Media buying. The next 5 years is the best time in history for you to make this happen. Learn “3 Massive Market Shifts” that have taken the online marketing world by storm over the last 2 years. For years, the tech, tools, and traffic partners have been in an uphill battle that was not for the faint of heart, this has all changed.
Now you can compete as a single entrepreneur that would have taken the work of 50 or a 100 people. Come learn some strategies we’re using at A4D that I believe if you follow, can help you start building a $50,000,000+ business today!
P.S. Using the skills you already have as a great media buyer and just a small tweak in strategy.
Speech by Jason Akatiff | CEO & Founder, A4D
Jason Akatiff Speech Transcript
How’s everybody doing today?
Come on, I need a response. How are we doing?
Liking the speakers? I think everybody’s been great. Trey Lewellen, I’ve known him for a couple of years now. I met him over at the Canton Fair.
And, man, the stuff that he’s doing in that business is pretty amazing. Also, I am so impressed by what the Stack That Money crew has put together in this.
I remember when Stack That Money first started, I was one of the first members. Lorenzo had me join over in that Forum.
And, just to watch the amazing things that they’ve built out of that community and the amazing things that they’ve done for the affiliate world really, really impressed me.
So I’m here to talk today — well, actually before I start, could I see a show of hands?
How many people know who I am? Not that many.
I’m here to talk today a little bit about how to take affiliate business, an affiliate mindset, and I know this because I started as an affiliate.
I’ll talk about that a little bit later.
But, oftentimes, when you’re an affiliate and when you start as an affiliate, all you’re looking at is you’re looking at “Okay, there’s this offer, I’m just trying to make some money on this offer.”
Spending $1, Making $2
And you start to build a very cashflow-driven mindset. That is “How do I spend $1 and make $2?”
What I’m here to talk to you about today is, how do you take that same mindset. Still, think about spending $1 and making $2.
But you also create and you’re focused on a longer-term goal and a longer-term vision.
There’s a misnomer that, in order to build a large business you need to lose money. You need to raise investment capital.
And, I think this is a thing that’s propagated by the venture capital world. I totally believe it’s not true.
I believe just planning properly from the start of where you’re gonna go. Then thinking about “How can I take the first steps into this thing and make money each and every step of the way?”
So, that’s what we’re going to talk about today.
Why Build A Business That Only Makes Cash
And, if we look at this, and if you start thinking about this from the perspective of a cash flow business, and if you could take that same cash flow business in 5 years from now, you could get anywhere from 8 to 12x on EBITDA.
Which is where I’m hearing stuff is trading at, from private equity and venture capital type people that are starting to become interested in our space.
Short Term Quick Cash Affiliate Mindset
So if we look at this, we have, year 1, year 2, year 3. And, each year, we get better, right?
Our first year, we make a $100,000. Our last year, we end up at $2.5 million. And, if we add all that up, it is $4.35 million.
If we do that again with a longer-term vision created, we get the same $4.35. But, we also get a multiple on year 5, which is our biggest year.
You know, that might be anywhere from 8 to, like I said, 8 – 15 times, is kind of what I’m hearing. I hear 12 sometimes. I’m hearing different stuff.
So, you could do the exact same amount of work and essentially create $34 million in wealth, potentially, doing the exact same thing.
But just doing it with a good plan, a good strategy from the start.
What we’re gonna discuss today is “Why now? What’s changed in recent years?”
How to build this? How you can plan even smarter from the front end? And then, how you can start?
I’m gonna talk about if you run a media buying business, how you can start to think about building some of the things that you need in order to be sellable into that media buying business.
Who Is Jason Akatiff
About me, I was an affiliate.
I don’t know how many people are affiliates or merchant or network people in this room, but I started as an affiliate back in 2003.
I was into black hat SEO. So that essentially means I would reverse-engineer Google’s and Bing’s algorithms.
And then I’d build automation. I taught myself to code. And we’d build automation in order to capitalise on that, I guess is what you could say.
I did media buying. And I put growth hacking up there because that’s what the venture world likes to hear at this point.
And then around 2008, I started training a bunch of other people to work with me to do media buying. In doing that, I set up a network platform.
At that time, I was a moderator on what used to be the largest affiliate forum, which was called Wicked Fire,
And a bunch of people got wind that I had an affiliate platform. And I’d been helping a bunch of people. Next thing you knew, I had about 2,000 media buyers sign up on my platform.
My history is all in media buying.
And you can see there in 2012, I got sued by the Federal Trade Commission.
We did about $400+ million, between $400 and $500 million in nutra rebills, nutra sales, back when there was no cloaking.
There was none of that type of stuff.
The advertorials had just come out and blogged landers and all that kind of stuff. And, we really did some huge numbers there.
So after 2012, I had to reinvent the business. Then, that kind of shows you some stuff there. Now, we’re getting heavily into e-commerce.
There’s that slide there, a few pictures are just my family and my kids.
Why Now, What’s Changed?
So what’s changed?
I think there are a few things that are going on right now that are really starting to make a difference.
Number one, how many of you saw this up there? I thought that the McDonald’s story that, so McDonald’s was with an agency called Leo Burnett for 25 years.
McDonald’s spends $1 billion a year in media and ad spend and creative and all that kind of stuff.
They were Leo Burnett for 25 years. And, McDonald’s basically went to Leo Burnett and they said, “Hey, we want you to go on performance and you can participate on performance.”
Leo Burnett said, “No, we don’t want your billion dollars’ worth of business.”
And my guess is they didn’t think that they could do it. So then, they went and that business moved over to Omniture.
We’ve also seen if you’ve been following this at all, Matomy going public, XL marketing raised a couple of rounds of funding. I think, over $170 million in total funding at this point.
So, you know, the venture world is starting to look at the white hat and the cleaner businesses that were involved in. There’s also another really interesting thing that’s going on that I think is going to shape this.
We all are familiar with, at least if you’re from America, and it may be going on here too.
In America, all the large retailers are starting to go away.
So that’s JC Penney’s, Sears, Macy’s, Big box stores are shutting down that was really big just 5, 10 years ago.
The home run place is, you’ve got Best Buy starting to shrink.
Shift Online
Obviously, retail is inevitably never gonna go away totally, but what is gonna happen, in my opinion, is it’s gonna continue to shift online.
And, all these people, they still need to sell their products. They still have to sell their products to consumers or they’re gonna go out of business.
So when they come online, they’ve got a couple of ways to do that.
They can sell through Amazon, but then Amazon owns them, right? They have no way to build their brand, they have no way to you represent themselves in any way special than any other Amazon-commoditised reseller.
They’re gonna want to build all of their own stores or go through other retailers that allow them to have this experience online.
And I think, right now, it’s 8-12 time multiples. I think what we’re gonna see in somewhere between 5 and 10 years, my guess is we’re gonna see 20-30 time multiples on any business that is good at driving consumers to purchases.
Some of the thoughts on that is, “How are we gonna build enterprise value for investors?”
So how are we gonna do this and what are investors gonna want to look at, or potential purchasers?
Right now, I don’t know how much you know about exits and stuff like that. Right now, private equity is really interested in our space because of the growth curve.
I think strategic still or not, so brands are not buying up a lot of performance-based marketing companies at this point.
You don’t have strategic and/or agencies really buying up performance-based marketing companies but I think we are gonna see it come 5 or 10 years, between 5 and 10 years window,
How Do We Build A Business
You’re gonna see real competitiveness. And the prices of those businesses go way up.
So how do we build a business? How do we build a platform?
Everybody wants to buy something that they can apply more people to, apply more capital to, and then it can accelerate whatever they’re doing, potentially.
What’s Valuable
So, things to think about the inside of your business that is valuable. Number one is data.
So data can be everything from records to, do you have a massive amount of cookies for retargeting pixels? Do you have a lot of lookalike campaigns and custom audiences and Facebook?
Data has all different facets but the more data that you have, the more valuable that your company is.
So, Fluent sold for over $100 million, they’re a co-reg company. They potentially got bought specifically for the data because they got bought by, I believe, an ad network or something like that.
Data is number one. Systems and processes is number two. I’m just gonna run through these pretty quickly.
Smart people, just an interesting little side note, I invest in start-ups.
If you have, for every investor or every engineer you have inside of a start-up. So if you’ve got 10 engineers, they’re going for $1 million ahead.
So if the company’s not even profitable, Google or somebody will potentially buy you at $1 million dollars ahead if you have 30 engineers that are that are high-quality engineers.
Smart people on your team, a technology of any sort, any kind of automation or technology or integrations with other stuff algorithms, you know, decision-making stuff.
Relationships with vendors, brands, whoever it might be.
Brand equity, do you have a brand name in the space right? Let’s see, and then, there’s a couple that helps you build moats, I put on here.
What’s Not Valuable
Intellectual property and hard assets of any sort. Now, what’s not valuable? Cloaking. Nobody’s interested in a business that’s doing cloaking.
Nobody’s interested in any kind of scams or false claims, instability, churn and burn.
People want to buy companies that they can take on, they feel good about.
When they take a look at you as an organization, this is another little thing that I’ve heard at this show, because two companies I know have sold in this space, recently.
So what they were saying, just a little side note, they were saying that they got a lower valuation on their companies because they were not based in the United States.
Just something to consider as you’re looking to form an entity, potentially having your main, your company domiciled in Delaware, if you ever plan on potentially exiting the company and looking for a buyer.
Anybody from the United States and I think anybody international, would look at a United States company more favourable as well, just because of all the laws and just terrible crap we have to deal with.
How do you plan even smarter? What you want to do is, you want to actually spend a little time before you act. Before you start to do something right.
Flavors of the Week
So I’ve been in this business for quite a long time now. And there’s been many flavors of the week.
It’s like every affiliate is on CPI. Then they then they’re moving to PPV. And then they’re moving to Mobile Pops, Content Arbitrage, E-commerce.
Who knows what the next thing is gonna be?
But when these things come along, you need to take a look at them. You need to take a look at them and you need to ask yourself, “Is this thing gonna be here in five years? Would somebody want to buy whatever this thing is?”
And just because somebody told you something is gonna make money and it’s making money right now, really ask yourself, “Can I build this into something that I can get a multiple on?”
I put this up here because I remind myself of this all the time. The further up you get in this business, the more people you know, the more opportunities show up in order for you to make millions of dollars very quickly.
It’s like oh, there’s a there’s a glitch in this ad network and you can go make millions of dollars really quickly. But, should you do that right?
And just because you can, doesn’t mean you should.
Fyre Festival
Anybody know what this little symbol up here is? That’s the Fyre Festival.
They flew all these people to an island. And they took all their money. They lost $7 million that they were supposed to be on a luxury vacation.
And they wound up in FEMA tents on some island in the Caribbean.
Pretty bad deal.
Day-to-day and Long-term Plans
So what you want to think about is, you’ve got your long-term plans and then you’ve got your day-to-day.
And as affiliates, we typically start in the day-to-day right.
Somebody gives us a campaign, we try and make some ads and we put them up. It doesn’t work, we iterate on the process. Then we just get into what we call the grind.
Well, take some time at least once a month or every two weeks, if you can. And then start going up these different levels.
Where do I want to be in 5 years from now? Where do I want to be in 10 years from now?
Yeah, I can make money today. I can always make money today. But what am I building towards?
So then you’ve got these basically these different levels.
So, as you create a vision of where you want to be in that 5-year goal, then you start to build strategies and tactics.
And strategies might be, I want to get into the CPI space because I see the future and I think I can build something that’s unique there that’s sellable.
The tactics are more specific.
So as you go into Facebook, this is specifically how you bid on Facebook today. At least for us, we start our campaigns on auto, yada, yada yada.
Determine a Vision and Goal
As you build these goals out, you want to make SMART goals always.
This is just something I adhere to. If you don’t use this strategy for making goals, I highly suggest to and invite you to try it out.
Specific, Measurable, Achievable, Realistic, Time-based goals.
So as we look at that, a goal you might have, and this is how it might look, “I’d like to build a company that does $100 million in revenue, 20% margin with no more than 20 people in 5 years. And I’d like it to not require me to run, operate or grow.”
There’s nothing here about a product, there’s nothing here about any of that stuff, right?
Build A Real Business
Once you build this vision, this 5-year plan for yourself of what you want to create, the other thing that I would probably add to this is I want to make money from day one.
I don’t want to lose money on my operation. I want to build a real business not a VC funded operation.
For me, that’s how I have to operate.
There’s another thing that would go into my goals is, I need to see it work quickly. I’m not going to spend 2 years building a SaaS platform, which I’ve built too. I’m not gonna spend 2 years doing that.
Set this big goal. And then what you do is, as you have that big goal or that big vision up there, then everything that comes into your life, analyse it.
Whether it plays into that larger vision or not. Think about that for a second.
I judge everything that shows up in my world. It is like, “Dude we’re killing it on this.” It is like, “Okay great.”
Does that make sense to go there? Because if it doesn’t make sense to go there, then I’m gonna have to pass on it.
Because there are more and more opportunities show up all the time.
Failure, Success
I like this slide. It says, “It’s easy, you just have to…”
As affiliates, we do so much stuff and we’re like, “Oh you just throw up a website and then you send some traffic to it and it just works and whatever.”
When you get deep into any of these things, when this guy says to you, “Hey, I made a million dollars last year doing this thing.”
And you think about it, you’re like all I have to do is, blah.
This is what it almost always ends up like. This is the reality.
You get into the weeds. And you got to iterate and figure stuff out. Then you find out that, oh it’s actually, I’ve talked to a bunch of people here about white hat campaigns and stuff like that.
I was talking with somebody last night and they’re like, I’m building out a white hat campaign and it was around, I believe it was around a skin care product.
And I was like, Facebook, overall, doesn’t like skin care products because of what the affiliates have done to them on skin care products. So, does it make sense to be involved in a vertical that you start out with Facebook not wanting it?
You having to fight an uphill battle in order to do that? And my answer is no.
Run On Every Single Traffic Source
He asked me, “What is the first thing that you look at when anything shows up into your world? Whether it’s a product, whether it’s an opportunity?”
And the first thing that I look at is can I run it on every single traffic source, compliantly?
That’s the very first question I ask.
Because if I can’t do that then I’m building everything on a sand foundation at the end of the day.
Analysing Strategic Opportunities
Few strategic questions that you can ask yourself as you look at these opportunities.
Will this thing still be here in five years?
Will it add asset value to my company besides cash? Some of that’s earlier stuff. Am I gonna get a ton of data, right? Like I build a co-reg company out. I’ve got 10 million records and I’ve got way more cookies than that on users and I’ve got profiles and that’s really, really valuable to companies.
If I’m 1% of the market, will that get me to my number that’s in that goal or it’s in that vision? If I’m 1% of the market. Because that’s a market that I want to be in. If all I have to capture is 1% of it, then I feel pretty good about that opportunity.
Can you turn this into a system, hire VA’s or staff to handle most of the work? I’ve seen people try and scale businesses and they try and scale them with unicorns. That is, people that are the best people.
And most businesses, you don’t want to need to you have unicorns to scale.
So, if you think about media buying business, if you need the best media buyers in order to scale your business that’s not a very good operation because those people are not easy to retain.
They’re super expensive. You need a couple of really good media buyers including yourself. And then you need to build out a whole operational team to hang in silo, a lot of the component parts of that.
That’s what we do. We have a whole media team and a whole creative team and everything’s kind of silo-ed.
So everybody can really focus it being amazing on their one simple part.
How To Start Pivoting Your Business
So, starting to pivot your business. Start to think about just some of the building blocks. Some of the building blocks that you can work with what you have now.
I put up here just a media buying company. So, white hat, sustainable offers, stuff that Facebook and Google and Taboola and everybody will call you and ask for more of your business, not try and make you go away.
Build relationships with those ad networks. Build relationships with those reps, so you can get in the special programs on the front end.
Facebook and all these guys, they have all kinds of special programs that they roll out. And if you’re in their good graces, some of those programs create tremendous ROIs.
On Yahoo, when Yahoo Gemini, before it was Yahoo Gemini, they opened up the feed to very specific people and we were seeing 1,000% ROIs on a 100% white hat campaigns in that Yahoo news feed, which has now become Gemini.
I used to have to buy it through their right media platform but you don’t have to anymore.
Systems for Choosing Offers
So, when you look at an offer, is it sustainable? Is it clean? Is it gonna add asset value to my business?
The other thing I like to look at in an offer is like, “Alright, let’s say I go down the road of this offer and I’m really successful at it. Could I become an advertiser to do the same thing?”
Would that be interesting to me, if that’s part of your part of your path to your vision? Could I become an advertiser or a merchant that does something like this offer?
So you’re thinking one or two steps past, just can I run this campaign and make money on it?
Let’s see.
Repeatable processes, that is, processes that happen over and over again.
Scales with average people. That’s what I talked about a little bit earlier.
KPIs to measure performance. So, you know in any system, you need measurements. What is your batting average on your on your creative assets?
Are you tracking CTRs? Are you tracking the CPMs of the positive engagement on Facebook?
And then, how formulaic can you make that? So you can do it over and over again, and then how do you take that and take average people, get them trained up to be able to handle and just follow those systems?
Hire Your First Employee
I put up a post on my blog the other day that was like you hire your first employee.
When you hire your first employee, most people hire a media buyer. They hire them in and then they think that they’ve been learning and just doing this stuff themselves.
And they think that this person that they’re gonna hire in is them.
But employees are not entrepreneurs. Employees are not affiliates. They’re a different kind of people.
So you need to think, “What is this person, how am I going to equip them in order to be successful?”
As you go hire that person, and the way you do that is systems and measurements where they know, “Oh if I hit this number or if I hit this CTR or if I hit this, another interesting metric we track.”
On video, we tracked that 10-second metric. So our KPIs for our creative department is we’re trying to hit a 50% on Facebook video ads.
We’re trying to hit a 50% metric on people that are retained up to 10 seconds. That’s their goal, that’s how they get bonuses.
So we built really, really detailed systems that we bring people in. We put them into systems and strategies and then we scale that way.
Do I Want To Do This
If I had to do it all over again, and there’s a little story here. As I mentioned. I got sued by the FTC. We did big numbers and whatnot.
At the end of that, I could have probably gone offshore and hit in and done all that debt stuff, but for me I was just like, “Maybe, I’ll just get out of the industry. Maybe I won’t work in affiliate marketing anymore.”
I was kind of jaded and beat up. They sued me. I only had to pay him $1 million so it wasn’t that big of a deal.
But it was just like, “Do I even want to do this?”
And then, I pulled out a nutra, which was, I say 90-95% plus of our business.
Had $17,000 a day in overhead. Two offices, one in San Diego, one in New York. And I was like, “Well, maybe I’ll just sell the company and whatnot.”
Then, I looked at it and I realised I didn’t have anything sellable. There was nothing sellable inside of the organization.
And that’s kind of what sent me on this journey. This journey that is how do I go build something sellable and sustainable?
I may never sell the company. I probably will and I definitely plan to. But even if you never plan on selling, always build something sellable because you may change your mind at some point.
And you want to make sure you’re building something of value.
So there’s a lot of stuff. As I mentioned, changes in the investment space. Planning smarter and attracting the right investors and build a strong foundation.
Stack That Money
There’s gonna be a lot of, you know, I only had so much time to talk about this today. And for those of you that are interested in more of the specifics in the how of how we’re going about this and how we’re doing this, Stack That Money has an education side of their business.
It’s called iStack.
If you’re not aware, iStack, they’re putting on a full-day workshop. I’m doing some speaking there tomorrow.
If you want to learn some more about how I’m doing this and how I’m going about it, some more of that detailed thought processes on our systems and stuff like that, I invite you to come to the iStack events.
If you’re not signed up, there’s a booth right outside the front door there.
But thank you so much, everybody. I really appreciate you having me.
And again, I’m not here for any other reason.
I own A4D, we’re a CPA network. I assume you’ll find us. We’ve got a booth here. I assume that you know we have a tremendous reputation in this space.
But the main reason that I’m on the stage is I really want to communicate with the audience here and in the community. And I love to hear the stories.
I’ve had a couple of them at this show that, “Hey, you know what Jason, you gave that presentation and it kind of stuck with me and here’s what I went and built.”
I got a minute and a half more here.
Learning Affiliate Marketing
I had a story. I went to Summit at Sea and this guy came and he sat down next to me and he’s like, “Jason, I learned affiliate marketing reading your blog and then being on the A4D network.”
And he’s like, I took that knowledge and I’ve built the second largest direct-to-consumer mattress company in the US.
Just sat down next to me and he’s like, “I just wanted to thank you for really opening my eyes to this space.”
I had some more of those some more of those today and yesterday as well. But I really hope you take some of this to heart.
I’m sure there’s some of you that are still thinking, “Well, you know, I’m in the black hat world, I’m killing it on this and that.”
That’s great.
And, I just invite you to really think about where you want to be in 5 years from now. So, you don’t wind up stuck on the hamster wheel in the same place.
I talked to people that have been in this business that I’ve known for 5, 10 years and some of them aren’t happy, right? They’re still making a lot of money but they’re not fulfilled just making money anymore.
If you’re there, I highly invite you to start to create that goal.
Start to create that vision for yourself and wind up in a much better place 5 to 10 years from now.
So, thank you, everybody, for having me.
