Vince Reed argues that ad budgets are a myth. When a campaign returns more revenue than it costs, you should spend as much as possible, not cap spending at a preset number. He uses a vending machine analogy: if you put in $1 and get $2 back, you'd keep feeding it money.
Here's the break even, advertise for free analogy so those of you watching can understand. And this is the mindset of real advertisers. I'm talking about people that are spending $1,000 a day at minimum on ads. So they're spending $30,000 a month or more. If you're spending 50 bucks a day or 5 bucks, you know, then this is gonna be harder to do. Yeah, but I'm talking about the people that are spending hundreds of thousands, 30,000amonth, you know, like, really spending the way they're thinking about the campaign, or at least the way that they should. So you spend $100. Let's say you make $100 that day, and you get 10 leads. Right? So essentially, you got those leads for free. Yeah. Right. Because you paid $100, you got. But you have 10 leads. And the goal would be obviously within those 10 leads. Unless the leads, obviously, in that case, would have been $10 a lead. Okay. If you spent $100, got 10 leads made, 100 bucks. Yeah. How much money can you make on the 10 leads? Because anything after that would be pure profit. Right. So the idea is, how do you structure and create your business in this way? Because the idea is, if you can create a business in this way, then when you wake up every day to run ads, the goal is, how much money can I spend? It's kind of like if you were standing in front of a vending machine. You put a dollar in the vending machine, and it spit out $2 and your soda.
Do it all day.
What would you do?
Put a dollar.
Now, what if you had a $5,000 monthly ad budget and you're in that same scenario.
Just cap at it.
I'm asking you. So you have a fight. You came to me, and you're like, I got a $5,000 ad budget.
Spend it all.
Okay.
Knowing that. Yeah. Get.
Wait, wait. So tell me, how would you spend it all you're talking about? So this place. I want to get into this a.
Little bit deeper still in the scenario.
Let me lay it out, okay? Because this is where people go wrong. And again, a lot of it is just understanding this in your subconscious mind when you're marketing. So this is what happens. Your business, you have an ad budget. It's $5,000 for the month. That's what you came to me with. And you have a business. And let's just say it's the vending machine. You put a dollar in, now you got $4,999. It spits $2 out. Now you got 5,000. $1 skip. Okay, how much are you spending that day?
5,000.
Why just 5,000.
Well, if that's my budget, this is.
The, this people, this is the problem. Now say it out loud again. What you just said you have $5,000.
I think I know where you're going.
You said you'd spend $5,000 that day.
I would spend that plus what I make.
Why not keep putting dollars in 24, 7, 365 as fast as you could? So is that what you're saying?
That's what I'm saying.
Okay.
Now that I know where you're going with this.
So what you just said is the problem with marketing and why it's hard for businesses to make money.
Because if I put the 5,000 in there, I double it. I have total now 10,000. I'm going to spend the 10,000.
The goal of advertising is to figure out a way to spend more.
And what you said is it's more fear I might lose the profits, I might lose the 5,000. I just said you put a dollar in and spit out $2 in the soda. And you said I'd spend $5,000 because that was your budget. There is no budget, is the point.
Okay.
The goal of advertising is to figure out a way to spend more. And this is an example of advertising for free. Right. In this example, let's just say based on the time of you putting the dollar in, getting the $2 out, let's say that took 24 hours. That's one day. And at the end of that day, you spent, you put into the vending machine 70,000 $1 bills. That's all the time. Let's just make that number up. Okay, what would be your goal the next day?
Spend as much as I can.
How? You can get more into that vending machine than 70,000. How do you get 71,000? Right, exactly. The goal is to figure out a way and build a business that allows you to spend as much money as possible to scale.
It's a weird concept, but the, but.
The one thing holding people back is what you referred to. Obviously, the fear. Uncertainty. But if you don't, if you don't know how much you're gonna make back then.
Right? That's the fear. Yeah, but it more so starts with the goal. Because here's the thing, a lot of people have businesses where this happens. I can't tell you how many times I see a person that has a business and we were crushing it and we were spending 5,000amonth and we were making 30 grand a month, spending 5,000. And I'm like, why did you just spend 5,000 and then all of a sudden they're doing something different because it like stopped working. When you have something that works, you have to like go turn on like the rocket fuel. All right? So either way it's technically not free because the person, well, it's not free. You still have to put the dollar in the concept and just I'm trying to give the people watching and you the understanding. Like the psychological trigger of an advertiser that's scaling. They're not spending money. It's free. Even if they broke, even If I spent $100,000 today and made zero, but made a hundred thousand, meaning zero profit, how many leads, how many buyers did I get on that $100,000, then the goal would be what am I doing with that with those customers or those leads, right?
