I’ve been ranting about sellers with zero integrity lately.
Specifically, I want to comment on the promising ROAS.
(And clients can be just as bad when it comes to this)
Let me make one thing clear:
No advertiser on the planet can take a given offer and magically bring ‘X ROAS’ with it.
(Maybe there are some, but I don’t know them. They’re probably too busy making a damn bank, like they should be)
In case you’re wondering what ROAS stands for, it stands for ‘Return on Ad Spend’. So if you spend $500 on advertising and earn $1,000, that would be a 2:1 ROAS. Because you returned twice what you spent. Simple math. So what is the problem?
The deal is that there are marketers who promise 3x, 4x, 5x+ ROAS to their prospects just to close a deal.
There are also clients that demand X amount of ROAS. And when I see it bounces off there faster than a New Year’s resolution gym member.
Let’s do a little thought experiment to show you why this media-buying ‘Bigfoot’ doesn’t exist.
Actually… suppose they do!
And I’ll show you why they would never, in their right mind, work for anyone but themselves.
Here you have. This won’t take long.
Right now I can go to any affiliate site and choose from thousands of products that I would like to sell and get a commission.
Let’s choose Golf.
The golf niche is an $84 billion industry. It’s a rabid market full of hungry shoppers with money to spend. So plenty of room to climb.
I see a $37 product, right now, where I can earn 75 percent of every sale.
If someone could always get a 5:1 ROAS, no matter what, then they would have to acquire that $37 sale for every $7.40 in ad spend ($37 divided by 5).
Your cut would be $27.75.
So minus the ad spend, you would be left with $20.35 from each sale ($27.75 – $7.40 = $20.35).
Pure profit without overhead, headaches, dealing with whiny customers, or anything like that.
That’s a 2.75:1 ROAS selling a product someone else built, hosts, manages, and everything else.
Now, I don’t know about you, but if I could put $1 into something and get $2.75 back, and not have to worry about ANYTHING else business-wise, I would do it all day, every day.
There is no way on the planet that someone who has this talent would give it up to do it for someone else for a few thousand dollars a month. That would be absolutely crazy.
The point is. The next time you hear a marketer say he can do that, ask him why he doesn’t do it himself.
They’ll probably say “oh, I don’t want to deal with payment processing, customer management, support” and all that stuff. In the scenario I just showed you, there is no responsibility other than sending traffic. The seller takes care of everything else.
Anyway, I’ll stop ranting. Now I’m all laughing.