Living The Red Life - Social Media vs Paid Ads : Why You're Missing Out on Millions of $$$

Episode Date: May 30, 2024

The crucial debate between organic and paid advertising. Paid ads are quicker and more predictable results, but organic has the potential to produce an even higher roi. Paid advertising allows for consistent traffic flow and scalable sales, which are essential for building a real business as opposed to a hobby. Paid ads provide control and predictability, making it easier to achieve revenue goals and demonstrate profitable acquisition channels, a critical factor when selling a business to potential buyers. Organic growth, while valuable in the long run, is less predictable and takes longer to yield significant returns.Successful businesses need a balance of both paid and organic strategies. While paid ads offer immediate returns and scalability, organic content is a long-term investment that enhances brand value and trust. Effective paid advertising requires testing, optimization, and a solid product or service. By understanding and leveraging both paid and organic methods, businesses can achieve sustainable growth and improved valuations.CHAPTER TITLES1:17 - The Importance of Both Paid Ads and Organic Growth 1:50 - Why Paid Ads are Essential for Business Consistency 2:51 - Comparing Paid Ads to Organic Growth4:03 - Analogies: Paid Ads vs. Organic Growth4:29 - The Challenges and Benefits of Paid Ads 5:10 - The Long-Term Value of Organic Growth6:17 - Building a Balanced Strategy 6:56 - Organic Growth as a Long-Term Strategy 7:15 - Paid Ads and Business Valuation 8:44 - Examples of Big Brands Using Paid Ads9:10 - The Role of Different Types of Paid Traffic 10:39 - The Myth of Affording Paid Ads 11:58 - Personal Success Stories with Paid Ads12:42 - Integrating Organic Growth and Paid Ads 12:56 - Creating Viral and Branded Content for Organic Growth14:33 - The Importance of Testing in Paid Ads 14:51 - Guidance for Members on Paid and Organic Strategies 16:06 - Summary and Final Thoughts on Paid vs. OrganicConnect with Rudy Mawer:LinkedInInstagramFacebookTwitter

If you go and sell your business ever, any sort of buyer, they don't want to hear, oh, I got a YouTube channel with 2 million. They have to go, what can I do with my hundreds of millions set in the bank account? How do I grow that quicker? And then you go, well, you can't really, you know, it's just posting once a week and it takes years to grow. They don't want to hear that, right? Unless you're Mr. Beast, then they will.

All the biggest companies in the world grow through advertising. Apple, Tesla, McDonald's, Burger king coca-cola these companies that are all household names are spending billions of dollars on ads and they're already a famous brand you're not you should be spending more not less than them one thing i'll also say is people go really well i can't afford paid ads everyone can afford paid ads because this is how i teach it my name's rudy moore host of living the red life podcast and i'm here to change the way you see your life in your earpiece every single week if you're ready to start living the red life ditch the blue pill take the red pill join me in wonderland and change your life

hey guys welcome back to another episode of living the red life today we're going to end the battle of organic versus paid ads i've been a paid ads expert, one of the best in the world, or as I'm known for many years, but I still love organic, right? And a lot of people say, Rudy, why do you like paid ads? Rudy, do you not do organic? People say, which one is better? Where should I start? So we're going to end that battle today, okay? A shorter episode. It's not going to be too crazy long because the answer is pretty clear and I'll kick off right away. I won't leave this open loop to the end. You need both, But let me dive into how to use paid ads, how to use organic, how to combine them together to get the best results and where you should start, because I

do believe you should start in one place more than the other first. And I will talk about that as we go and where to start and exactly how to start and exactly how to do them to make them successful. So the first thing to understand is why I said you need both because they feed into each other, right? Paid ads, I don't believe you have a business until you have a consistent traffic flow and a consistent way to get sales. I mean, you've got a hobby, right?

If you don't have that. Once you actually can make consistent sales where you're getting new customers, new leads and scaling predictably without you having to go and hustle or you cold DMing or cold emailing or pitching at events. I think once you have that, you have a real scalable business, right? And I think the way you get that is paid ads. Can organic do it? Yes. But with organic, you have to be the one in a thousand people that quickly grows an Instagram, quickly gets traction, quickly gets tens of thousands of followers.

And it's just like, you know, it's not easy and it's not predictable and it's not assured. Whereas if ads are consistent and you know what to do and you do the right things you have a good product they have a much much much higher chance of success than being viral on organic now if you go viral and organic it's amazing but it's kind of like to me the reason i say paid ads are better first is like it's like saying oh i'm gonna be a millionaire and i ask how they go i'm gonna keep buying lottery tickets till it happens it's like yeah, eh, that's not really a tactic. That's like you may become one in like a, you know, one in 10 million that gets lucky. Right. Whereas I want to become a millionaire by saying I'm going to work hard and build a business. That's now I'm understandable.

That's more realistic. Right. Still hard, but realistic. So that's how I see paid ads. You're going to get way more success focusing on that. And it's not going to be easy, right? And it's going to take you months of testing and you're going to lose a little bit of money in the process and want to quit a few times. And you're going to say ads suck. And then one day your account will get banned and you'll go ads really suck. And then you're going to build it back up. That's entrepreneurship in general, right? It's going to be hard and that's why most don't do it. But paid ads will pay off if you have the right product service, do it the right way, and it will give you consistency. And I mean, you can get that much quicker than you can with

organic. Now, that doesn't mean organic is bad and it doesn't mean you shouldn't do organic. It means organic is more like a long-term strategy. I like my analogy. So another analogy is paid ads is like getting a job to create wealth or starting a business to create wealth. And organic is like real estate. It might take longer to kick in and grow that portfolio. But when you're 65 years old, you might have a big real estate portfolio that's crazy valuable and you can just live on it. That is the truth with organic versus paid ads. Paid ads is your business is going to accumulate your wealth quicker. Doing consulting, getting a job, you'll get your wealth quicker and it's more you're in control of it and it's more predictable.

Right. But eventually you're going to you know, if you're organic, get so good over five years, you're going to go, wow, the organics like catching up with the paid ads and it's even giving me better leads. And then you'll go, I really love my organic. I'm glad I invested in my organic five years ago when I had my day job, right? Kind of like real estate. It's like, you're not going to become rich off real estate in a week or a month or a year, but you can start saving and buy a house a few years later, buy another one. And by the time you're 65, you now have a bit of a real estate empire and you don't even need your job or business because that'll keep making you crazy money. That could be the case with organic over time. But if you're 25 years old, you're probably not, unless you're going into a full-time real estate profession, you're probably not going to say, I'm never going to run businesses. I'm just going to do

my real estate stuff, right? Unless that is your business, then it's different. So I hope that makes sense. Like paid ads will give you consistency, give you control, let you scale faster. And it will get you in a place where the organic also goes grows quicker, right? Because we grow a lot on our socials from our Instagram. At one point in my first business, I was getting 500 followers a day from my paid ads because I was spending 20 grand a day, 10, 20 grand a day. So I was getting millions of impressions and those people would follow me. Now, don't get me wrong. The organic works the other way around too, where those organic people are going to follow you and they're going to convert way better when they see your ads and

offer. So you see how there's no separation. They just go hand in hand. And it's so important to understand there isn't a right or wrong. There's a do both, but maybe get paid ads focused first because organic will take longer to ROI. Now, if you say, Rudy, I'm starting a business and a Facebook, Instagram, social YouTube page, and for two years, I don't need to make money. I just want to create amazing content. I love creating content and I want to have a big channel. Then that's okay to start with organic because you see how your goal is so different. And that is the business. That is the vision is your organic channel. Most of you aren't doing that, right? You're saying, Rudy, I need to make money in six months to quit my job. Rudy, I need to make money now to pay my employees. Rudy, I need to grow my business now,

not in two or three years when my organic finally maybe grows, right? So yeah, paid ads to start. Do organic at the same time in the background, but don't expect a ton from it. Expect more from paid ads much quicker. Plus, one thing I haven't discussed that most people ignore is if you go and sell your business ever, any sort of buyer wants to see acquisition channels and sales processes where you can spend money and make money, especially if you sell to private equity or whatever. They want a spreadsheet that says, this is our ad spend, this is our ROI, this is our cost of goods, this is our return. And they want to say, okay, well, we're private equity. We got billions of dollars.

How can we 10x that ad spend and get 10 times more back? They don't want to hear, oh, I got a YouTube channel with two million and I make all this money. They go, well, what can I do? Private equity go, what can I do with my hundreds of millions sat in the bank account? How do I grow that quicker? And then you go, well, you can't really. You know, it's just posting once a week and it takes years to grow. They don't want to hear that, right? Unless you're Mr. Beast, then they will. But so even when you sell your business, they want to see that you have proven acquisition channels, not just an organic presence. Now, does a massive brand and strong organic help improve the valuation? Yes, absolutely. Remember, they go hand in hand. Will it alone be sufficient? No, I don't believe so it will lower your valuation if you have no acquisition channel outside of organic now same again right

if all you have is paid you have no referrals no partnerships no organic no selling from other like platforms then yes then they'll say hey all your eggs are in one basket so that diversification is important but most companies want to see that you can advertise profitably why because all the biggest companies in the world grow through advertising okay i love to show a slide on my presentations and at my events where it literally shows that um billion dollar companies will spend billion dollars plus a year on advertising. And I say to my members, I'm like, look at this. These companies that are all household names are spending billions of dollars on ads and they're already a famous brand. You're not. You should be spending more, not less than them, right? You

should be going Apple, Tesla, McDonald's, Burger King, Coca-Cola. They're famous brands and they're still spending billions of dollars on ads to get more famous, more well-known, to make more sales and to grow. So ads are never going to go away. They're a key part of every business. Now, does that mean Facebook ads when I say ads or paid traffic? No, paid traffic can be paying to be on a TV, paying to be on Billboard, paying to be on big influencer accounts, right? You're paying for traffic, paying for Facebook ads, YouTube ads, Google ads, TikTok ads, Instagram ads, paying for email blasts. It's paid traffic. You are exchanging money for people to go to your product or service or

lead gen or whatever, right? So paid traffic is the exchange of money for traffic, right? As the name suggests, i.e. eyeballs, people, attention, and impressions, okay? Very important part of business. You should want to pay to play because that means you can control your income. If you want to make a million dollars more next year and you know you get a three times ROAS, you have to spend $333,000. $333,000 equals a million in revenue if you have a three times ROAS. That's great to know as a business. And now you sell it to private equity. They say, can we scale this 10X? If you

say, yeah, no problem. And it's true. Then now they can go and spend 3.3 million and make 10 million back. Everyone's happy. Paid acquisition. You can't do that quite like that with organic, right? You understand that. So paid ads versus organic. I hope that settles the debate. Start with paid. Build organic in the background at the same time. Paid, you can start $5, $10, $20 a day. And now one thing I'll also say is people go, really? Well, I can't afford paid ads. Everyone can afford paid ads because this is how I teach it. If you spend $10 a day and make back $20 a day, can you run a paid ads? Yes or no? Answer is probably yes. If you spend $100 a day and make back $250 a day, can you run paid ads? Answer is probably yes, unless you have

stupid costs, which you probably shouldn't have, right? And you need to go and fix. Can you spend $1,000 a day and make back $250, $2,500? Spend $1,000, make back $2,500? Answer is yes. Can you spend 10 grand a day, make back 25 grand a day? Answer is probably yes. Can you spend 100 grand a day, make back 250k a day? Answer is probably yes. Can you spend a million dollars a day, make back two and a half million? Answer is probably yes. You see every single one of you, and that was all hypothetical. I'm not saying you'll get that return or any promises like that, but based on that hypothetical example, you could all spend money on ads. You just don't know how to make money back from ads and become profitable. That's the thing you're missing. Not that you don't have money to spend on ads, you just don't know how to make it profitable.

Because let's face it, if we could all do that, we all would. And our brands would grow 10 times quicker than if we were just doing organic. Everyone needs to figure that out. I'm telling you, that is the key to unlocking success and scale in your business. It's how I've grown my own businesses, 10 of them past a million. It's how I've grown this company past 20 million in revenue because I know how to run paid ads. It's how I took a company to a million dollars a day in revenue because I know how to run paid ads. It's how I've helped thousands of people. So

don't ignore it. Paid ads is going nowhere. It's a massive part of business. It's like understanding copywriting or operations or hiring or HR or marketing funnels or tech. You have to have it in your business. If you don't have it in your business, your business is going to be slow, painful, hard, and it's not going to grow and you're going to wonder why. Now, organic, you want to build in the background and you want to do two things with organic. I was teaching this at my castle last week to have 1500k in a circle legacy members. The couple of things you want to do in your organic, right, is you want to create some content, what I call is branded content, and you want to create some content that I call

is viral content. Me and my team try and do a mix of both. So if you look at my Instagram, some content is viral content. It's content that's random. It's the idea to get attention, to be different, to be shareable, and to go to people that don't necessarily know me. You may see my Instagram and go, why is Rudy posting this weird TikTok pointing thing where he's teaching free tips? Why is he doing this thing where he's sharing five of his books, right? That's because it's more shareable, broader, mainstream, viral-like content. And then there might be a picture of me with my dogs, right? Or a picture of me and my team, or a picture of me at my castle, or a picture of me in the office, right? That's more branded

content showing my brand, who I am, what I stand for, what I do, what my company does, what my team does, the results my clients get, right? No one, but it's not, you're never going to go viral on the internet when you have a client just saying, Rudy's great. I love Rudy. Rudy's programs are amazing, blah, blah, blah. No one, right? No one is going to share that a million times. Now, maybe if you like help save someone's life, that is more shareable and viral, right? But you get the idea. That's branded content that serves your company and maybe potential customers or people that know, like, and viral like but you get the idea that's branded content that serves your company and maybe potential customers or people that know like and trust you warmer people

right but a lot of your content needs to be viral like content because you need to attract those people and build your organic following right and the way you do that is creating this viral like content so with organic you want to do a mix of both. You want viral-like content and more branded-like content. And with paid ads, you need great ads, you need a great offer, you need a great landing page, a great sales process. And then you need to test, test, test. And those two things are what we teach all of our members. We don't tell them to do one or the other. We maybe start them with one and we add a second one in when we think they're getting the first one and they're not at capacity and burning out. And we teach them how to do it the right way so they get results much quicker than by trying to figure it out themselves. I tried

to figure it out myself for many, many, many years and failed. And eventually I learned from mentors and got it right within a year. That's our goal in our masterminds and all our programs is, hey, you don't have to spend three, four, five years and thousands of dollars on ads, blowing them without any clue if they're going to work or not. We're going to show you exactly what to do, how to do it. We're going to teach you all the lessons we spent millions figuring out and hopefully get you to a point of success faster, right? Nothing's guaranteed in life apart from taxes and death, but we can guarantee we'll get you there probably faster with more guidance, support, and a clearer direction than trying to figure it out alone, okay? And we tell our members, you know, paid will take some

time. Give it three to six months. Organic, build in the background, and in a couple of years' time, you'll be glad you did, and here's exactly how to to do that so that's a wrap on paid versus organic i hope that gives you i try and teach and educate versus tell so i could have just told you do these two things and um you know here's how to do them but instead i wanted you to understand the key principles and the logic behind my answer and why so you can understand when to add them both in and and how they fit in the ecosystem of marketing your business and growing your business, okay? So I hope you enjoyed the big, grand, famous battle of ads versus organic.

And I'm glad that I got to share that opinion. I hope you resonate with that too. But I would love your feedback. Instagram me, let me know what you guys think and where your time, energy and effort is. And if you have questions on either and you're struggling to grow either, just hit me up. Happy to work with you on it and help you DM me any questions. And if you want to get with my team and have us work on it with you, we're also happy to

do that. Just DM me on Instagram and we can go from there. But that's a wrap, guys. Thank you very much. And I'll see you very soon. Until then, keep it red. Keep living the red life. I'll see you very soon until then keep it red keep living the red life I'll see you soon