How to Build a Profitable Email List With Social Media Advertising

Your email list is the most valuable asset for an online business. There’s a lot to consider when maximizing the number of people who sign up, but sometimes you have to also focus on getting enough people to see your opt-in the first place.

Noah Kagan has spent over $2 million on Facebook ads while building his business AppSumo, powered by an email list of over 700,000. A bold move, but you have to also realize that Kagan was employee number 30 at Facebook, and helped build their ad system.

Needless to say, Noah has vast experience and can share exactly how to do profitable ad spends on Facebook for list-building. So who better to have on the show for another free consulting wisdom-seeking episode of New Rainmaker?

In this 29-minute episode Noah and I discuss:

  • Why you should focus on fundamentals instead of Facebook
  • Is Facebook now a pay-to-play platform for marketers?
  • How to convert social traffic into email subscriptions
  • A longer (more profitable) view of social media advertising
  • What you should do if an ad spend is profitable
  • How to make sure your ad campaigns will work
  • Why he suggests using retargeting for product-based campaigns
  • Which social ad platforms have performed best for him
  • How to successfully advertise on Twitter
  • Two surprisingly successful recent ad campaigns

The Show Notes

How to Build a Profitable Email List with Social Media Advertising

Brian Clark: Hey there, Rainmakers. Welcome to the show. I am Brian Clark, founder and CEO of Copyblogger Media. Today’s episode is another one in the series that I’m calling ‘free consulting.’ I have a specific thing I want to learn more about, and I think about who’s the smartest person I know for this topic. That person today is Noah Kagan because we want to talk about using Facebook ads to build our email list.

You guys know, I launched a new curated email newsletter on personal development called Further. It’s doing fine organically, but what if I’ve got more money than time at this point? How can I use advertising to grow that list smartly? Well, that’s what we’re going to ask Noah.

If you’re not familiar with Noah, he was actually employee number 30 at Facebook but that’s not what I want to talk to him, because what he did after he left Facebook was build AppSumo, which is a huge gigantic email-powered business, kind of like Groupon for web developers and online marketers. People like us. Now he has branched out and expanded that into a business that is way beyond the Groupon model. We’re going to talk to him about that a little bit. In fact, why don’t we get Noah to tell us. Noah, how are you?

Noah Kagan: Good, Brian. Thanks for having me, man.

Brian Clark: Thanks for coming, man. Hope you appreciate being our victim in our free consulting. I want to know something, and I want to share it with them. It makes for a good show.

Noah Kagan: Wow. I’m not getting paid for this. I’ll help you out.

Noah’s Story

Brian Clark: I forgot to mention that part to you. Why don’t you tell people a little bit about the story. Obviously, you were early on in Facebook. You were early on at Mint, and now you’re your own guy as a founder of AppSumo. Give us the sketch of how you got here.

Noah Kagan: Yeah, man. I’ll start with the AppSumo part. Everything else is kind of online. I think what’s interesting is that I started seeing all these web apps come out, and I was like, “Man, one of the hardest things for every single business online is marketing.” In my previous business, I kept getting shit on, and I was a credit card payments guy for Facebook games. We did all the payments, and everyone hated us because they’re like, “You’re a payments guy, we don’t care about you. Get us more customers.”

Noah Kagan: So I wanted to do something that was more on the top of the funnel, which was getting people customers. We realized with AppSumo, if we created some type of distribution that everyone would actually like us and be like, “Hey, promote our products,” and the customers would be like, “Oh, cool. Thanks for discovering cool things for us.”

So we’ve spent the past four years building that up. Ninety percent of our business comes through email. That’s not something I ever really did before or thought of, but I basically became a super huge email advocate, which is, in my opinion, the number one way to communicate with your customers.

Brian Clark: Absolutely.

Noah Kagan: Since then we’ve built tools. We basically took all the tools we’ve been building at AppSumo and put that into a tool kit called Those are tools that we’ve been using internally to grow our own email list and get more traffic.

Brian Clark: Excellent. We will link that up in the show notes, so everyone can check that out. I actually have someone who produces a site for me who is recommending Sumo tools, and I was like, “Yeah. I know that’s Noah, right?”

Noah Kagan: Awesome.

Brian Clark: It’s cool though.

Why You Should Focus on Fundamentals Instead of Facebook

Brian Clark: Okay. I kind of set the stage. I have this new email newsletter. It’s curated. It’s really just fun for me. It’s like my personal blog. By the way, why did you name your personal blog OkDork?

Noah Kagan: I bought it in 2000, which now is 15 years ago. I thought I would buy domains and get rich, and that was one of the names I came up with. I have that one. I have, and the only one I’ve ever been offered is for Community Next, which is a Jewish group in Michigan. They offered me a $1,000 for that. I never got rich off domains, but that was one of ones I bought.

Brian Clark: I had the same idea. Usually, I would buy domains as a placeholder for an idea, and if I decided to do it, you do it. If not, you let it lapse. But no one’s ever paid me a substantial amount of money for any of them. I had actually do the work of building sites out of them. What a pain in the arse.

Noah Kagan: I think that’s a key thing that maybe it should be the theme of Facebook ads, and in general, is that you read articles where this guy or girl buys domains, and they made a shit load of money. Then you do the exact same thing that you’ve read, and it doesn’t work out. I think that’s kind of the same that I’ve noticed with Facebook ads.

You read this article, “2,000% return when I bought my Facebook ads.” You copy them, and then it doesn’t work. So the thing to understand is why is it not working for you and then how can you improve that? Or are there other ways that you should be considering, just versus doing what everybody else is telling you to do.

Brian Clark: Yeah. That’s why this show is going to be about the fundamentals. Facebook changes all the time. Tactics change all the time. Even you’ll tell us that your own approach that works will stop working at some point. You have to continue to reiterate on it.

Is Facebook Now a Pay-to-Play Platform for Marketers?

Brian Clark: Here’s really where I want to start out because I have a love-hate relationship with Facebook, mostly hate. We killed the Copyblogger page because we get traffic from Facebook, but it’s by other people sharing. Our page, unless we paid, really did nothing. On the other hand, I have a local Boulder site, and it does wonderfully on Facebook, organically. I can’t really figure that out, but for the most part, it seems that the sentiment is Facebook is now a pay-to-play platform for marketers. True?

Noah Kagan: Yeah. A concept that I have always been surprised at is that I pay to tell everyone to go to Facebook, and then I have to pay to tell everyone to come back to me. With email, what I’ve realized is it’s the most control you can have in communicating with your customers. You’re married right, Brian?

Brian Clark: Yes.

Noah Kagan: You don’t have someone else talk to your wife, do you?

Brian Clark: I haven’t worked that out, but no.

Noah Kagan: You talk to her yourself. And that’s what Facebook is doing. They’re talking to your customers, so you don’t even know who really gets to see it. It’s, “4,000 people today saw your boosted post.” I think what Facebook is good for is actually what you pointed out about your Boulder site, which is for organic or social reach — it’s able to spread something, but in terms of a marketing channel that you want to be wary of giving someone else control of your business and of your outcomes.

Brian Clark: Yeah. We call it digital sharecropping, and home-base is always your site with your list, but it seems that you have been incredibly effective at taking Facebook traffic and converting it into that higher value email relationship. That’s why you’re on the hot seat today.

Now you wrote a great article, we’re going to link this up to about a year ago about how you spent $2,000,000 on Facebook ads and built massive lists and what you learned from it, which was very useful. A year later, where are you at today with Facebook as far as your own advertising and what you think about where the platform’s headed?

How to Convert Social Traffic into Email Subscriptions

Noah Kagan: Specifically for Facebook, we’re spending only $3,000 a month on Facebook. That’s $36,000 a year, which is much less. I think at our peak when we were doing somewhere between $200,000 to $300,000 a month. It’s dramatically gone down for us. I think what people have to do with their marketing is consider the effectiveness. If I have $300,000, what is actually the most effective way for us, at that time, which is growing our email list. Right now it’s trying to get people to install I basically take $300,000, and I say, “Which will help me get the most amount of people to install it?”

Facebook actually hasn’t been that. It’s very expensive for us. A lot of the traffic is mobile, which converts pretty horribly. A lot of it’s international. It converts horribly. You have to be careful of that. You have to look at, “Are there other channels I could spend that on?” What more people need to do is sponsor smaller sites. Instead of going to Facebook, go to, who’s a great guy for Facebook ads. For us, WordPress sites are great. Go sponsor smaller WordPress sites, instead of just Facebook as the only way of thinking about how to do your marketing.

Brian Clark: Here’s my dilemma and my scenario. I’m starting off with a new list, small project, so I don’t think the over-saturation issue would affect me. Here’s my problem, because you, like I, are an ROI marketer as everyone should be, but think back to when I started Copyblogger. For the first 18, 19 months, I didn’t sell anything. All I did was build audience. In that period of time, I figured out what the audience wanted to buy. We built it, sold it, and the rest is history. We have done that every year since.

I have that same mentality with this new project, and yet, like I mentioned, at this point I’ve got more money than time. Advertising to build that list — because I know how valuable that audience will be to me to figure out what to sell them — yet that means I’m coming out of pocket with no chance for immediate ROI. Would you ever do that yourself?

Noah Kagan: No.

Brian Clark: I knew you’re going to say that. That’s generally how I feel, too.

A Longer (More Profitable) View of Social Media Advertising

Noah Kagan: I’ll tell you why. Sometimes, just knowing that people do a certain tactic is just as important as knowing why they’re doing that tactic. When you’re starting a lot of new businesses out, it’s easy to just spend on ads because you don’t have to kiss anybody’s arse, and that’s why I loved it for AppSumo. We did no content marketing whatsoever, and content marketing is all the rage, which is also the same thing as blogging. The point is we didn’t do any of it because I didn’t want to have to go write a post and hope someone would link to it and hope I’d get in a directory or any of that stuff. I was like, “If I buy ads, I can just put in 10, and I get out 20.” It scaled really well.

The difference, though, is that if you go and spend money on ads and it’s not working, 1) you might actually think it’s your product that’s off. You’re like, “Well, no one really wants this,” which may not be the case. So you’re like, “Oh. Well no one’s clicking and buying and doing whatever I want them to do. Well this product’s wrong,” which is not true.

Secondly, you’re spending a lot of money that you don’t really know if there’s going to be an ROI on. You’re going to get a 1000 emails subscribers. Great job. Are any of them going to buy, “Who knows!” What we’ve encouraged people to do – and what I personally encourage people to do — is go validate with offline or one-to-one or other methods, so you’re confident you’ll make that money back before you start spending money on advertising.

Brian Clark: When you started AppSumo, were those effectively affiliate offers?

What You Should Do If an Ad Spend Is Profitable

Noah Kagan: When we started, just like Groupon, we basically lined up exclusive deals. So I would come to you and say, “Brian, you sell your course for a $100 or your web product for a $100. We’ll sell it for $50, and then we split $25-$25.” So I would buy ads. I’ll give you basically the general metric that I was targeting. If you had a $100 product, I sold it for $50, and I get 50% margin. That means I had $25 profit, gross profit. Are you still with me?

Brian Clark: Yeah. Of course.

Noah Kagan: I basically, on Facebook ads, would spend what it would take to get $25. If I could get within $25 of profit within 30 days from those people, then I would say this is a good ad spend, and I would spend as much as I can until it taps out. I just want to repeat that because I think that’s a little unclear. It’s like, “What the hell is he talking about?” Two things. One, when someone comes to your website to make a purchase, only about 2 percent around there are going to purchase. So you need to collect email addresses. does that, or there are other tools you can use to do that.

So collect email addresses, which will get you another 10 percent. What we did is that, even if people didn’t buy right away, I basically looked at, from that spend on that day, how much money came back to me in 30 days, and if it was at least the amount of money that I needed. If I spent $100, and I got my $100 back from selling four of those products, I was like, “Awesome.”

What I think most people do is they are kind of like, “Oh, okay. I think it’s working.” Fine, but what you need to do — and what’s the ideal gold mine — is that let’s say that it’s $25 for a product. I spend $25 that day, and I make back $25 right away. I basically go and spend unlimited. I think what happens to too many people, Brian, is that they spend it, they make a little bit of profit, and then they keep it that way. If I find that there’s any profit, I basically try to maximize it and turn up as high as I can. That’s why we got to $300,000 right away.

How to Make Sure Your Ad Campaigns Will Work

Brian Clark: That’s a truism from old school direct marketing. Once you figure out how to make an ROI, you try to buy as much ad inventory or whatever the medium is, as you can. Sometimes, the frustrating part is you can’t buy enough.

Noah Kagan: There’s other ways, too, that we figured out. One thing that most people do when they have profitable — like I saw this guy today, and he was talking about how he had a profitable ad campaign. I was like, “Why are you only spending 50 bucks?” So ways that you can expand that, or you can do manual bidding. So instead of letting Facebook decide how much to bid for you, just make a higher bid. What that will do is you’ll spend more, which reduces your profit but you’ll spend a lot more money, so you actually get to grow more.

Secondly, one thing that was really helpful for us was international spend. We literally tried every major country. My favorite ones outside of the Tier 1 countries — Spain, Germany, France — any of these European countries that do have money. Maybe avoid Greece for now, but that actually was ways we could actually expand our budget when it was working.

Brian Clark: Absolutely. Let’s assume we do have a product to sell. We’re able to calculate whether or not we’re actually making money. Of course, we are funneling them into email because that raises your conversion rate, as you already pointed out. You basically say Facebook has the ability if you’re trying to build a list, that you can choose specific conversion at the site. In this case, that would be the opt in, but you actually advise setting up click to website. Why?

Noah Kagan: Think about it. What is Facebook’s goal? Facebook’s only goal is to make as much money as possible. They will, from an advertiser’s perspective, do whatever it takes to spend the most money. If your ads will spend more money than the other advertiser, they’ll spend all your money. If it’s like, “Great. It’s an opt in.” Perfect. They’ll do that. I like to do it where I have the control, instead of Facebook, so that’s why I generally will choose a click to website.

What I’d recommend, Brian, is that, ultimately, from someone beginning out, if you’re just starting your website, “Don’t sweat if it’s OCPM or click thing or it’s an optimize thing or whatever a thing.” Just start with the most basic thing so that you can get a sense of, “Hey, I spent a $100 this month,” and I wouldn’t really spend more than that. That’s how much I spent when I first started with Facebook ads for AppSumo. And see, “How much money did I make back from these people?” I generally recommend also collecting email addresses because most people don’t buy right away. The nice thing with email is you can say, “Hey, here’s some free things and also here’s that product that maybe you were still interested in.”

Why Noah Suggests Using Retargeting for Product-Based Campaigns

Brian Clark: Yeah. I want to talk a little bit more about budgeting in a minute because you have some really interesting ideas about how you make sure it’s going to work before you hit the gas.

Before that, I played around with the Ad Manager a bit, and it really comes down to getting the right interest group targeting. You’ve got this amazing demographic information. You have the ability to target people who like, for example, Tony Robbins. I would be the anti-guru version of what Tony Robbins talks about because I’m not trying to make myself that guy, but it’s the same topic. Personal development — health, wealth, wisdom — all that kind of good stuff.

I played around with it, and I did try to target against other people who are interested in certain pages in more general topics. But until you really get into spending, you don’t know what’s working or not. How do you choose your initial interest group targeting?

Noah Kagan: What I would actually recommend is not any of it. For someone who is really just starting out, Brian, what I’d actually recommend is more of custom audience or focusing on retargeting, if you have a paid product. “Oh wow, we’re actually spending a lot more than I thought and yet look at this” — I’m pulling up my Facebook stuff, so I could speak more accurately to what we’re doing.

What I recommend is don’t go and try to get new people when you already have 80 percent of your traffic not converting to your email or purchase. So spend time on just retargeting your custom audiences. I use Perfect Audience for my retargeting, but you can even just do it directly on Facebook. I would start with that. There’s way more complicated things that people will tell you how to scrape stuff and blah blah. I’m not going to go into that. For the most basic level, do a pixel on your site, and retarget those people as your first version for your ads. Why try to go out and get new people when you already have people who have heard of you?

Brian Clark: That’s a good point because even if you’re doing really well on conversion, 90, 80 percent of people have left for one reason or another. You’re saying, “Go ahead. Those people had some interest because they clicked through in the first place.”

Noah Kagan: Or they found your content. Exactly. When you start setting up your actual ads that are new, your retargeting stuff — once you got it working — will always be paying dividends. We have retargeting ads for our course. I haven’t actually looked at them in six months. Maybe even longer than that.

Brian Clark: Right.

Noah Kagan: Because it started working before — and you probably should go check it more often than that — but the nice thing with retargeting, once you hone in on the ROI. So I spend a $100, and as long as each month, I could see that the pixel is firing and I am making over a $100, then I just keep it going. If I cared a little bit more, if that was my priority, I would go back and try to tweak that a lot more.

The thing I would say with, you know you were saying, “All right, fine. You got the retargeting going but now, what should I actually do to get new customers hearing about me?” What I personally like doing — and I’m going to give you some strategies — we should talk after this, just remind me if I don’t bring it up about what stuff, stuff that’s kind of interesting to the advertiser. There’s some creative things that have worked for us, but specifically on the targeting, I always recommend doing some kind of targeting, less than 10,000 people. Really, really, really small. Why? Because I want to know that it really works before it’s super big and I have to cut through all the shit to get to the actual one that’s going to be working.

If I were you, what I always do, and what works for me, is I look at my best spending customers. If you have a business already, take your best 20, 100 — I took the best 100 of AppSumo, and I just manually looked them up on Facebook. You can search their email addresses. You can search them in LinkedIn.

Then what I did is I created a Google spreadsheet, and I basically just listed all their different attributes. Where are they from? What’s their gender? What’s their age? What’s their profession? Books, movies, companies they like, blogs they like, people they like. You’ll basically get a pretty clear picture. Maybe you don’t want to do a 100 because you’re lazy. Fine. Do 10. Do five. Do even one if you’re super lazy. Then you’ll find very, very odd patterns. And the more narrow you get, I would do under 10,000 people, the better.

When we started out, MacHeist was the big one. The best one is someone who’s a little identical to you. MacHeist was like an arm for Mac, so I just targeted them super aggressively. I was like, “If you love MacHeist, you’ll love AppSumo. Here’s an Apple logo.” We were very aggressive. Then over time, we found out that Tim Ferris’audience really liked us. They liked all the products. I was just like, “If you have love Tim Ferris or Tim Ferris’ book, you’ll like this.

Then you start looking at like, “All right. What are the other things …” and you get a little broader. But I would say, in the beginning, you want to go as narrow as possible. Just looking at your top five people if that, to understand their preferences. Let’s do an example. Who is a reader of yours or a listener of yours like? What’s that prototypical person or a person who like, “Oh, man. John blah, is that guy.”

Brian Clark: Yeah. That’s hard because people know me for something else. There are a lot of marketers on my list just watching what I’m doing. I actually invited them to do that as a kind of a case study. So I don’t have that much of a feel because, effectively, all I ask for is the email address, and I’m going to start figuring that out.
I think the key advice here that I’ve heard from others lately is that you have actual people who are perfectly the persona that you’re looking for. What you have to do is figure them out first, and then go to Facebook or whatever the advertising platform is.

Noah Kagan: Yeah. I mean, just take your last subscriber even for your site. I would just take them, search their email address on Facebook, and you’ll actually be able to get it. There’s some other tools online now. I’ll send you a link afterwards where you can search someone’s email, and it will basically go scour the web for every type of personal profile information about them, which is kind of creepy now that I say it out loud.

Brian Clark: It very much is.

Noah Kagan: But it’s more just to get an idea of you’re looking for patterns of cross references. Some of my favorite things are what are the blogs that they’re reading? What are the magazines that they read? Books are huge one. If you have narrower book, like they all love a certain type of copyright conversion marketing, like maybe they like scientific advertising. Those are the kind of jackpots you’re looking for. When you start targeting TechCrunch or Mashable, or even Social Media Examiner, they’re so broad and big that it’s going to be a lot harder for you, versus, let’s say if you’re trying to do WordPress hosting, I would target WPEngine.

Or if you’re doing WordPress hosting, maybe like Chris Lema’s fan page. Just try to start super narrow in the beginning, and that’s what I would do. Basically, what I do from there is once I find that it works with them, I max out that budget. And then I’ll go to the second tier, and I’ll start to test out with smaller amounts, which stuff works.

I think what’s really telling is, people hear me talk, “Oh, I spent millions of dollars literally,” but I started out the first month with a $100 or $400. The second month, once I saw it working, it was a $1,000. It wasn’t like, “Oh, it worked overnight.” It took a few months for us to get it in. Once we got it in, it was $50,000 a month, and then it kept rising.

Brian Clark: I think you’ve really already addressed this, but you’re effectively saying, Start with very small amounts of money, very small slices of an audience, then see if it works, and then try to see if that also scales up.

Noah Kagan: Yeah. There are things that I pulled back, so we’re going from thousands a day, to now I’m doing a 100 a day. It was because we saw that for what we’re promoting now, which is mostly Sumo, just the CPA got to be $50, something pretty high, where at that point, we didn’t really know our lot, so I don’t feel comfortable doing that ad. If I know that it works, then I’ll go back and spend aggressively.

Things I think are interesting, like News Feed was a big thing for a lot of people. That’s when I started really getting back into Facebook a little over a year ago or two years ago. Then mobile is another thing that a lot of people are, besides app installs, so much of Facebook, probably 30 to 40 percent of their traffic has got to be mobile traffic. So as an advertiser, I think that’s something you have to be very, very concerned about because if you’re going to be doing ads to mobile, you’re probably going to get a really crappy conversion, and you’re going to be spending a lot of money for things that aren’t converting.

Brian Clark: I don’t think I ever opted in to an email list on my phone. It doesn’t feel right. But then again, I’m an old guy, so maybe the younger generation is more comfortable with that.

Noah Kagan: That’s what I want to say for marketing. We all have the same time, so what is the most effective use of time? Is it actually doing Facebook ads? Is it doing a blog post? Is it sponsoring an Instagram person? I think what people need to do is spend time thinking about where they’re going to get the most leverage before they go and say, “Oh. Facebook ads, I can just put in money and get email subscribers.” It’s look like, “How do you know that?” I would test some small amounts, and see what actually works before I would go and just commit 100 percent to Facebook.

Which Social Ad Platforms Have Performed Best for Noah

Brian Clark: Have you tried anything with Twitter, which I found the ROI on is really bad compared to Facebook, but again, it could be contextual. Organically, Twitter is killing it for me, but that’s my biggest audience. Have you tried any of the other social advertising platforms?

Noah Kagan: I’m not sure if there’s a platform I haven’t tried. I’ve spent about a $100,000 on Google. Just to give you some background. I spent a $100,000 on Google. I probably made about $15,000 back. That’s not a good return for the people doing math.

Brian Clark: That’s weird because Google is always the hardcore ROI marketer’s first move. Search intent and all that.

Noah Kagan: I think what people have to think about, what is your product and then where is the mind of that customer? If you’re on Google and you’re looking for a solution, you’re not looking for a same day, a weekly special on web tools. You’re not thinking about that. But on Facebook, you’re browsing your ex-girlfriend’s photos, and you’re like, “Oh cool. There’s some new web app. I’ll check that out.” It makes a lot more sense.

The same thing with Twitter. I’ve had some horrible success with Twitter. Not horrible success. That makes no sense. I’ve had some horrible times with Twitter where they’re not a direct response thing, but for content advertising, Twitter is going to be great because people are used to going to Twitter, reading a blog post, and then coming right back to wasting another 15 minutes. The same thing with I had a course called, which is a totally free course that shows people how to grow an email list, and that worked really well on Twitter. Because it was just like, “Oh cool.” Really easy to click, add your email and you’re done, and go right back to browsing it.

How to Successfully Advertise on Twitter

Brian Clark: Did you use Twitter cards with the subscription button right there?

Noah Kagan: We did. I can’t say it’s a game changer, but yeah, it worked well enough. We were fine with it. I think what you have to consider is where is the intent and the mindset of the person you want to be taking action? Even on Facebook, one thing I was going to mention to you, Brian, in terms of two strategies that have worked well of things to advertise. Advertising content has actually worked pretty well. So taking a piece of content — and not making it seem like an ad — but take a blog post that’s really popular or a post that’s converted people, and just advertise that instead of creating a landing page or putting them into an opt-in page. I’ve had really good success with that.

I’ve also had really good success from Twitter and Facebook on advertising contests. Contests are good because, for some of them, you don’t have to pay out right away. You pay out the prize over many years, or you pay out in installments. Advertising it actually is a great way for it to go more viral and get a really effective CPA (Cost Per Acquisition), or CPE, (Cost Per Email).

Brian Clark: Obviously, I’m always a content guy, but it’s interesting of course that the same thing we teach people about what’s the right social network? Well, it depends. Who are you trying to reach? That’s absolutely the same thing with advertising except the stakes are just a bit higher when you start burning cash.

Noah Kagan: The thing to add to that, Brian, you’re very right, your cash is at stake. In addition to that, what you have to consider is everyone’s already doing Facebook. Everyone’s already doing Twitter. A lot of people are doing Google already. They’re a $100-$200 billion plus company. Where are people not advertising? That’s actually where I have some of the best success with spending money for results. Are there new networks like SnapChat that haven’t been tapped out fully? Are there smaller bloggers? Are there new directories? The places where people haven’t advertised yet, I’ve always had the best success.

Two Surprisingly Successful Recent Ad Campaigns

Brian Clark: It’s interesting because you’ll see MailChimp and SquareSpace, heavy podcast sponsors. They’re everywhere. You would imagine it’s got to be working. You would hope that they actually care. I don’t know about SquareSpace. They buy Superbowl ads.

Noah Kagan: I mean, “I buy Senior Citizen home ads.” I was talking to one — I don’t know if I’m allowed to mention his name — but it’s a pretty popular health supplement company. He said that he gets 95 percent of his revenue from podcasts, and it’s because he sponsors all the major podcasts. So I can’t say 100 percent that it’s working for everybody, but I’m saying that’s a channel that I would even consider.

What I look for in advertising, besides that it’s ROI, is that it’s scalable and repeatable because if you can do it one time, fine, but if you can’t scale it or repeat it, like Reddit, for example.

In the beginning of AppSumo, I spent a crap ton of money on Reddit ads because not as many people were doing it, and it was really cheap. There was a lot of traffic, and over time, I couldn’t repeat it. No matter what I did, no matter what we advertised, or which subreddit, it just stopped working. That’s what happens with ads. When there’s a short line at the grocery store, everyone moves into that one.

Brian Clark: So you’re saying the actual popularity of the platform impacts your advertising just because of the sheer volume of competitive messages.

Noah Kagan: Yeah, because if you are advertising to Tim Ferris’ fans, and I am too, then it’s just going to get more expensive until a point — for a certain person, it’s profitable, but for other people, it won’t be.

Brian Clark: Yeah, that’s interesting. All right, Noah. I really appreciate you coming on today and sharing your wisdom. A lot of good stuff. A lot of things to digest. I would take this show as a starting point. Do your research. We’re going to link up some of the resources that Noah already mentioned, including Sumo, for you to check.

What’s coming up next? Anything you want to preview or tease at?

Noah Kagan: We’re developing out Sumo. Besides even using Sumo, I think everyone in general needs to build their own email lists. Facebook and Twitter are good backups to amplify your messages, but as things get more locked down, you basically want to be able to connect directly with your customers. Possibly the next thing – we’re not working on, but someone is — is being able to mass text message your customers, not in an annoying way, but in a permission way where they’re looking forward to hearing from you.

Brian Clark: Yeah, there’s a lot of people I think working on that. Anyway, thanks, sir, very much for your time.

Noah Kagan: Alright, brother.