Scott Rewick discusses with Philipp Schoeffmann the secrets to Facebook compliant scaling and more at Affiliate World Europe 2018 in Barcelona.

Interview with Scott Rewick| Co-founder & President, Lexicon Digital Media Group

By Philipp Schoeffmann

Interview Transcript

Phil:
Can you share some highlights, for example, you’ve created one of the first affiliate networks, for example. Is that true?
Scott:
Yeah. You know, back in the day there was Commission Junction, there was, what was it, the big one? I can’t think of it. MetaReward was one of the first affiliate networks out there. We started in 1999. There were very, very few of us around and we hit upon this idea of reaching out to this army of 16-17 year old kids that were doing, kind of the first version of media buying and we said, and you know back then it was the credit card companies that came on for the first time and offered commissions to get a new card. So yeah, I mean we had no idea we were walking into this world but we just started doing it really, to be honest.
Phil:
Fantastic, let’s fast-forward to today.
Scott:
Sure.

Facebook compliant Scaling: How To Scale To 150k Per Day Spend On Facebook

Phil:
What you just shared onstage is actually about how to scale to 150k per day spend on social, right?
Scott:
Facebook.
Phil:
How do you do it?
Scott:
So you know, look, I’ve been doing this a long time. I want to make businesses stay around. We work so hard on these businesses. My partner feels the same way. So we really early on decided that we were going to be one of the facebook compliant guys because if you’re facebook compliant, and if you can show Facebook you’re compliant as they whack the heads of all these other guys who are non-compliant, turns out it’s actually easier for you because you’re in a very few group of people that can buy advertising on Facebook successfully.
Phil:
Alright. Okay, definitely true. If you look more towards tactics, like your main takeaways that you also shared onstage. Can you give us the top three?

Offence and Defence

Scott:
I break it down two ways. Offence and defence. Offence is really your ability to create highly converting offers and apply that over a wide range of media. Defence is everything that is necessary to support that. And so often times offence gets most of the attention right because it’s exciting to buy media. It’s exciting to do all that stuff. But really, my argument is the money is sort of made on everything that you don’t see. And that’s things like building out customer service, compliance. It’s having call centers integrated, postcards, it’s learning how to have a multi-
Phil:
Postcards?

Being An Online Marketer

Scott:
Yeah. Like, stupid right? I’m an online marketer but turns out people also get postcards and like to do stuff off of postcards.
Phil:
Actually it’s getting better and better in terms of conversions because people don’t expect it. Especially here..
Scott:
If you consider yourself a marketer you have to be willing to accept any form of marketing and so, no longer can you say, “I’m an online marketer,” it’s very, very limiting. So really the purpose of my talk was to over-emphasise the idea that if you build up the backend piece of it. So it’s, having multiple merchant accounts. It’s having a backup call center. It’s a customer service team that can be spun up at a moments notice if you go from spending 10k to 100k. If you go from say, getting 100 calls a day to 1,000 calls a day, if you don’t do that, 900 calls will go unanswered. You’ll get very upset people, your merchant account will blow up and they’ll hold your money. And nobody wants that. So I really am making a point to say that the offence is great but really the money is meant on the defence. That’s where you make all your money. That’s where you keep it.

Building The Defence

Phil:
Okay, that’s pretty amazing. So share some more about the defence that you’re building.
Scott:
Well look, I mean, it was not natural to me. I’ve been a CEO of a bunch of companies. My partner, Chris is a very, very good media buyer. So we got together. We kind of made the realisation that we both love to kick doors down and create messes but we had no one to clean it up. And if you do that too often you get a lot of problems behind you. So I took the approach and said, “Look, for me I’m going to do everything that you don’t want to do. So I’m going to create this perfect world where all you do is buy media and what do you hate to do?”Oh I hate to do taxes, accounting, finance, HR.” And so I said, “Okay,” —
Phil:
I do actually, I do.
Scott:
You should talk to me afterwards.
Phil:
Not HR, but the rest. Finance is okay if it shows profit.
Scott:
But I became obsessed with eliminating single points of failure. I became obsessed with multiple systems, backup systems because I knew he and I both had experience scaling businesses but it inevitably becomes a point when ship breaks.

The Back Up Plans

And when ship breaks, that’s the very, very critical point to say, “Are you going to collapse?” which again, this landscape is littered with large graveyards of companies that didn’t play defence. Or do you have backup systems? And our road has not been easy by any stretch. We’ve had these ups, we’ve had these downs. Three months ago we got whacked by Facebook pretty hard, we’re building our way back up. So I’m obsessed with like when the shit hits the fan. Are you either, out of business or do you have backup plans? And so that’s really become kind of like my focus, which again makes me really boring at dinner parties. Obscenely boring. I’m obsessed with, “Can I answer an email in 20 minutes rather than 10 minutes?” Like, that’s — or like, you know, that’s interesting to me.

Failure Is Often Times The Success

Phil:
I’ll challenge you on that one. So maybe you can share like, one of your biggest success stories and one of your biggest failures.
Scott:
Well, let’s see. I think failure is often times the success. Prior to starting this company, I ran a small public company. I was CEO of a public company that ultimately imploded and failed. It was one of my first failures in this space. I have what I think is, well it should be modest but a pretty good track record of starting companies and this was the first time I really fell flat on my ass and failed. And it took me a year to recover. And I was like, “Aw man, I thought it was like super awesome.” “No, you suck actually.“Phil:You mentioned ego before?

Learn From Failures and Keep Trying

Scott:
Yeah, yeah. It was horrible, but ultimately, if you can lick your wounds and think about what to do differently next time it makes the world of difference. So, I would say failure is probably my biggest success story. In terms of learning the lessons that it presents to you and kind of trying it again. So that would be huge. I mean, even just more recent with failure, we found ourselves in a position with Facebook to be reliant on them for 90% of our traffic. Back in January when things blew up for us, all roads were Facebook. And we knew in the back of our head that it was bad idea because Facebook can be a very cruel, cruel woman. She can cut you off at the knees whenever she feels like it and no shits are given. Like, zero shits are given. So we faced that three months ago when ad account after ad account would get shut down and we had no idea why.
Phil:
Right.
Scott:
So, to build a team that can look at the problem, assess it, make some theories, hypothesis about what to do differently, implement that and come back is really a testament to what we’ve built, in my opinion. In terms of you’re building to be resilient in a space where you can have a lot of traffic and no traffic almost overnight. So that’s probably a pretty cool thing that we’ve done.
Phil:
So did you actually diversify in terms of traffic sources now? Or are you still putting most of your..

Focus On Building Your Company

Scott:
You know, we did. I mean, so plan B would be, “Okay Facebook is giving us a hard time, there is search, there is native, there is first-party mail, third-party mail.” And so, we certainly went down that road and we’ve got good businesses in that area. But ultimately I think we felt like once the dust settled and they took out the people they didn’t like, how could we be viewed as one of the good guys? How could we look at us and say, “This is a legitimate company, NativePath has a real brand, offering real products with real customers.” And so, the focus then became about building that company. That once the dust settled, we could continue to advertise on Facebook, which we do, which we do successfully. So I’m pretty stoked about that.

Newbie Tip: Know How To Play The Game

Phil:
I agree on that. So speaking about age and experience. A lot of new people actually enter this industry, and many of those actually come to Affiliate World, which is amazing. So let’s offer some value to those people as well and help them get started. What do you think, a new person entering affiliate marketing and all these different niches, where should this person go and what should this person focus on?
Scott:
Well I think you learn how to play the game. Well first off, you have to know what game you’re playing right. A lot of times affiliates that start off as affiliates realise that the real value might be in owning a product. it’s not being an affiliate. The product owners are always envious of the affiliates because they have the traffic.

Understand The Landscape And The Language

So I think if you’re starting out for the first time, know what game you’re playing or you want to play. Be willing to kind of have that shift and also I think, understand the landscape and the language. Being data-focused, one of the biggest things I tell people is, you know look, you can get a C in math, that’s fine or you failed math but you’ve got to know some basic math about this stuff. It really is not that difficult to learn that. So I think it’s knowing what game you want to play, understanding the landscape, who the players are, and learning how to speak the language. What’s AOV? What’s lifetime value? You know, all these things you’ve got to learn to play the game and once you have that basics I think then you can kind of niche yourself off and say, “Well I’m really interested in health and wellness,” or “I love the mortgage industry,” or whatever it is, but learn how to play the game before you jump in is my biggest advice to someone who’s starting out brand new.
Phil:
Cool, perfect. Well I think this conference here is a good place to get started.
Scott:
For sure, yeah.
Phil:
Or leverage what you’ve already found out. So thanks for being here.
Scott:
No problem, it was my pleasure. Thank you for having me.