Derek Tsuboi:

Oh man. If I had a nickel... So I would like to kind of start this by saying there have been more than I can count on one hand number of occasions where from the paid ads side of things, things are crushing. We're doing awesome. We're getting a great return. I'm doing well, but the business owner or the person in charge of say, the marketing department, doesn't truly know their numbers and this is something I've seen time and time again. And when the business doesn't understand their numbers and the numbers I'm talking about are what's their cost of goods, what is their actual breakeven number, not just 1.0 or being at 1.1, hey, we're in the positive, like what is the actual cost of goods being sold? Are there any other costs that we need to consider?

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Derek Tsuboi:

And even from a standpoint of where we're actually super profitable in driving most of the business into the company, a lot of times they don't know or seem to get skeptical when they hear that this is attributed to paid ads. So I guess the big thing I'd have to say is when businesses don't truly understand their financials and where their revenue is coming from or how much it's actually costing them to acquire these sales, are when I run into kind of the biggest issues with clients.

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Zach:

Oh yeah. Not knowing your numbers.

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Derek Tsuboi:

Yeah. I guess that would be the number one piece of advice there would be to make sure that your client or whoever you're working with understands those numbers before you really start to scale or before you really start to get into the weeds. Because you may realize that either this client may not be such a great fit for you if those numbers are too constraint, or if the client just doesn't have a general understanding of where their sales are coming from, then you may be fighting an uphill battle that you're just never going to win.

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Dylan:

Is the answer there just better analytics or are there some more tactical piece of advice other than know your numbers, right? Because, know your numbers said every agency ever. Right?

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Derek Tsuboi:

Of course.

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Zach:

Break that down. Right?

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Derek Tsuboi:

So breaking that down further, what I would say is attribution modeling, understanding, say even within their getting access to their Google Analytics account, for example, would be a great move. There was a time where I didn't require that when I started working with clients. And if I could go back in time, I'd say to myself and say, "No, you need to get into their analytics account ASAP because you need to understand one, where the sales are coming from." If they're driving most of their sales through email, and I'm sure you guys have dealt with this before, Facebook's crazy attribution modeling sometimes. They'll take a little bit too much credit for sales. So that's something I would recommend highly, highly getting into right from the get go. [inaudible 00:06:21] into GA if they have it. If they don't and they're just like, say a Shopify store, you can even get some decent numbers and attribution modeling from the Shopify store itself and see sort of where some of the sales are coming from.

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Derek Tsuboi:

I wouldn't go to Facebook's Ads Manager platform to be the source of truth for this information, starting out with the company, until you can kind of compare those numbers and see sort of how on or off the Facebook Attribution Modeling might be for that company. Does that make a little bit of sense?

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Dylan:

Yeah.

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Derek Tsuboi:

Cool.

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Zach:

They'll love it.

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Dylan:

Now, with you being a media buyer, those kinds of questions you always ask out of the gate just to kind of gauge how it truly into their business they really are to kind of gauge if it's a good client for you, or is that something that you just kind of learn as you go, more or less?

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Derek Tsuboi:

It's something I've learned over time to bring up in conversation right from the get go. Some of the first questions I'll get into with clients is asking them sort of those prying questions of, "What are your numbers look like? How much are you guys doing in sales versus how much is it costing you to get those numbers in sales? Where are you guys spending your budgets? What platforms are you actively investing in? Which are you not?" Those are the sorts of things I like to try to find out right from the get go because that right there in itself is going to tell you a lot about that client before you even get into the ad account and take a look.

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Dylan:

Yeah, no, and I mean, it's always nice to work on somebody and enjoy to work with. That's always going to be one of those nice little benefits there.

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Derek Tsuboi:

Yeah. Especially if they know a little bit about what you're talking about. It definitely makes things a lot easier. I'd say with the clients I've worked with in the past, it's been probably about a 50/50 mix between working direct with the owner or kind of managing person versus working directly with a marketing director or working with somebody that's in charge of a department, per se.

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Dylan:

Yeah. I mean, no, I mean, it's killer to kind of know those numbers. I mean, I think you're just kind of spot on there just because no one really knows that stuff unless they really dig deep. And as you mentioned, 1.1 is not going to cut it. So I mean, it's one of those things for sure.

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Zach:

Hey, we're in the green.

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Dylan:

Right.

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Zach:

Scale, scale, scale, but sweet.

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Dylan:

Let's go ahead and kind of [inaudible 00:08:46] this to the kind of rich ad poor ad segment. Would love to kind of dive into this poor ad first...

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Dylan:

As you mentioned, you spent a good 29-30K on this bad boy. It didn't result in much, but just so everybody has some context and this will be in the show notes, but we have Mr. Greg Luther, real estate coach, looking for quick closings, join my free training this Wednesday. The links in the description. Join now [blueprintforclosing.com. 00:09:14] We got a video. He's going on and on. It's got 68,000 views. A good amount of engagement, but Derek go ahead and rip this apart and kind of why did this ad fail more or less?

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Derek Tsuboi:

Oh man. So as you guys will be able to see too, from the screenshots, there's several variations of the ad I tried to run as well. Basically what we're looking at here is a kind of prescripted, prerecorded video. It's got a very short description with a direct call to action here to join the inner circle, which is just a monthly payment plan. And he's got the text at the very top, one click quick closings. And then at the bottom, it's got real estate coach and his signature. So it's kind of got that frame with the text look for a Facebook Ad, which those were working super, super well. Still in some industries to my knowledge, but not in this case. As you can see, yeah, you mentioned we had 68,000 views on it, like 312 likes, bunch of shares and comments. This has all of the makings of what would be a good ad, but it's not.

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Dylan:

Would you say... had did you morph the video, just the pitch, the landing page? What do you think is stemmed the most from this? Because when I was reading the comments, "Hey, I'm loving your book. Coaching is the best." I mean the comments look pretty decent. So I'm kind of curious where this drop-off really consisted of.

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Derek Tsuboi:

Yeah. Like I said, it had the makings of being a very successful ad, checked all the boxes and honestly I think what really fell off on this was I feel like this was just too salesy at the time. And you'll kind of see what I'm talking about when we talk about the rich ad. But in this case, this ad screams, "I'm an ad." And I feel like in this case, that's why it did not work very well. I think people, of course really liked the content as you can see from the engagements and everything, but the ad just did not sell very well. People just did not buy the product. I think we made back $3,000 and we spent 29K.

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Dylan:

[crosstalk 00:11:41] Oh man.

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Derek Tsuboi:

Yeah. So that's a salary right there for a lot of people out here. And I just blew that in three weeks.

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Dylan:

Man. And yeah, this came back with about a 3K return essentially.

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Derek Tsuboi:

Yeah.

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Dylan:

Yeah. When I'm on, I mean, I'm sure the rich ad kind of breaks that up even, but my gosh, to kind of really derail this a little bit more, let's go ahead and dive in and roast a random ad I found on the internet yesterday. You all ready for this one?

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Derek Tsuboi:

Yeah.

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Dylan:

Alrighty. So I'm going to go ahead and give everybody some context. This will be in the show notes. It's terrible. I'm excited for it. So it's some Blue Ellie, Amazon brand, product page. It starts off with some fire emojis, amazing. The item name, they straight rip this from Alibaba, 4 by 16.4 feet LED strip lights for bedroom, kitchen, TV, party. The worst start to an ad you could probably ever see, music sync, Bluetooth control, adjustable brightness, 10 beta testers per day. Requirements, you must have an Amazon account. You must have a PayPal. Do not share this deal with any Facebook group and message us if you're interested.

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Dylan:

I mean the image isn't terrible. The lights look pretty sick, but my gosh, you can tell they rip this and did a terrible job doing so. So, Derek, first thoughts, go ahead and rip this bad boy apart.

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Derek Tsuboi:

Oh man. I've been waiting. So yeah, I don't know what the heck is going on with these emojis in the very beginning. So we got love eyes. Two of them fire, two of them, a random comma, amazing, double exclamation. I don't even like-

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Dylan:

Wow, your copy is terrible.

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Derek Tsuboi:

Yeah. And then the line below that is definitely the product name. So I don't know why the product name is there. That's just obviously just terrible. Music sync, Bluetooth control, adjustable brightness here. It literally looks like they pulled the product description and added it to the description of the ad itself. I love the little emoji next to the "Please message us if you're interested." The first one there. That is like a placeholder emoji for whatever the emoji you're trying to use isn't recognized by Facebook. So, in my opinion, like seeing that, I see that in ads a lot. It just makes me laugh because no one really checked what they're doing-

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Zach:

Oh yeah.

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Derek Tsuboi:

Which isn't bad. I mean, it's pretty terrible.

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Dylan:

So what do you think the conversion around this bad boy was? Just ballpark your numbers here.

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Derek Tsuboi:

It's got to be like .2.

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Dylan:

That's higher than I was going to give it. I wasn't even going to give it a 10th of a percent. Oh my gosh, Zach. Zach, let's hear your thoughts. Is this something you would buy the kiddos maybe for your house? What's your thought process on it, my boy?

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Zach:

It isn't even worth commenting on. It's awful. I don't know. I don't understand. I feel like something's going on here from an affiliate standpoint. You have to have... They're clearly trying to like, get... I'm trying to roast a shitty ad here, but I'm really trying to break down the strategy. It says like, "Blue Ellie, Amazon product," and a requirement is you have to have Amazon on account. Like there, this is... They're clearly an Amazon affiliate. What's with the... You have to have PayPal. And what's with the, "Do not share this deal with a Facebook group." People are wanting them to do that? And it's reverse psychology or what's- [crosstalk 00:15:34].

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Dylan:

I was thinking exclusivity, if anything, but I don't... Yeah, this is a rough one.

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Derek Tsuboi:

I'm thinking of reverse psychology. Definitely reverse psychology.

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Zach:

Yeah. I'd love to meet the person who is like, "Oh, I'm going to share this in my group."

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Dylan:

Wow. All right. Hey, we had to ease it up a little bit, you all. This ad surprisingly converted at 1.4%. Psych, no idea. It probably crapped the bed pretty hardcore?

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Derek Tsuboi:

Man. You had me going there for a second. [crosstalk 00:16:06]

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Dylan:

This is actually my ad. No. No, no. Oh man. That'd be embarrassing. All right. So another derail you all. Let's go ahead and dive in to these rich ads. Kind of add some flavor to this.

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Dylan:

So before we kind of dive into the more context of these, how did these perform? Were they similar in spend, 29-30K and what kind of ROAS or ROI were you seeing on these bad boys?

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Derek Tsuboi:

On the rich ads? We are seeing some pretty serious returns. We average typically anywhere from maybe a four to an eight times return, which is pretty, pretty solid when you're spending say 30K on average per asset. So in this case, we basically created two Facebook Live videos. We got really pumped on the idea of just doing Facebook Live because hey, it's like super easy. We don't need to bring out the camera crew, no editing, no crazy lights and stuff and flying anybody out anywhere. Let's just get Greg to go live on his phone and just say some drops of knowledge. And then we'll run it as an ad and see what happens.

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Dylan:

These were actual Facebook Lives you turn into ads or was that the live view you just got and made a bunch of money off of?

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Derek Tsuboi:

No, it's a Facebook Live that we turned into ads.

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Dylan:

Oh, wow.

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Derek Tsuboi:

Couldn't be any easier.

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Dylan:

Yeah, and the copy is so simple. Don't ever call your buyer seller leads. Here's a link, 150,000 views, 295 comments, 100 shares. My gosh. I mean the copy just really makes you, all right, why would I never call my [inaudible 00:17:54] buyers? So, I mean, was it just kind of one of those things kind of you mentioned on the roast ads were kind of more of the have the opposite effect to get people to do it and listen, or kind of what's the concept or strategy behind these?

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Derek Tsuboi:

That's the idea, is the polarizing content or polarizing text, I should say. This in the real estate niche are things that are just very controversial. So what we found is that utilizing this Facebook Live strategy, we could actually reduce our costs massively in time it takes to post content and create content just by doing Lives, doing one kind of main sentence, really. And you could see in these ads, there's no CTA, really. We just put the link in there, no click here, none of that, just the link and it just crushes. It's crazy. I never would have expected this to happen, but it did. And I have tons of examples of these exact same types of videos, just crushing.

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Dylan:

Once you kind of crack this code, you definitely started streaming more to the Lives and transitioning most of the ad side of things.

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Derek Tsuboi:

Yes. And I've actually seen that same level of success among other coaches, course creators, influencers, anyone that's kind of a thought leader. It just seemingly works so well, for some reason. I have some speculation on that, of course.

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Dylan:

Now with this specific service offering, et cetera, what's the kind of AOV sitting around?

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Derek Tsuboi:

So the product itself is $377 per month. It's actually a monthly membership. [crosstalk 00:19:32] Yeah. So, I mean, that's why we can afford to spend so much on ads, is because there's no cogs at all. 1.01 is profit for Greg. So, that's not even really a big deal. And then being able to spend as much as we can for the ads, we can just continue to drive sales.

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Dylan:

Oh, yeah. And I mean, we haven't had an ad like this before. It was from a Live, very selfie style, very user generated content look. And I mean, it's super native it's as native you can get on Facebook. So, may I ask, [crosstalk 00:20:15] I think, Oh, it's hey. And that secret sauce works. I'm getting hungry and it's all I can kind of think about now, is that sauce. So, I mean, that works.

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Dylan:

So Zach, when it comes to this kind of rich ad, would you have expected this bad boy to come from a Live video actually? Because I'm kind of curious in your thoughts on this. Because we've never seen this before.

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Zach:

You know, gosh, I feel like the first ads that I saw that came from Live videos were in 2015, I think it was 2015, with Dr. Axe. And he had his bone broth products and he was doing these 30 minute, little mini webinars on Facebook Lives and then just promoting them and they would just, they cleaned up for... I think that was like when Facebook Live came out and it crushed and it's actually really encouraging to see that that strategy's still relevant because I hadn't really heard or seen anybody do that in the last year or so, so.

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Dylan:

Oh yeah. And I mean, coming from the poor ad spending about 29-30K in it, crapping the bed a little bit, what would you say you all spend on average for these kind of our top of funnel campaigns here? I mean, is that 30K similar to the test? Or was this a video? Are these bundles of videos going over 100K or any kind of concepts you can kind of reveal there?

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Derek Tsuboi:

Yeah. So between those two videos and basically the reason I included two, it was because it was the same video, essentially, basically just rerecorded it again, the same idea, just to see if we could duplicate the success yet, like six months later, just recreate the same Live. And of course we sort of did. So we were able to kind of proof of concept the idea of the content of the ad. But getting down to the numbers, we spent 60K committedly, between these two Facebook Lives and we brought back, we do the math here, [inaudible 00:22:24] 2,000 times 3, $130,000 [crosstalk 00:22:33] on this.

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Zach:

Little calculator promo right there, a little CIA to 3X. [crosstalk 00:22:39] That's great.

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Dylan:

But man, that's quite a difference there. I mean, hey, for that poor ad spent, 29-30K made 3K and that rich ad spent 60ish K, made 150K. So I mean, that's quite a difference there. And I mean, the production is different. The Live was the biggest stand out to me. So I mean, those are two pretty 180 types of ads right there. And my gosh, they were performed so differently.

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Derek Tsuboi:

Yeah. The big thing to remember here too, is in the actual Facebook reporting, it only is reporting our initial sale. So the first 377 gets tracked by Facebook. And then I didn't have the offline conversions like set up to track the recurring revenue from the clients. Average monthly lifespan of a client is about three to four months. So you take the inner circle signup up column or the revenue column and times it by three, it should technically be 3.5 to be completely kosher. But even at three times, 153,000 on a 60K spend for an info product that has absolutely no cost associated with it, is just pretty phenomenal. When you think about how much effort it took to just record a 10 minute Facebook Live, write a sentence and put a link in the description.

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Dylan:

Oh yeah. So, I mean, for you all listening out there, if you want to [inaudible 00:24:10] a wild angle, record a Live. Turn that bad boy into an ad and watch the money flow in.

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Derek Tsuboi:

It is for real. If you haven't tried that strategy with your brand and especially if you have an influencer type of brand or thought leader, a type of situation, coach, course creator, content, this strategy could work super well for you. It's worked really well for me since early 2019. Even still to this day, this is part of our main marketing strategy. Across the board last year, I think we were doing about a little under 2 million and now we're doing well over six and that is 100% the result of Facebook advertising and I'd say 95% of our ads are Facebook Lives.

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Dylan:

Man. That's nice there. Heck yeah. Well Derek, man, I was seeing a super different ad than we're kind of simply getting there. So what's the best way people to kind of get in contact with you, check out and see what you're kind of doing there?

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Derek Tsuboi:

Well, right now I have my website, derektsuboi.com. There's a contact form on there that you can reach out if you want to get in touch with me. I do some private consulting. I will be coming out with some courses and some content here soon as well. I've finally started to clear my schedule. I'm getting tired of growing everyone else's businesses. It's time to grow mine.

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Dylan:

Heck yeah. Well snap. You all heard from Derek. Derek once again, man, thank you so much for coming on and kind of sharing that value. We absolutely geek out over it. So, hey, once again, man, much appreciated.

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Derek Tsuboi:

Not a problem. Thanks for having me Dylan and Zach. Super stoked to be here. Very excited.

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Zach:

Heck yeah. Well cool. We'll go ahead and wrap that up episode up, but [crosstalk 00:00:25:58].