Everything I've Learned Spending $30M on YouTube Ads | Tommie Powers Interview

Summary

In this insightful interview, Nathan Chan, CEO and founder, discusses mastering YouTube ads with a self-proclaimed 'YouTube ads goat' who has spent over 30 million dollars on the platform since 2012. The conversation delves into the power of YouTube as an advertising medium, the importance of creative hooks, messages, and calls to action in ads, and the strategy of viewing ads through the lens of customer lifetime value. The expert shares his journey from Google ads to YouTube, emphasizing the platform's potential for businesses of all sizes and the necessity for resilience in entrepreneurship.

Takeaways

• 📈 YouTube boasts two billion active users per month, making it a vast platform with a high potential audience for any business.
• 🎥 The power of YouTube ads lies in their ability to replicate the global impact of TV, but in a digital, accessible format across multiple devices.
• 🛍️ Diversification of ad spend beyond Facebook to platforms like YouTube can be beneficial, especially for businesses looking to expand their reach.
• 🚀 Starting an online business requires resilience and the ability to adapt, as illustrated by the interviewee's transition from management to online marketing.
• 💡 Creativity in ads should include a strong hook, clear message, and a direct call to action to effectively capture the audience's attention within the first few seconds.
• 🔄 The concept of 'open loops' is used in advertising to create intrigue and maintain viewer interest, similar to cliffhangers in TV shows or movie trailers.
• 📊 For scaling ad campaigns, starting small and learning quickly is essential before increasing the budget for greater impact.
• 💰 Understanding unit economics and customer lifetime value is crucial for determining how much can be spent on acquiring a customer through ads.
• 📉 The mindset of learning from ad spend, rather than immediate profitability, accelerates the path to successful advertising strategies.
• 🔑 The key differences between YouTube and Facebook ads include the format of creative content and the user behavior on each platform, requiring tailored approaches.
• 🌐 The future of YouTube advertising is promising with increasing global internet adoption and the potential for more businesses to leverage its capabilities.

Q & A

What is the significance of having two billion active users per month on YouTube for advertisers?

It means that no matter who the target audience is, they are likely on YouTube, providing advertisers with a vast potential reach to connect with their desired demographic.

Why did the interviewee start using Google Ads and affiliate marketing?

The interviewee started using Google Ads and affiliate marketing in 2007 as a way to provide for his family and find success online after not achieving success with other methods.

How did the interviewee's experience with eBay selling in a pawn shop influence his online career?

The experience showed him the potential of making money online through selling items like a broken camcorder for a profit, which sparked his interest in the internet as a viable way to generate income.

What was the turning point for the interviewee that led him to specialize in YouTube ads?

The turning point was when he started an agency and began running Google Ads. His success with clients like Kevin Kergansky, who saw significant growth after implementing YouTube ad strategies, led him to specialize in YouTube ads.

What is the interviewee's perspective on the power of YouTube ads compared to traditional TV advertising?

He believes YouTube ads are powerful because they take the concept of TV advertising and expand it to digital formats that are accessible on multiple devices, allowing for a broader reach and more engagement.

How did the interviewee's strategy of using YouTube's external link annotations contribute to business growth?

By using external link annotations, he was able to embed clickable links within videos, which reduced viewer guard and directed them to the client's website, leading to significant business growth for clients like Kevin Kergansky.

What is the interviewee's advice for businesses that are not yet making six figures?

His advice is to focus on one advertising platform and not spread themselves thin until they have gained some traction. Diversification should come after achieving a certain level of success.

What are the key differences between running Facebook ads and YouTube ads according to the interviewee?

The key differences include the format of creative messaging, the user behavior on each platform, and the intent behind user interaction. YouTube ads often require a stronger hook and message baked into the video itself due to the platform's nature of seeking information.

What is the interviewee's C3 Formula and why is it important for successful advertising?

The C3 Formula stands for Creative, Campaigns, and Conversions. It's important because these three elements are crucial for any advertising platform. They represent what you're saying, who you're saying it to, and how you're getting them to take action.

How does the interviewee define 'margin' in the context of advertising and why is it important?

He defines 'margin' as everything it takes to deliver the promise made when taking someone's money. It's important because it dictates how much an advertiser can pay to acquire a customer while still being profitable, considering the potential for future sales to the same customer.

What mindset does the interviewee suggest for businesses when it comes to spending on advertising?

He suggests a mindset of learning and investment. The more a business spends on advertising, the faster they learn what works and what doesn't, ultimately leading to success through iteration and optimization.

Outlines

00:00

🌐 The Power of YouTube Ads

The paragraph introduces the concept of YouTube's massive user base and the potential for advertisers to reach diverse audiences. It highlights an interview with Nathan Chan, CEO and founder, discussing YouTube ads mastery. The speaker emphasizes the importance of understanding the platform since its inception in 2012, after experiencing a significant loss from Google Ads. The narrative transitions into the journey of building an agency and leveraging YouTube ads for various clients, resulting in substantial growth for businesses like Organifi and others, showcasing the transformative power of YouTube advertising.

05:01

📈 Scaling Business with YouTube Ads Strategies

This section delves into the speaker's experience with scaling businesses using YouTube ads. It discusses a specific strategy involving uploading long videos to YouTube and utilizing recommended ads to drive traffic, which significantly reduced viewer defenses due to the platform's casual nature. The strategy incorporated external link annotations to direct viewers to the speaker's website. This approach was successfully replicated across multiple clients, leading to substantial growth in revenue. The speaker also touches on the importance of having the freedom to experiment with ad strategies and the role of results in gaining clients' trust.

10:01

🚀 Early Days of YouTube Advertising and Market Potential

The speaker reflects on the current state of YouTube advertising, comparing it to the early days of Facebook and Google Ads. He suggests that many businesses have yet to fully utilize YouTube's advertising capabilities, often due to misconceptions about the complexity of creating video content. The paragraph highlights the potential for growth in the YouTube advertising space, with the speaker estimating that only a fraction of Google Ads users are currently running YouTube ads. The speaker also discusses the challenges Google faces in encouraging more advertisers to adopt the platform.

15:02

🔍 Navigating the YouTube Ad Ecosystem

This paragraph focuses on the unique aspects of YouTube ads, emphasizing the importance of understanding the platform's user behavior and the differences between it and other advertising channels like Facebook. The speaker discusses the need to adapt ads to suit YouTube's user intent, which often involves seeking information rather than mindless scrolling. The speaker also shares insights on the importance of diversification in advertising strategies, suggesting that businesses should focus on one platform until they achieve significant traction before considering expansion.

20:02

🎯 Targeting and Adapting Ads for Different Platforms

The speaker discusses the importance of tailoring ads to fit the platform on which they will be displayed. For YouTube, the speaker suggests that ads need to be self-contained, as they do not have the supporting text that Facebook ads have. The paragraph also addresses the misconception that Facebook ads can be directly transferred to YouTube, highlighting the need to modify the creative to match YouTube's ecosystem. The speaker advises businesses to focus on one advertising platform until they have a solid foundation of success before diversifying.

25:04

📊 The Economics of YouTube Advertising

In this section, the speaker discusses the financial aspects of YouTube advertising, emphasizing the importance of understanding margins and return on ad spend (ROAS). The speaker encourages businesses to consider the lifetime value of a customer and the potential for future sales when determining how much to spend on acquiring a customer. The paragraph also touches on the importance of delivering on promises made during advertising to ensure customer satisfaction and retention.

30:05

🎬 The Art of Crafting Effective YouTube Ads

The speaker outlines the key components of an effective YouTube ad: the hook, message, and call to action. The hook is crucial for capturing attention within the first five seconds of an ad, while the message conveys the ad's content, and the call to action guides viewers on what to do next. The speaker also discusses the importance of creating a sense of urgency and using strategies like open loops to keep viewers engaged. Additionally, the speaker talks about the need to understand the target audience's mindset and tailor the hook accordingly.

35:06

📈 Learning Through Scale in YouTube Advertising

This paragraph discusses the relationship between ad spend and the speed of learning in the context of YouTube advertising. The speaker suggests that starting with a small budget is possible but acknowledges that higher spending can accelerate the learning process. The speaker emphasizes the importance of iterative learning and adjusting strategies based on what works and what doesn't, rather than focusing solely on immediate profitability.

40:07

📊 Understanding Customer Acquisition Costs

The speaker delves into the importance of understanding the cost of acquiring a customer and the potential for future sales. The paragraph focuses on the concept of 'true margin,' which is the amount left after all costs associated with delivering on the promise made during advertising are accounted for. The speaker encourages businesses to consider the long-term value of a customer and the potential for additional sales when determining how much to spend on advertising.

45:09

🌟 Inspiring Insights on YouTube Ad Strategies

In the final paragraph, the speaker shares his enthusiasm for the potential of YouTube advertising, highlighting the platform's global reach and the opportunity for increased adoption as more of the world connects to the internet. The speaker also expresses a desire to understand the thought processes behind successful product development and customer loyalty, citing Steve Jobs as an entrepreneur he would like to have dinner with to gain insights into these areas.

Keywords

💡YouTube Ads

YouTube Ads refer to the paid advertisements that run on YouTube's platform. They are a central theme in the video, as the interviewee is an expert in this field, having spent millions on such ads. The video discusses strategies and experiences with YouTube Ads, emphasizing their power in reaching a vast audience due to YouTube's two billion active users per month.

💡Agency

An agency in the context of this video is a business that provides services such as managing and optimizing ad campaigns for clients. The interviewee transitioned into the 'agency game' after his initial online income source was shut down, learning to manage ad campaigns for others and eventually becoming a media buyer and consultant.

💡Google Ads

Google Ads is an online advertising service where advertisers can display their ads in Google's ad network. The interviewee mentions starting his online success with Google Ads and affiliate marketing before transitioning into an agency role. It is part of the foundation that led to his expertise in digital advertising.

💡Creative

In the context of advertising, 'creative' refers to the content of the advertisement, including its design, messaging, and call to action. The video emphasizes the importance of having a strong creative in ads, with the interviewee discussing the elements of a successful YouTube ad, such as the hook, message, and call to action.

💡Campaigns

Campaigns in this video relate to the strategic planning and execution of advertising efforts. The interviewee talks about the importance of campaigns in reaching the right audience through targeting, which is a key part of the C3 formula he discusses (Creative, Campaigns, Conversions).

💡Conversions

Conversions are the desired actions that a business wants a customer to take, such as making a purchase or signing up for a newsletter. The video discusses conversions as the final part of the C3 formula, emphasizing the importance of effectively guiding viewers from the ad to taking a specific action on a landing page.

💡Margin

Margin in the context of this video refers to the profit margin, which is the difference between the revenue generated from a sale and the cost of delivering on the promise made during the sale. The interviewee discusses understanding margins as crucial for determining how much can be spent on customer acquisition.

💡Customer Lifetime Value (CLV)

CLV is a concept that refers to the total worth of a customer to a business over the entire duration of their relationship. The interviewee suggests that understanding CLV is important for determining how much to spend on acquiring a customer, as it considers future sales beyond the initial transaction.

💡Hook

A hook in advertising is a strategy to capture the audience's attention early in the ad. The interviewee describes the importance of a hook in YouTube ads, especially in the skippable in-stream ads, where advertisers have only five seconds to engage viewers before they can skip the ad.

💡Call to Action (CTA)

A call to action is a directive for the audience to take a specific desired action, such as 'Sign Up' or 'Buy Now'. The video discusses the importance of having a clear and specific CTA in ads to guide viewers on what to do after engaging with the advertisement.

💡Open Loops

Open loops are a psychological concept used in advertising to create a sense of intrigue or incompleteness that makes the audience want to continue watching or come back for more. The interviewee explains using open loops in YouTube ads to keep viewers engaged until the call to action.

Highlights

YouTube has two billion active users per month, making it a vast platform for advertisers to reach their audience.

The interviewee has spent over 30 million dollars on YouTube ads since 2012, showcasing his expertise in the platform.

Diversifying ad spend beyond Facebook to YouTube can be beneficial for businesses struggling with Facebook ad costs.

The interviewee's first online success came from Google Ads and affiliate marketing, which was crucial after his Google account was shut down.

Starting an agency allowed the interviewee to leverage his skills in traffic and numbers, leading to success in the digital marketing field.

YouTube's power as an advertising platform is compared to the impact of TV, but in a digital, accessible format across multiple devices.

A strategy involving uploading long videos to YouTube and using recommended ads was highly successful for a client, increasing their revenue significantly.

The interviewee has helped various clients, including Organifi, to catapult their brands using YouTube ads.

YouTube ads are still in the early stages of adoption compared to Facebook ads, presenting a significant opportunity for advertisers.

Small to medium-sized businesses may not be taking full advantage of YouTube ads due to misconceptions about the complexity of video advertising.

Understanding the different user behaviors on Facebook and YouTube is crucial for effective advertising on both platforms.

The interviewee recommends businesses not to spread themselves too thin and focus on one advertising platform until they achieve significant traction.

Key differences between YouTube and Facebook ads include the importance of the video as the primary message carrier on YouTube.

The interviewee's C3 formula focuses on creative, campaigns, and conversions as the three key elements of successful advertising.

Creating a hook in YouTube ads is essential to capture attention within the first five seconds before viewers can skip the ad.

Open loops in advertising create a desire in viewers to learn more, similar to the effect seen in soap operas and movie trailers.

Starting with a small budget on YouTube ads is possible, but larger budgets allow for faster learning and optimization.

Margins in advertising should cover all costs associated with delivering on the promise made to the customer during the sale.

The interviewee emphasizes the importance of resilience in entrepreneurship and the potential power of YouTube ads as a marketing medium.

Transcripts

two billion active users per month

like your audience is on there doesn't

matter who they are they're on youtube

it's just a matter of can you get in

front of those people

[Music]

hey guys welcome back to another

interview nathan chan here ceo founder

make sure you give us a thumbs up for

this video if you want to know how to

master youtube ads in 2021 or beyond

we've got the youtube ads goat he's

spent over 30 million dollars on youtube

ads

he's been using this platform pretty

much since inception since 2012.

so if you want to know how to diversify

your facebook ad spend you're getting

killed on facebook ads now this guy is

the best in the business

you have to watch this interview alright

tommy thanks so much for taking the time

to speak with me today

the first question i ask everyone that

comes on is how did you get your job

man 2007 i was trying to find a way to

provide for my family and

i always knew the internet was a way and

i didn't get any success until i started

doing google ads and affiliate marketing

that's really what allowed me to have my

first success

you know online buying ads and

everything like that 2009

2010 google shed my account down that

was about

90 95 of my income at the time

so it's pretty devastating and so a

buddy of mine was like

i got these guys that want you to run

their ads for them and i'm like why

would i run their ads

you know and uh you know long story

short he was like you know they pay you

it's like an agency thing

that's how i got in the agency game i

need to make some money and so

i kind of was good at this traffic thing

and the numbers and everything

and i was able to you know these guys

was like we'll pay you to do ours

and i learned this agency game then i

kind of been off and on

as an agency slash media buyer slash

consultant

ever since yeah well so since 2009

you started your agency gotcha and um

yeah tell me about kind of how

how did you get started around i guess

getting online like what what what what

were you doing before that

99 to 2007

i was in management that was me really

my career you know i worked at walmart

for quite a few years

um i actually joined their management

training program

and then uh i had a bunch of other

management jobs and then i ended up

working at this company called cash

america they owned the

most number of pawn shops of any company

in the world it ended up being a really

uh life-changing uh scenario for me

i learned a lot in that business about

myself

one thing i did do in that pawn shop was

ebay they were not aware of ebay

and i was aware of ebay and i ended up

having this idea

i bought a camera of camcorder back then

camcorders with the rage

i bought it for 20 dollars but the

problem with it was the door was

jammed so you couldn't put a new tape in

or get it out right

i sold it on ebay for 88 dollars that

was like whoa

what's going on so i just started doing

a bunch of stuff with ebay at one point

i think i was making about

five or six grand of money on ebay but

when i left that company

that was my product like that's how i

got

my product and because i knew all of

these managers at other stores and

things like that

uh when i left that job there went my

supply chain

basically right but that was another

indication for me that the internet was

like all right i know i can make

money on this internet so fast forward

like i said 2007

i'm not just you know i mean there's

several instances where i knew the

internet

was the way and i'm just gonna go

hardcore with this internet thing

and i'm gonna make it work i'm gonna

figure it out one way or the other i'm

gonna make it work

and here we are yeah well crazy man

thanks so much for sharing so

um you said that in 2009 you started

your agency you started buying

traffic you're running google ads um

now you really specialize in youtube ads

why do you think youtube ads are so

powerful you know if you really look at

tv and the way it changed

you know global the global culture

globally right

because you gotta understand like you

and i on the other side of the world

from each other right now

but even prior to the internet i

knew what was going on on your side of

the world you knew what's going on on my

side of the world why because

tv prior to tv i mean you had radio but

you didn't have the visual

right so it's the same idea you're just

putting tv in a digital format

you know and and it's accessible on

multiple devices

is really what video created it

basically took tv

and expanded on it and that's why you

know it's so powerful

i mean average people walking around

with three or four connected devices on

them so

it's just allowed us to connect with

people on all of those devices in your

car on your arm

you know glasses phones

you know tablets everything and you know

you can hit someone with audio

video the whole thing with it you know

and it's just

youtube it gives you their capability

unlike anything else

that really is out right now yeah i see

so um i guess you've had a lot of

experience running youtube ads

uh you know we you've been doing it for

over a decade now

um so you're one of the ogs uh

can you tell us some of the examples or

some of the results or some of the crazy

things you've done with youtube ads for

some of your clients

this guy kevin kergansky to break up

doctor

he was kind of the first person that

gave me the freedom to kind of do

whatever i wanted

and so i had this idea that he

at the time he was running this vsl it

was like an hour and 10 minutes

so my idea was let's upload it to

youtube

let's buy the little recommended ads

over the recommended videos

point black to that video on youtube

because the psychology of them being on

the youtube platform

would bring their guard down and

at that time youtube had something

called external link annotations with

you connect your website to your youtube

channel and you can embed a clickable

link

right inside the video at any point and

they can live as long as they want it

and that was my idea and i just thought

man this could be so amazing and this

guy was like if you say

i don't know but whatever you say and

you know we basically

probably within six months took him from

five grand a month to a seven figure

business run rate

uh in a really short amount of time so

naturally i was already working with

other clients who

wasn't giving me the freedom but that

allowed me to go to these other people

and say

this is what i'm doing for this client i

want to do this for you

and now instead of them holding me down

there was really more

because i had results to show them give

me the opportunity

and so i ran that play like three or

four times

uh back to back it just was going crazy

so kevin you know really

you know was the catalyst for that

matter of fact

uh i ended up working with this company

organifi

and we ran that same place initially

with their youtube ads

and once again it hit it's just

out of the gate it just and that company

you know i was able to help them with

youtube

really catapult that brand up and uh so

i ran that play

hard man i don't even remember how many

times

with clients maybe about seven eight

times

uh i taught a lot of people that

strategy

that was really the kind of the primary

thing that i was teaching when i first

started teaching youtube

ads was this this strategy so a lot of

other people made a lot of money i don't

i didn't track

everyone but i also had clients that i

talked and not necessarily ran it for

them that i coached them or consulted

for

that did that as well but oh man that

was amazing

um so that's you know probably a good

of what kind of led to this whole oh

gee if you will right i was teaching

this no one was talking about it

and that really opened up a lot of doors

for me so fast forward you know

uh 500 startups with vc

firm they ended up reaching out i did a

bunch of work with them i worked with a

lot of their startups

um fast forward i decided to become an

investor

um and that didn't go that well i

realized that

my pockets wouldn't be enough for that

so fast forward 2019

the current agency that i'm running

probably really late 2019 we kind of

pivoted purely to youtube ads but prior

to that we were doing a lot of stuff

facebook ads building funnels who's

doing it all

uh but we've just seen these these

opportunities with youtube

you know kind of continue to um

pop up and so we just kind of you know

switched gears to that

one of our clients who was doing legion

we basically was able to take them on

youtube

really just blow that up three four five

thousand dollars a day from scratch

another one of my clients robert

blanchard

uh we have robbie uh basically go to you

know eight figures

uh these are current things right so

there's a lot of

other things in there that i can't

remember but that'll give you you know

some ideas from

kind of the beginning kind of up to now

if you will yeah

love it and um yeah like you can use

youtube ads for

not just lead gen info products but also

e-commerce

service based business sas you've done

it all right

for sure or or i've coached or consulted

i'm very selective about who we actually

run the ads

the full done for you but i've done

quite a bit with companies who

you know want to run their own and they

just need the right game plan the right

blueprint you know

the right playbook if you will so i kind

of help them put that together and now

i've had every part of the spectrum you

can think about

fascinating so let's go a little bit

deeper on youtube ads

um you know we talk to some of the

smartest marketers

fastest growing companies founders and

a lot of people are saying you know that

youtube ads

is kind of like it's still early days

comparative like early days facebook ads

or

uh you know adwords google ads you know

i like buying traffic there and

i'd love to get your take i mean i think

a lot of people

assume that um

it's hard they also assume that

you know because you need video that

they overthink you know creative

because you know that that is a unique

factor about youtube is that you

only can run video so

anybody that knows any of the smartest

guys

that are really doing numbers buying ads

blowing their business up whatever level

of spectrum that they're on but they're

really

understand paid advertising

a lot of times the video is intimidating

because i think people overthink

what they need for that and the reality

is

it's a lot simpler than a lot of people

so for that reason i feel like

a lot of companies are not taking

advantage of it

then you kind of got small to

medium-sized businesses and i would say

honestly up to 50 million dollars a year

revenue you got this huge bucket of

companies

that are that are just you know they

don't have the resources or they don't

think that they have the resources or

there aren't agencies that are offering

you know creative services

along with the advertising to kind of

close that gap

because maybe they don't have the

capability to produce

but you know maybe they don't want to

bite it off

but it's really not as hard as they

think but i get it it's like another

thing i got to keep up with right i'm a

business owner i already got a gazillion

things and

a million hats that i'm wearing that's

another thing that i'm i don't know if

i'm ready for that right

so i understand the thinking but you

know it's

it's just i just feel like people aren't

really taking advantage of it yet

because they telling themselves so many

reasons why

they aren't ready and that's why i think

it is still kind of early days because

you know the number of advertisers on

youtube i don't know the exact numbers

but i'd imagine facebook probably got

three

to four times the advertisers than

youtube

and i would imagine this is me i don't

have any data to prove this is just my

opinion

i think probably only 30 of people with

a google ads account

that are running ads on google are

actually running youtube ads

i've had conversations with reps at

google who say you know

getting other advertisers to adopt

youtube

is a challenge it has been a struggle

but the company

is putting a big focus on particularly a

getting advertisers already using google

services to adopt youtube

and then getting other advertisers onto

the platform that may not

may not even be running youtube maybe

they're just running google so

that's kind of where i'm getting but

this is my estimation i think about a

third of them uh

aren't doing it and then you know i

would say

facebook just got way more people

advertising facebook versus

youtube now in terms of google as a

whole

there are a lot of advertisers on google

but

i would imagine that maybe maybe a third

of them

are actually running youtube ads so

that's kind of what

my that's my opinion again there's no

facts to support that

that's just what i think that's really

interesting um

because yeah when you think about it uh

you know everybody's running facebook

ads everybody you know

there's a there's an aura like you know

facebook ads can change the game

and then there's a lot of people from

old days you know early days that you

know a lot of businesses running

uh google ads you know using adwords um

to run google ads through search

right um so i'm curious

when it comes to youtube ads like what

about

you know your niche does it work for any

niche what what

like yeah i've said this a thousand

times by now but it's

two billion active users per month

like your audience is on there you know

what i'm saying like

it doesn't matter who they are they're

on youtube it's just a matter of can you

get in front of those people

and with all of this uh mechanism that

they give you for targeting

you can absolutely isolate specifically

who you want to reach

so they're on there it doesn't matter

what business you're in if you got

something to sell

there are people who are on youtube

that's buying whatever you selling

yeah i didn't realize it was that big um

so yeah but youtube like i use youtube

all the time

i'm always using it to learn things i

love searching on there

um so look i think there's a massive

opportunity that's why we're excited to

speak with you also partner with you as

well to teach one of our newest programs

but

let's talk about like facebook ads you

know versus youtube ads because

you know at founder we we spend a lot of

money on facebook ads

um you know we haven't cracked youtube

ads yet we're excited to really get into

it ourselves

um but i'm curious you know can you just

take your facebook ads if you're running

them right now because a lot of people

are a lot of people watching this

like can you just take them and then

just run them on youtube ads does that

work

you know i try not to say things don't

work because like everything could

work if you got you know the right

pieces together but

but i've seen it work but it's just the

probability is low

and um typically the way i

describe it is that when you're running

facebook ads

instagram you know whatever you know

you're getting

especially if you're running video uh

you also have the post area above the

video

that makes up your creative so your

creative is not

just video it's video plus whatever

you're saying in your post area text

combined together so if you just are

running video

on facebook and you just stick that on

youtube you lose the context of the post

area

right that's where i think a lot of

people get it wrong

and that's why i think the probability

is a lot lower because you do got to

somewhat modify

but the message is the message if you

got a good message

that's working on your facebook ads very

likely is gonna work on youtube if you

get the same audience targeting

you just gotta modify it a a tad bit

to match the ecosystem in which you're

trying to communicate

and with facebook you have image and

text or if you're running

video you got the video and post area

text

that is your creative and it's not just

the video

so you have to keep in mind that you got

to contextualize those both

together to be able to deliver that same

message effectively

on youtube i see so

i'm curious is it enough to just run if

you're if you're a business

uh or you you know you're starting a

business you want to start running ads

is it enough to just run ads on facebook

or do you believe you need to be

diversifying because

that's kind of what we're hearing in the

community that's what people are

starting to say i'd love to hear your

take

i do recommend diversification but i

also

i mean look you know we talk about

youtube people know me for that we're

having this conversation but

i also like to level with people and be

honest with them

if your business isn't making six

figures yet

stick to one thing don't try to you know

i see

too many people you know spreading

themselves thin

before they get any real traction if you

haven't gotten traction in your business

you should not be trying to do multiple

things because

they are two different animals i mean

that's just to be true

um they're not wildly different from

each other

but they are two different animals and

they take slightly different approaches

you know 70 80 percent of the stuff we

do

is the same thing we can do on facebook

on youtube

you know but there is a 20 to 30 percent

of it that's

gonna be slightly different for that

platform and so what happens is when

you're

you're trying to get traction you're

spreading yourself out then

when reality is you put all your focus

in you know

uh uh limit your focus you know

until you get to a point where you know

diversification

typically i say you know if your

business is doing you know

i would say a couple of six figures two

or three hundred k a year

you're primarily doing that through your

facebook ads

you should probably start thinking about

diversification because you're probably

getting some traction now you know

you don't make a couple hundred grand a

year

just playing around like typically you

found

you've hit on something uh to get to

that level

so you're definitely onto something at

that point and you probably have

something you can turn into

you know a bigger business so that's

when the time really wouldn't be

thinking about it but on your way there

i would say pick one you know i know

people that you know start with youtube

ads

you know that's their thing they love

video they are they already

you know kind of into the content

creation mode and shooting video

so you know you can also start with

youtube ads but

i wouldn't recommend trying to do too

many things

until you get a bit of traction yeah no

look i respect that

um i'm curious could you tell like just

for the audience that are not familiar

like what do you think the key

differences are

between facebook and youtube ads i

mentioned before

that with facebook your creative message

is a combination of you know the

image in the text or the video in the

text

in your post so that's a

key distinction right there that

when you're delivering a message to your

audience because that's what your

creative is

in order to modify in order to deliver

the same message effectively

you don't have you just have video you

don't you don't you don't have

that other stuff right i think the other

thing is that with youtube

it's almost like uh an alley hoop if you

want to think about it right it's like

the video is almost like the guy who

talks in the ball up

you know if you will right your video

want to be almost like an alley-oop

you're baking a bit more into your

messaging in order to pull that off

so that by the time they get to your

landing page you know

that's you know kind of where you bring

it home now obviously if you have a

high ticket high price product you're

going to need multiple touch points i

mean this is what it is

but if you talking you know 200 or less

i mean you can do a lot of damage you

know right from your message

to your landing page now once you get a

three four five hundred thousand two

thousand dollar

five grand that type of stuff i know

guys selling twenty five thousand dollar

stuff

you know you're gonna need you're gonna

need multiple touch points so you're

gonna need to get them on a phone call

closed type situation but um typically

we're trying to bake a lot more into

that messaging

and your landing pages are actually a

lot

simpler versus with facebook you see a

lot of long form sales letters and

you know you see a lot of you know that

type of stuff whereas

uh you know because you're trying to

deliver a message to get them to convert

well we just take a lot of that and we

make it into our video created

it's kind of the way we think about it

so i think that's a key distinction

um and then i think the third key one

would just be

you know evaluating isolating

you know because it's a different

behavior type someone's on facebook

they're scrolling

so your focus has stopped the scroll so

i went on youtube

you know um 70 of searches on youtube

start with how to so people are

searching for information

so it's a different type of intent so

you got to evaluate

them different and it's not necessarily

an easy thing to do

just to be honest but you have to try to

isolate them and separate them if you're

trying to

compare apples to apples behavior from

facebook

and youtube you're probably just looking

at your data all wrong so that's another

key point is just

understanding the type of behavior from

one versus the other right even on

instagram like they're scrolling

right they're not no one's logging on

the facebook well maybe a few people are

but

98 of them you know you go to facebook

and you scroll to news feed you go to

instagram

scroll to news feed but with youtube

typically people

are specifically looking for something

when they go there

so there's a key that's a key

distinction and if you don't understand

that i think

you know you'll get trapped up trying to

compare these things head to head in

reality

your your prospect and you get the same

exact person right

one of them on facebook they're

scrolling they ain't in the mask they're

in a different mentality

they go over to youtube they had a whole

nother mentality same person

so you just gotta understand that and

play to that

if you will yeah no that's a really good

point i was just thinking about that

it's like

yeah if i'm on facebook i'm thinking

about something else i'm looking at what

friends are doing i wanna catch up

family

all that kind of stuff i'm reading

perhaps articles or looking like what's

happening in the world or my world or my

curated world

and when i'm on youtube i'm there to

learn i'm there to be entertained like

all these kinds of things

and uh yeah the the ad is more in your

face

facebook you got messages popping you

got chat going like you got all these

other distractions so you're just in a

different mindset

um well look i'm sure people want to

know

more around like like

you've spent a lot of money on youtube

ads how much have you spent

like what would you say i mean i think

it's about

30 million uh you know probably 35

closer to 40 now i think 30 million is

probably a number that i came up with

maybe like

i don't know a year or two ago um

because we probably you know my clients

combined in the last 12 months

and spent maybe 20 million but that's

not just

youtube that's a combination of things

and we don't manage all of that

but um you know we clients that we work

with they do give

us a level of access to a lot of the

other things because we're trying to

kind of build a cohesive

you know game plan right which is

another key point

you should be able your facebook and

your

youtube especially if you hire agencies

they should probably talk to one another

um but yeah i'd probably say maybe

closer to 40 million now but it's just

kind of hard to keep up

i'm terrible at tracking those things

because i'm always thinking about

their head what's ahead of me and not

looking back but

um conservatively easy 30 million

probably closer to 40 maybe more than

that i don't know but

i just try not to overshoot you know

what it really is because i don't i

really don't i really don't

know i haven't tracked it you know

dollar for dollar throughout

i just don't really i'm always trying to

like what's the next level that i want

to go to so

i'm not much of a uh that ain't really

my thing but you know people ask me that

a lot so

you know that's all good i respect that

but it's safe to say you're spending

like well over a million dollars

a month on youtube ads right yeah yeah

so it's a lot of money so so

where i'm going with this is obviously

um you know

everyone watching now you've got some

stuff to share around how to

like what are you look what have you

learned from all of that

and i'd love to you for you to share

around your c3

formula like you know like tell us more

about that

the c3 really is more of a

overarching lesson that i learned just

in this game

ultimately you know your creative

your campaigns and conversions are the

three

key elements really it doesn't you know

matter where you buy

an ass actually um you're gonna need the

three of those things to be dialed in

it's what are you saying who you send it

to

and uh what are you selling at the end

of the day right so your creative is

you know what are you saying you know so

your your campaigns is like

who do you want to say that to that's

where you create the targeting and all

of the different things to

get that message in front of the right

people right and then conversions

is when they see my ad and i get them to

click on it and go to my website on my

landing page

how do i get them to convert conversions

my funnel my landing page

you know get them into my world if you

will and so those are kind of the three

uh buckets that we kind of break

everything down in

and usually for us we like to start

with the end and work backwards so it's

first of all it's like

what are you selling who do you want to

sell it to

what do you need to say to them to get

their attention to even be

interested in you know that that's kind

of how we work that that system

yeah fascinating so let's break that

down a little more let's talk about

creative um so when it comes to creative

for you what makes a great youtube ad

from your perspective

so the key three uh hook

message call to action right hook

message call to action

the hook is important because with

youtube

we're talking you know the majority of

the type of ads we run today

uh so remember back you know while back

we were talking about

kevin and the strategy of uploading the

video

so back then we were running something

called uh

i think they called them in display now

it's called discovery

youtube discovery ads is what the

technical name is today but back then it

was called in display

and at that time we ran probably 80

70 80 percent was that well today we run

in stream about 70 to 80 percent

that's basically you're watching a

youtube video you're about to watch it

the ad pops up and you got to wait five

seconds to skip right

that's the predominant type of youtube

ad that we run today

in order to be effective that type of ad

that's what i talk about hook message

call to action

because you got five seconds to cook

them

to get them to care about whatever

you're talking about

and then you have the message component

is the uh from the hook

to your call to action like all of the

things that you're gonna say

within that time frame and then

obviously your call to action what do

you want them to do as a result

so with call to action you got to be

very specific

right uh if you want someone to register

for a webinar or

you know buy your product if you know

that you're going to send someone down a

path of a series of questions

you're telling them that you know so one

of the examples in

uh legion we tell them fill out this one

minute

form now we use one minute so that's

because it can be a minute if they go

ahead and do it

but it's letting them know when they get

there

there's it's not they're not just gonna

land on the page and you know whatever

the case may be right

so you're being more specific about the

action that you want them to take

you have to really you know communicate

that the hook

is really more about to me

a targeting strategy of

what are your people what mindset are

they in what kind of content are they

consuming you know are they only

watching some channel or you know are

they consuming content about x or

what are their interests you know so

based on your targeting your hook

should be as relevant as you can

to where they are already so that you

can connect with them based on where

their minds say that

that's really what a a really strong

hook is going to do

well they really don't do two things

they also open loops

which is another strategy you probably

heard of before but

open loops i like to use open loops uh

and we like to segment our audience

based on you know where they may be at

so that we can try to

uh create a hook that's uh relevant to

where they are

now and then open a loop to keep them

watching right then that's when you kind

of

build the rest of the message out from

there

and you know that those are kind of the

key

main elements i don't know if you want

to go deeper on that but

those are kind of the key things that

that that i wanted to point out

yeah no this is awesome man this is this

you just like yeah this is awesome i'm

i'm curious

what do you mean by open loops what are

they like how's that work

so i tell you why i learned it this guy

named andre chaperone

he had a product called autoresponder

madness

and in that product he taught us how to

use

what he called soap opera sequences so

if you ever watch the soap

opera at the end they show you some

stuff

reality tv do a lot of this now too well

like at the end of the show

they they show you the next show but

they just really

wet your beak you know what i mean

because it's like man i gotta watch the

next show

another thing that do this very well is

movie trailers

right so a movie trailer is designed to

open a bunch of loots

to make you want to get up and get in

your car drive to the movie theater

stand in line

pay money go stand in the line again

get a bunch of popcorn and all of this

stuff then go sit down

wait 30 minutes because they're gonna

put a bunch of things in front of you

then play the movie imagine that right

so

movie trailers are very powerful in this

type of thing so i usually like to give

examples right so i could try to explain

it and probably wouldn't do it justice

but

you know movie trailers soap operas

different shows and stuff like that like

you'll see it all around you it's

everywhere

yeah now that that was a great example i

love that man

um and look we go through like

all this stuff in way more depth in in

you know our master class

that we do together so there'll be more

info about this

um wherever you wherever you're

listening watching there's more info

about this below but um okay let's talk

about metrics

um so how much do people need to be

spending per day

like uh you know how can someone

leverage youtube ads

uh with you know a hundred dollars

compared to a thousand ten thousand

dollars like yeah talk to us about

metrics

yeah i mean you know it's subjective

right uh

you know every person is running their

own race

and so i i i uh you know i i get caught

up in that at times as well and i have

to remind myself i'm running my own race

i can't try to compare myself to

but like you can start with 5 or 10

bucks a day you know you just have to

understand that

you're going to learn slower that way

the more you spend the faster you're

going to learn

and that's really the mindset that i

would like

most well i don't think i'm gonna ever

get everyone to see it the way i see it

but like

if if possible the thing i try to get

people to understand is the mindset

of learning the more you spend the

faster you learn

and the faster you get to success but

some people aren't you know they don't

run as fast as other people

and that's okay but just keep that in

mind so

you know you can start with five ten

dollars a day 20 bucks a day

um you know and then it kind of depends

on what you're selling

so if you're selling something for a

thousand dollars and you spending 10

bucks a day

it's gonna take you a really long time

to you know

learn to get any amount of data i mean

you know that would take what 100 days

and 10 bucks a day just to spend the

price of what you're selling right it's

you know but if you're selling a 50

widget you know what i'm saying you

could start with 10 or 20 bucks a day

and you could get some learnings pretty

quick

you know you know 100 bucks 200 bucks

you

you'd have an idea of you know

click-through rates you know what people

could i get a conversion um you know

because it's not about

being profitable out of the gate it's

about learning

and then the faster you can learn um all

we're doing

ultimately is we learn as quickly as we

can

we figure out what works we figure out

what don't we stop doing what didn't

we keep doing what was and we try to do

more than and we just iterate through

that process

over and over again so it's

it's not you know i mean you don't have

to have a crazy large but i mean even

our big budget clients they don't come

to us

out of the gate and we spending five

grand a day it don't really work like

that most of the time

we're starting out at a couple hundred

dollars a day and then we build it until

we can scale it up to five

ten fifteen thousand dollars a day but

that's not what we start yeah

love it though love love that breakdown

and and this idea of learning

um because i think sometimes people are

just like oh i'll spend some money

and i'm going to make all this money

back and like yeah

it's it takes time right so let's talk

about um

margins unit economics

um because i think that's really

important as well what kind of margins

what kind of roads or return on ad spend

should you be aiming for with the

youtube

play the way i see it is

every successful business that i've ever

seen

has some things in common but one of

them

is they get a customer and then they're

selling more stuff

and i feel like a lot of times in our

industry

everyone's trying to make money the

first time they go

you know get accustomed and it's like

imagine meeting a girl for the first

time and

you know you want to immediately go from

meeting to having a baby being married

and the whole nine like at the gate like

it don't work like that you know what i

mean

so so i'm a big proponent of people

understanding

more about what they can pay to acquire

a customer

based on the fact that they know they're

going to sell them more stuff

is what i like you know for people to

look at in it and

in that that's when you start getting

into the margins that's when you start

looking at

how much revenue am i going to make and

what is going to cost me

to deliver on the promise that i made so

i want to be clear about that right

because

when you're looking at traffic your

margin should be

everything it took to deliver on the

promise that you made so

if somebody bought a 100 thing from you

what does it cost for me to put that in

their hand if you're doing

physical products right if you're doing

a digital product

you got to look at you know

what does it cost to put it in their

hand you know what is

how much my merchant fees are going to

cost me what's my typical refund

chargeback rate

uh you know what is my manufacturing

cost of you doing physical product

you have to take all of that stuff into

consideration to get some idea of

if i collect the hundred dollars what's

actually left

and then that's gonna start dictating

how much you should pay

right but if you understand that you can

sell more things to people i think

you know the mindset is different from

what you can pay

what you think you can pay now versus

what you really can pay

but the first step you do got to do is

you got to look at

how my how much money am i gonna make

when i sell this

right top line revenue and how much it's

gonna cost me

to deliver on my promise right so if

there's a promise that i'm gonna put

some in the mail to you

or a promise you're gonna be able to log

into this thing or download something or

whatever it is

you have to think about all of the

things that

you got to do to deliver on that because

that's what your true margin is

is what's left over when it's all said

and done

um so that's really how i try to get

people to think about

the margin and then from there i can

start walking you into

well what can i actually pay because

maybe

i got 50 bucks left out of this could i

pay fifty dollars

well technically then you break even

right you collect a hundred

you you you spend 50 to deliver your

promise

you spent 50 getting them you didn't

make anything

well i mean did you or did you well if

you didn't make anything

can you sell them something else because

now when you sell that customer

something else in the future

you don't got to pay for that customer

again you already did that

so now you all profit right so it's just

a mindset shift

um to to to have but

uh margin true margin is what i call it

is everything that it takes to deliver

the promise you made when you took

somebody's money

yeah no man that was gold i love it uh

because

yeah there's levels to this right yes

there's levels

and the companies like your organifiers

who you work with and you help them

scale tremendously

um you know the reason

that they were one of the reasons

they're able to is because they

they could spend a lot of money like um

ryan dice

uh always says that uh the the person or

the company that can spend the most

wins to acquire a customer so true man i

learned that lesson

uh actually a russian guy taught me that

listen

2012 we were spending about 70 grand a

day

and i was spending 70 grand a day on

google display

um we when i took over their account

they were spending about five grand a

day

and they wanted to scale that and i

think the most at that time maybe i

spent like 12

000 in a day but when they told me their

cpa

i was like oh yeah i'm about to oh

because they was doing a 7.95

free trial and they were paying 100

bucks and for the life of me i couldn't

understand how they do

how they doing that you know and that's

how i learned the lesson of

you know whoever can spend the most wins

because you know that's just what i was

doing like these guys were probably

spending 200 to 200k at bay

um but we were spending we scaled from

five grand a day to seventy thousand

because of that and i learned that

lesson that's the first time i've ever

had

anything even remotely close to that and

it really blew my mind because i

couldn't understand

how are you spending a hundred dollars

in y'all so then i understood

funnels and upsells and rebuilds and all

of these things that they were doing

and so when he basically ran the map

because i'm you know math

it's like this math doesn't make sense

you got to make this math work

i mean you don't have to make it work i

just keep spending your money but i'm

just curious

and uh you know he started explaining to

me what they were doing but he still

left some stuff

out so you know i went through the

process myself

and that's what i learned man i got like

a crazy

lesson in that because these guys had

upsells and cross sales and rebuilds and

all of these things

then they were promoting affiliate

offers as well so their customer value

was probably

four or five hundred dollars maybe and

so they could pay a hundred because they

knew their numbers

that's how i actually learned that that

uh that lesson

so when i hear people say that i always

think about that situation

because it's like it's so true that's

how i learned that lesson working with

somebody who

who was doing something like that yeah

that's crazy man thanks for sharing

dude we could talk about this all day um

you know we're really excited to work

with you

uh to create this incredible program

on how to successfully run youtube ads

on the founder platform

um but look we'll work towards wrapping

up we've got a hot seat round

so we're going to ask you a few

questions 30 seconds

so the first question i have is what's a

brand that people should be studying

right now that are producing amazing

videos

uh when it comes to youtube ads

grammarly

that's easy what's one trait every

single entrepreneur needs to be

successful

resilience what's one thing you

wish people knew about youtube ads how

powerful it is

i mean it's i think it's the most

powerful advertising medium on the

planet but obviously i'm biased

what excites you the most about the

future of youtube advertising

more uh adoption uh

more you know like the whole world isn't

even connected to the internet

uh so just the fact that you know

there's seven billion people on the

planet and

we still got a ways to go to get people

uh

connected uh globally uh

so that they can be able to access it um

that's exciting

super exciting yeah love it um if you

could have

dinner with any entrepreneur dead or

alive

who would it be and why i would probably

say steve jobs i'd probably say steve

jobs i got so many apple products in my

house

how you get me to do that why

i got so many freaking apple products in

my house is like

how how like what were you thinking

you know what i'm saying to create this

phenomenon of what we you know

it's just i i want to know how how he

thought about product development and

just

getting people to adopt this product and

be

you know so um

you know uh loyal

yeah no it's incredible if you think

about like

i'd love to know the customer lifetime

value of you and i

for foreign

like yeah if you think of like all that

like

team members like insane amount of

equipment

yeah awesome well look man we'll wrap

there thank you so much for your time

this was incredible uh i we only just

scratched the surface with you there's

so much more but

uh we're so thankful to be working with

you and for you to give back to our

platform and to our community so thank

you so much man

thanks so much so much i enjoyed it hey

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