10 Lessons from Spending $10M+ on Digital Ads

Angela Frank: 00:00:00

Welcome to The Growth Pod. Today we're checking in one on one to share what I've learned from spending over $10 million on paid ads. I'm your host, Angela Frank.

ollar revenue for clients. In: 2022

On The Growth Pod, I, along with some of the coolest experts in business, share tips designed to help profitable business that you love. So if you're like me and you love learning about how to grow your business more efficiently, you've come to the right place.

Over the past 10 years, I've run a lot of ads. At this point, I think I've managed closer to $15 million in ad spend. But the title sounds catchier.

With 10 things from spending $10 million and honestly, I could spend $100 million. And I don't think that these takeaways would change.

I actually think that these takeaw even more important as the amount of ad spend that I spend increases.

But before we get into this list, I want to share the most important thing when it comes to running ads, and it's that you need to trust in your own data and ignore what you see your competitors doing online.

When you look at your competitors, it can be useful for inspiration, but it's highly unlikely that every ad that you see that they're running is working for them also, unless you know that the economics of their business is directly relatable to your own. It's unlikely that even if it is working for them, that it will work for you and generate profitable results.

So that tees us up nicely for the first takeaway, which is ads aren't as profitable as you think that they are.

I think this was the earliest realization that I had and it actually came in the first business that I ever started, which was a small Etsy based e commerce business. And when, when I started on Etsy, you could run search ads very much like Google shopping ads.

You had keywords and you promoted your listing and it would show up when somebody searched for a product like yours. And you had a lot of control over your targeting in terms of keywords and things like that.

And when I turned on these ads on Etsy, I started getting sales, but at the end of the month I didn't make any money. And that was a real lesson for me. And a few years later I was working with a fitness equipment retailer.

And one of the first things that I did was take a look at their ads. They were spending about a hundred thousand dollars a month running ads on Google and it turns out that their ads weren't profitable either.

And the more that I started working with different companies across different niches and offers, I saw the same trend. It didn't matter the niche business size or offer.

It seemed that everyone that I encountered just couldn't figure out ads in a way that made sense for their business. But they kept running them because, well, everyone else's. And their idea was that they just needed to figure out how to make it work for them.

And this leads me to the second takeaway, which is not all businesses need to be running ads.

When I work with a business who is running ads but just can't seem to crack the code, oftentimes there's a totally separate marketing channel that's working really well for their business and can be a huge driver in their growth. But it's been neglected.

And oftentimes this neglect is caused by the fact that they're spending so much money on their advertising that that's where their attention is.

And so in these cases, I'm able to help clients scale back their ad spend and use it to invest in other channels that become the primary growth drivers for their businesses. And that usually ends up either significantly reducing or entirely eliminating their need to run paid ads.

Of course, there's nothing wrong with testing ads, but you can build an amazing business without them. Like Sean Tupper, who I interviewed for episod episode 22 of The Growth Pod.

He built his investing platform ticker to over 9,000 users, and he doesn't use any paid ads. Instead, he leaned into the area that drives growth for his business, which is primarily leveraging YouTube for client acquisition.

So let's say you've tested ads and they do work for you. Obviously you're not going to stop running them. And so the rest of the takeaways in this episode are for you.

Takeaway number three is that you should never depend solely on advertising to drive business growth.

Going back to my earlier example of the company that was losing money on their ads before working with me, their ads were not only unprofitable, but they were also entirely reliant on Google Ads for the revenue that they were making. And now this is dangerous for two reasons.

One, with this strategy, you have to spend money in order to acquire your customers, whether or not you have the budget budget for it. Because without this money spent on ads, your company would not generate any revenue and would die.

And the second reason is that you're entirely beholden to continue paying whatever the ad platforms want to charge you, even if you do have the budget. And you're beholden to pay that whether or not it makes sense for your business.

So never rely on one paid advertising channel and never become reliant on paid ads alone. Now that you're running a diversified channel strategy, it's time to learn how to grow your ad accounts.

And that takes us to the next takeaway, which is ads require a lot of time and money invested to get things right.

To create a truly successful ad strategy, you need to be continually and aggressively testing new creative targeting and messaging within your accounts. It's not enough to launch a few new pieces of creative each month. You need to be testing a few new pieces each week, or better yet, every day.

And to do this, there are a lot of costs involved.

Not only with your team, who needs to spend a large portion of their time on creating the creative, setting up the tests, and compiling learnings, but you will also need to spend a large portion of your time analyzing those learnings. And you will need to spend money testing these creatives. Copy and targeting.

At first, it might not seem worth it to spend the resources on this, but it is the only way to set your accounts up for success. Quickly identify new art opportunities before your competitors do, and navigate changes that inevitably will impact your advertising performance.

When it comes to setting a budget, I've learned that too little budget is bad. Too much budget is worse. There used to be a day where you could profitably drive traffic to an unoptimized website.

Ask someone to buy something, and most of the time they would, and you'd be running a profitable business. But ads don't work like that anymore.

Recently, I read a statement from Russell Brunson, who said that unless you're spending a million dollars per month on ads, the platforms don't really care about you. But honestly, based on my experience, I think even that is a little outdated.

And in my experience, unless you're spending a few million dollars per month or more on a single platform, advertisers don't really care about you. So what does that mean for your business? Well, you need to find the sweet spot for your budget.

When you spend too little, your ads aren't going to be shown enough to generate profitable results for your company. But with too much budget, you also will not generate profitable results for your company.

So if you're comfortably spending $100,000 a month on ads and you just haven't figured out how to increase that budget without losing your efficiency, you may actually be in your sweet spot and you're better off focusing your resources elsewhere. The sixth takeaway that I've learned is Creative and copy are more important than targeting for the reasons mentioned above.

It's important to continually test new creative and messaging to ensure that your ads are performing well. And these two things, creative and copy, are more important for you than the targeting for your ads.

However, my seventh takeaway is that targeting is still important. Of course who you show your ads to is important.

If you're selling something for nursing mothers, you wouldn't want to be showing Your ads to 80 year old males who love motorcycles. Weird example, but you get the point. So targeting is important, but creative and copy are more important.

Also, if something is working for you, ignore best practices I've heard over and over and over again in my career. Oh well, that doesn't work anymore when I'm sharing something that is very much working right now for one of my clients.

Of course it's important to pay attention to marketing trends and where it looks like your growth is going, but you need to value the data that you're generating while running your marketing and your ads higher than anything else that you see or hear. And the opposite is also true, right? Just because something is working for someone else doesn't mean it will work for you.

Oftentimes I will have strategies that work really well for one client, but it doesn't perform as well when we test it on another account. And this is because every business is different. Your offer is different, your economics are different, and your customers are different.

This leads very nicely into the next takeaway, which is getting the basics right produces better results than growth hacking. Seriously, don't chase the shiny new thing in advertising without perfecting your creative and copy testing strategy.

If you don't know what messaging attracts, your ideal customers, or the audience that best resonates with your ads, you're focusing on the wrong things by trying to growth hack your ads. Ads work well when they're well understood, and so if you don't understand your ads, start there first and nail the basics.

And my 10th lesson that I've learned after spending over $10 million on ads is that your funnel is more important than your ads. Just like getting the basics right. If you don't have a well thought out funnel as part of your marketing ecosystem, you're wasting money.

You need a highly optimized path for prospects to take on their way to purchasing your offer. Spend more time and effort on your funnel before you launch your ads and then continue optimizing it as often as possible.

This way, your ads can generate as much revenue as possible while creating those profitable results for your business. Thank you so much for listening to this episode of The Growth Pod. I look forward to seeing you in the next one.