss pool given to us by the advertiser, basically like, Hey, here's five K in losses and I'll touch on this later. But as an affiliate, I don't run things anymore unless I get some of my testing paid for like, I'm just not going to run completely on my own book. And, uh, yeah, I got a loss pool partners are great offers. Great. And I was on the phone this morning at like 9:00 AM asking somebody I respect to like, look at my campaigns, but I'm like, dude, I can't figure it out. Like I have no idea.
Speaker 2 (25:50):
He got is this weekend. You're going to come up live it's okay. I'm great. I can't even figure out how to crack a killer offer, but like you built the community, that's going to help solve this problem for you over the next couple of days. Like do, like, I think that it's just, uh, look, I, I mean, I guess in some sense, I welcome it. I mean, if I wasn't failing so bad at this offer, I wouldn't have reached out for this intensive help. And when I did it, I learned like tons of stuff. Like I learned a whole new, like literally a whole new way to buy media that I didn't know about before. So I'm testing it today and this weekend, we'll see if it works and it's going to be like, I'll literally have to like update all my SLPs and stuff, you know, but it's, it's, I'm failing bad and not like my failing bad, but like, I've been an affiliate for a while. And I know when to push and when to cut and run. So I'm not someone that just like a noob just fights forever. And I'm literally, like, since I started chatting with you guys beforehand, I refresh that's like four times like, like what I need and they didn't look good.
Speaker 2 (26:59):
It's not nice. You know what I mean? But I'm that invested in it where maybe I've gone too deep. Another amazing fail is, um, amazing fail is when I really got started on Facebook was solar, um, which was a really big vertical for us. Right. We did tons of money on solar. We were definitely want to top producers, solar leads for over a year and it took me six months to figure out how to make it work. And when I went backwards, like I had probably lost like 300 grand before I got it profitable. But like, I was never looking at it like on an all time basis. I was just doing a day to day and I was so deep trying to crack it. And what's amazing about this is, is an, obviously everything changes Facebook all the time, but my theory back then was to launch like multiple campaigns and then figure out which one hit the best and then keep that one.
Speaker 2 (27:50):
Right. So it was basically like doubling and tripling my losses losers, you know? And I didn't look at it until the very end that I was like, Holy, like this possibly like, I don't know, 150, 200 grand, you know? And I just wouldn't quit like this offer. I wouldn't quit. I'll never forget. I was at a hotel in Russia with my wife. And like, she was like, look, I think you just need to get a job. Like this is driving you crazy. Like, just stop with this. I was like, I will defeat this. You know? And, and that's like, honestly, that terrible point of view is how I feel right now about this failing campaign.
Speaker 1 (28:28):
We'll have you back on the show in a month and we'll see if you're, you're out a hundred Jesus
Speaker 2 (28:34):
Yahoo, Gemini, another great example of failure. I lost $65,000 when I first learned that traffic source $65,000 to learn a traffic source gone. That was a heartbreaker when I figured that out because I don't pay attention because I'm so deep in trying to figure it out. But I never looked at the final laws until it's all done.
Speaker 1 (28:54):
So I feel like this is a perfect segue into our next segment, which is really some financial for two
Speaker 2 (29:00):
Principles, like what
Speaker 1 (29:02):
Not to do in advertising. And I feel like the first one here is how to really, you know, think about limiting your losses are James. We actually, now I think back our first interaction, I think you were doing a live stream and you were talking about, I think lead gen and solar. And I was just popping in the comments talking about like, how much are you willing to like lose on an offer? That's so expensive. Like solar is like, you know, you think like a $300 payout is a lot like jumping into solar. You can lose money very quickly as you, you experience, right? So what are some frameworks and perspectives that you can provide for somebody that is starting out new offers, opening up new traffic sources and how they can live
Speaker 2 (29:47):
Losses, terrible, terrible way to segue since I'm basically not doing it. Um, looking, you gotta have a sticking point and you can not become emotional with it, which is what I'm doing right now. You gotta be a lot more rational and you gotta consistently pull all time stats and not daily stats because losing a hundred dollars a day or $300 a day or $500 a day, whatever your tolerance is, it doesn't seem like that bad. But then when you, when you look at it and you're like, I've been at this for 45 days, $300 a day, I'm down 14 grand, that sting. So I think that's like a big, a big loss limiter. And also I think it's a nice, basically what I do now is, is I look at the offer and I say, okay, I'm down 5k. And I'm shooting for 20 to 30% ROI when I figured this out.
Speaker 2 (30:34):
So payouts 50 bucks, right? So let's say that I'm going to make $10 a sale, but I'm down 5k. Y'all got to make 500 sales to catch up. Will this offer allow me to make 500 sales to catch up? Will this make a thousand sales to catch up? Because like, when you look at it from a lifetime point of view to be probably you got to make all that money back. So I try to slow down and take a look at it a lifetime and see, what is it going to take to get me back out of the hole?
Speaker 1 (31:00):
That's killer lifetime sets
Speaker 2 (31:03):
Speaker 1 (31:04):
So let's talk about this next segment, uh, which, um, I think is great. Like we were talking before about, uh, you know, these tips and, and we're like, Hey, what are some principles for people that, you know, how they manage cashflow? And you basically, like, I don't have cashflow issues. I negotiate terms. I'm like, all right, let's talk about that. Right. So like share with folks how you think about negotiating terms. And I want to just jump right to on the affiliate side, it sounds like you're negotiating a loss pool up front, but I don't know. Maybe you could shed light there and then kind of land.
Speaker 2 (31:40):
Yeah. I mean, I look at a certain point, you've got to have leverage to negotiate this type of stuff. And I've had enough successes on offers that now people understand that investing in a prepay with me on our law school, it's, it's a good investment for them and that it's going to keep me married to it. And part of the reason that I am doing what I am with this offer, I don't want these guys that are actually my friends to be out that law school. Like I want their investment to have been worth it. Um, but it gives you, it definitely gives you a certain leverage point. I think the step that I had before that was when you're an affiliate and especially like in lead generation, um, with bigger companies. So not necessarily with a network, it could be a network, but like companies like you're selling the solar city, solar leads, they want to pay you like net 30 and everything else.
Speaker 2 (32:25):
But at the end of the day, like you need to value yourself and understand the value you can have to them that you're like a monster revenue producer for them. So someone says like, Oh, we pay net 30. And I'm like, I can't afford. I never say like, I won't. I say I can't afford, I don't have the money. Oh, good. Yeah. Like you gotta be like humble. You can't try to be like Mr. Baller. But I just say like, look, I'm not able to afford to float this capital for you. Like I just can't do it. And then a lot of times they'll capitulate and then I'll kind of be like, well, how much volume do I need to be? Where you can start to float me the cash? Or where do I need to be to get past their payment terms? And a lot of them, especially European buyers will completely stick and I'll be like, okay, well I just can't afford it.
Speaker 2 (33:08):
You know, they'll be like, no, it's the way we do it. So what I'll do is I will smash them for one week and then turn the traffic off and just say, Hey, I got to wait until I can get paid. And like nine times at nine and a half times out of 10, they will capitulate and make a payment. So I keep it going. And it just using that leverage to never be out of pocket and to really maintain your bank roll. Like it's, it's, it's dangerous with an unknown advertiser, unknown affiliate network to float that much cash. Because if you look at it, let's say you have like a great month. You make a bunch of money, let's call it a hundred K okay. A hundred K profit. You just put it in your pocket. And then in order to make that a hundred K let's say you spent 300 grand, well, you want to do it again the next month.
Speaker 2 (33:50):
So I got to flow 300 grand to make a hundred. If that person doesn't pay me last three months of cash. So is it really, this is like our entire business model ad capital. It's just floating people's steps. We're just taking these risks liberal, voluntarily. And you're making me sound and feel like a complete idiot in the past as well. When I didn't feel good about advertisers. And I don't like, like, I understand the fact that you don't have money until it's in your pocket. It doesn't matter. What's in your tracker. It doesn't matter. What's on your spreadsheet. It doesn't matter. What's in your brain. It's not yours until it's in your pocket. And I would figure out ways to kind of quasi by insurance. So like if I had an offer that I was crushing, but I didn't like the payment terms, or I felt bad about the advertiser, I'll just go to a network and tell them like, Hey, I have an offer.
Speaker 2 (34:37):
I'm crushing it. You front me the cash and finance it for, you know, take 5% instead of 10 or 20. And just make an agreement with me that you will be the one that basically bankrolls me and buys the risk and I'll pay you 5% for it. So it's kind of like a way to make your own insurance. That's amazing. So on your, on your affiliate business and your agency business, what percentage would you say are prepaying of those deals? Those contracts as partnerships, what percent are pre-paying you upfront for that media versus where you're for the clients? I never put my card on the media ever. They put their own credit card. I won't run the deal. Like I'm not going to risk my own money for them to build a business and listen, because that's the other thing people don't pay in all reality, people don't pay.
Speaker 2 (35:22):
When I first got an elite game, it was 2008 and I was doing a lot of television, um, a lot of television ads. And I had a guy that was massive television lead producer. And he was floating all the major lenders and banks, net terms. Well, when all those banks shut and said, screw you, this dude was out millions and millions of dollars. And I was under the impression that banks they're completely reliable. Of course, they're going to pay you what I realized, like, no, they probably won't. And when bad times happen, like pandemics or whatever, it's very easy to make excuses. So I just, I don't know. I just recognize no, I'm never going to put my card on the account and float people unless they want to pay me for the loan because it's basically a loan. Like if I'm, if I'm putting my card in the account, I'm floating you 30 days that costs money, but my money can make money.
Speaker 2 (36:10):
So I never do that. And on the affiliate side, I just either get paid upfront or I start getting paid dailies. And once I do volume, I just say, look, I need to prepay, like I just to keep it rolling. I need to prepay it because I can't afford it. I love that prepay let's year for your first for talking about that on the show, man. And I feel like nobody asks for it. It's just a, but it changed the game in terms of your cashflow, the guys over at strike point media. I mean, they, they were on the show a couple weeks ago. They talk about how, you know, not so much in the affiliate space, but like when their clients started to prepay, it changed the game for them and their trajectory and their cashflow and their growth was when they changed those payment terms.
Speaker 2 (36:51):
And I felt like you can, as an affiliate, you get way more aggressive when you're on a prepay too, in terms of like the volume that you can push. So it, wasn't a killer James, your amazing guests. Thank you so much. Uh, tell everyone a little bit about, uh, you know, how we can support you where people can get in touch and, uh, yeah, I mean, it's lame, but the easiest way, even though I'm not on there ever is like Facebook messenger. I check it like once a week and I hit everybody back and it's the most direct way, um, symphony agency, the hardest, the hardest agency in the world to hire or really, really good. We just probably don't want to work with you. Do we kick? Well, that's a good, amazing pitch. And then, uh, geek out events, like really the, the, I believe the highest level learning workshops, et cetera in the game, we'll be doing another event in a month, either in LA or Miami. We're always like really poorly prepared until everybody last minute, but it still sells out super fast. So it works. Um, so yeah, hit me up on Facebook messenger. If you have questions, I answer all questions that people ask me about media buying business, whatever. I don't give a. It just might take a second to respond, but I will absolutely respond. So guys, thank you so much for, uh, having love it, man. I love it could want.
Speaker 3 (38:05):
I love it. All right. Thanks so much, James. Have a good day, guys. Thanks so much for listening to another episode of the rich ed or ed podcasts. If you're like me and listen to podcasts on the go, go ahead and subscribe on Apple podcasts, Spotify, YouTube, and rich [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 Zack at FunnelDash com. Show me you left a review. I'll give you a free copy of the rich add or ed book to learn more about the book. Go to rich ed for a.com to leave a review that a rich ed or ed.com/review.
Speaker 2 (38:46):
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‘You guys are definitely on to something”
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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