The Secret to Making Paid Advertising Work

Google and Facebook combined generate more money from ad dollars than any television channel out there. They're huge. That means paid advertising works, because if it didn't, they wouldn't be making hundreds of billions of dollars a year. Today I'm going to share with you the secret to making paid advertising work.

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Now here's the thing, here's the secret, are you ready for it?

It's a funnel.

The reason paid advertising doesn't work for most people is they're driving traffic to a product and expecting it to convert.

Now, I could tell you that yeah you need to look at what your competition is doing, look at their ad copy, use things like Facebook Ad Library.

You need to end up doing things like using tools like Ubersuggest to see the keywords that other people are going after, because you may not be going after the right keywords.

But look, even if you do that, you have the right product, you have the right landing page.

Over time no matter how much you tweak your ads, no matter how much you tweak your landing page, you're going to struggle to end up making money.

And do you know why this is? It's a funnel. The reason a funnel is important is because it optimizes for lifetime value of a customer.

And that's why when Amazon tracks its user and you buy a DVD, they know that they should email you other DVDs that you should end up buying.

They know that when you buy a product, that they can end up getting you to buy other products as well that are very similar that'll get you a big user experience.

Amazon themselves, when they end up spending on paid advertising, they usually lose money right there in that first transaction.

But their funnel optimizes for lifetime value of a customer.

That's why it's so important. You can't optimize for hey, what am I making on the front end?

You got to optimize for lifetime value. Someone once told me, you know what the difference between seven-figure, eight-figure, and nine-figure companies are?

And I'm what, and they told me. Seven-figure companies spend money on paid ads and they want to make their two, three-X return right there.

So for every dollar they spend, they want to make two, $3 right then and there. He was saying that eight-figure companies, what they want to do is when they spend a dollar on advertising, they want to make a dollar back right then and there and over time, they'll make more but they want to at least break even on the front end.

But nine-figure companies and even beyond that, they're willing to lose money because they know in the long run the lifetime value of the customer is so much more.

And you can't just assume that someone's going to keep coming back and buying more from you. You've got to optimize for a lifetime value of your customer.

You got to create that funnel. That funnel's what helps increase that number. Because with funnels, you can do things like checkout bumps.

You can do things like upsells. You can do things like downsells. You can do trigger-based emails that are very relevant to them, which causes them to convert more.

You could do things like push notifications, so that way when someone goes to your checkout page, they add stuff in there, but they don't complete, you can send a push notification through their browser to get them to come back and then convert more.

All those little things won't drastically change your numbers and get you double sales, triple sales.

But what will happen is all those little things will add up and that's what will make your paid ad campaigns extremely profitable, combined with you creating an amazing customer experience
like Zappos does or Amazon does, right?

Or all these other big companies like Apple do. That's how you keep getting people to come back, increase that lifetime value and make paid advertising work.

In essence, the secret to making paid advertising work isn't how you optimize the paid ad campaigns, it's your funnel. That's what opens up doors so you can spend more on paid advertising because over time, the costs will continue to rise, they're not going to go lower.

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