How To Scale Your Facebook Ads In 3 Steps transcript

there are three different stages of growth in any meta ads account if you're going to scale your meta ads account there are some things that have to happen consistently no matter if you're spending $100 a month or a million dollar a month and yet what I have learned from spending a lot of money on a lot of businesses that are a lot of different sizes is that different kinds of problems rise to the Forefront of any particular business at any given time depending on what stage of the journey that they are in and so what I want to lay out for you for the next little while is what those three stages of growth are and my hope for this episode is for you to begin to locate where you are on the journey so that you can then put your practical problem solving effort into the right place because this is one of the things that goes wrong if you don't know where you are in the sort of process of scaling an account the process of scaling your brand you will end up spinning your wheels on the wrong problems and so if you can identify the right problems to solve you'll be much better at solving them and so for the next little while I want layout the the three different phases of growth and tell you both what I see as the main problems in those phases as well as the main uh ways that you can solve those problems and hopefully also give you some handles on how you can go about identifying which phase you're in and and maybe you you'll kind of find yourself in one of them three phases of growth okay so phase one I'm going to call the creative stage okay the creative stage and the creative stage is where the number one problem you have to solve for your brand is actually generating some semblance of what I'll call product Market fit or um creative success those two are really hand inand it's possible that your brand actually is in this stage because it's not clear that there's product Market fit yet so that may be the problem or it may be that you have what is basically product Market fait like you've acquired some customers somehow or another there's some reason to believe maybe you've achieved six figures in Revenue it's actually really hard to generate six figures in Revenue without some level of product Market fit so you've got some baseline level of your business where you've established product Market or maybe maybe you're still trying to figure that out okay um and you have to now figure out what kind of creative is going to propel my ad account forward so this is the fundamental problem to solve at this stage of the business is creative by creative I don't mean like how do you produce the creative I mean what is the angle that sells your product right so uh I've considered starting a brand uh at different times and and I have I have run brands that were in six figures and tried to grow them and when we've seen Brands be successful from those early stages the reason they're successful is that we find ads that move move uh that with which we can acquire customers at or under our our targets okay sort of that simply so when I was the CEO for 100 at one point we had six brands in our portfolio and those Brands ranged from sub $1 million sometimes sub $500,000 Brands we had recently acquired to brands that were approaching $10 million in Revenue right getting to that stage of business and uh and and there's at any given time I think when we had up to six there was like three in each of these two categories okay where uh let's call them cluster one was the was what was the brands that are in this sort of uh creative stage phase one of meta ads growth all we're doing is spending as much time as possible trying different ad ideas as wide ranging of AD ideas as possible to see can any of these work to acquire customers uh at our Target and this is where like you're you know just looking to do anything you can creatively you're thinking about okay Stills versus videos ugc versus um you know more produced stuff or um stuff that's you know a little bit more editing flourish to it customer generated content long form explainers all these different things to see what works and and crucially not just the format of the ad but the actual content the actual sales pitch right so so again I had a client recently where um or I was working with them and we were hoping that we could uh get to $10 million in Revenue across a couple of years I think that was the the timeline that we had hoped for right but what we ended up doing was having ads that hit so much that we went from functionally $0 in spend to like a few $1,000 and spend within a few months that was because we very quickly much faster than I had forecasted had uh we we definitely had product Market fit we kind of already knew that but we found ads that move the product really really really effectively and because of those ads suddenly we had a scale ad account right hundreds of thousands of dollars a month like we had done it we had done this thing and suddenly that $10 million Revenue number got moved way up in our timeline and all of our things Chang now I almost never would forecast that's the outcome that's going to happen and yet uh it definitely can because if when you find creative that works it can be that experience where you go okay we have figured out how to sell the product we figured out what we need to do and now we're just like taking off and spend is growing really fast and and you went from spending a100 or $200 a day banging your head against the wall trying to figure out if anything was going to work till like a th000 2,000 3,000 $8,000 a day uh really fast as fast as you can keep inventory in stock when you have a moment like that it is all about in that scenario some combination of creative and offer and a lot of times this phase is the most fun in e-commerce if it's working I me it's incredibly frustrating if it's not working if it's not working you're probably losing money your business isn't really working very well or you need to find a different acquisition Channel or whatever it is you can really be banging your head against the wall it can be extraordinarily frustrating and some of you listening to watching this are probably in that stage where you're experiencing that but some of you have probably also experienced the fun part of the stage because when it happens is a wild ride everybody is really happy it this this time is marked by Massive percentage increases in spend as you find things that hit everybody looks around goes oh my gosh we're selling out of our product so fast and you know and I've just seen that a million times and certainly that happened to me at 4x400 as well when I was when I was running those Brands like some of our Brands just like suddenly worked and we would found ads that worked and we would sell through products and sell out and didn't even know you know you hit the right moment the right combo of seasonality and creative and all those things and it it would just just work so um that's what phase one is if you were in this phase your job especially if you're the CEO or if you're the founder of the company right uh it means you're probably pretty small you don't have a very big team and your job becomes how do I do everything I can put every resource I possibly can if I'm really going to use meta to grow this brand how do I do everything I can to find creative that works and this is often a messaging problem first as I said what is the thing that is going to sell your product to somebody don't forget that if you're running meta ads you're in direct response advertising you're in per Performance Marketing that means you need to think like a performance marketer like a direct response Advertiser in some ways like the best people to look at occasionally uh or at least some of the time like don't go pull up Nike at account right they are doing they're doing something very different than what you are doing go even if you're in the same space even if you're selling athletic shoes and athletic uh apparel or whatever right instead go look at uh you know the classic examples like David Ogie or Eugene Schwarz like go go look at people who are trying to get you to pull your wallet out and buy something right now go look at infomercials now not that your ads exactly have to work like that but watch what they're doing to think about that if you if you are in a phase where you really are struggling to get somebody to take their wallet out and make a make a purchase decision right now your ads just will not scale think really carefully about what your messaging is going to be this often starts with words not images but I will say that if you are following the things that I'm saying in this uh in my podcast and you are running manual bids and building your ad account like that you should also take basically anything you can and shove it into the ad account so again I talked to a brand recently who had been paying attention to some of my content and they were selling um they were selling headwear and they said they said it worked like we did it suddenly right like we just kept recording explainer videos of the founder talking about the product and what makes this headwear different or better or whatever and I don't even remember what the features were or the benefits were of the product but he just kept trying he just took shot after shot after shot shot grabbed his phone just recorded video after video showing the product explaining it talking about what the offer was all those things putting it into the ad account and at some point bam something clicked and now they had uh initial stage of success now you have to replicate that a few times before you're out of this stage right one ad is not going to make your whole brand you have to do that a few extra times but that's usually about finding the messaging that works and this gets you to like I said a couple hundred, 300,000 in spend per month averaged out you know could be more could be less depending on seasonality depending on how big your brand and your Niche is and all those kinds of things right but uh but you get the idea and once you get that first one or two of them you will probably find that you can start to produce a few more of them um because you found the angle that works and now you just got to go recreate it with different assets Etc so there's number one now what I just said at the end there implies what stage two is if stage one is the creative stage stage two is the operational stage at this point what happens is now You' found messaging that works you found angles that works that work now your brand is growing you're starting to produce a little bit more money you have the ability to generate more content probably and your job now is to create as much more of that ad content as possible and this is where I think there is a real benefit to volume output literally just like how much creative can I make and how diverse of creative assets can I make all while hitting your core talking points right using the things you learned in stage one to now increase your output of production and so now the problem shifts from being a creative problem to an operational problem because it's not really about messaging per se anymore it's about scaling up your ability to produce content that communicates that messaging and that is actually a really different skill set it's really hard I personally sort of hate doing operational and process work I can do it okay it's not that I'm completely incompetent at it but I'm not very good at it it's not natural to me and it feels like going for a run in the mud to me just like like the world is just working against me I just hate it okay and so if I was to be in that stage of the brand what I would need to do is go now work in a bunch of like this is where you're getting deep in the weeds of a SA or clickup or whatever you use to do project management right and this is where you're starting to think about all the different kinds of output you can create this is where you're you know you're adding designers and and video editors to your team right like in my case for for uh for our clients this is where we've worked with more Staffing to add um folks from the Philippines to build up my ability to Output these things we have process for our clients all all of my clients right now are somewhere in this stage or in the next one okay our job is to figure out how to use the tools at our disposal to generate as much output as possible around that core messaging so yeah so you're adding designers still image designers you're adding video editors maybe to your team you might be doing influencer seating to generate a huge amount more content from influencers you you might be getting customer generated content uh from customers like cgc right like a post-p purchase video where you're asking people to review the product you might be um employing a third-party creative agency who's doing additional work for you to scale up uh your output you might be uh thinking more about like just all kinds of types of creative that you aren't doing right now and go like oh we need to add another copywriter or another person to do brief ads or another whatever to to keep expanding the diverse volume of assets that you want and try to get as much creative as possible into the ad account and at the same time you also may be employing um somebody on your team to do landing page iterations uh offer changes those kinds of things to test those alongside your creative here's the key idea everything that I just said every single one of those things requires creating process and budget and timelines and all those things for right if you want to do influencer seaing here are the steps involved you need to give somebody the job of influencer seaing that person needs to uh identify influencers you want to work with that person needs to uh reach out to the influencers get them to opt in to receiving your products you need to then send them the products you need to make sure you get the right product and send it to them you need to see uh how many of them post you need to monitor those posts collect the content somebody has to build the content in the ad account you probably want to maintain a relationship with some of the people especially the ones who do a great job you want to measure the performance of some of them so you know who to keep working with and who who not like there's that's a lot of different things it's a very process intensive thing even if it's not particularly expensive and I don't think it is actually uh it's just got a lot of stages this is where like a great influencer agency can be really helpful right they have identified ways to smooth out that very friction filled process and you can repeat that same thing like let's say you want to just triple the amount of output that your own team has and this is Key by the way so much of the way you actually scale an out account account is just with creative volume it's not just like with new like good asset it's about the ability to uh like like in the beginning stages it's about like find a winner right find a winner and let that scale and that the ad account a lot of times will look like one ad that powers the whole account forward okay but like it's possible like I think a lot of times in stage two your ad account is sort of less top heavy this I've heard actually mixed things about this I I know some people still see really top heavy ad accounts over time where it's what I mean by that is is one ad that's producing 60% of the spend or something like that especially if you're running manual bids and and the the bids are just surfacing winners and pressing losers and so all the energy of the account goes towards one out like that can still happen but at least in my accounts right now what I'm seeing is is even in my top spending accounts like or or or or even in my top spending campaigns like one ad's producing 15% of the spend uh and that's the the top spending ad okay so um so I'm trying to layer on asset after asset creative after creative trying to get as many different pieces in there as possible to reach as many different people as possible so if we can accomplish that then what do we have to do well we have to scale up the output and now if I want to get a second graphic designer I have to figure out which graphic designer gets what work and I have to have a process for that and if I want to brief those graphic designers to uh generate static images I have to find inspiration for those and I have to brief those and I have to again get them built in the ad account and um and so on right and somebody has to report back to somebody else in the business about how much you're spending and how it's going and what the return is going to be in there's forecasting is probably involved and this is another thing right the financial infrastructure gets harder to build in the early stages before you have um true pmf before you're starting to grow what you might find is that like a forecast is only marginally helpful it's going to be really wrong anyway like you take the scenario I mentioned earlier it's impossible to to forecast impossible to forecast going from uh you know essentially zero in spend to $300,000 to spend in five months or whatever your forecast is worthless at that point right it's broken it's just not going to be useful at all okay but at some point your spend gets less volatile less crazy the the the wild ride you experienced in those early days and all the fun of it actually sometimes the feeling changes now it actually feels a little bit more like running uh or swimming Upstream where you can still do it but it's really really hard work because you have to keep putting all of this stuff in there now if this goes right you can keep expanding spend for a very long time you can keep growing spend for a very long time and it can keep working so sometimes the winds here feel smaller sometimes they actually still keep coming and you and as you scale up your output right it's not necessarily the case that you're going to slow down your percentage of spend increase over time because you may actually keep finding new wins maybe you actually this maybe having this process allows you to go develop more products because now you're the operator you're not just the marketer anymore and you've got a lead growth person or an agency or whatever it is that can do this thing for you and so now your time is freed up to go develop more products and you give the products to the agency and they're producing more Stuff Etc right you get the idea and so that can push the spend really far forward but the complexity that comes with doing this is real and that's why the problem becomes an operational problem to solve so much of it is about here's the way we solve it right what we do is we get a forecast and we say here's what we think is possible what we should be able to do what are we going to need to do that how much content are we going to need to produce like how many cameras are we going to need to pick up and then how many ads are going to be able to spin out from that and uh and broadly right I don't need to precisely forecast exactly how many ads you need but are we going to be able to produce enough ads to support that level spend if we can't then what do we need to add to produce it if we can then how do we actually get it done and now you're communicating every week how's it going relative to our forecast we need to adjust our forecast did we over forecast or under forecast do we need to adjust our um targets weekly so that okay now we have too much inventory we need to take a lower return so we can turn that inventory back into Cash Etc there's all these conversations and so the way you solve this problem is with a good forecast well-considered forecast a good and careful plan uh where you're you're forecasting all the way down through the entire p&l based on cohorts um and then you're building team relative to how much money you have available relative to that forecast to Output as much as you possibly can and then you keep growing it over time this also requires typically like I said project management software Etc and some some strategic intelligence about where the the next best effort is for your team's time and and and dollars in terms of which kind of creative you want to invest in next right like again customer generated content versus something you design versus uh influencer content versus whatever else okay uh so there's some some strategic sense of like where's the next place that we can uh where's the next Domino that can fall that can open up the the one after that okay push down the one after that but again this is mostly a processed problem the way you know you're in that stage right is that you have seen some success you've probably gotten to the six figures and spend somewhere around there high five figures in six six figures in spend maybe even 200,000 a month something like that and now the goal is okay um and but you're seeing a Slowdown in the probably seeing a Slowdown in the percentage increase of your spend it's not quite such a wild ride and now you have to uh put your head down here this is a the mistake the mistake in this stage of of uh growth is to start looking at other channels and this is very often where people start doing this they diversify too early because these operational problems are not problems they see very clearly they think they Sol have a creative problem they're their new creative that they launch isn't isn't um pushing their spend forward as much as when they were in stage one and so now they're in stage two and new creative might help a little but just not doing the same thing and now they're going like looking around going like okay we got to we got to stop being so reliant on this one channel or whatever else and that's that's the mistake to avoid here the mistake is to think that you have to go diversify your spend as the next stage actually this is a stage where I think um because it gets harder to manage and because there's more process it actually typically requires more Focus but just in some different ways than it did the first time okay and so uh so that's the mistake if you're sub20 million in Revenue there's probably at least some element at which this is a stage you are still in you may be getting towards stage three now and I'll tell you what stage three is in a second but probably if paid media has been a part of your journey and your sub20 million Revenue it's very likely that in some way or another uh that you are still in this stage and you need to keep focusing and keep solving more of these problems and you you probably haven't really reached total diminishing returns yet on increased Focus increased creative production Etc there's probably more spend to to be had I mentioned it in this episode but my own work with clients uh has required me to staff up a creative team to generate more creative at more volume we work with Our Brands we are usually producing between 5 and 20 variants of every ad concept that we produce because we want creative volume and creative diversity to generate the output that we want to do that I have hired my entire design and uh video team uh video editing team from the Philippines via my friends at more Staffing and that's because they do very very good work and I can pay them a really good wage attract really good talent one of my designers worked with a major International magazine as a graphic designer in the Philippines before working with me she has an incredible resume and I found her through more Staffing and she now leads my graphic design team and we're starting to put production designers underneath her and she does an awesome job I can pay her really good money relative to what is available to her in the Philippines less money than I would pay that same person in the US she wins the business wins the bottom line wins and ultimately in this case the client wins because we're able to deliver really great work that uh produces creative uh that sells products you should go staff up your team whether it's on the design and marketing side of the business or whether it's supply chain and operations and process and all those kinds of things in an e-commerce business you'll find incredible Talent with people with great rums in the Philippines via more Staffing go to more now.co more now.co to go work with my friends at more Staffing go find incredible Talent from the Philippines for your business today stage three I'm going to call the measurement stage this is another thing that people get to too early they think they have a measurement problem when they're mostly on meta like I said 0 to 20 million if you're focusing mostly Ona you might have some Google spend in there some influencer spend that's sort of separate from meta or whatever but you can normally see pretty clearly that meta is the driver of your growth and therefore spending your time on incrementality and attribution tools and things like this is just a waste this is the reason why for a long time I mean a while back I recorded an episode called you don't need an attribution tool because the vast majority of Brands don't they're too small it just doesn't matter your meta as dashboard is good enough the tool isn't telling you anything specific just let Let The Meta as dashboard allocate spend towards the best performers according to your attribution settings and your optimization settings and go from there you don't actually need uh a third party tool to measure this but at some point um complexity in the business enters in a way where measurement becomes a lot harder and it happens in two ways the first is uh with additional ad channels so at some point maybe you say you know we do want to bring other channels here we want to get more serious and maybe it's something as simple as you know in the early stages you're all your Google spend is entirely search and shopping but you're going to move some more to PAC which is a little harder to measure now there's video and image assets and display and YouTube in there in a way that's a little bit trickier or maybe you're just spending on YouTube and you're not really sure if it's working you don't trust the number in the Google dashboard but it's also like you don't know which way to not trust it maybe it's over reporting maybe it's Under reporting it's hard to see what the audiences are everything about it feels a little bit harder uh and so you start to wonder like wait a minute is this actually working now look there's never going to be a point where your bank account isn't the ultimate attribution Source stated positively if you're making money in some way or another it is working okay uh so uh so that's ultimately the the uh true indicator of Truth and if you've gotten 20 million in Revenue you probably have some sense of what your new customer revenue is divided by your spend your am we call it um right your acquisition marketing efficiency ratio that number um probably is somewhat intuitive to you so if you're at 10 million and your AMR is one and a half okay if you get to 20 million and your am goes up to two and at the same time as that's happened you spent a lot more on YouTube well YouTube probably cause that okay uh and so at that point the attribution tool may or may not be that important to you but somewhere at some point it may be the case that some incrementality or attribution um testing may be useful to you somewhere along this journey like I said probably north of 20 million is the place where you need to start thinking about this and really I bet it's closer to 50 for a lot of Brands it's just you can just get really really far in stage two like I said the the trap in stage two is to think that you need to start diversifying your spend sooner in fact if if you just stay focused you can go again very very far go listen to my episode of Jack Rubin and listen to him talk about how much you focused on one channel for how long and he's gonna get to 50 million like it's just like and just in the UK right there's a quarter of the audience that you have in the US so you can get really far uh doing that but at the same time there is some point at which this there is additional complexity from different channels and having some kind of measurement may be useful to you at that stage maybe it may be useful to you somewhere in there especially once you get towards nine figures D to C Etc then it's like you know having some additional tools really doesn't cost you that much relative to the revenue that you're making and you may as well start to bring some of those in and see what they say but there's actually another way where uh where measurement becomes more of a problem you're scaling up you know you've got the messaging that works you've got serious product Market fit you've got great operational process around focusing and outputting lots and lots of meta ads to grow and grow and grow that channel and that's great but what happens when you get uh when you introduce another sales channel it's a significant part of your business right typically that starts with Amazon but it also might include brick and mortar what happens when suddenly you sell into Target or into Walmart or into I don't know Home Depot or Best Buy or whatever you know whatever is your Niche whatever you're in one of these large brick and mortar retailers where suddenly you know for a fact that they are probably uh that your ads even your conversion based ads are are doing something to generate some kind of sell through in the rest of your business and yet at the same time it's really hard to see what that connection is now this becomes a Big Challenge because and and I've seen this happen I talked to somebody a long time ago who was saying that they added brick and mortar their D Toc business their DDC Ras tanked H they were in major they they was Target they added Target their DDC business looked a whole lot worse and so suddenly the performance in their DDC business their Rass went way down and so they pulled back spend and what happened their Target sell through also got way worse and they almost like destroyed the business doing it because it turns out their D Toc spend was actually powering the whole thing and they probably got sophisticated added some you know reach spend and YouTube awareness spend and whatever else right they they start adding other channels to do these things but this becomes a much bigger challenge at that point in the game and it's fair at that point to say like okay let's bring in some other tools and see what we can do to get some more sophisticated measurement now this isn't a different problem than Sage two at this point you probably have Sage two humming right you've got a creative team outputting a lot of stuff all the time and maybe they're still working on it and find finding ways to do more and more assets at more and more volume and you maybe if you're making more and more money you can bring in bigger influencers and take bigger whatever right all those things can all be part of that process but stage three this measurement process comes in the mistake in stage three is to think you're there too early uh again many people actually there's two mistakes one of them is to think you're there too early people think they're there when they're actually not yet the second one is to not recognize that this is happening in your business it's to it's to start to think like wait a minute like I said the the example I gave where they sold them to Target and suddenly um their D Toc row ass looked worse right it's a big mistake to pull back your spend there it can really really hurt you uh even though it's harder to measure but just look in your dashboard look in your meta as dashboard and look at the thousands tens of thousands if if you're in stage three 20 million plus right like in Revenue uh you're probably getting hundreds of thousands of clicks that are not resulting in a purchase on your website those mean something for your Brand's awareness for people to know who you are for people to walk into a major retailer like Target in that example and see who you are on the shelf and have had now an experience with a brand and understand what it is and be able to pick it up and look at it and get your questions answer by seeing what the packaging looks like or the product looks like or whatever right all those things can happen so there that's the the mistake is to potentially pull back your spend too early because you don't realize that it's accomplishing more and that's where again potentially more sophisticated measurement can can be a big difference maker I know for example last I had checked the the large incrementality tools um out there were you know were costing roughly 10 grand a month or something like that to use and um and that makes sense right because that that their customer is a much bigger customer than just your your average you know $5 million Shopify brand or whatever it is right not to uh not to sound condescending about that to to build a $5 millionar brand is incredibly impressive but um but yeah they're that's not who that company is targeting at that point because it's just too obvious they don't they just don't need the help here's the question for you which stage are you in which problem do you need to solve next are you at a place right now where you need to get the fundamentals of media buying you need to solve your creative problem you you solve your offer problem and then start pushing spend towards that or are you at a place where you've actually got some of those things down and now the game is how do I get more creative and more output going so that I can scale this thing up and grow my spend or are you at a stage where you actually are now starting to see a more multi-channel more complex business and uh you need to think more about measuring uh differently and being able to understand those things which stage are you in answering that question correctly is the way to understand uh exactly uh where to put your effort next or exactly is possible where to put your effort next and that by solving right problem next uh you will generate the largest impact on your business thanks so much as always for watching or listening to this episode if it was helpful to you the number one way you can say thanks to me is by sharing it with somebody else to wh for whom you also think it might be helpful you can also of course subscribe to this wherever you are watching or listening to it uh I'm playing with all kinds of different things right now in terms of editing and uh and intros and outros and all that stuff if you have any feedback for anything that you've noticed that I've been doing I would be so grateful for it you can email me podcast AJF growth.com you can also reach out to me on Twitter at andrewj Ferris or see everything that I'm doing or or if you want to work with me in some capacity go to AJF growth.com fill out the form there and let's get talking about what's possible don't forget to go to see my sponsor more Staffing virtual assistants can be helpful virtual professionals can change your business I love more Staffing you will love working with them go to more now.co to working with them today thanks so much for watching and listening I'll talk to you next time [Music]