November 25, 2021 0 638

Interview with Martin Ochwat: Spending Over $100 Million on Facebook Ads

The online marketing world is a space that never runs short of fantastic life-changing experiences. Today we are sharing with you an interview with a really interesting guy called Martin Ochwat. Martin is going to tell us how he spent $3 500 000 in a single weekend on Facebook ads, flushed it down the toilet, and somehow still didn't get fired. He then went on to spend over $100 000 000 successfully in the gaming niche, started his own e-commerce brands that did over 7 figures in revenue, and now he's doing insurance lead generation.

Martin has got a pretty crazy story, so read through this interview held by Linx Digital University in which he shares his whole experience in the industry and advice to people interested in the online marketing world.

 Martin, tell us a little bit about yourself.

Thanks for having me. So I'm a digital marketer, and I’ve been in the space for about the last 7 years. I worked in gaming, e-commerce, and now lead-gen. Facebook ads is my bread and butter and I've always relied on it as a channel. I’m just a really good marketer but am really bad at other things like operations, building brands, and all that but I’ve just found a niche that works for me. So I've been working in the space for a couple of years and I've spent a lot of money, generated a lot of revenue but also spent over $100 000 000 on ads.

 So take us back to before you became a media buyer. How did you get into media buying?

So I actually got into media buying by accident. I studied math in school, back in Canada. I ran a startup and it failed then I kind of ran out of money. One day a friend calls me from college and he's like "Hey you know I work at this crazy gaming company in San Francisco, you should come down and work here." I didn't really have anything else going for me so I figured, "Why not!". I flew down to Silicon Valley in San Francisco, did an interview which went well, and then they just threw me on their Facebook ad buying team. They said go ahead and learn ad buying and that's how everything started.

 So what happened in the first 2 weeks on the job?

When I got there, I had pretty much zero experience with media buying. It was just me and my boss managing close to $80 000 000 a year in Facebook ad spend. One day, my boss left for the weekend, I think he went to some music festival and he's like, "Martin, just manage the campaigns and make sure nothing goes wrong". So we had this internal tool to manage our ads because we had around 10 000 ads running at a time, and in 2014, Facebook Business Manager was not able to load that much information.

So I was launching an ad and I meant to type in $65 per app install, and accidentally I typed in $65 per click as our bid, then I went away for the weekend. My boss calls me he's like, "Have you checked the ads?" I'm like "No, what happened?" I log in and check the ads and we had spent like $3 000 000 in the course of 1 day and a half on android campaigns because of my $65 per click bid. I was pretty scared because it was almost guaranteed that I'm getting fired and somehow I did not get fired. My boss somehow covered for me. I guess he took the blame and they didn't fire me in my second week on the job.

However, it ended up being a pretty good thing in the long run because that weekend Sheryl Sandberg, the Chief Operating Officer of Facebook got notified about how much we had spent on ads in 2 days. So Facebook started giving us a bunch of support. We got their best account managers and over the next year, we were able to scale our ad spend to over $100 000 000 a year.

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 How did you manage to spend all that budget while working as 2 people only?

Initially, it was very manual. I think we were spending 16 hour days trying to launch ads with our internal tool which would let us launch like 10 to 100 ads at a time. So I would just sit there for hours trying to launch ads. Then you know we would export all the data because Business Manager was unusable for this back then. I’d just look at excel and be like this ad set is not performing well and I'd manually go in and kill a bunch of ads. This was similar to how you do media buying now with automated rules, dynamic creative optimization, and all these features that make your life easier. Those features didn't exist for us back then, so we ended up building a lot of them ourselves in-house. We had 2 engineers and we’d just say let's build rules where if one ad set has a really high click-through rate, we're gonna scale up its budget by like 20% a day and if one has a really bad ROAS, we'll lower its budget.

So we ended up building tools that helped me and my boss scale. Eventually, we got more people on our team and finally, Facebook ended up getting inspired by some of the tools we had built in-house and they released them on the platform for other media buyers. So it's nowhere near as complicated now but back then it was just a lot of grinding and a lot of trying to build small tools to make your life a little easier.

 So you were basically spending all that money at that point. What was the key lever at that level of high ad spend with Facebook ads? Was it the creative side or was it more on the optimization side?

 At the high spend back then and even now, I'd still say the creative side makes the biggest impact. Luckily we have a good creative team. We actually worked with a lot of celebrities early on. We had signed Kate Upton for some tiny amount of money, it wasn't even near 7 figures and we had her in 3 commercials. We were so early on hiring celebs which helped us a lot on the creative side. We had people like Kate Upton and Arnold Schwarzenegger in our ads themselves.

But back in the day, Facebook would boost new ads because they wanted to give them a little more data to see advertisers can scale. So your new ads would perform better than old ads. This took us to the point where we were launching new ads constantly, automated 24/7 and we were just looking for little hacks and little advantages that we could get.  So any small automation advantage, any creative advantage, and anytime a new platform comes out like Instagram stories, we would just jump on that right away and that would keep us going over time and continue to let us sustain the ad spend.

 Then how did you end up getting into your next venture which was e-commerce and dropshipping?

After spending 2 years at Machine Zone, the gaming space became very competitive and the trends were always changing. I noticed that our style of games that were popular at the time and were the 2 top-grossing games in the app store, (Game of War and Mobile Strike) started to gross less and less yet the ad costs were increasing. So I knew the trend is probably not going to continue and I just got bored at my job. So I started spending evenings playing around with e-commerce because I had a friend that had done relatively well in e-commerce.

So I spent about a month trying to figure out how Shopify works, what dropshipping is and this was early 2017 when dropshipping hadn't fully taken off yet. After about a month of throwing 50 different products in the store and trying creatives, I had one product that worked well. It was a very simple style watch that looked kind of like a Daniel Wellington. That was enough to get me going. So I scaled up ads for that and eventually launched a whole dropshipping watch brand. I then jumped from dropshipping watches to clothing, swimwear, jewelry and I just went horizontally into different niches. I actually found specific niches that would do better at certain times of the year. Like in the summer we would do really well with swimwear, in the winter it would be more like jewelry for gifting. But through that, I was able to scale up to over $1 000 000 a year in revenue across different stores. That's how I jumped into dropshipping using the exact same Facebook advertising skillsets that I learned while I was in the gaming niche at Machine Zone.

 What is the big difference between the gaming niche and e-commerce?

The first difference I felt was that spending a lot of your own money feels very different because you can't make any mistakes. But gaming is probably the most competitive niche that I've ever worked in. There is just so much innovation that's happening there, the media buyers are really strong, the LTVs are really high and guys have massive budgets. These days it's really hard to compete in the gaming niche unless you've raised millions of dollars to create an amazing game that has a really good LTV and can scale.

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In e-commerce, I find it is way more fragmented. So there's a huge long tail and you can have lots of stores selling totally different things. You can have totally random stuff that will scale to 7 figures a year, so it's a lot less competitive. If you go for the super big niches like clothing, purses, or swimwear you’ll obviously find extreme competition. But I find it as a more open playing field that anyone can have an advantage without spending necessarily a ton of money. The business might not scale as high but if you're just one person or a small team, you can make a really good living out of it.

 Why didn't you end up settling with e-commerce?

Eventually, the dropshipping easy money wave came to an end and I saw this coming earlier on. So I teamed up with one of my friends and we spent about 1 year and a half making an e-commerce brand. It was a sustainable natural products brand called Wellow. I’d say that it was a good learning experience through which I learned that I wasn't great at creating brands, creating products, managing supply chains, operations, logistics, and all those small components of running an actual e-commerce business. I either didn't enjoy them or wasn't great at them but I was really good at digital marketing.

So one day as I'm working on this brand, a friend approached me and he said, "Hey you know we are launching a life insurance brokerage and we wanted to get your help to try out some lead-gen ads." I accepted to launch some ads for them and I noticed that our cost per lead was cheaper than the cost of selling a stick of deodorant on the internet. If you can get one lead to convert, the LTV of the leads can be $1 000 to $2 000, or even more dollars. So it was an eye-opening experience for me that in lead-gen there’s a huge opportunity because of the LTVs. So I started dabbling more into that and started helping to grow this life insurance brokerage I'm working on now.

 So what's next for you with your insurance lead generation for this business, and what are your plans for 2021 in terms of scaling that up?

So we've hit some bottlenecks, not on the advertising side but on the actual operation side of the business. So we are working on getting more agents and automating a lot of the life insurance buying process specifically in Canada. Our plan is to take over Canada right now as it's a much less competitive niche than in the US and eventually continue with global expansion.

We are resetting our growth expectations in the short term which gives me time to try out new channels. So we're focusing more heavily on Google search and Youtube. We have also been ramping up our SEO efforts. So it's been a good time to diversify, not just to rely on Facebook which has been more challenging since iOS 14 came out. Eventually, we just want to become the premier life insurance brokerage in Canada.

 What's your piece of advice for a beginner media buyer who's starting out on their first job thinking about how this is going to sustain them in the long term?

Starting out is always the hardest. If you can get a good community, whether it's a Facebook group of other media buyers or co-workers that are experienced, or becoming part of a master class - that will help. The only way I've really found to learn media buying is to actually go and do it like. You can learn off courses and you can learn from watching videos but don't get stuck just watching things, you have to go out and spend your money on ads. It doesn't have to be a lot of money. You could start with $20 a day or maybe less on Facebook. But by running ads, that's how you really learn ads and then you just continue to scale your budget and scale your skillset over time.

 This has been interesting Martin, how can people reach you if they want to learn more from you?

You can find me on Facebook, Instagram, and even on Linkedin with the username Martin Ochwat. Just send me a dm and I’ll try to respond as soon as I can.

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That’s it for today’s interview, you can also check out more about Martin on his website and surely you’ll get a few more tips and learn how he has been doing it in this online marketing game. Thank you for reading to the end.

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