Scaling Ad Spend Without Dropping Profit Margins


I've scaled 3 different high-ticket offers to $20k+/day in ad spend each, and at peak was collectively spending $45k/day.

I talk to marketers & offer owners spending $1k-8k/day and all of them have the same problem - they're terrified to scale/spend more.

They - like me, until recently - all have the same belief that scaling = lower profits.

And yes, there is a lot of business complexity involved with acquiring more customers. Increased overhead. Decreased customer experience. Increased stress.

But, when it comes to cold traffic advertising, the times of "performance decreases as you scale" are over. They ended back in 2021-2022 in my opinion.

What I've seen is that beyond a certain point (usually $5k-10k/day in ad spend) your performance should get BETTER when you scale, as you feed the ad platform more data.

The ONLY reasons your performance will be like a rollercoaster when scaling:
— 80% of cases: you're not feeding the ad platform enough data to give you consistent, stable performance
— 20% of cases: your offer is way too niche/specific to be applicable to a wider audience on cold traffic

Most business owners will make the excuse that's its the 2nd situation and that their market is "saturated" or "too small" for them to scale, when in reality it's situation 1.

Think about it: if you are selling something high-ticket, when you're spending 4-5x your offer price every day, that is the point where you should start getting the BEST results from your advertising.

I like to relate it to my early days of dropshipping, spending $20/day on Facebook Ads trying to sell some crappy product for $40 from Aliexpress.

Performance would be like a rollercoaster. Most days I would make $0. Some days I would make $100-200 profit. Then back to $0.

The reason for the rollercoaster is because the ad platforms did not have enough DATA to optimize off of.

If you're spending 0.5x your offer price every day in ad spend, you obviously can't expect Meta or Google's AI to do a good job at finding your customers.

Most high-level marketers I talk to say that at 3-5x your offer price in daily budget is where you start to unlock real stability in your advertising performance.

So, naturally, if you're selling something high-ticket, let's say for $5k, how can you possibly expect Meta or Google to optimize correctly when you're not even spending 1x your offer price every day?

It's the exact same as the dropshipper expecting to get rich spending $20/day advertising a $20 product. It's not enough DATA to ever be sustainable.

Another way of thinking of it is like the engine of a high-performance sports car.

These are engines that are designed to perform BEST at 80-100+ miles per hour. So if you're trying to drive a sports car at 20 miles per hour, it's not running efficiently and is actually performing WORSE.

By hesitating to scale your ad spend, you're keeping your high-performance engine in first gear. Your ride will have hitches and bumps and not be smooth as a result.

So, to smooth out performance, using this rough 3-5x offer price rule:

If your offer is $3k = your performance should start to snowball positively at $9k-15k/day
If your offer is $5k = snowball positively at $15k-25k/day
If your offer is $10k = snowball positively at $30k-50k/day

This tracks pretty accurately with the offers that I've scaled before, which have all been priced between $3k-10k.

If you're spending LESS than this, it doesn't mean there's anything wrong with your business, nor am I saying everyone "should" try to scale to these levels.

The point I am making is, if the reason you're not scaling is because you're afraid of profits dropping, it's a false belief.

Your profits are actually suffering MORE by you spending LESS.

As Meta & Google keep growing their data powerhouses & their AI gets better and better, more of the performance will get pushed to the big players who can FEED the platform the data they need to optimize.

Like all AI platforms, the more data they have = the smarter they become.

Feed them what they want and watch how they reward you.

-Lucas

Lucas Lee-Tyson

Lessons learned from $62m+ in digital product sales.

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