When using paid ads such as facebook or any other paid advertising (I am currently using other sources), there is an interesting phenomena that takes place. To get an ad that works takes testing, lots and lots of testing. I hung out yesterday at the Ads4Dough event with a bunch of guys who are spending hundreds, to thousands, to tens of thousands of dollars per day on ad spend.

Everyone agreed that none of us were any good at writing ads that were far superior to lessor marketers. It is simply that we were willing to write and test more of them.

If you come up with an ad, and traffic source for a dating offer that pays you $10 for a lead sign up, then you need to spend about $20 or $30 to figure out if the ad you wrote is working. This is called statistical significance. It is worth learning the math on this, or at least deeply understanding it, and knowing how to use an online calculator that checks it for you.

So for the average guy, he can afford to run $30 tests 20 or 30 times to find an ad and a traffic source that works. This is totally doable if you are willing to work a regular job, and spend this $900 over a month or two depending on your salary. Then when you find something that works, you keep feeding more money into it. If you live frugally, and test lots, then eventually you will most likely eventually find something that works.

You don’t see many affiliate offers with $6,000 payouts, or even $1,000 or even $100 payouts. I think one of the reasons for this is that you better have very deep pockets to do the testing.

I was either lucky or unfortunate enough to have a product, super high quality chiropractic treatment, that has a decent payout for our office. Basically it takes a ton of work to really fix someones spine, with lots of staff, overhead, student loans, blah, blah, so it costs some money to do well. As a result when I test market, I need to spend a ton of money to find an ad that works. It is only the fact that I had gotten to help facebook, and got to do a bunch of testing in the process that gave me faith in facebook ads, and the fact that I know the exact value for each conversion in our organization that gave me the courage to work out the marketing on facebook.

Without my vast experience with facebook ads, and certainty on the math of it all, as a chiropractor I would have been terrified to even test it to the level it needs to be.

Each time I run a facebook ad, I need to spend a ton more money to test that ad, than I would if I were testing dating ads, or some other offer.

I am sure I could sell 10 million dollar private jets on facebook, but whoever was funding it better be willing to spend a million or so on each test while we are working out the marketing.

This is also why I don’t like taking on clients unless they have a ton of money to play with.

If the person has a product with a $100 profit per sale then they better be willing to spend $200 or $300 per test, and be willing to do 20 or so tests to maybe find one that is profitable. Then if it did not work, what then? It doesn’t mean that I suck, or that facebook ads, (or whatever the channel) sucks, it is simply that we did not come up with the right ad yet. The right ad is there, but you better have the fortitude and bank roll to ride it out till you figure it out.

I can see why back in the magazine days they usually did not use direct response. There is no fricken way you could have tested enough to make a working ad back then unless you were lucky or a genius.

I remember in direct mail days, I used to have to spend close to a thousand dollars to do a test. The one product I sold back then was a little under $100, and I spent many thousands of dollars before I got lucky and got one that had an ROI.

Shoemoney at my first Elite Retreat was the one that first opened my eyes to the benefit of knowing exactly all of the profits and costs of the product that I was selling online, compared to most affiliate marketers. It took me years to understand what he meant by this, but boy is he right. When I am selling a mortgage offer like I have been working on lately, I have no idea how much profit that advertiser is making, so I don’t really know how much I can afford to spend on the ads, and then negotiate if I am a little negative. He was right, that those of us with our own products can dominate because we know just how far we can push our spend. It is kind of like a huge game of group poker.

The upside of selling something expensive is that you are not going to have as much competition.

There are ways to mitigate your risk on this, such as getting leads instead of sales. But ultimately the guy who owns the company is going to have to pay for all of those leads, to find the one gem he is looking for, so he better have balls of steel.

Good night, and good luck!