How Much Do You Need To Spend To Be Successful On Ads?

A big question we get from a lot of people who want to start running ads to get more clients in their video agency is how much do I need to be spending per day? What's my average spend? What should that actually look like so I can be successful with ads and get clients coming into my funnel, coming into my business, and closing retainers. So today's video, I'm just going to be breaking down the costs for you, showing you exactly what you should be looking at, what we've seen across 500 plus video business owners. And just to give you a little bit of clarity on that so you can understand a little bit more. So let's go ahead and dive into the iPad. So what should your ad spend be? It's a good question. Let's kind of work backwards from a cpa, which is going to be cost per acquisition. So that's how much money does it cost me to actually get a client who has paid me and closed on a deal? So typically what we see with our clients is anywhere between 5 to 10%. So this means if your average deal size is $20,000, then you should expect to spend anywhere between 1,000 to $2,000. And to some people, that may seem like a lot. But the thing is, in, built into this $20,000, we help our clients have 80% profit margins, which means 80% of this is profit. So an extra 1,2k to where I can have somebody coming in and it's automated is 100% worth it? Because what happens is, if I can take, and this is a question you need to ask yourself, are you willing to trade one to $2,000 to make $20,000, yes or no? The answer should be a resounding yes, because you cannot get that type of return in any other part of the stock market, investments, anything like that. And so you have to ask yourself, are you willing to trade 1,000 to 2,000, 5 to 10% of your total package, which you, you can take this and bake these into the price points of what you offer. And to acquire, are you willing to spend that to acquire a $20,000 client? The answer should be yes, right? And so typically what we see is about a CPA of 5 to 10%. Now, the way we start is we don't start by spending that right off the bat. Typically, what we do with our clients is we have them spend $10 to $20 per day. And then what we do is we test usually three to four ads. And then of those three to four ads, we typically find one to two Winning ads and then we slowly increase the spend from there. So from here what we do is once we find those one to two winning ads, we separate those into their own campaigns here. And so these are the campaigns. And then on this we may go to, you know, $40 a day and all while monitoring a couple of different metrics here. And so typically what we monitor are a couple different things. We look at cpc, we look at ctr, we look at lead cost, and then we look at cost per qualified lead. CPC is cost per click. CTR is the click through percentage, click through rate. Lead cost is how much is it costing us to get a lead? And then cost per qualified call is exactly what it sounds like. It's how much money does it cost us to get a qualified call on the calendar? And then what we're going to look at is click close rate and average cash collected close rate would be typically anywhere between 20 and 30%. Average cash collected is going to depend on the client. So let's say you're selling a $20,000 package and you're collecting 15,000, right? Or $10,000 on that. That's going to be our average cash collected. We need to know how much money are you collecting so we can do our projections and help you actually build that out. And so we're looking for a cheap cost per click, anywhere between typically 3 to $4. Our CTR needs to be above 1%. Lead cost is going to vary, but it could be anywhere between $20 a lead to $100 a lead cost per qualified booked call can be anywhere between $75 cost per qualified call all the way up to. I've seen some clients have $500 cost per calls or cost per qualified calls. Now that's okay because these people are selling something for a higher ticket amount of money for like 40, 50, 60, $70,000. And they can afford a higher cost per call. Right. And then we look at close rate and then we look at what's your average cash collected on that amount of money. And so you're just, you want to back into this, you want to look at, okay, test the ads. We spend a little bit of money. And then what we do is the magical thing from here that we do from here is once we get that first, let's say you get that first $20,000. Deal. I'm just going to, we have clients doing more than that. I'm just going to use $20,000 here though. Now what I'm going to do is I'm going to repay all of my ad spend, and then I'm going to take a portion of this $20,000. Let's say it costs us $1,000 to get a $20,000 client. I land that first $20,000 client. I then repay my ad spend, which is the $1,000. So I'm left with $19,000 here, right? And then I'm going to take another thousand dollars from that and use that thousand dollars to go buy another $20,000 client. This is what we call client financed acquisition. Now you can go around and around and get as many clients as you want, because you have the money from the client you just closed and you put that back into more clients, right? So this is the concept a lot of people need to understand at this point. You are now in ATM printing mode. Like you can literally take money from the client you just closed, put that back into ads, spend another thousand dollars to get another $20,000. Right. And I think the question people need to be asking is like, if you could put $1 in and even just get $10 out, how many times would you spend the $1? Obviously you would spend it as much as humanly possible. And so you have to realize that when you're spending money on ads, you're paying to play, right? And you're finding those winning ads and then you're ramping those things until they don't work anymore. And we've had clients have ads run for years and years and years in their business to where they don't even have to touch them. They get them set up, they run the ads, right? And then the ads just run for a very long time. Get getting them qualified calls, qualified leads, qualified people coming in, and then they just keep letting it run and they're taking the money from the clients they make, put it putting a portion of that back into ads and then taking profit out and just doing that over and over and over again. So hopefully this answers the question of like, how much should you be spending on ads to get the best results? And obviously the question is as much like in the beginning, 10 to $20 a day. And then as you start to ramp, you should be spending as much as you possibly can to get as many clients as you possibly can inside of the business that you can physically handle and do a good job for. So hopefully that makes sense. If you want to learn more about how we can actually help a master filmmaker, click the link below, schedule a demo with the team. Otherwise, keep enjoying the free YouTube videos we'll see in the next one.