The 50/50 Rule: A Winning Social Media Formula For 2022

In Zero to One, Peter Thiel repeatedly talks about a blindspot confusing many artists, engineers and entrepreneurs. That goes something like ‘build it, and they will come.’

Peter thinks the number one reason entrepreneurs fail is they can’t find a reliable way to generate attention and demand for their product or service.

It’s simple if people don’t know your product or service exists, it will not sell.

If we want people to know about what we have to offer, we need to find the places people are spending their attention and introduce it to them there. For now, at least, that means social media and content platforms.

Like Facebook, Reddit, Medium, and so on…

This isn’t a secret, which means thousands or millions of businesses compete for the same attention.

Take yourself, for example. How many times do you click on a Facebook or Instagram ad? Not often, right. We’ve quickly learned to filter out ads to the point where I don’t even notice them when scrolling.

As demand to advertise on these platforms increases, so does the advertising cost. When I ran Facebook ads in 2012 – 2016, I could get $2 CPM’s and 10 cents click-throughs with basic adverts. Now our CPM’s are $10+, and clicks are $1+.

With that said, social media is still the best way in 2022 to generate attention for your business. We just need to create better content.

Simple Ads No Longer Work

Minimal effort marketing no longer works.

I spend $300 on this ad, March 2018. It generated 100k impressions, 100+ landing page visits and 20+ new members for our gym.

Just a static image with simple copy.

Two years we spent $100 on a similar type of ad for 10k impressions, <20 landing page views and one new member.

Simple images and generic copy just doesn’t work the way it used to. Keep in mind that you’re not just competing against your competitors. You’re competing against every business with the same target audience as you do.

A target audience for our gym is Women, 25 – 45. So we compete against beauty brands, salons, cafes, childcare and a ton of others.

Being a small business with a limited budget, we used to invest as little as possible into creating ads so we could spend as much as possible on buying ads and putting them in front of as many people as possible.

That worked well until the platforms were saturated with ads, and everyone learned to filter them out as they got their social media fix. Adds became background, largely ignored.

The 50/50 Rule

“The business that can spend the most to acquire a customer wins.” – Dan Kennedy.

To make ads noticeable and effective again to shift from background static to clear signal is pretty simple.

We need to create better ads.

How content creators win on platforms like Youtube is how businesses can succeed on Facebook and Instagram.

To quote Mr Beast, the world’s most-watched Youtuber, “All I care about is creating the best videos possible.

We will win if we create engaging content that doesn’t look like ads.

We do that by investing as much of our budget as possible into creating good content and the least possible amount into distribution (Ads).

Gary Vaynerchuck calls this the 50/50 rule.

He noticed many of us are spending all our budget on distribution and barely any on creating content that people want to consume.

He encourages his audience to push as close to a 50/50 split between them as possible. He spends 80% of his budget creating content and 20% on distribution.

To force yourself to follow this approach. First, set a marketing budget. Most resources on Google suggest somewhere between 5 – 10% of revenue for small businesses. We’re going with 7.5%.

Now limit your ad spend to 50% of the marketing budget. So you have to focus the rest on creating better content.

Real-Life Example

Applying this to my gym, World Fitness.

Based on projections for 2022, we have a marketing budget of $40,000 and must invest $20,000 into content creation.

I’ll update this article in 12 months with our results.

The three metrics I’ll use to measure results are:

1. Engagement Rate
2. Social media website traffic
3. Social media leads

If your marketing efforts are falling flat and you’re trying to figure out the solution. This might be the change you need to make.

Most companies spend 90% on distribution and 10% on content. Spend 50% on content creation, target specific audiences, so your ad spend is stays effective, and measure your results over time to see if it works.

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