Why Your Paid Ads Stop Scaling and What You Need to Understand to Fix It

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Have you ever tried scaling the heck out of an ad and it just stops performing?

You might be at a really low level of spend, only a couple hundred bucks a day or something like that. You try to kick it up and then it just stops performing all of a sudden.

There’s no way it could be you, right? No, it’s got to be the multi hundred billion dollar ad channel. Couldn’t possibly be your fault. Or the fact that your ad creatives just aren’t good enough.

Okay, if that was the case, the lessons I cover here that make myself and my clients tremendous amounts of money are going to be helpful to you. If you do consider that it could be something that you can influence rather than just blaming it on the ad channel.

All we do around here is talk about hitting million dollar months. We take lessons from the 40 different people that we’ve helped hit a million dollars a month over the last 10 years as a marketing agency. The exclusive and elusive 0.1% of all business owners in America, according to the US Bureau of Labor Statistics, hit 10 million a year. Let alone the big 12 million, the big million dollar months.

We just take all the lessons from those businesses and hand them down to you.

If your business is already generating $100k+ per month, My Inner Circle is where you break through to the next level. Inside, I’ll help you identify and solve the bottlenecks holding you back so you can scale faster and with more clarity.

Why Most Advertising Advice You Are Getting Is from People Who Have Never Scaled Ads

For starters you have to understand this concept.

Really think about who you get advice from. This is really important to understand.

There are personal brands who exist out there that are just straight up copy and paste operations. No original thought. Exclusively existing to be like an unethical money vacuum and just take money out of the economy and put it in their own pockets.

You know how many of those types of personal brands exist? People who literally don’t actually have the experience doing what they claim they teach. Let alone what they claim they originate as thoughts and strategies and tactics for you to turn around and make money with.

Think about that type of person that you might be learning from right now.

On top of that, think about the people out there that you’re learning from that are just handing down beliefs where they’re spending like at most a couple grand a month and they’re giving you perspective on what you should do to advertise.

Because like you’re new to the game, you’re trying to figure things out. So you go ask your buddy who literally spends next to nothing on advertising and barely makes like tens of thousands of dollars a month.

You’re getting advice from that type of person. You’re passively scrolling through groups that are supposed to be full of experts but in reality it’s those exact same two types of people. That’s a majority of the people that are out there teaching stuff.

In comparison, over here we spend low millions of dollars a month on paid advertising between at most 15 different clients and we make a ton of money for those different clients. We do raising capital, meaning there’s 8 million accredited investors in the United States. We had a guy the other day come through a lead form, he sold a company to Barclays for $1.6 billion. He came through one of our raising capital clients funnels.

We get people at a minimum that have hundreds of thousands of dollars that are looking to play that money. We have info product clients that are spending anywhere between hundreds of thousands of dollars a month. Some of them even just by themselves can spend upwards of a million a month in ad spend give or take the month and they’re flipping that into at a minimum, in almost all instances, like 4 to 1, 6 to 1 ROI. Our biggest info client does $5.5 million a month.

Service providers that have high ticket products and services.

On top of that I just really want you to understand there’s a difference between advice and counsel.

I learned this from one of my first mentors, a guy named Greg Reed. Greg said advice is calling your mom and asking her how to make a million dollars. If she doesn’t know how to make a million dollars and never had, well there you go.

There’s so many people on Earth that are going to give you advice. Like the copy and paste personal brands that we just called out.

Counsel is from when people who already have been there, done that at a scaled level, likely well beyond the level that you’re going to try to operate at yourself, come along and hand down pieces of advice to you.

Take this as an example right here. If a guy tells you, hey, I’m spending a couple million dollars a month, here’s some top lessons on how to actually scale the heck out of some ads. If you’re just trying to spend like maybe $100 to $300,000 a month in paid ad spend to hit a million dollars a month, it’s like well that’s great advice to learn from. Because you have to spend a fraction of what I’m talking about I have to spend for this exact same lesson to work.

You see what I mean?

So the very first thing I want to make sure I point out, just make sure you’re actually learning from the right people.

Most of you when you’re sitting there trying to have certainty about what you think you already know about paid advertising, that knowledge comes from the two types of people that I just called out.

You have to be able to acknowledge that you got to drop specific lessons that just don’t make sense. Because all the things I’m about to talk about might contradict the lessons you’ve already learned that you try to claim as truth.

Why You Should Trust What Ad Platforms Tell You Instead of Following Outdated Advertising Advice

These are multi hundred billion dollar companies. Give or take the specific times of year and likely just into the future, these are trillion dollar companies.

Facebook as an example has been worth a trillion dollars in their market cap. Do you know how statistically improbable that is? If it’s a 0.1% probability to hit $10 million a year, what do you think the probability is to be in a market cap worth a trillion dollars?

Google makes a majority of their income from their ad channels. TikTok makes damn near all their money from their ad channels and some affiliate commissions from their TikTok shop platforms now. But still an absolute massive portion of all three of these different ad platforms comes from their paid advertising.

You don’t think they’ve figured it out?

It’s like they can have somebody who knows next to nothing go onto their platform, throw some of the most mediocre creatives ever at the platform to a mediocre looking landing page and still get that person to be able to make some money.

Now here’s something that you have to consider and this is very important to understand.

Even if you can get an offer to like a couple hundred grand a month, that is a tiny blip in the grand scheme of things. It is so small and meaningless in the eyes of these companies. But to you it might mean everything.

So you therefore get this illusion of like, man, I managed to scale my offer to a couple hundred grand a month, I know what I’m talking about.

When in reality, again, every time you go to scale your ads you fail. Because you don’t actually understand what you’re doing. The ad platforms know what they’re doing and they take that set of ad creatives and landing pages that you’ve been feeding them and they get it to work for you. Because that’s how powerful and dominant their specific platform technology is.

Now here’s the good news. The ad channels are really good at finding the right people for your specific offers.

They have on average about 52,000 data points per user. And I always make this joke whenever I bring this up. Hey, do you know 52,000 things about yourself? Of course you don’t. You couldn’t guess 52,000 things about yourself. You probably couldn’t even think of 52,000 random things.

52,000 not just random points either. Highly contextual points that they leverage in their advertising algorithm to dramatically increase the probability that what you feed into the ad channel actually gets in front of the right people and gets it to convert. 

A Consumer Reports investigation using actual Facebook data from 709 users revealed just how deep this surveillance goes—on average, each user had their data sent to Facebook by 2,230 separate companies, with some users tracked by over 7,000 companies feeding the platform information. 

A total of 186,892 companies were identified sending data into Facebook’s ecosystem, which is exactly what gives these platforms the targeting firepower to make even mediocre ad creatives perform when the algorithm is doing its job behind the scenes.

How to Understand In Market and Needs Convinced Audiences Using the Stadium Selling Framework

So what you have to understand is there’s this spectrum.

Let’s use broad targeting as an example because right now it’s very popular. Let’s say that you’re targeting a country that has upwards of like 100 million people that you could potentially get in front of.

There’s a good chance that upwards of 90 plus million of these people are totally worthless for your specific offer. Like they don’t even stand a chance at ever converting on what you do.

And you know Facebook knows that. Google knows that. TikTok knows that.

But then you’ve got this other little sliver. Now that we’re down to 10%, let’s call it 90% of that 10% is again something that you would never ever find a successful conversion with.

So right away out of 100 million people total, we have 90 million that would just never convert. We have 9 million that technically can be broken down into four different categories.

This is the stadium selling logic from Chad Holmes, from his book The Ultimate Selling Machine.

At any given time there’s that 3 to 4% of people that you want to consider in-market. In-market means these are the people who actively identify as I’m a buyer for what that person sells. Simply put they want to give you money because they’re already sold. They don’t need to be sold, they’re already sold. 

Research in buyer intent intelligence confirms this razor-thin window—at any given moment, only about 3% of your total addressable market is actively ready to buy, while the remaining 97% sits at earlier stages of awareness, consideration, or simply isn’t in the market at all. 

This means the true in-market pool is dramatically smaller than most advertisers assume, which is exactly why the ad platforms burn through that tiny pocket of ready buyers so fast at low spend before things start to get expensive.

And then you have these other three categories.

There’s a 30 percentile category that we call the needs convinced category. The needs convinced category can be a great audience that you can tap into but it requires you to communicate completely differently than you would to an in-market demographic.

A big mistake, and I’ll reiterate it here just because we’re talking about it, the needs convinced demographic is a huge mistake to target and go after first.

A needs convinced demographic is to lean into when you’re scaling and you’ve officially run out of in-market customers to actively go after and convert. In-market customers are always more profitable than needs convinced demographic customers. Needs convinced demographic customers are less profitable but still profitable. But again it’s like a scaling tactic, not something you just lean into right away.

Then you got this next 30%. These are people who we want to consider mass market. Mass market is a demographic of people that are probable to buy but it’s going to eat into your profitability a lot.

Whenever I have to get to the point, and this is a rare instance by the way, where I have to get to the point of doing mass marketing for a client, I’m spending as an example like 500 grand to make like a million dollar. Like a 2 to 1 ROAS. Scale erodes your profitability.

If you have to get to the point where you do mass marketing it’s where you’re taking people who don’t actively identify in any way, shape or form as a potential buyer of yours and you end up converting them into a buyer because you have to. You ran out of the needs convinced demographic and you’ve absolutely run out of the in-market demographic too.

And then up here you got this other percentage of people which are just never going to buy. Not even in-market. They’re never ever ever going to buy so you don’t even worry about these folks.

My point is we always want to go after the in-market demographic first.

Why Your Ads Perform Well at Low Spend and Then Stop Working When You Try to Scale Them

Now let’s tie these things together.

When you specifically focus on broad targeting and you don’t do any interest stack, you don’t upload lists or have a warm audience to retarget, or really have any kind of data to leverage to convert people, what you’re going to do is you’re technically and most probable to be communicating to that needs convinced demographic.

Now here’s what the ad channels are really good at and this is the part that you generally fail to understand.

You throw mediocre ad creatives at the ad platforms because you’re not great at advertising. But you think you’re good because you got an offer to a couple hundred K a month and you’re working with trillion dollar companies who have insane technology. It’s like alien level technology that they’re allowing you to utilize and it gives you this illusion that you’re a good advertiser.

When you’re actually a good advertiser you understand all of this thoroughly.

The reality of the situation is that you likely have about a million folks that you actively have a chance with that technically fit into these two demographics.

Now out of those million people there are literally, without exaggeration, probably at most about 3 to 5,000 of them that you could consider in-market for what you do. That are ready to buy what you’ve got. That are going to see your ads and they’re going to convert.

At your initial test budgets that you’re going to throw at it, that’s who the ad platforms are going to go after first. They’re always going to go after those people. That’s how it works.

Once you get out of that specific demographic and you look at the other large quantity of people that you’re going to target, the other 995,000 that you’re going to get in front of, that’s when you start to scale and things become problematic. 

A major study of over 300 advertisers found that nearly 75% of performance marketers have experienced diminishing returns from their social media ad investments, with most reporting that the decline impacts over 30% of their total spend. 

The top reasons? Audience saturation cited by 66% of respondents, ad fatigue at 59%, and algorithm inefficiencies at 47%—all of which kick in precisely when you exhaust that initial small pocket of high-intent buyers and the platform starts reaching into less qualified segments to spend your budget.

Because you shift from hitting this 3 to 5,000 people initially that are converting and that are probable customers that already identify as buyers for your stuff. And then you switch unknowingly.

This is the big thing that you have to understand. When you just start to scale you start to switch. It starts to go from this one pocket of the 3 to 4% into the needs convinced demographic and you don’t know that.

Now here’s where pixel conditioning comes into play.

When you first launch a campaign you got this window. This specific window, this is like the easiest it’s ever going to be. This is the most probable window for when it’s going to get you the results that you’re after.

Once you launch a campaign it’s like boom, you should be printing. You should get the best results you ideally should be getting, the most qualified people through the funnel.

There’s an illusion, like a myth by the way. It’s an old school piece of advice where advertisers used to say it takes like hundreds of conversions or 50 conversions before pixel will start to bias towards who it goes after.

No. That’s not even close to true.

I have a buddy right now, we just launched some test ads for him for his sales agency. My buddy Josh Troy. Josh has an audience demographic he’s going after for this specific set of ads where he’s trying to communicate to info product coaching businesses.

In this specific set of ads the ads talk to that demographic, the targeting is geared towards that demographic, the landing page is geared towards that demographic.

Well one of the first conversions, literally one of the first people on the pixel that counted as a conversion, coincidentally was a raising capital client. It was a big PE company that just got targeted by Josh’s ads. Or maybe somebody in the info space shared it to the guy. We don’t know how it reached him because again none of the targeting was geared towards this.

Either way though this PE company ended up being a great potential deal first of all. But second of all the next four people that came in, so literally the first one came in and then two, three, four, five, the next four people that came in were raising capital, raising capital, raising capital, raising capital.

It doesn’t take hundreds, let alone 50 people to hit a pixel before it starts to bias towards who it goes after next.

It takes literally one.

One unqualified person hitting your pixel can wildly deter the success and the probability of success in the following stages of the campaign cycle. Got to understand that.

You also got to understand signal. When things are going well you can’t just sit back and hope it continues. You have to know how to communicate to this massive technological platform. Budget increases, turning things on and off, decreasing budgets, randomly swapping things in and out, those are all signals.

A good signal you can send to it would be increasing the budget as an example. So you start feeding it a little more budget as it gets more of the right folks through.

Why Minority Hooks Run Out of Buyers When You Scale and You Need to Find the Majority Hook

Now you got to understand hooks.

If you’ve seen my other content before, I’ve talked about things called minority hooks. Minority hooks are like tiny little reasons that people are going to be responsive to your ads. These are things that the broad market as a whole could identify as buyers for your offer. But minority hooks are what a very small fraction of the total audience in itself would identify as a buying motive.

Now this is where most of you fail. You leverage minority hooks.

Look, when you’re at a couple hundred bucks a day you can get away with it because there’s probably a couple hundred bucks a day worth of people in your minority hook.

If I target the sales industry, which is like one out of every eight people on Earth are in sales. If I target real estate, it’s like the same thing, massive industry. If I target investments as a category, the financial services sector, it’s again massive categories.

You could probably get away with spending a couple thousand dollars a day inside of those niches before your minority hooks gas out and they don’t work anymore.

The game of advertising is to find the majority hook.

Now just to be extremely clear with you. I get it. As human beings we do not want to consistently exert effort again and again and again. In an ideal scenario we could kick back, conserve our energy, be somewhat lazy and not have to recreate ads as frequently as what I’m about to tell you you probably need to be doing.

However, the reality of the situation is until you actually find the majority hook you have to consistently test new ad creatives. You have to go out there and film new ads. You have to make new image ads. You have to actively put intentional thought into figuring out what the majority hook is for your specific demographic of in-market customers. 

Research confirms why this constant creative testing isn’t optional—61% of consumers actively avoid brands that show them the same ads repeatedly, and 70% have unsubscribed from brands in the past three months because creative fatigue overwhelmed their feeds. 

Studies show that companies implementing proper creative rotation and frequency management maintain 63-78% higher success rates than those running ads until they’re completely burned out, which is why the businesses that actually scale treat new creative production as a core ongoing system, not a one-time thing you do when you remember.

And it’s very important to take note of what I just said.

Don’t think with the majority hook for your needs convinced demographics until you reach that point of scale. Don’t think with the majority hook for the mass market demographics until you reach that level of scale. Only think with the majority hook for the in-market demographics.

That, my friend, is where you have the highest probability to milk the conversions for a long sustainable time and really get a strong ROI while doing it.

How to Find the Majority Hook That Makes Your Ads Scale Without Hitting a Ceiling

The majority hook is what more than half of your total demographic of in-market customers, needs convinced customers eventually, and mass market customers beyond that, respond to most.

I want to be very clear when I say this. This level of information is literally what creates businesses that are at scale versus what snuffs businesses out that get to a couple hundred grand a month and then cap out.

Yeah sometimes it’s an offer thing. Sometimes it’s a you got the wrong people on the team thing. Sometimes there are just different variables like mass scaled events that are happening that are kind of holding things back.

But almost every instance that I’ve seen in terms of what you’re most in control of is you’ve just never found the majority hook. You found a hook. This is another thing that happens that keeps businesses stalled.

One of my Inner Circle members is a perfect example. When they first came to me they were stuck at 300K a month for three years in a row. Three years in a row. 300K a month.

Why? Well at the end of the day they did a good job at finding a secondary hook. They did a good job at even tapping into a few of these little minority hooks. But they never found the majority hook.

So when they first came in I just did a simple exercise with them where we went through a practice together to extract the majority hook. From his business, from his customers perspective, from his team’s perspective, from his perspective.

And we took all three of these different areas where we looked at what the majority hook could be. We just started developing ad creatives around all the different ideas because that’s the thing. You don’t technically know what the majority hook is until you find it.

When you find it, it’s like the best click through rate you’ve ever had. The best ROI you’ve ever had. The most consistent scaling like it feels like it just never ends. Every time you increase the budget it doesn’t feel like there’s a ceiling in sight.

You just like looking up at the stars.

When you find the majority hook these hooks rip.

That, my friend, is what makes all the difference. You finding the majority hook. Soon as you find the majority hook, game over. You will never ever deal with a situation again where you’re trying to scale and it just taps out. It just won’t happen. That’s how majority hooks work.

Hope you got a lot of value from what we just talked about here today. Stop learning from random copy and paste personal brands and taking advice from people that have just never been there or done that. Makes no sense.

Unlike most courses that stop the moment you buy, my Master Internet Marketing course gets updated every year with fresh cohorts, live Q&A, and the latest strategies that are actually working today. It’s a $5k investment designed to keep paying you back. Apply here.

Go get richer.

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