- Traffic Crash Course Part 3 -
FREE traffic vs. PAID traffic

Lesson Transcript

Now that I have you thinking about traffic generation the right way, we will not talk about the ongoing debate of free traffic versus paid traffic.

When I do a live event, I usually ask the audience what they think the best way to get traffic - free or paid. You must be thinking the same thing right now that free traffic is better because it's free!

I think free traffic is great!

Why?

You guessed it - because it's free! However, free traffic is a bit of a misnomer.  

There is time and effort spent to get free traffic from sources like Google or anything organic from social media. Paid traffic, on the other hand, is where you go out and pay to place an ad.

Free traffic or paid traffic?

Free traffic is something you have no control over. You will spend a lot of time and effort to get results. Although, if you can get organic traffic from Google, it can be some of the best high value traffic!

As anybody who's done SEO or relied on any source of free traffic for a period of time knows that rankings change. Trends change. When it does, you will lose that free source of traffic and there's no recourse.

There's nothing you can do about it and you are left with no traffic.

I'm not discouraging you to work for free traffic because they are valuable sources and it's a great way to start if you are out on a budget.

However, if you want to build reliable predictable, scalable traffic, and a business that you can sleep at night - knowing that it's going to scale, you will have to master paid traffic. Buying traffic from sources like Google Adwords, Facebook ads, native advertising, solo ads, etc. 

How much do I need to budget?

The answer is: that's the wrong question to ask. It's not about the budget. For the average small guy getting started or running their online business, throwing a lot of money in buying traffic is not the right way to do paid advertising.

Most businesses, small guys, like us, we practice what is in the marketing world called direct response marketing.

Direct response marketing is when you invest in an ad and your goal is to make a reliable, predictable, measurable return in the shortest time possible. Direct response marketing is not new. It has been around now for a long time.

Before the internet, direct response marketing was things like sending out catalogs or postcards and advertisements and specific things were some direct mail where somebody would go out. They would buy an ad in a newspaper or send out a direct mail piece.

They would say, "Okay, I want this to go out to 10,000 people." They knew when they would send that out to 10,000 people, it would cost them X amount of dollars in marketing, but they knew that once they did that they would make back way more than they invested in the marketing.

This is the same thing we do online. We don't throw 1000 bucks to Facebook or Google and just show the ad to whoever.

We place the ad with the intention of having it shown to people who are actively engaged and interested in what we have to targeted potential people. Our goal is to get an immediate or as quickly as possible return on our advertising spend. 

Think of it this way: if I could show you a place where you could place an ad right now and you could invest $1 in advertising and know with a high degree of certainty that sometime in the next seven days that $1 invested was going to yield a $2 return.

The question now is how often would you invest?

The answer is, as often as you can!

When we buy traffic, our goal is to go out with our best offers our best funnels, and to buy traffic to that. When we spend money on traffic, we don't hope that it's going to make money, we want to know that it's going to return a positive ROI in the shortest time possible.

I know this opens up many more questions. One of the common questions: if I invest $1, how long before I get it back?

It depends...

When we're starting out and buy ads, we never want to have to wait for a long time before we see an ROI. We want to get that time period down as short as possible.

The question should be: how long can you wait before you get that money back? You'll have to think about cash flow. If you're just starting out, you're going to want to get that money back a little bit sooner.

Meanwhile, as you build your cash flow and reserves in your business, you can spend more on advertising and be more aggressive. Now you can afford to wait longer to get that ROI back.

Budget doesn't really matter when we talk about paid advertising. What you need is to know the sources of traffic where you can buy visitors to your website and knowing that there's a certainty that you're going to make money from those visitors in an X period of time.

You just need to manage the cash flow to make sure that you can continue to do that before you start making a profit. The bigger your business gets, the longer you can wait.

That's why big companies that go out and seek venture capital investors, so that they can afford to go in and spend more than the competitors to buy the advertising to own that market.

They're not worried about making money in the next week. They're happy if they make it in the next year.

Here's the good news: 

There are lots of ways to use Facebook, Google, native ads, etc. where you can make an immediate profit, from a dew days to a few weeks. You don't have to wait months. The more successful you are at this, the more you can spend on ads.

This is an important thing to remember, which ever company in a given market, can afford to spend the most money on ads to acquire ads is going to own that market.

Why?

Because every single ad platform that exists on the internet today is based on an auction based system, meaning whoever can spend the most is going to have their ads come up first, they get to buy the inventory.

If you can't afford to spend as much as the guy that's up in the rankings, your ads aren't going to run. That's why maximizing lifetime value is crucial. We will dive into this in a different crash course. 

Conclusion

Paid traffic is the key to reliable, predictable, scalable revenue online. It's not about the budget. You are a direct response marketer; you're looking for sources of traffic that you can drive to your sales funnels and turn those into a profit in the shortest time possible.

Once you've done this, and you know that you can invest here and have a profit by there, you want to invest as much as you can, in that traffic to grow your business.

This crash course will set a foundation in your brain to make sure you think about the traffic the right way. Once you build your traffic campaigns on the platform, the foundation of knowledge you just learned from this course, you're going to be far more successful.