July 15, 2025 • 25 mins
Do social ads even work—or are you just paying bots to click "like"? In this episode, we break down our own experience with YouTube and Facebook ads, what Prof G had to say about it, and why most founders might be wasting their money. If you're bootstrapping and debating digital ads, listen before you spend a dime.
PODCAST LINKS
Website:
https://www.startupdifferent.com
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https://www.youtube.com/@StartupDifferent
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SOCIAL
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Chapters
00:00 – Intro: Ads vs Organic
02:30 – What Happened With Our YouTube Ads
06:00 – Facebook Ads: Cost and Conversion
09:10 – Prof G's Take: Do Social Ads Work?
12:40 – How to Know If Ads Are Working
15:30 – The Role of Trolls and Bots
18:10 – Should Founders Use Paid Social Early?
21:00 – Final Verdict: What We Learned About Ads
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
We so we got trolled by these guys and they're kind of like
Chris, who are these community dudes?
Like all this like weird stuff and like, come on.
Like we're a Twitter handle, like a tiny company.
We're Twitter handle with like 300 followers.
Anyway, so I go to a conference down in Florida and the guys
there like the booth of the company was another company and
like the founder of that companywas the guy chirping us.
(00:21):
So I just go right up to him like real life mother fucker.
Morning hustle. Smart dream.
So why turn that grinding through a joy?
Ride. OK, alright, I want to talk
about social media ads. So listening to Prodigy, Prodigy
(00:42):
pod really good, really like I like actually he's just the
whole like pivot ecosystem, but I like the the one that's about
or with his office hours. Effectively, it's really short.
It's like 30 minutes, but he answered a couple questions.
It's kind of cool because like real and I think he really likes
it too. OK, that's my hot take anyway.
So one guy for a week ago asked a question that was like, OK,
(01:04):
I'm an ecommerce business. I have these ads on Facebook.
I am, I'm getting clicks. But these like some conversions,
but a lot of the clicks that areon this ad are bots, OK.
And other things that are on theplatform, is this fraudulent?
Does social media ads, do they actually work or not?
(01:25):
And we can talk about what Prof G said too.
But what? By the way, that's Scott
Galloway for anybody who's not familiar with Amazing person,
check it out. But so like I wanted to tackle
this because you and I have had an interesting experience, I
think with social media advertising too.
So maybe we can start with our own story and I'll talk a little
bit about our our YouTube experience.
Yeah, you should probably also set the table that like for our
(01:49):
actual business pre, you know, starting podcasts and things
like that, we did almost none, none.
OK, we we are newbies turns. Out chiefs of police do not go
on TikTok to 2 by 8 campus mobile safety apps.
Yeah, exactly. So we are complete newbies at
social media advertising that whole landscape.
(02:09):
In fact, I even think it I didn't think it was very
important. Yeah, it was like it wasn't
important for business. We had like a Twitter handle, I
think, and like A blog and, and,and we didn't, but we got no,
and I don't think it was like a lack of effort.
Like for a while we had a dedicated blog person and you
were trying to do inbound and all that kind of stuff.
And which is a little bit different from social like
admittedly, but like we got all nothing through The only thing
(02:31):
that happened on Twitter is we would get trolled, right.
That's that's the big when we want a really big deal, somebody
would troll. Remember one time I actually,
oh, I never told you that one time.
So there were these guys. We won this big deal in Florida
for the fortified Florida. Yeah, but we so we got trolled
by these guys. They're kind of like Chris, who
are these Canadian dudes? Is there like all this like
(02:51):
weird stuff? And like, come on, like we're a
Twitter handle, like a tiny company.
We're Twitter handle with like 300 followers.
Like this is like, like, how desperate are you, bro?
Anyway, so I go to a conference down in Florida and the guys,
they are like the booth of the company was another company and
like the founder of that companywas the guy chirping us.
So I just go right up to him like real life motherfucker,
(03:12):
like ohk, OK. I'm like, yeah, you don't seem
like you had a lot of problems with us, you know?
And he's just, and he's just back pedaling as hard as really
well, I'm really intimidating. Yeah.
This specimen I'm quite intimidating, so anyway, yeah,
but. Wow, good on you for.
Anyways, well, no, this is like,that's garbage, you know what I
(03:35):
mean? Like that's just that.
Is the ultimate power move when somebody chirps here or
something like that? Social media, right?
You go right up to them in person and talk to them and
yeah, what's going? On I know we're still talking
about it reminds me of somethingelse when we were kids where we
you and I were playing soccer atI can't remember some soccer
field near Mirror House Kingston, and we were playing
(03:57):
together, just you and me. I was on one of those big Nets
and these two other guys came over.
Ohi remember this and you went and you were like not in the you
like you Clearly you spotted stranger danger and I'm just a
kid, so I have no idea. I was probably ten, you probably
20. And I remember you going like
right up to that guy and just being like, like, I don't know
what you said, but probably something like to the tuna get
the fuck out of here. And they pieced out and it was
(04:19):
like, whoa, Chris is intense. Yeah, that's where I learned
some of that stuff. You're very hot and cold.
You're really like, hey, I'm happy to see you or I will fight
you. Right now had my blood boil a
couple of times, but I do remember that.
And I was just like, we were like, you know, you know, two
brothers playing in the soccer field with nobody around you
random guys come in and start hassling us.
And I'm just saying I'm not not.Yeah, you were not.
(04:39):
Down for that I'm just not dealing with this right now and
you know it was like two teenagers that were like you
know being pulled you know like it was just like no, I'm just
gonna intimidate these guys to get them to like screw off and.
We were not down for a game of four.
Yeah, and I'm not a big guy, butI was just like, no, I think I
could take these guys. Yeah, I think I could take.
I think that's like. The default mail thing when you
(05:00):
meet, this sounds really weird. When you meet a new person,
you're like, could I fight them?And could I fight them and win?
You know what I mean? Like, anyway, like Graham, I
think I can take Frank Graham. Actually, I think grandma's got
a pretty, pretty big left hook. But anyway, we'll see.
We'll find out right after this episode today.
(05:21):
Oh, didn't see you there. I'm just reading Startup
Different, my book to help you get to your multi $1,000,000
business. You can find it on Amazon,
Audible and Kindle. OK, back to social media.
So OK, so anyway, this guy callsin and thinks it's basically
like a scam. OK.
And Prachi, it really tries to push on the like, no, actually
it's legit. It's complicated, but legit.
(05:44):
And I think this is what's weirdabout this market is that or
about advertising on social is that it really, really depends
on what you're selling and you're and, and the way in which
you're creating your advertisements in this kind of
stuff. So going back to our YouTube
story, which we never completed,I'll just say that what we're
talking about there is promotions of YouTube videos,
which is actually right, I thinkfundamentally different.
(06:04):
We found that to be not so great.
You could get views, really, really low retention rate.
It's like anybody to look at it.And we found that getting more
subscribers didn't actually leadto more views of the videos,
right? So it was kind of like maybe our
metrics are wrong there we assumed.
We assume that subscribers meansthat people are subscribing and
getting notifications of. How rented lists I think is what
(06:28):
this is called, right? Because we're it's a list of
people that is owned by the platform but that we can notify
of what's happening. But we just found we weren't
getting any traction doing that right.
And so I and I actually remain committed and again proved me
wrong YouTube that these are mostly bots that.
Yeah, I found there was a tool that was really just looked like
some, you know, graduate studenthad just put up that kind of
(06:51):
like analyzed your YouTube channels are commercial versions
of this. They have to pay for it to.
But I was like being super cheap.
So I'm like, I kept going through many pages of Google
results until I found one that that was actually doing and I
ran it and yeah, huge portion ofour subscribers it thought were
bought right. So we were like.
Do we really deflating? And and the other thing that was
(07:12):
weird about it too. And this is usually a red flag
for social media. If you go to a company and they
say we guarantee you a certain number of people will subscribe
to your thing, that's usually a sign they're selling likes and
they're selling bots, which violates terms of service, among
other things. But there's also just bad.
It's just a waste of money. These aren't real people, right?
(07:33):
And it happens on Instagram too.It's not just YouTube, you know,
whatever. Anyway, so, but I, I, I kind of
got thinking about this and I wanted to attack this a little
bit more. So let's switch from, from
YouTube here to more like Meta. So we're gonna stick with
Facebook ads and, you know, for the, for the millennials in the
house and to, you know, sort of Instagram and, and maybe a
lesser extent TikTok. And, but I, so I guess all these
(07:54):
ads feel like scams, but if you don't do any ads, it kind of
feels like no growth, right? Like right?
Like you got to do some sort of promotion.
Like, I think organic growth, wehad an episode a long time ago
where we at Nathan young, Yep, we asked him about, you know, by
the way, really interesting agency check out his his stuff.
But we asked him, you know, is organic growth dead?
(08:16):
And I I don't think and his point, it's like kind of I think
it was kind of what he said, butit's it's really it's just
really challenging he. Said too though like any
marketing channel can work OK but and I struggle with that
because. I like yes and no, but I think
the point of of an you don't want just any ad channel.
You want that Channel is most efficient.
(08:37):
And he would say that too, right?
But I think like if it's really,really inefficient, I think
that's a sign it doesn't work. Yeah, you know what I mean.
Yeah, absolutely. What's that term?
ROAS. Return Aspen.
Yeah, yeah, yeah. A good one.
So, you know, when you're looking at a marketing channel,
you wanna be like, OK, look, like, does it make more money
than it costs? You know, and a lot of times
you're like, Nope, right. It costs more than it makes.
(08:58):
So let's talk about this. So the return is really
important. Let's start with conversion
rates. So I got some data here in front
of me just from some of the research before the the the
show. So what do you think for the
average ad on social media? What do you think the like
conversion rate is generally? Less than 1%.
(09:19):
Yeah. So it's approximately 9%.
It's not super high, Yeah, superhigh conversion rate and usually
your clock cost per click is about.
A buck. Yeah, yeah.
Hold on A. Second, I just gotta put
something out there. OK, Jimmy, if I see 100 ads
today, I will definitely see 100ads today on whatever social
media, wherever, on my like justnews feeds, things like that.
(09:41):
I'm not clicking on 9. Percent.
I mean, there's a function of targeting here.
There's a function of how good the ads are, right?
There's a function, Well, if yousee a hundred, yeah, there's no
way you're clicking 9 ads. But I don't know if you're gonna
see nine ads in a day. Maybe you would.
I don't know. Yeah, good call.
But this is what the data is telling.
Who, Who that, who's? The of course well, I highly.
Reputable aggregate is. Yeah, the good folks at Betta
(10:03):
get another story on that after actually.
But so is supposed to be around approximately 9%, right average
about a buck cost per click and they say about four to five
times return on investment for alot of these ad campaigns.
Now I'm going to get, I'm going to dig more into this in a
second because we need to know more.
The other thing though that was kind of interesting is that
about about 1/3, a little bit over 1/3, about 37% is wasted.
(10:27):
So what will happen is you get aconversion, the person goes to
your website and they don't do the thing or they're directed to
a bad, like a band, correct page, bad link.
Oh. Really.
So they're. Huge percentage of it, that's
just. Garbage I.
So there there is something to be said here like you can
definitely spin up some ads, butyou know how well you're
(10:47):
converting them like past the ads, getting them to purchase
the product or whatever is stillkind of tricky.
So that's, that's one thing I was saying.
The other thing that was important here too is the nature
of the products that do well. So effectively anything that's
like lower than like 100 bucks, this is what the data says it,
it tends to do better. It just tends to have a more, a
(11:10):
bigger likelihood of where you're going to get lower
conversion rates or even interest is on like SAS
products. So you get, you get to like 2%,
you know, range for two, two to two to three, 4% conversion
rates on SAS products to these platforms.
So basically it's like if you'reselling something cheap and
you're on social media, it's a good place to be, you're
(11:32):
probably gonna do pretty OK. If you're trying to sell
something a bit more complicated, it's not as great.
There's a heavy tax cost, customer acquisition cost to
getting people onto the SaaS platform that you're trying to
trying to push. Thought that was kind.
Of interesting, interesting, yeah.
Because just if I can confirm something.
So when, when you said that 9% and that's the conversion rate
(11:53):
and just just for us, like, you know, I, I'm on software
development side, I don't do a lot of this marketing stuff.
Conversion means they bought thething.
So yeah, well or or depends on the the metrics of the campaign.
OK. Some, some conversion rates are
based on like driving website views or driving other.
Things. OK.
It is a. It's a broader category than a
purchase. OK.
Yeah, alright. But I think what he's trying to
(12:15):
say is that you're gonna do better on cheaper products and
on things and you're more likelyto get a purchase in that that's
what you're pushing. Yeah, because I think about it
myself, it's like low risk. Oh, I saw this thing online.
It looks kind of. Interesting.
We've all ordered something fromlike Facebook or Instagram.
We're like, oh, that's sick. You know that like floating,
spinning planter things? You got it?
(12:35):
Yeah, My, my, the two magnet thing and it spins and yeah, I
don't really use it as much anymore.
I bought a lot of shit on Facebook, to be honest.
There was that, there was. There's this like circle thing
that when you spin it, I saw that you see the case.
So you think about. That your daughter showed it to
me, actually. But have you ever seen the
actual ad for that product? So for for folks at home, just
for visualization. So it's basically like a circle
(12:57):
circle thing with like the sand in it.
It's like multi coloured. It's kind of like to be like
hourglass, yeah, like an hourglass, but you spin it over,
it's a lot thinner. You spin it over and it makes a
beautiful like design and it's kind of cool every time it's a
little bit different. So the ad for it though, is this
guy spinning one that's like thesize of like, I don't know, like
a 75 inch TV that's a circle spinning it like, whoa, that's
sick. And then you look it up online
(13:17):
like I'm gonna get one. You're like, Oh my God, it's
only 60 bucks is great. And then you get it is about the
size of your hand. So it's like, I shit, but but it
was still kind of cool. I gave it to my wife.
Yeah, Yeah, but it's like when you order it on Wish or
whatever, right? Like whenever you get that shit
Anyway, So it was it's a cool project.
But anyway, I get hit with thesethings and like, I actually
think, yeah, like sometimes I dobuy this stupid thing, stupid
(13:40):
shirts. I buy a lot on Facebook.
So what you're saying is like the social media advertising
actually does work for these types of products that are low
cost? Like what's the formula here?
Yeah. So there's one other element to
this that's really important, which is the actual quality of
the advertisement. OK, so I'm gonna.
Ask you a question. Oh so you have to have the fake
(14:01):
big huge thing and then ship thesmall?
Yeah, but maybe I don't know what sort of.
Let's hang on. Let me ask you this question.
So what do you think does better?
Is it a hype, like the hype advertisement like this is
awesome. This is the biggest thing this
is happening. This is, you know, really big
energy, kind of big, big deck energy.
(14:23):
Or is it the honesty? Authentic.
You know, we're starting out. This is a cool new thing, you
know? No, not many people try.
What? What does?
What do you think does better? Yeah.
Hype. Hype.
Hype kills. Man, remember those like oil of
oregano and that's for the people would be like, you know,
like, oh, like people who have like cancer and all these
things. You know, there's just one thing
(14:43):
that like solves it all and it'slike selling out like right now
and smash that order button right now there's only a bit
left in its oil of oregano or something like that.
Nasty. By the way, you actually had
that? No, of course I've ordered it.
So if you well, I did, my wife did.
And she's, and actually, I remember going to a conference
years ago, I tell my good friendDavid Perry at at one of these
(15:04):
shows, we got talking and he's like, yeah, my wife got this
thing. You know, whenever I get sick, I
have to like put it under my tongue, whatever.
I'm like, Oh my God, it's oil oforegano, isn't He's like, yeah,
it burns and it does it, it is hot fire.
You know, honestly, it is like if you took like the most
concentrated part of garlic and then you shoved it in your nose.
(15:25):
That's what this feels like. It is fire in your mouth and if
you get it on your throat and not like, like, you know, not
like the the Gen. Z, like fire like this is like
actual fire hurts. It hurts.
But it, you know, I guess it kind of felt better.
I find it really disgusting. I stopped doing it.
I was like, I can't do this anymore.
OK, I can do it. She's a champ, but I can't do it
right. Anyway.
So, yeah. So basically platforms reward
(15:45):
the former, the hype vibe that that big energy.
So you have a product, it's lessthan $100.
You're going to see decent conversion rates.
You will get some bot clicks on those conversion rates, but like
it's OK, I guess still works outYou yeah you're gonna have
probably a four to five times like ROI on that.
OK and it's all about these hypeheavy.
(16:09):
This is the next big thing get on the bandwagon with everybody
else kind of vibe. OK.
And so I thought that was reallyinteresting because that's just
not how I think I would do it and it's.
Partially how I wouldn't. Do it like when I think about
this pod, for example, like we didn't come out and say, hey,
you're gonna be rich as fuck if you listen to this podcast like
we did. We did not promise that, right?
I'm like, hey, by the way, there's some start miss out
(16:30):
there. Watch.
Out for that, by the way, here'sa whole bunch of ways we made.
Big mistakes we're all about humility maybe don't we're doing
this wrong. I need to wear a big chain, you
know, like come in, just put a put 100 grand into a chain.
But anyway, so like, yeah, I thought that was kind of kind of
fascinating. So I don't know I but those that
conversion rate is really what'sstunned me.
(16:52):
And and when we go back to Prodigy, I think that's why he
was so into it as well. I think he was like, Oh no, it
works like it. Really, Really.
Now do you think he uses it to get to grow his listener base?
I don't know because it's a pod and also I don't even know if he
needs to advertise anymore. Yeah, but he's been at it for a
long time, right? So like, and he's got books and
(17:12):
he's like, I think he, he's kindof parlayed one thing to the
next. He's one of the only people that
I've listened to on another pod and been like, I wanna listen to
his pod. Yeah, that almost never happens,
even though everybody in podcasting says that's how you
get people to listen to your stuff, which I I'm not sure
that's true. But for that, that would be the
one time when I did that. Every other time it's been
somebody being like, oh, hey, listen to this really cool pot.
(17:32):
You should check it out too, youknow, I mean, yeah, yeah.
So anyway, but. And then I wanted to one other
thing here too. I was wondering what like if you
had a product that was like 100 bucks.
One thing I was wondering, this is probably folks watching
today, listening today, wondering, OK, so I have this
idea. It's an ecommerce thing.
I've got my Spotify store set up.
(17:53):
I'm gonna do social ads. How much should I spend to trial
this out? And I thought this was a good
tactical question. So basically the the rule of
thumb for a lot of this is that your customer acquisition cost
of your product should be about 20 to 30% of the products price.
So if you're selling something for 100 bucks, just make this
easy. You're you, you would be putting
20 to $30 in ads would be required to sell the 100 dollar
(18:15):
item. That's acceptable.
So you could eat a lot into yourmerge and depending on the type
of product you have, but and most direct to consumer brands,
start testing with about 1000 to3 grand a month on social.
OK, so that might be straight not doable for a lot of people.
We haven't even hit the influencer piece here either
like get like sending free stuffto influencers or paying
(18:37):
influencers to look at it or whatever, right.
And I think that's probably alsoa valid channel in some cases.
But I'll be honest, like I wouldbe wanting to use that tool you
suggested early on, yeah, which is able to detect of somebody's
base. Like so they have a 1/2 a
million Subs on, I don't know, Instagram.
I'd want to know how many of those are bots.
(18:57):
OK. Mean, flipping back to YouTube
for a second. Yeah, We were concerned about
bots on YouTube because we felt like our subscribers were, you
know, like the actual listeners was a much smaller number than
what our subscriber count was. So we're thinking like bots.
There's got to be a lot of bots here.
I ran that tool. Didn't you e-mail out to
YouTube? Ask about.
(19:17):
It yeah, I said to you. So apparently, apparently I
think a lot of the platforms useactually heard a few years ago
LinkedIn did a purge of like something like 28 million
accounts. Really they're all just spots,
which doesn't surprise me if you've been on LinkedIn.
I think they're the bots are back and they're pissed.
But anyway. The like the first so when I
asked YouTube, I said, hey, yeah, can you purge our camp?
(19:39):
Can you purge the people that aren't real?
And they're basically like, no. And they they did say that they
do regular courage. Everyone stay do yeah And then I
was like, OK, but like like justrunning through this with me.
We spent money on ads with you. Like I tried to like logically,
like later. Why would we spend ads on you
YouTube so that you could then drive people to watch with and
(20:01):
engage and hopefully like our stuff and like, mind you like
this as great as I think our show is, I'm sure there's some
people who watch it like I don'tcare, but some people might get
into it. But I what we found is just it
just doesn't happen Like no, even if you spend like really
big bucks and you get like a lotof views the.
End end game isn't like that much retention, right?
(20:21):
And I think that's that's a, that's a really.
Calm. Highly suspect.
But I think some of it are bots like if you just look at these
accounts, they have no, they don't like any other yeah, any
other they're not sub to anything else Yeah, they have
like no videos yeah, they don't really have an image or they
have an obviously AI generated image and you're like this is.
Garbage. Yeah.
Or the name is like some random set of like letters and a couple
(20:42):
of numbers, you know, like it. It just all vary like spammy.
Yeah. You know, looking stuff.
Yeah, I don't know. So I think it's complicated, but
I, well, I guess what I was on the one hand, I was reassured to
hear that it does actually kind of work that you can actually.
Work, Yeah. So it's not a lost cause.
Yeah, it's maybe that if it's not working that well, the
(21:03):
product has to be better. Or the message has to be there
or there. And then that's when you get
into that iterative loop, you know, the MVP, that all that
kind of stuff. And I think for that, that when
I was referencing earlier that 1000 to $3000 in like monthly
spending, by the way, that's just to like pile it.
That's just understand if you'regonna get there.
I actually read a few stories inthe research for this.
That was like people who had like a really good idea for a
(21:26):
product and a really good idea for an ad now.
And they would just run the ad before they had any other
infrastructure. Yeah.
Kind of like, I mean, at what point is it fraud?
But anyway, so and they and theydid, you know, so they would,
there was one guy who put up an app like 500 bucks.
Yeah. And he got like actual sales for
this thing that he had an idea for.
And then all of a sudden he's scrambling to find suppliers to
(21:47):
do it. And I was like, that's kind of
cool, but it's also kind of like.
But that's a problem. So like, what do you do if you
run a test like that and let's say you get like a handful of
sales, you don't get hundreds. You just get like, land.
Of living dead, you know, like what do?
You do, do you? Then just go.
Ohhhhh. Yeah, we're just gonna give you
your money back. No.
I think you sell it. I think you give those people
the product and that becomes like.
You have no product, so how you gonna like are you gonna go make
(22:08):
5 of this thing and then. I mean like maybe it depends
like what kind of hustle are we talking about here?
Like for some people, this is I think most, I think a lot of
people don't question Mark woulddo an ecommerce business on the
side because there's not actually that many barriers to
entry anymore, right? You know, between all the
different I tools to like make your advertising even and all
these collaterals to if you understand how to use Shopify,
(22:30):
if you like actually do it, running ads, running ads is
actually kind of complicated. Those platforms are so
convoluted no matter what you'reusing.
But but you know, whatever you figure that out, you do it like
I I think for a lot of people, if they got a couple of sales,
they did cool amount of something, right?
And I think it's trying to validate, right.
And I think you say really tightto those customers.
As soon as you sell it to them, you send them like an e-mail
(22:51):
from like you. Yeah, being like, hey, I'm the
founder of whatever this is. And can you tell me what you
thought of the product, where tocome up short?
What do you want more and you know get get more from?
Them OK, so like if we were to kind of net this out and, you
know, conclude this episode, like what are your tips for
somebody who's, you know, going to go and dive into the world of
(23:12):
social media? Marketing.
Sell your product. Have a product?
Yeah. Sell your product for less than
$100. Yeah, have an ad that's about
like your, you know, the big hype ad like.
Engaging. Engaging the ad, yeah.
Yeah, and and not enough. Not like, you know, we're humble
roots, like humble pie. Don't do that.
You're like, this is the next big thing and you could miss
(23:34):
out. And then test it.
I'm gonna test it. Out you willing to put a couple
grand into testing it over a month yeah and yeah if you do
get some sales if you don't get many sales then consider what
that means maybe stop that test try to connect with those
customers you sold to and figureout what happened and figure out
you can better tailor the product It's it's I mean that
(23:56):
that is the nuance of any consumer product though at least
the markets enormous yeah like you can keep keep trying till
you find your target right cool yeah anyway, so I think that's
where we land on that awesome any other social media comments
I you love social media. Hate social?
Media. Sorry.
Yeah, that's fine. That's cool.
No, I don't mind LinkedIn, actually.
But why? Yeah, I don't know.
(24:16):
I just feel like it's busy, you know?
It seems more. I'm getting so much.
From it still on there too, so much of it's like these weird
diagrams that are like are charts or infographics that are
just like everybody. All the big influencers do them
now and I'm just like, oh, I don't think these are that
valuable anymore because everybody does them.
Sometimes you find a nugget thatyou can use and go back and use
(24:37):
it in your business, and that's good.
So I don't know. I scroll for a little bit and
then give it likes and then. Toss the lake around.
Yeah, exactly. Alright, well, cool.
That's our pot on social media, he said 18.
Start it up. Let's get it rolling.
Big ideas, Money folding, hustle, Smart dream.
So why boy?
We so we got trolled by these guys and they're kind of like
Chris, who are these community dudes?
Like all this like weird stuff and like, come on.
Like we're a Twitter handle, like a tiny company.
We're Twitter handle with like 300 followers.
Anyway, so I go to a conference down in Florida and the guys
there like the booth of the company was another company and
like the founder of that companywas the guy chirping us.
(00:21):
So I just go right up to him like real life mother fucker.
Morning hustle. Smart dream.
So why turn that grinding through a joy?
Ride. OK, alright, I want to talk
about social media ads. So listening to Prodigy, Prodigy
(00:42):
pod really good, really like I like actually he's just the
whole like pivot ecosystem, but I like the the one that's about
or with his office hours. Effectively, it's really short.
It's like 30 minutes, but he answered a couple questions.
It's kind of cool because like real and I think he really likes
it too. OK, that's my hot take anyway.
So one guy for a week ago asked a question that was like, OK,
(01:04):
I'm an ecommerce business. I have these ads on Facebook.
I am, I'm getting clicks. But these like some conversions,
but a lot of the clicks that areon this ad are bots, OK.
And other things that are on theplatform, is this fraudulent?
Does social media ads, do they actually work or not?
(01:25):
And we can talk about what Prof G said too.
But what? By the way, that's Scott
Galloway for anybody who's not familiar with Amazing person,
check it out. But so like I wanted to tackle
this because you and I have had an interesting experience, I
think with social media advertising too.
So maybe we can start with our own story and I'll talk a little
bit about our our YouTube experience.
Yeah, you should probably also set the table that like for our
(01:49):
actual business pre, you know, starting podcasts and things
like that, we did almost none, none.
OK, we we are newbies turns. Out chiefs of police do not go
on TikTok to 2 by 8 campus mobile safety apps.
Yeah, exactly. So we are complete newbies at
social media advertising that whole landscape.
(02:09):
In fact, I even think it I didn't think it was very
important. Yeah, it was like it wasn't
important for business. We had like a Twitter handle, I
think, and like A blog and, and,and we didn't, but we got no,
and I don't think it was like a lack of effort.
Like for a while we had a dedicated blog person and you
were trying to do inbound and all that kind of stuff.
And which is a little bit different from social like
admittedly, but like we got all nothing through The only thing
(02:31):
that happened on Twitter is we would get trolled, right.
That's that's the big when we want a really big deal, somebody
would troll. Remember one time I actually,
oh, I never told you that one time.
So there were these guys. We won this big deal in Florida
for the fortified Florida. Yeah, but we so we got trolled
by these guys. They're kind of like Chris, who
are these Canadian dudes? Is there like all this like
(02:51):
weird stuff? And like, come on, like we're a
Twitter handle, like a tiny company.
We're Twitter handle with like 300 followers.
Like this is like, like, how desperate are you, bro?
Anyway, so I go to a conference down in Florida and the guys,
they are like the booth of the company was another company and
like the founder of that companywas the guy chirping us.
So I just go right up to him like real life motherfucker,
(03:12):
like ohk, OK. I'm like, yeah, you don't seem
like you had a lot of problems with us, you know?
And he's just, and he's just back pedaling as hard as really
well, I'm really intimidating. Yeah.
This specimen I'm quite intimidating, so anyway, yeah,
but. Wow, good on you for.
Anyways, well, no, this is like,that's garbage, you know what I
(03:35):
mean? Like that's just that.
Is the ultimate power move when somebody chirps here or
something like that? Social media, right?
You go right up to them in person and talk to them and
yeah, what's going? On I know we're still talking
about it reminds me of somethingelse when we were kids where we
you and I were playing soccer atI can't remember some soccer
field near Mirror House Kingston, and we were playing
(03:57):
together, just you and me. I was on one of those big Nets
and these two other guys came over.
Ohi remember this and you went and you were like not in the you
like you Clearly you spotted stranger danger and I'm just a
kid, so I have no idea. I was probably ten, you probably
20. And I remember you going like
right up to that guy and just being like, like, I don't know
what you said, but probably something like to the tuna get
the fuck out of here. And they pieced out and it was
(04:19):
like, whoa, Chris is intense. Yeah, that's where I learned
some of that stuff. You're very hot and cold.
You're really like, hey, I'm happy to see you or I will fight
you. Right now had my blood boil a
couple of times, but I do remember that.
And I was just like, we were like, you know, you know, two
brothers playing in the soccer field with nobody around you
random guys come in and start hassling us.
And I'm just saying I'm not not.Yeah, you were not.
(04:39):
Down for that I'm just not dealing with this right now and
you know it was like two teenagers that were like you
know being pulled you know like it was just like no, I'm just
gonna intimidate these guys to get them to like screw off and.
We were not down for a game of four.
Yeah, and I'm not a big guy, butI was just like, no, I think I
could take these guys. Yeah, I think I could take.
I think that's like. The default mail thing when you
(05:00):
meet, this sounds really weird. When you meet a new person,
you're like, could I fight them?And could I fight them and win?
You know what I mean? Like, anyway, like Graham, I
think I can take Frank Graham. Actually, I think grandma's got
a pretty, pretty big left hook. But anyway, we'll see.
We'll find out right after this episode today.
(05:21):
Oh, didn't see you there. I'm just reading Startup
Different, my book to help you get to your multi $1,000,000
business. You can find it on Amazon,
Audible and Kindle. OK, back to social media.
So OK, so anyway, this guy callsin and thinks it's basically
like a scam. OK.
And Prachi, it really tries to push on the like, no, actually
it's legit. It's complicated, but legit.
(05:44):
And I think this is what's weirdabout this market is that or
about advertising on social is that it really, really depends
on what you're selling and you're and, and the way in which
you're creating your advertisements in this kind of
stuff. So going back to our YouTube
story, which we never completed,I'll just say that what we're
talking about there is promotions of YouTube videos,
which is actually right, I thinkfundamentally different.
(06:04):
We found that to be not so great.
You could get views, really, really low retention rate.
It's like anybody to look at it.And we found that getting more
subscribers didn't actually leadto more views of the videos,
right? So it was kind of like maybe our
metrics are wrong there we assumed.
We assume that subscribers meansthat people are subscribing and
getting notifications of. How rented lists I think is what
(06:28):
this is called, right? Because we're it's a list of
people that is owned by the platform but that we can notify
of what's happening. But we just found we weren't
getting any traction doing that right.
And so I and I actually remain committed and again proved me
wrong YouTube that these are mostly bots that.
Yeah, I found there was a tool that was really just looked like
some, you know, graduate studenthad just put up that kind of
(06:51):
like analyzed your YouTube channels are commercial versions
of this. They have to pay for it to.
But I was like being super cheap.
So I'm like, I kept going through many pages of Google
results until I found one that that was actually doing and I
ran it and yeah, huge portion ofour subscribers it thought were
bought right. So we were like.
Do we really deflating? And and the other thing that was
(07:12):
weird about it too. And this is usually a red flag
for social media. If you go to a company and they
say we guarantee you a certain number of people will subscribe
to your thing, that's usually a sign they're selling likes and
they're selling bots, which violates terms of service, among
other things. But there's also just bad.
It's just a waste of money. These aren't real people, right?
(07:33):
And it happens on Instagram too.It's not just YouTube, you know,
whatever. Anyway, so, but I, I, I kind of
got thinking about this and I wanted to attack this a little
bit more. So let's switch from, from
YouTube here to more like Meta. So we're gonna stick with
Facebook ads and, you know, for the, for the millennials in the
house and to, you know, sort of Instagram and, and maybe a
lesser extent TikTok. And, but I, so I guess all these
(07:54):
ads feel like scams, but if you don't do any ads, it kind of
feels like no growth, right? Like right?
Like you got to do some sort of promotion.
Like, I think organic growth, wehad an episode a long time ago
where we at Nathan young, Yep, we asked him about, you know, by
the way, really interesting agency check out his his stuff.
But we asked him, you know, is organic growth dead?
(08:16):
And I I don't think and his point, it's like kind of I think
it was kind of what he said, butit's it's really it's just
really challenging he. Said too though like any
marketing channel can work OK but and I struggle with that
because. I like yes and no, but I think
the point of of an you don't want just any ad channel.
You want that Channel is most efficient.
(08:37):
And he would say that too, right?
But I think like if it's really,really inefficient, I think
that's a sign it doesn't work. Yeah, you know what I mean.
Yeah, absolutely. What's that term?
ROAS. Return Aspen.
Yeah, yeah, yeah. A good one.
So, you know, when you're looking at a marketing channel,
you wanna be like, OK, look, like, does it make more money
than it costs? You know, and a lot of times
you're like, Nope, right. It costs more than it makes.
(08:58):
So let's talk about this. So the return is really
important. Let's start with conversion
rates. So I got some data here in front
of me just from some of the research before the the the
show. So what do you think for the
average ad on social media? What do you think the like
conversion rate is generally? Less than 1%.
(09:19):
Yeah. So it's approximately 9%.
It's not super high, Yeah, superhigh conversion rate and usually
your clock cost per click is about.
A buck. Yeah, yeah.
Hold on A. Second, I just gotta put
something out there. OK, Jimmy, if I see 100 ads
today, I will definitely see 100ads today on whatever social
media, wherever, on my like justnews feeds, things like that.
(09:41):
I'm not clicking on 9. Percent.
I mean, there's a function of targeting here.
There's a function of how good the ads are, right?
There's a function, Well, if yousee a hundred, yeah, there's no
way you're clicking 9 ads. But I don't know if you're gonna
see nine ads in a day. Maybe you would.
I don't know. Yeah, good call.
But this is what the data is telling.
Who, Who that, who's? The of course well, I highly.
Reputable aggregate is. Yeah, the good folks at Betta
(10:03):
get another story on that after actually.
But so is supposed to be around approximately 9%, right average
about a buck cost per click and they say about four to five
times return on investment for alot of these ad campaigns.
Now I'm going to get, I'm going to dig more into this in a
second because we need to know more.
The other thing though that was kind of interesting is that
about about 1/3, a little bit over 1/3, about 37% is wasted.
(10:27):
So what will happen is you get aconversion, the person goes to
your website and they don't do the thing or they're directed to
a bad, like a band, correct page, bad link.
Oh. Really.
So they're. Huge percentage of it, that's
just. Garbage I.
So there there is something to be said here like you can
definitely spin up some ads, butyou know how well you're
(10:47):
converting them like past the ads, getting them to purchase
the product or whatever is stillkind of tricky.
So that's, that's one thing I was saying.
The other thing that was important here too is the nature
of the products that do well. So effectively anything that's
like lower than like 100 bucks, this is what the data says it,
it tends to do better. It just tends to have a more, a
(11:10):
bigger likelihood of where you're going to get lower
conversion rates or even interest is on like SAS
products. So you get, you get to like 2%,
you know, range for two, two to two to three, 4% conversion
rates on SAS products to these platforms.
So basically it's like if you'reselling something cheap and
you're on social media, it's a good place to be, you're
(11:32):
probably gonna do pretty OK. If you're trying to sell
something a bit more complicated, it's not as great.
There's a heavy tax cost, customer acquisition cost to
getting people onto the SaaS platform that you're trying to
trying to push. Thought that was kind.
Of interesting, interesting, yeah.
Because just if I can confirm something.
So when, when you said that 9% and that's the conversion rate
(11:53):
and just just for us, like, you know, I, I'm on software
development side, I don't do a lot of this marketing stuff.
Conversion means they bought thething.
So yeah, well or or depends on the the metrics of the campaign.
OK. Some, some conversion rates are
based on like driving website views or driving other.
Things. OK.
It is a. It's a broader category than a
purchase. OK.
Yeah, alright. But I think what he's trying to
(12:15):
say is that you're gonna do better on cheaper products and
on things and you're more likelyto get a purchase in that that's
what you're pushing. Yeah, because I think about it
myself, it's like low risk. Oh, I saw this thing online.
It looks kind of. Interesting.
We've all ordered something fromlike Facebook or Instagram.
We're like, oh, that's sick. You know that like floating,
spinning planter things? You got it?
(12:35):
Yeah, My, my, the two magnet thing and it spins and yeah, I
don't really use it as much anymore.
I bought a lot of shit on Facebook, to be honest.
There was that, there was. There's this like circle thing
that when you spin it, I saw that you see the case.
So you think about. That your daughter showed it to
me, actually. But have you ever seen the
actual ad for that product? So for for folks at home, just
for visualization. So it's basically like a circle
(12:57):
circle thing with like the sand in it.
It's like multi coloured. It's kind of like to be like
hourglass, yeah, like an hourglass, but you spin it over,
it's a lot thinner. You spin it over and it makes a
beautiful like design and it's kind of cool every time it's a
little bit different. So the ad for it though, is this
guy spinning one that's like thesize of like, I don't know, like
a 75 inch TV that's a circle spinning it like, whoa, that's
sick. And then you look it up online
(13:17):
like I'm gonna get one. You're like, Oh my God, it's
only 60 bucks is great. And then you get it is about the
size of your hand. So it's like, I shit, but but it
was still kind of cool. I gave it to my wife.
Yeah, Yeah, but it's like when you order it on Wish or
whatever, right? Like whenever you get that shit
Anyway, So it was it's a cool project.
But anyway, I get hit with thesethings and like, I actually
think, yeah, like sometimes I dobuy this stupid thing, stupid
(13:40):
shirts. I buy a lot on Facebook.
So what you're saying is like the social media advertising
actually does work for these types of products that are low
cost? Like what's the formula here?
Yeah. So there's one other element to
this that's really important, which is the actual quality of
the advertisement. OK, so I'm gonna.
Ask you a question. Oh so you have to have the fake
(14:01):
big huge thing and then ship thesmall?
Yeah, but maybe I don't know what sort of.
Let's hang on. Let me ask you this question.
So what do you think does better?
Is it a hype, like the hype advertisement like this is
awesome. This is the biggest thing this
is happening. This is, you know, really big
energy, kind of big, big deck energy.
(14:23):
Or is it the honesty? Authentic.
You know, we're starting out. This is a cool new thing, you
know? No, not many people try.
What? What does?
What do you think does better? Yeah.
Hype. Hype.
Hype kills. Man, remember those like oil of
oregano and that's for the people would be like, you know,
like, oh, like people who have like cancer and all these
things. You know, there's just one thing
(14:43):
that like solves it all and it'slike selling out like right now
and smash that order button right now there's only a bit
left in its oil of oregano or something like that.
Nasty. By the way, you actually had
that? No, of course I've ordered it.
So if you well, I did, my wife did.
And she's, and actually, I remember going to a conference
years ago, I tell my good friendDavid Perry at at one of these
(15:04):
shows, we got talking and he's like, yeah, my wife got this
thing. You know, whenever I get sick, I
have to like put it under my tongue, whatever.
I'm like, Oh my God, it's oil oforegano, isn't He's like, yeah,
it burns and it does it, it is hot fire.
You know, honestly, it is like if you took like the most
concentrated part of garlic and then you shoved it in your nose.
(15:25):
That's what this feels like. It is fire in your mouth and if
you get it on your throat and not like, like, you know, not
like the the Gen. Z, like fire like this is like
actual fire hurts. It hurts.
But it, you know, I guess it kind of felt better.
I find it really disgusting. I stopped doing it.
I was like, I can't do this anymore.
OK, I can do it. She's a champ, but I can't do it
right. Anyway.
So, yeah. So basically platforms reward
(15:45):
the former, the hype vibe that that big energy.
So you have a product, it's lessthan $100.
You're going to see decent conversion rates.
You will get some bot clicks on those conversion rates, but like
it's OK, I guess still works outYou yeah you're gonna have
probably a four to five times like ROI on that.
OK and it's all about these hypeheavy.
(16:09):
This is the next big thing get on the bandwagon with everybody
else kind of vibe. OK.
And so I thought that was reallyinteresting because that's just
not how I think I would do it and it's.
Partially how I wouldn't. Do it like when I think about
this pod, for example, like we didn't come out and say, hey,
you're gonna be rich as fuck if you listen to this podcast like
we did. We did not promise that, right?
I'm like, hey, by the way, there's some start miss out
(16:30):
there. Watch.
Out for that, by the way, here'sa whole bunch of ways we made.
Big mistakes we're all about humility maybe don't we're doing
this wrong. I need to wear a big chain, you
know, like come in, just put a put 100 grand into a chain.
But anyway, so like, yeah, I thought that was kind of kind of
fascinating. So I don't know I but those that
conversion rate is really what'sstunned me.
(16:52):
And and when we go back to Prodigy, I think that's why he
was so into it as well. I think he was like, Oh no, it
works like it. Really, Really.
Now do you think he uses it to get to grow his listener base?
I don't know because it's a pod and also I don't even know if he
needs to advertise anymore. Yeah, but he's been at it for a
long time, right? So like, and he's got books and
(17:12):
he's like, I think he, he's kindof parlayed one thing to the
next. He's one of the only people that
I've listened to on another pod and been like, I wanna listen to
his pod. Yeah, that almost never happens,
even though everybody in podcasting says that's how you
get people to listen to your stuff, which I I'm not sure
that's true. But for that, that would be the
one time when I did that. Every other time it's been
somebody being like, oh, hey, listen to this really cool pot.
(17:32):
You should check it out too, youknow, I mean, yeah, yeah.
So anyway, but. And then I wanted to one other
thing here too. I was wondering what like if you
had a product that was like 100 bucks.
One thing I was wondering, this is probably folks watching
today, listening today, wondering, OK, so I have this
idea. It's an ecommerce thing.
I've got my Spotify store set up.
(17:53):
I'm gonna do social ads. How much should I spend to trial
this out? And I thought this was a good
tactical question. So basically the the rule of
thumb for a lot of this is that your customer acquisition cost
of your product should be about 20 to 30% of the products price.
So if you're selling something for 100 bucks, just make this
easy. You're you, you would be putting
20 to $30 in ads would be required to sell the 100 dollar
(18:15):
item. That's acceptable.
So you could eat a lot into yourmerge and depending on the type
of product you have, but and most direct to consumer brands,
start testing with about 1000 to3 grand a month on social.
OK, so that might be straight not doable for a lot of people.
We haven't even hit the influencer piece here either
like get like sending free stuffto influencers or paying
(18:37):
influencers to look at it or whatever, right.
And I think that's probably alsoa valid channel in some cases.
But I'll be honest, like I wouldbe wanting to use that tool you
suggested early on, yeah, which is able to detect of somebody's
base. Like so they have a 1/2 a
million Subs on, I don't know, Instagram.
I'd want to know how many of those are bots.
(18:57):
OK. Mean, flipping back to YouTube
for a second. Yeah, We were concerned about
bots on YouTube because we felt like our subscribers were, you
know, like the actual listeners was a much smaller number than
what our subscriber count was. So we're thinking like bots.
There's got to be a lot of bots here.
I ran that tool. Didn't you e-mail out to
YouTube? Ask about.
(19:17):
It yeah, I said to you. So apparently, apparently I
think a lot of the platforms useactually heard a few years ago
LinkedIn did a purge of like something like 28 million
accounts. Really they're all just spots,
which doesn't surprise me if you've been on LinkedIn.
I think they're the bots are back and they're pissed.
But anyway. The like the first so when I
asked YouTube, I said, hey, yeah, can you purge our camp?
(19:39):
Can you purge the people that aren't real?
And they're basically like, no. And they they did say that they
do regular courage. Everyone stay do yeah And then I
was like, OK, but like like justrunning through this with me.
We spent money on ads with you. Like I tried to like logically,
like later. Why would we spend ads on you
YouTube so that you could then drive people to watch with and
(20:01):
engage and hopefully like our stuff and like, mind you like
this as great as I think our show is, I'm sure there's some
people who watch it like I don'tcare, but some people might get
into it. But I what we found is just it
just doesn't happen Like no, even if you spend like really
big bucks and you get like a lotof views the.
End end game isn't like that much retention, right?
(20:21):
And I think that's that's a, that's a really.
Calm. Highly suspect.
But I think some of it are bots like if you just look at these
accounts, they have no, they don't like any other yeah, any
other they're not sub to anything else Yeah, they have
like no videos yeah, they don't really have an image or they
have an obviously AI generated image and you're like this is.
Garbage. Yeah.
Or the name is like some random set of like letters and a couple
(20:42):
of numbers, you know, like it. It just all vary like spammy.
Yeah. You know, looking stuff.
Yeah, I don't know. So I think it's complicated, but
I, well, I guess what I was on the one hand, I was reassured to
hear that it does actually kind of work that you can actually.
Work, Yeah. So it's not a lost cause.
Yeah, it's maybe that if it's not working that well, the
(21:03):
product has to be better. Or the message has to be there
or there. And then that's when you get
into that iterative loop, you know, the MVP, that all that
kind of stuff. And I think for that, that when
I was referencing earlier that 1000 to $3000 in like monthly
spending, by the way, that's just to like pile it.
That's just understand if you'regonna get there.
I actually read a few stories inthe research for this.
That was like people who had like a really good idea for a
(21:26):
product and a really good idea for an ad now.
And they would just run the ad before they had any other
infrastructure. Yeah.
Kind of like, I mean, at what point is it fraud?
But anyway, so and they and theydid, you know, so they would,
there was one guy who put up an app like 500 bucks.
Yeah. And he got like actual sales for
this thing that he had an idea for.
And then all of a sudden he's scrambling to find suppliers to
(21:47):
do it. And I was like, that's kind of
cool, but it's also kind of like.
But that's a problem. So like, what do you do if you
run a test like that and let's say you get like a handful of
sales, you don't get hundreds. You just get like, land.
Of living dead, you know, like what do?
You do, do you? Then just go.
Ohhhhh. Yeah, we're just gonna give you
your money back. No.
I think you sell it. I think you give those people
the product and that becomes like.
You have no product, so how you gonna like are you gonna go make
(22:08):
5 of this thing and then. I mean like maybe it depends
like what kind of hustle are we talking about here?
Like for some people, this is I think most, I think a lot of
people don't question Mark woulddo an ecommerce business on the
side because there's not actually that many barriers to
entry anymore, right? You know, between all the
different I tools to like make your advertising even and all
these collaterals to if you understand how to use Shopify,
(22:30):
if you like actually do it, running ads, running ads is
actually kind of complicated. Those platforms are so
convoluted no matter what you'reusing.
But but you know, whatever you figure that out, you do it like
I I think for a lot of people, if they got a couple of sales,
they did cool amount of something, right?
And I think it's trying to validate, right.
And I think you say really tightto those customers.
As soon as you sell it to them, you send them like an e-mail
(22:51):
from like you. Yeah, being like, hey, I'm the
founder of whatever this is. And can you tell me what you
thought of the product, where tocome up short?
What do you want more and you know get get more from?
Them OK, so like if we were to kind of net this out and, you
know, conclude this episode, like what are your tips for
somebody who's, you know, going to go and dive into the world of
(23:12):
social media? Marketing.
Sell your product. Have a product?
Yeah. Sell your product for less than
$100. Yeah, have an ad that's about
like your, you know, the big hype ad like.
Engaging. Engaging the ad, yeah.
Yeah, and and not enough. Not like, you know, we're humble
roots, like humble pie. Don't do that.
You're like, this is the next big thing and you could miss
(23:34):
out. And then test it.
I'm gonna test it. Out you willing to put a couple
grand into testing it over a month yeah and yeah if you do
get some sales if you don't get many sales then consider what
that means maybe stop that test try to connect with those
customers you sold to and figureout what happened and figure out
you can better tailor the product It's it's I mean that
(23:56):
that is the nuance of any consumer product though at least
the markets enormous yeah like you can keep keep trying till
you find your target right cool yeah anyway, so I think that's
where we land on that awesome any other social media comments
I you love social media. Hate social?
Media. Sorry.
Yeah, that's fine. That's cool.
No, I don't mind LinkedIn, actually.
But why? Yeah, I don't know.
(24:16):
I just feel like it's busy, you know?
It seems more. I'm getting so much.
From it still on there too, so much of it's like these weird
diagrams that are like are charts or infographics that are
just like everybody. All the big influencers do them
now and I'm just like, oh, I don't think these are that
valuable anymore because everybody does them.
Sometimes you find a nugget thatyou can use and go back and use
(24:37):
it in your business, and that's good.
So I don't know. I scroll for a little bit and
then give it likes and then. Toss the lake around.
Yeah, exactly. Alright, well, cool.
That's our pot on social media, he said 18.
Start it up. Let's get it rolling.
Big ideas, Money folding, hustle, Smart dream.
So why boy?
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