MBA1584 Should You Outsource Your Paid Ad Marketing?

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Or should you hire a firm or a company to take care of it for you? Paid advertising can get complicated. It's getting more and more sophisticated as it's getting more powerful because you can target specific niches and markets. But learning how to do it yourself is like getting your bachelor's degree all over again. It may take some time. Is it worth you investing the time to learn this and do it yourself? Or are you better off handing it over to an expert and paying their fee to get your brand and your business out there? That's what we discuss in today's episode. So let's get into it. Let's get down to business. Many small business owners, after a few months of being in business, are ready to start investing in paid advertising. You're a new company, a new business, a new brand, and you want to get your name out there, you want to start bringing in new customers. And long term marketing like content marketing and SEO may take some time to start seeing some traffic. So many people are left with a question, hey, should I start learning how to run my own Facebook ads or Instagram ads or Google search and cut out the middleman or woman and go ahead and start spending money on ads? A lot of people say, hey, I'm spending money on the ads themselves. I can put my whole budget into the ads themselves instead of having to pay somebody do it. And in a lot of cases, it's not super inexpensive to hire somebody to run your paid ads. Many firms will take a percentage of your spend. So say, for example, you spend $2,000 on ads this month, they'll want to charge you 20 to 30% of your spend. So we're talking about 2 to $300 may seem insignificant at the start, but as you start spending, you know, 5, 10, $20,000 on ads, which is not uncommon, it gets a little pricey. So I wanna share with you a little bit about the experiences I've had in our businesses. I've run my own ads, I've hired people to do ads for us, and I've kind of done something in between as well. First I wanna say that when I started to run my own ads, I had to actually take a full course on how to run Facebook ads. I started with Facebook, this is even before Instagram was out. I paid $500 for the course. It took me about three weeks to finish the course. Even then, it took me maybe about a good solid two months to start running high. Converting ads. In the beginning, you spend a little bit of money because you know what you're doing. You're still kind of experimenting, you're trying to find the audience, all that kind of stuff. You're a newbie. But once I started to get was starting to convert and I was making good return on investment for the ads, the problem was is that in order for me to optimize these ads, to improve them, to continue to come up with new copy and new ads constantly, it was taking a lot of my time. I would say it would take about three to five hours a week. So from there I moved on to hiring somebody to take care of my advertising. This particular firm was taking a flat fee of $2,000. Now this was back in 2015, so I would imagine, you know, prices being much higher Now I actually know because I've kind of shopped around a little bit, and the going rate for a flat fee is around 3,000. And those are really rare, by the way, getting a flat fee contract or a flat fee agency to, you know, run your ads for a flat fee and not kind of run them based on your spend. Most agencies will charge you, like I said, a percentage of your spend, 20, 30% of how much you spend on ads. I know that kind of sounds weird, but why would the spend have anything to do with it? Because it's not like they're running more ads. They're just spending more on each of those ads. But that's just how it works in that market. And I found that my ads actually converted much higher. These are experts. These are people that know what they're doing. They run advertising for many companies on different platforms. They've run paid ads on YouTube and Instagram and all the other platforms you could think of. So they really know how to handle these types of things. My cost per lead and cost per conversion really dropped. Just for comparison, I think my Facebook ads, when I was running them, it was like $7 per lead. And when I hired somebody, it was about $3.15 per lead, so more than half the cost. So it really did make sense for me to hire somebody because I was spending about $5,000 a month on paid ads at, at the time, and I was spending 2,000, obviously, for the agency to do this. So I was paying a total of $7,000 to run my paid ads. But remember, I'm doubling my return on investment. So it actually ended up being more of a return on investment for me to pay somebody $2,000 to, you know, lower my cost per acquisition by a hundred percent. So that was my experience. I then stopped working with that firm. Not because they didn't do a good job. It's just that we started to not spend as much on paid ads. We started working more marketing, and I started to just kind of run the ads myself using kind of the foundation they built on Facebook and on Instagram that they built for me. When they're running the ads, the audiences, the actual ads, I would tweak the ads and the copying the images, and that actually was okay. I was saving the $2,000. I was running the ads, and I was getting pretty good conversions, but it wasn't sustainable. At some point, it started to, you know, kind of lose its efficacy. I would say it lasted about nine months. I then went back to hiring somebody to take care of our Paid ads. So here's the bottom line. If you're starting out and you have a limited budget, I would say if you're spending less than $4,000 on paid advertising a month, I think you should invest the time, maybe over a weekend to learn the basics of running one type of ads, whatever it was, like Facebook and Instagram, you know, those are one thing now. So. Because if you can run Instagram ads inside of Facebook, ad the ad manager. So I definitely would recommend maybe doing it yourself in the beginning. It gives you a good understanding of how things are run. So even if you're hiring somebody, you kind of have an understanding of what they're doing and how they're doing it and how to measure success. Now, why do I say $4,000? It's because if you're gonna pay somebody, you know, if your total budget of paid advertising is $4,000, that means you have to, you know, at very least pay $2,000. And you're only left $2,000 left on a ad spend. And it may not give you the returns enough, depending on your cost per acquisition as well as the lifetime value of a customer, but it may not give you enough of a win for you to see it's worth it. Now, if your budget is like six or $8,000, you spend $2,000 to hire somebody, and you have $6,000 left over to run ads with, you're going to see a greater impact. You're going to see it's well worth it, and you're going to be sold on using somebody. So My threshold is $4,000. Anything above $4,000, like 5, 6, I would hire somebody to do it. Because these are experts. They know what they're doing. They've run ads over and over and over for other clients. They know the platform very well, they know the market, they know when things are going up, when things are going down. They're monitoring these things to make sure that your ads are running and optimized at all times. This allows you to focus on the business itself and the product itself. And you don't need to kind of have your laptop open all the time tracking your ad performances. I do have some advice, though. When you do hire either a firm or you hire an individual, a freelancer, to do this for you, you gotta set some KPIs and some outcomes, some expectations, and you have to meet with them regularly. When I say regularly, I'm talking about weekly to see if they're hitting their KPIs. I know this sounds excessive, but you have to treat them like an employee in your company where you would meet them every week and say, hey, how are we doing? Let's measure our success. Are we getting closer to our goals? Are we lowering that cost per acquisition? How are things going? Okay. Why? Because otherwise you're not going to really know if it's worth it for you. You're not going to really know if you're winning. You're not going to really know if your money's being spent properly. You might have regrets and you might say, oh, I'm spending all this money. I don't know if this is working. And you just quit to avoid all that. Before you hire anybody, have some goals. What are you doing this for? You want more customers? Do you want more traffic? Do you want more people on your email list? Okay, so what are your goals with that? How many new email list subscribers do you want? How many new customers do you want come to the table when you're meeting with somebody that is going to work with you and say, these are my goals, this is what I want. How can we work towards them? They might say, well, these are pretty ambitious goals. Or we can hit these goals. This is how much you're going to have to spend to get this on average. And then you can work backwards. You could start at some point, but then you can start tracking these results. The holy grail of paid advertising is I put in X amount of money, I get X amount back through sales. And it's just like a tap where you could turn it on or add more to the top of the funnel, more money to the top of the advertising funnel to churn, and then you just kind of turn on the tap more. You add more money to the top of the advertising funnel so you can get more customers. It should be a straight formula. Now, it does take time to get to that point. And when I say time, it may take a couple months to fine tune your brand, your message, your ads, your audience, your targeting, all that stuff. But it's well worth that investment because your business needs to be marketing, it needs to be out there, it needs to be bringing in new customers. And paid advertising is a great way to do it.

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Business should invest in paid ads at some point I was on the fence with this a few years ago. I used to say, well, maybe paid advertising is not for everybody. Maybe you don't need it. Maybe you could just do content marketing. Maybe you could just do word of mouth. Businesses become very, very competitive online and in order for you to stand out, you have to pay to play. You have to get in front of people. You have to bring people back to your website with retargeting ads. And it doesn't mean that if you can't afford paid ads right now, you're doomed. No, it just means you can work towards that because it's easier to scale faster when you can pay for an audience. A good analogy is you can spend all day cooking a seven course meal. It may take more than a day because the day before you might spend shopping for the ingredients and the day before that you're researching recipes. Or you could literally go to a local restaurant that has a professional chef that can go ahead and serve you that seven course meal within a half an hour, right? You can go and make an order, sit down at a table and eat that seven course meal. The last thing I want to pass on to you today is remember that with paid advertising you're renting an audience. This is not your audience, it's the platform's audience, Facebook, Instagram, and you're renting time in front of them. But your job is to convert them to your audience. So make sure whatever you do that you capture an email, you send them to a landing page and offer them something for their email. An ebook, a free trial, a free course, a manifesto, whatever it is. You need to convert them from Facebook's audience or Instagram's audience to your audience. And the way you do that is you get them on your email list. So that way you can then build that relationship and market to them via your email marketing. And you're no longer renting. They're now yours. Thank you so much for listening to the Hundred Dollar MBA show. If you love it, you hear hit subscribe right now and never miss an episode by hitting subscribe. When we publish our next episode, it appears right on your device automatically. That way you don't have to be searching for When's the next episode? Or where's the next episode? And while you're at it, leave us a rating and review. We'd love to hear what you think of the show. Before I go, I want to leave you with this. There's something magical about seeing your first conversion from paid ads where you're like, okay, I spent $30 for advertising for this customer and this customer spent $400. Wow, what a great return on investment. How can I do more of that? It gets you excited. It gets you realize, hey, there is a way to get new customers and make a profit. So whether you choose to hire somebody or do it yourself, get that first feeling. Get that buzz, get that first conversion because it'll motivate you to keep on going. Thank you so much for listening and I'll check you in tomorrow's episode Q and A Wednesday. I'll see you then. Take care. Of.

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