Hamad Dar's Blog

Facebook LookAlike Marketing Hack That Will Save You Tons of Money

I have yet to meet a performance marketer who has not fallen in love with Facebook’s LookAlike audience feature. If you provide minimum data (100 users) to Facebook about your leads or customers, it can find more potential customers for you that lookalike your seed data.

It doesn’t just sound sexy. It works. It works wonders. It’s the most amazing feature I’ve seen on any ad platform thus far. But you can make it even more amazing by following a simple trick.

If you have worked for even a few weeks in the internet marketing industry, you’d be aware that the advertising marketplaces work on bidding and competition. Since more and more people are trying to reach customers in US, UK, Canada, Australia & Europe, advertising is generally more expensive in these geos compared to Pakistan, India, Philippines, Mexico, Brazil etc.

And to take advantage of this location arbitrage, all you have to do is begin your ad campaign by targeting customers or audience in a cheap geo-location like Pakistan or India. Once you have 100+ leads or customers from one country, you can use that data to create LookAlike audience for any country including the US. This saves you serious costs in data acquisition which is often done by losing money. And you end up with a valuable data for very little ad spend that allows you to scale your campaigns in any country.

To build LookAlike audience, you’ll need a customer file, engagement on your Facebook page including video views, or website data using pixel. To learn about pixels, watch this. To learn how to build custom audience, watch this. And to learn how to create LookAlike audience from your custom audience, watch this.

How VC Funding Can Kill Innovation

A few days ago, I published a blog post about my views on the future of the open internet. The post mostly focused around Twitter which went from being a very open platform to becoming a very centralized platform completely killing 3rd party apps that it stole innovation from. I believe all these decisions were financial and were driven by pressure from the investors.

Twitter & 3rd Party Apps

A lot of features that we see today on Twitter were actually originally developed and created by 3rd party apps. In fact, the first twitter client for both Mac & iPhone were developed by 3rd parties. Some of the clients got acquired by Twitter including TweetDeck & Tweetie. TweetDeck’s support was killed from all platforms except for Mac. Thousands of other apps were ruthlessly killed by discontinuing API supports.

Financial Decisions

Twitter said the decisions were made to discontinue support for “legacy APIs” at the same time acknowledging that no new APIs will be created. In my opinion, the decision was a financial one, and largely driven by what the investors wanted off Twitter.

Fred Wilson, a VC who invested early-stage in Twitter said in a blog post he wrote in 2016

In the early days of Twitter, there were third party applications (Summize for Search, Tweetie for iOS client, etc). These were all built on Twitter’s API. If Twitter had imagined itself as a protocol instead of an application, these third party applications would not have had to compete with (or get bought by) Twitter. But at the time, there wasn’t an obvious way for Twitter’s founders and management team to benefit from a protocol-based business model.
Fred Wilson

Posterous & Twitter

But the damage wasn’t limited to Twitter clients. Twitter acquired and closed other services too.

Posterous was an ultra-simple blogging platform with focus on social media integration and ultra-easy mobile blogging using emails with support for many forms of media.

Posterous grew at a very fast rate and had over 15 million users by 2012. They ran a wide-spread campaign asking users from smaller or dying platforms to import their blogs to this new dead-simple platform. Anyone who did that most likely regretted that decision as Twitter acquired Posterous in May 2012 only to shutdown the blogging platform, and all blogs hosted on it in the next 6 weeks.

All for financial reasons.

It’s Not Twitter

I don’t hate Twitter. I love it. But everything that Twitter has done was done in the financial interest. And somehow I don’t think it is what Jack wanted off Twitter. If he did, he would have had built Twitter like this from ground-up. But he didn’t. Because he had different plans for Twitter. Plans that obviously changed as financial concerns got in to the picture.

And it isn’t Twitter alone. I only expressed my thoughts with reference to Twitter in continuity of my original post about the open internet, which was also written with Twitter in mind.

All large tech companies have killed platforms and services, acquiring only to shutdown, for financial gains.

And while it looks sexy to say that we’re trying to change the world, with decisions like these we’re actually just trying to change our own lives and those of our investors’. As killing innovation isn’t how you change the world.

Why Credit Cards Are Good, And Especially For Internet Marketing

As I’ve written before, real wealth is built when your money is compounded. Similarly, wealth can never be built if you’re in debt because your debt is also compounded. I wanted to begin this blog post by highlighting the obvious and that is that you should never get into any kind of debt including credit card debt.

But the problem is not with your credit card but your spending habits. And with the right spending habits, credit card is your friend and not your foe.

In 2016, when we launched our dropshipping business, we did a massive spend on Facebook advertising. We were maxing out 4 credit cards daily and were clearing the credit card bills daily as well. We could have used our debit cards too, except that they don’t come with loyalty points, cashbacks, airline miles converting into free tickets, free fuel, chargeback privileges, and theft protection.

The key is that you must always use your credit cards like debit cards and never go in debt. You should always clear your bills timely, and never spend money that you don’t have. I advise you to enable “auto-pay” when getting your credit cards and link it to your current/checkings account.

Here’s a proof of me redeeming points for fuel just 2 weeks ago.

Not using credit cards is like leaving free money on the table. And not using them right, is like giving away your future money as well.

The Thing About ‘Zero’

I’ll be honest. This isn’t my thought. It’s something I read somewhere and I couldn’t agree more.

The thing about zero is that it makes you imagine. You can think of all the possibilities. If your startup is doing ‘zero’ dollars in revenue, you can sell dreams to investors. But if it’s doing $1000 or $2000 or $5000 a month in revenue, the investors are going to see, assess and project you based on those numbers.

And so in a way, if you’re seeking to raise investment, zero can be better than doing a small amount of revenue. Which is unfair, right? But that’s the thing about ‘zero’. And it’s also why sometimes you see companies doing ‘zero’ raising arbitrarily wild amount of investments.

The Fundamental Error We Make When Planning For Retirement

The key to retirement is understanding a fundamental concept called savings rate. A lot of people only focus on the savings, and not the savings rate. Let me explain to you why the savings rate is more important than the savings.

A friend of mine was saving $200 every month while he was making north of $1000. A few years later, his business really took off and now he was saving $300 every month while making nearly $3000. While he was making progress in saving more money, he thought that he was going to retire much earlier now. But that isn’t true. He actually delayed his retirement. Sounds strange, right? Let me explain.

His savings rate before was 20% of his income and a few years later despite increasing the savings amount, he reduced his savings rate to 10%. The reason why this matters is because his expenses have gone up considerably. While his savings have gone up by $100 each month, his expenses have gone up by $1900 per month.

Now that his new lifestyle requires much more money to maintain, and assuming that he doesn’t want to downgrade his lifestyle once he retires, his savings will now support him for considerably lesser time period. And hence he will have to work for a longer time period now before he can retire.

Here’s a retirement calculator for people in Pakistan.

The Open Internet That I Envision

Just yesterday, my Twitter account was suspended. It was suspended because Twitter thought I was involved in “artificial account interactions and engagements”. On appeal, my account was reinstated with a warning that “any future violations could lead to a permanent suspension”. But I didn’t engage in the above-mentioned behavior.

Despite no policy violation, my account now has what we marketers call a “strike”. Future strikes mean, I’ll lose my account permanently. And I’ve a serious problem with this kind of policing.

Twitter and other social media gained popularity because they provided a place to speak independently providing censorship-resistant platforms. But that has slowly been taken away in the name of keeping community safe from abuse and misleading information.

My Breadcrumbs

Because of the obvious problems with the internet today, I no longer feel safe hosting my thoughts on other platforms including Facebook & Twitter as I do not see them as a permanent place of storage for my thoughts and information which will eventually be governed by them, can be deleted as per their will, and removed permanently from the internet. Such web-applications pretend to provide a free and impartial place but are no longer censorship-resistant.

I’ve written 22,500 tweets so far over the period of 10 years, all of which can be deleted by the “propriety” centralized automated system removing my breadcrumbs completely.

Internet Is Broken Today

Just last week, founder of twitter Jack acknowledged these problems himself by doing a round of Tweetstorm

Twitter is funding a small independent team of up to five open source architects, engineers, and designers to develop an open and decentralized standard for social media. The goal is for Twitter to ultimately be a client of this standard. ????
— jack ???????????? (@jack) December 11, 2019

First, we’re facing entirely new challenges centralized solutions are struggling to meet. For instance, centralized enforcement of global policy to address abuse and misleading information is unlikely to scale over the long-term without placing far too much burden on people.
— jack ???????????? (@jack) December 11, 2019

Third, existing social media incentives frequently lead to attention being focused on content and conversation that sparks controversy and outrage, rather than conversation which informs and promotes health.
— jack ???????????? (@jack) December 11, 2019

Finally, new technologies have emerged to make a decentralized approach more viable. Blockchain points to a series of decentralized solutions for open and durable hosting, governance, and even monetization. Much work to be done, but the fundamentals are there.
— jack ???????????? (@jack) December 11, 2019

As mentioned by Jack, social media today no longer serves as a place to simply host content, instead it has become recommendation engine of sorts where content competes for attention also incentivizing content creators to create attention-grabbing content which can often be controversial, gruesome or simply negative.

This sort of recommendation engine is not just limited to social media. It has also taken over emails. Gmail now powers over 50% emails in existence, and controls/prohibits 97% of emails from reaching users’ primary inbox using similar recommendation engine approach.

The problem with these propriety recommendation engines is that you can’t view the hosted content in a different manner using alternatives yet as mentioned by Jack, but it could be possible if social media was a protocol, and Twitter one of the clients with one of the available recommendations engine. The consumer of content could pick and choose any recommendation engine he preferred.

The Open Internet

I read a very interesting post published by Albert Wenger, explaining why finally the time is now for open protocols. The traditional caveat with open protocols (like HTTP, SMTP etc) has been that there wasn’t a big enough financial incentive associated with creating, contributing to or maintaining an open protocol.

This can finally be solved with token-economics as mentioned by Jack as well in his tweet.

An excerpt from Albert’s blog explains how cryptographic tokens can rescue the internet

Now, however, we have a new way of providing incentives for the creation of protocols and for governing their evolution. I am talking about cryptographic tokens. You can think of these like the tokens you might buy at a fair to get on a ride: different operators can have their own rides and set their own price in terms of tokens. You only need to buy tokens once (in exchange for fiat currency) and then can use them throughout the fair. With blockchains we now have a way of issuing and redeeming these tokens digitally (the underlying blockchain can be Bitcoin or Ethereum or possibly its own as in the case of Steemit).
A for profit company can now create a new protocol and create value for itself (and its investors) by retaining some of the tokens. If the protocol becomes widely used, the value of the tokens will increase. For instance, think of a decentralized storage service (a la Amazon’s S3). Anyone can implement the storage protocol in whatever language they want to as long as they meet the protocol spec. They can then get paid in the relevant storage tokens. The original creator of the protocol will make money to the extent that it is adopted and to the degree they have retained some of the tokens (so they can sell them at a higher price later on). This is not hypothetical as there are a variety of such protocols out there, including Storj, SIA and Filecoin.
I can’t emphasize enough how radical a change this is to the past. Historically the only way to make money from a protocol was to create software that implemented it and then try to sell this software (or more recently to host it). Since the creation of this software (e.g. web server/browser) is a separate act many of the researchers who have created some of the most successful protocols in use today have had little direct financial gain. With tokens, however, the creators of a protocol can “monetize” it directly and will in fact benefit more as others build businesses on top of that protocol.

With newfound financial incentives now available to create open protocols, the stage is finally set to make pave for the open and decentralized internet.

Losing Bids And Winning Campaigns

Every performance marketer has different techniques to run their ads. Most professional marketers use a wide range of techniques in order to scale depending on the goals of the campaign. Losing bids is one of the ways to run a profitable campaign.

Losing bid sounds like you’re losing something. But often that isn’t how it works. In fact, losing bid actually means you’re not willing to pay the top dollar for the eyeball. Instead you will bid on whatever audience is left after the auction competition.

This works particularly well for campaigns on a budget. This also works well for campaigns that are not led by the sense of urgency. But it can even work well for campaigns that you really want to scale quickly.

You can run these kind of campaigns by setting a very small daily budget if you are doing automatic bids. Sometimes I run ad-sets for as low as Rs 125 (less than $1) per day. As Facebook is going to evenly distribute your daily budget in a 24 hour period, you will automatically get a lower bid. You can also run such a campaign by setting a low manual-bid with a higher daily budget, which the ad-set may or may not consume.

It is true that you will be getting lesser impressions, clicks or sales compared to higher bids or budgets but at a lower cost which is great when you don’t have the urgency to get your lead or sale, and can wait a few days.

But you can even scale such kinds of campaigns using horizontal scaling methods. To scale, you can duplicate your ad-sets with different targeting for each ad-set while maintaining low budget per ad-set.

We’ve run campaigns with $1000/day budget by using 50 ad-sets spending $20/day each. We obviously avoided paying the premium for the bids as well as were able to spend a large amount of money daily on our campaign reaching the scale we intended.

This kind of strategy definitely works and I encourage you try it if you haven’t already.

Will Over Skill

I’ve met many people in my life who’ve done well for themselves despite not having the top skill. And I’ve met many people in my life who are struggling despite being very good at what they do. I think this is because of the phenomenon that I term as “will over skill”.

I’m a a staunch believer that most businesses just need to be run long enough for them to succeed. There’s no short cut to compounding. Most skills can not outrun what compounding growth does to your business. If you grow your business on a very small scale but do it year after year, you’ll have a very large business at some point.

And so if you’re losing will despite having skill, you’re not going to make it. But if you have will despite not having skill, you’re more likely to get somewhere.

The skills would either be acquired at some point, or hired if they can’t be acquired.

You Always Have Two Options; Retention Vs Acquisition

I feel a lot of founders, especially when they are running their first company, don’t have their priorities straight when growing a company.

Let me start with an example. When losing weight, you create a calorie deficit. You have two options to do it; you can either burn more calories or intake lesser calories. For wealth generation, you can increase your earnings or reduce your expenses. And for your business growth, you can increase your users, or reduce the number by which they are leaving your business.

Most first-time founders focus on increasing the user-base as a way to grow their business. It shouldn’t always be the top priority. In fact, I believe the top priority should be to reduce churn. Let me give you another example to explain what I mean.

Suppose your business generates $100,000 in annual recurring revenue and your churn rate is 50%. It means every year your business will need to replace $50,000 worth of customers in order to achieve the growth rate of 0%.

A lot of businesses continue to focus to add more users. They would focus to add 50% more users every year. They would spend a lot of money for this much customer acquisition and in the end achieve a 0% growth rate.

The right, easier and cost-free strategy requires working on cutting down the churn rate. If you’re able to bring the churn rate down to 25%, you only need to add 30% more users in order to see a 5% growth. You would spend lesser money on customer acquisition and will eventually achieve a steady growth rate.

We always have two options, and we often focus on the wrong one.