3 Unsettling Ways Internet Marketers Lie to You

So, when you clicked on this video, you probably had two major questions. One, have I been lied to by marketers? And two, what are those lies? Uh, short answer, yes. You almost certainly have. Marketers claim legitimacy in all sorts of ways. And they also know that in order to earn trust, they don't actually have to be credible. They just have to look credible. I've scaled two agencies to a combined revenue of $160,000 a month. I've also worked in marketing for the better part of six years now. So, I know all of the major ways that marketers deceive you. And there are three big families of deception. The

first one is revenue. So, I'm starting with probably the most well-known hack here. just to warm you guys up. If you guys want to see some more advanced stuff, some kind of scary stuff, then definitely wait until the end. But on the surface, uh the problem with revenue is that it usually sounds impressive and then underneath rarely does it actually translate to any sort of bottom line profit. And a big problem is that most people will claim revenue instead of profit by veiling it into terminology like, hey, I generated $300,000 last month, which while technically correct, doesn't actually tell you anything about how much money they're taking home. And that's ultimately the important thing in business. So, uh, lots of companies actually run on razor thin margins. 10 to 20% is actually super common. So, next time if somebody says they're doing 100K a month, that might actually mean they're only netting 10K. In other words, despite having this super crazy social proof that shows what an incredible entrepreneur they are and how much you should probably buy their course, they actually take home about as much as a mid-level manager in a corporate job. So, marketers intentionally use words that inflate their perception of their accomplishment. And uh in terms of revenue, you will routinely see things like generate uh drive uh bill, you know, ad and so on and so forth all over sites and posts. So if you see something like that, like our system generated $2 million last quarter, you know, that may sound impressive at first glance, but you have to realize that the generated here probably just means transactions. So you're going to see this all the time in the agency space and the coaching space, but also in the SAS space, interestingly. Uh so for example, something like we bill $120 million annually across our network doesn't actually mean that the company therein bills $120 million. It means their network, whatever the hell that means. Uh when they add up all of the invoices that they have sent in the last 12 months, you know, that have build $120 million, but they can make five grand a year for all we know. You should not take that as proof of their accomplishment or credibility. Another big issue is when people say revenue, they often also include future months of a contracted service. So, let's say somebody signs a 12-month deal for $5,000 a month in revenue. You will immediately start seeing claims like, "Hey, I just closed $60,000. " And it's like, "Well, yeah, you know, you may have closed a deal that would eventually be worth $60,000 in the next year, but it's not like you just made $60,000. You actually collected $5,000 and you're probably going to spend $3,000 of that on expenses. " So, when all said and done, what they've made, like what you're thinking make means here was $2,000, which is literally oneird of this stated accomplishment. So anyway, how do you actually protect yourself against all this BS? Uh if somebody doesn't explicitly mention profit, my rule of thumb is you should assume that they are talking about generating revenue. And a good rule of thumb in terms of like how much revenue actually translates to profit is about 30%. Which means the next time you hear somebody say, hey, I generated $20,000 last month, you should be taking that to mean, okay, this person probably made5 to maybe $10,000 a month. So that's how much this opportunity is really worth. So the second big misdirection which is a lot more insidious is teams and this

is a very deep game. Uh it is where marketers will essentially borrow the past accomplishments of their team members and then they will present it as their own or as their companies. So it gets pretty bad out there. Uh if you guys have ever seen something like our company's in partnership with teams at brands like Apple that basically means nothing. All it means is we have at some point spoken to or maybe even just exchanged some emails with somebody that at some point has worked at Apple. Another example is our team has worked with Microsoft. But like what does this actually mean? It does not mean that the agency or the company has worked with Microsoft. What it means is again at some point in time somebody at the company that they hired into their business has worked with Microsoft. It could be like a summer internship. So this takes advantage of a very old psychological principle and it's fundamental to the way that your brain works more or less. It's called the halo effect. when somebody is connected to something that is impressive like let's say Apple or whatever even if that connection is very loose your brain tries to be efficient and it tries to conserve energy so it fills in the blanks and it just assumes that some of the qualities of this big company of Apple you know renowned multi-billion dollar business must apply to this person as well meaning they must be smart and must be productive and they must be good at what they do cuz Apple is and why would Apple have hired them if they weren't. So at a company that I actually used to own a minority share of, this was a very big tactic. Now it was a marketing company. So all sorts of multi-million and multi-billion dollar associations. It looked really big from the outside looking in. And the whole reason why was because the founder of this business would specifically hunt to hire people that had worked at renowned and recognizable big businesses. And they would do this regardless of the context, even if it was like a brief, you know, two or three month contract entirely so they could just say, "Hey, our team has experience working with Facebook. " you know that one single throwaway line during a sales call was actually worth the tens of thousands of dollars a year that the founder would keep them on payroll for. So the next time you see any sort of vague team association and you are about to make a decision based in part on the premise of their accomplishments my recommendation is you need to clarify hey who exactly did this thing? Was it you who worked with Facebook? Was it your whole team that worked with Facebook? Is it was it the entirety of the agency? Was it a single member of your team? You know what does worked with actually mean? Were you guys, you know, hired by them or did somebody in your team work for them as a W2? Uh, and by work, you know, what did you mean? Did you mean money changed hands during this arrangement? Was it like a summer internship? Like, if you are going to do this, you should be extraordinarily clear about what the magnitude of that accomplishment is because that'll typically change your mental calculus in whether or not you move forward with them. The third

massive misdirection is really big, and it's ownership. Anytime you guys hear the phrase, I own XYZ company or I co-own this business or I own a portfolio of agencies or something, you should be very wary of the claim that you are about to hear next. Because on the surface, this sounds absolute. When somebody owns something, that also suggests that they control it and they direct it. You know, they're part of the day-to-day operations of that thing. But in practice, the word own in business is actually almost meaningless because ownership nowadays is very disconnected from the actual operation of the asset and then the leadership of the company. It can mean anything from a majority stake, which is owning most of the business to literally a token 1%. So if you own 1% of a business, you are technically a co-owner of the business and you can market yourself as such. But you know, you saying co-owner implies a lot more than that. So practical example, if somebody says, I co-own a company that does $10 million a year. At first, you're probably going to assume that, you know, they're sitting on this giant watt of cash. But if we peel it back layer by layer with everything that we know now, first, what does the $10 million a year here mean? Is it the revenue of the business? Uh, if the person is not clarifying, then yes, it is almost always going to be the revenue. So, this doesn't mean that they're actually making $10 million a year. Means that on average, the business is probably going to be making closer to, you know, $2 or $3 million a year in profit. How about the term co-owner? Uh well like we talked about co-ownership does a lot of heavy lifting here. We don't actually know how much of the business that the person owns themselves. Their actual stake could be so small that a their influence on the business is basically irrelevant. B they don't actually take home much of the business at all and c it's actually possible because there are some arrangements to this nature where you know despite the fact that they might own a big chunk of the business they are not actually entitled to any dividends. So, of the $10 million year claim, you know, if we assume the margins are 30% and then they actually only own 20% of the business, they might actually only be making about $600,000 a year from that. And, you know, $600,000 a year is still impressive, but it is a far cry from the $10 million a year that they are saying that they are making. Another layer to this is a person that can own a company that owns a bunch of companies. Now, it's basically like a giant pyramid, right? Because you have to ask yourself, how much of the original company does that person own? Then, how much of the company's companies uh are owned by that company? And then how much do the company's companies make in terms of revenue? actually profit at the end of the month? You know, when you do the math, it usually ends up being just mathematically something like 5 to 10% of their stated accomplishment. All right, so putting all this stuff together, let's now deconstruct a pretty monster claim that I just saw circulating on the internet a couple days ago. It's actually the inspiration for this video. Somebody at the beginning of one of the videos said something like, "Hey, we've done over a billion dollars in sales. So using everything that, you know, I have now run through with you, let's do this step by step. First, the billion dollars in sales is revenue, right? If they drove those sales primarily through some sort of low margin paid advertising, which is what tends to happen nowadays, that means that they probably didn't make most of that money. So, we're going to have to cut it, right? In terms of what actually made it to their bottom line of the billion dollars, might be 20%, maybe 200 million. Also, when it's big figures like this, it means that they probably didn't collect all of that money upfront. A lot of that was probably some sort of annual deal or maybe it was like a monthly deal where they did some long-standing monthly churn calculations to it, right? If they signed a deal for $50,000 a month and the person stays with them for an average of 6 months, they're going to start claiming things like, you know, we closed $300,000. So, next, what does the we here mean? Well, how big is the company? If somebody is saying we and they just happen to work at a company that has even a hundred people, then you have to do the math and you have to assume that they're going to be one of the average people at that business. What I mean by this is if you take a billion dollars in sales and you divide it by 100, that actually only means $10 million on average. $10 million on average each times a low margin of about 20% really means that each person at that organization generated an average of $2 million. And finally, you have to ask yourself over what time period. Anytime that you see a claim on the internet that says we closed X dollars without mentioning over what time period, you should assume that it is over a long time period. So the question that you need to answer is how long has that company operated for? Let's say we go and we find out and it's 10 years. If that's the case, the average productivity of the average salesperson at that company was 200,000 in profit a year for 10 years. And you should by the law of averages assume that is also the case for the person that you are evaluating who's saying this claim so that you could buy something. So what that means is they are selling you a billion dollars in sales, which you assume means that they're incredible. Top 0. 00001% in sales on planet Earth. And then in reality, they're probably actually closer to maybe $200,000 a year, which you know, obviously can still be impressive depending on where you are in your career and you know what you want from them. But you should be very clear of that ahead of time. Mathematically speaking, you know what is 1 billion divided by 200,000? My math ain't so good, but it's like 5,000. So like the magnitude of the associated claim versus what actually happened is a 5,000 times. You should be wary about what you're about to buy next. Okay

that is that. Hopefully I cleared up some marketing magic for you guys. and let you all make more educated decisions surrounding where and when you are going to spend your money. Uh, if you guys want to learn how to build a sort of business that enables you not to have to rely on inflated, silly marketing check out Maker School. It's my 90-day accountability program for AI and no code services. And the whole premise is we help you get your very first customer in 90 days or your money back. It is really big. We are one of the largest online communities in the world right now. And I don't mean that just by revenue. I actually mean that by profit. Our profit margins are over 90%. Um, alternatively, if you guys want to implement high growth systems using AI and no code into your own business, whether it is small to mid-sized, uh, book a call with my team at Leftclick. We, and I don't mean we here as like my random team members, but we have worked with multi-billion dollar companies, and we know how to install systems that operate at all levels of the stack, whether you're SMBs or a larger business. All right, thank you very much for making it to the end, and I'll see you all in the next video. Bye.