SFB Newsletter #14

Hey 👋

Marketing is a lot like health… What drives real results is nutrition in the kitchen vs just training in the gym… Problem being that’s not very ‘sexy.’ 

What’s sexy is training: lifting weights, running, yoga etc…

It’s the same for marketing - what drives real results is your funnel as a pose to just running ads. Yet funnels aren’t very ‘sexy.’

Ads are sexy - click a few buttons on facebook, use ‘the magic ad formula’ and make thousands while you sleep. That said… I do love ads, and we’ll be taking a deep dive into them today in the newsletter.

If you have a great funnel, with great offers in your business - ads can help you to scale faster and more consistently than anything else I know of.

The ability to reach millions of people quickly is unlike anything else in business. It’s truly wild if you get it right.

So let’s dive in…

There are a few definitions you’ll need to know as we go through this so let me first outline define them.

• Audience - The people you set to see your ad in the settings. There are three different types of audiences - Saved, Lookalike & Custom Audiences that I’ll cover shortly.

• Creative - The video or image you use in the ad.

• Headline - The main headline in the ad.

• Copy - Any other text that accompanies the ad.

• Placement - Which type of ad it is - eg a Stories Ad, a Newsfeed Ad, Reel etc.

These are the tools you have to play with ^ and the way you approach them should change depending ‘where you are in the campaign.’

There are three main phases of ‘running ads’ - the testing phase, the maintenance phase and the scaling phase.

Phase 1 - The Testing Phase

Here you want to keep your budgets under $200 per day in total. As a Small Business Owner - every $1 counts - if you set your budgets too high without testing you’ll be throwing thousands of dollars down the drain - and the ad platforms will happily take your cash and guzzle the fuel.

Personally, during this phase I spend 80% of my energy finding the right audiences to target.

Mainly because it takes one click of the button to create a new audience.

I see a lot of people launch ads with countless different headline and creative combinations - I’ve not seen this scale well during the testing phase.

During the testing phase I want to find 3-5 audiences that will convert with just one creative, one headline and one piece of copy.

The key to the testing phase is speed - If I can perform 100’s of tests in the time it takes you to perform 1-10 - I’ll have more data and I’ll probably win.

Therefore when it comes to testing - test what’s fast - audiences.

In all worthy ad platforms there are Three Main Audiences you will want to understand.

You want to run your ad to Saved Audiences and Lookalike Audiences that you don’t own to control and then turn people from those audiences into custom audiences that you do own and control.

You can also set up feedback loops between your custom audiences and your lookalikes - more on this in a moment. 🙂 

1. Saved Audiences - These are your demographic, geographic, interest and behaviour based targeting.

If you’ve ever run ads before you’ve probably used a saved audience to do so. In all ad platforms these settings will pop up…

What gender, age, locations, interests etc…

Here’s an example of one of my saved audiences that is performing very well for me right now.

^ You’ll notice I also have some exclusions here - because this is an ad targeting the ICE COLD market with the intention to grow my audience - I remove existing leads and purchases.

When you’re in the testing phase it’s important to test just one thing at a time - so if you use interest targeting - don’t add 10 interests into the mix - just add one.

Why..?

So when you buy some data - you come out the other side with a clean spilt test on which audience is more productive for you.

Say you have 10 audiences - even if the ad performs you won’t know which interest is driving the returns.

You may also notice that I have have 11 or so countries above - there is a setting that allows me to see which countries are performing best so I can zero in on them if needed.

3. Custom Audiences

I’m going to do these audiences in a strange order: 1, 3 then 2. It will make more sense in a moment.

Custom audiences are those you can create based off an action someone takes inside your funnels.

Did you know that if someone watches just 3 seconds of any video you post on your social media you can add them into a custom audience for up to 1 year?

You can also tag people who pass by or are present at a physical location.

You can then run re-targeting ads to those people.

You can also put a pixel on your website and capture that persons unique browser address and re-market to them.

You can also upload your email list into the system and market to those people.

If you’re going to upload a list to an ad platform - the most valuable list is those that contain phone numbers as these will almost always match to a profile. Emails sit around 40%.

2. Lookalike Audiences - The ad platforms have thousands of data points on each user - If you can feed them a small list (30-100 people depending platform) they will create an audience that closely matches this profile. (1-10% of the country you give them data on)

** Whilst you only need a small audience to get started - larger audiences work best.

The deeper you go into your funnel (Ice < Cold < Warm < Hot) the more relevant custom audiences you’ll be able to feed back to the platform to create higher quality lookalike audiences.

The goal of running ads is to turn traffic you don’t own or control (social media) into traffic you own and control (email/owned list.)

Lookalike audiences can help: At one stage a few years ago lookalike audiences made up 100% of my front end targeting. Today that’s changed a little however they are still a critical part of the machine.

How much should you spend on testing?

I spend up to $200 / day at the campaign level.

At the ad set level I spend 1-2x the CPA.

So if my goal is to get a lead for $5 - I’ll spend up to $10 on the ad.
If my goal is to make a sale for $30 - I’ll spend up to $60 on the ad.

Of course you can adjust these metrics to suit your needs - I’ve just found that it’s better to be aggressive in the beginning.

The good thing about spending 2x the CPA is that it creates a very easy decision making process…

There are only three outcomes.

0 sales - Turn the ad off.
1 sale - Turn the ad off - note what worked - you’re closer than you think.
> 2 sales - Ad stays on.

PLACEMENTS.

If you grab an old newspaper and open it up, you’ll start seeing ads of various shapes and sizes littered through the pages. You’ll notice they fit the neatly into the page, occupying the exact dimensions they have available.

Now as you can imagine it will cost more to run a full page ad than it does a little ad in the corner…

Do the same rules apply for online ad platforms..?

Not necessarily.

If you look at Facebook and Instagram for example - It costs me up to 5x less to run a ‘full page’ ad that takes up the ‘whole phone’ if I focus on instagram Stories and Reels as a placement.

This allows me to drive cheaper traffic into my funnels - with the added benefit of needing no copy or headlines in the ads I run. It’s just a portrait sized creative.

One thing to be careful of inside ad platforms is that almost all of the advice that comes from inside the system is shit. Trust me I’ve tested it extensively - it’s a strange reality that those who created the system are not even sure how to best use it.

Eg…

I guess some evidence that your goals and the goals of the platform may be entirely different. Best to know it: question everything then seek every optimisation and advantage you can.

When to move on from the testing phase…

When you hit your KPI’s.

The ultimate KPI is the Cost Per Acquisition. If you’re 10x for a service business, or at your required profit level for an ecom business - you can keep moving.

I’ve outlined a basic template of KPI’s above… but for your business you’ll have to work backwards from your average order values to work out your numbers.

Direct Response Marketing is very objective.

The fastest way to slide on backwards is to believe all of your own thoughts and assumptions. Instead, be like a scientist - create a hypothesis of the numbers you want to hit - then enter a testing phase where you ruthlessly test that hypothesis.

Over time your assumptions will improve and you’ll have a higher hit rate on your tests.

** Note - this is one reason I don’t like the question - ‘What do you think of my marketing?’ At the end of the day this is an assumption based question. I can guess and maybe make a good one… a better question is ‘hey, I ran this test - here are the numbers, what do you think?’

That said if you’re spending $200 per day and you’re within your KPI’s it’s time to move into the maintenance phase.

Phase 2 - The Maintenance Phase

The key here is to maintain your performance as you start scaling the system up.

The first and most simple thing to do is to start adding 20% per day to the budgets. If you’re in luck the ads will just keep performing, and within just 9 days you’ll be over $1,000 per day and graduating into phase 3.

Yet for most this won’t be the case.

Whilst I’ve mentioned that marketing is very objective - there is also a big mindset component when it comes to scaling ads - you’ll notice mental barriers as you start spending more money, especially if it’s your own.

This may sound disconnected but I believe there are a couple of important things to do around this time - try to keep a 50% free calendar, get in the gym, eat well and get good sleep - all of this will help to keep you steady and focused.

During phase 2, I focus on testing more creatives, copy and headline combinations to find the winners - I keep my base of 3-5 audiences I know are performing and I look to find the right combinations.

If I spend 80% of my time, effort and energy on audiences in phase 1 - in phase 2 I spend 80% of my time, effort and energy on creatives, headlines and copy in phase 2.

There is also a distinct hierarchy in these areas.

The creative is the most important part of your ad - and for this video ads will almost always outproduce image ads. (if they are done well of course)

Don’t get me wrong image ads can work well in certain contexts - I just don’t see them outperform videos very often. I guess there is an advantage in images in that they are easier to produce.

I believe that at least 50% of the success of the ad will come down to the creative - so it’s best in phase 2 to spend most of your time focused on this.

The two most important elements of your ad are the pattern interrupt and your hook - these should happen in the first 10 or so seconds of the ad. The pattern interrupt grabs the attention - the hook keeps it.

Then it’s the headline which makes up 30% of the success of the ad.

Here is the a simple headline formula I learnt from a mentor of mine a few years ago that has been incredibly helpful to me.

You run the headline through each of these elements - ‘unique, ultra specific, useful and urgent’ - you then score these out of 25 each which gives you an overall score of 100.

It’s called the 4U’s.

Give me a minute I’ll jump over onto instagram find a headline, I’ll bring it in here and we can optimise it together to show you how this works.

Ok I immediately found an ad from one of my favourite marketers… (you will have seen me raving on about these guys in previous editions of the newsletter…)

It pains me a little to do this because I love their ads so much - but the 4U’s spares no one.

‘👉 Double Your Flexibility in the Next 4 Weeks!’

Unique - 12/25
Ultra Specific - 12/25
Useful - 20/25
Urgent - 20/25

Total = 64/100

So this headline is scoring well for urgency and it’s also quite useful - Something to note with urgency, you have to keep it believable. Just saying ‘double you flexibility in 2 days’ probably won’t work well.

Let’s see what we can work here…

..

.

I’m thinking we can bring in a unique mechanism or piece of IP and link the result to that - and then we can make that result more specific. Maybe add some social proof…

Reading the rest of the ad… They use ‘Science of Stretching’ as their unique mechanism - it’s fairly generic. Let’s see… Maybe I’ll drop the IP and focus on more specificity with the social proof instead.

..

.

👉 Add 236% to Your Flexibility in the Next 4 Weeks!
(Our Average from 6,327 case studies)

Unique - 17/25
Ultra Specific - 23/25
Useful - 21/25
Urgent - 20/25

Total = 81/100

The general rule for the 4 U’s: If you score highly in ¾ of the U’s you have a nice headline to test.

Then onto the copy which makes up 20% of the ad.

I frequently see people start here - Instead it’s wise to finish with copy as the final piece of ‘refinement’ in your ad campaign.

20 years ago copy was more important than creative - that’s flipped today - creative is now more important than copy.

I used to spend a lot of time studying copywriting to try and find an edge. In terms of education this is incredibly valuable - however I later discovered that If I made amazing offers all throughout my funnel I didn’t need to focus as hard on my copy.

I still study it - though I do believe the offer, and understanding the mindset of the prospect are more important than ‘the words you use.’

I guess this is more the ‘psychology of copy,’ than the words themselves. That’s what I’m really interested in.

That said…

Here is a useful script I’ve used continuously for the part 8 years - It’s featured in thousands of ads.

It’s called PASPA…

Pain/Problem
Agitate
Solve
Proove
Call to Action

Phase 3 - The Scaling Phase

Once you’ve passed $1,000 and you’re still in KPI you’ve entered the scaling phase.

The first and most simple thing to do here is to copy your winning campaigns with $1000 daily budgets, leave them on for a couple of hours and see if they stay in KPI.

The first time I scaled a funnel to this level ^ I did exactly this and we did $220K in revenue through one of my sales funnels within a few weeks off just $65K in ad spend.

Here it’s important to keep the potential pool of customers/clients as high as possible so you can keep scaling. This is one reason I like being more general with funnels as a pose to being more specific, because over the long term the systems will be more scalable and hold greater asset value.

I guess the mindset could be summed up like this…

Instead of ‘niching down’ - go international.

Another strategy is to keep adding 20-100% per day to the ads and monitor things closely - you can also set up automated rules to make your decisions for you if you don’t want to constantly check your computer.

The key to the scaling level is basing your decisions on the overall average of the campaign. If you’re in KPI and you’re profitable… Why not keep scaling?

One of the great things about ads, (if you set up your audiences properly) you’ll be able to keep growing - hypothetically, endlessly - if you can get just one sale you can often get ten, if you can get 10 you can get 1,000 etc.

Ads are much easier than they seem.

Talk soon,

Ben.

PS… How You Can Support This Newsletter.

This newsletter is free.

As it stands I’ve invested over $500,000 of my own money to discover the principles, strategies, techniques, tools, tactics and systems I share with you in this newsletter.

This money was invested into books, courses, retreats, consulting (1 on 1 and groups), coaching, business masterminds, seminars and events over the past 10 years.

I’ve also invested ten’s of thousands of hours to get to this point. I’ve been in the trenches testing everything you can imagine for over 10 years now. I’ve made mistakes that have made and cost me millions of dollars.

I plan to share everything with you here in this newsletter.

But that’s all in the past… let’s talk about the present and some of my costs.

I run ads to grow the newsletter and it costs me $2 USD to gain a new subscriber.

I also spend $1,000 per month on various software platforms to be able to be able to bring this content to you.

As the newsletter grows, I’ll bring in sponsors - If I am an actual customer of the products and if I believe in them I’ll bring them to you and share my views via this newsletter.

For now the best way to support is to purchase some of our products.

Currently I have three products that I think you’ll love and that are perfect starters - they cost anywhere from $20-$67 - if just 5% of our subscribers claim one of our products I’ll break even and be able to keep producing the newsletter.

We also have offers to serve clients where we work with you in a more intimate setting. There you have direct access to me as I help you scale. If you want to learn about that you can book in a call with me below.

PPS… End of year fast approaching - great time to be working on the business.