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How I made $10k in one day with Facebook Ads

273 points by patrickod 14y ago

tnorthcutt 14y ago
You brought in $10k in revenue. That's not the same as "made $10k", at least as I understand that term.
mtkd 14y ago
I can see this scenario working - local event, targeted adverts, non-commodity product. The concern with FB (and other social platform advertising) is around 'intent' and whether you can viably sell commodity product to visitors not actively searching for the commodity product in the way you can by advertising on a search platform - and whether the pricing on a social platform should reflect a different quality of referral.
- brendanib 14y ago
  Totally agree. It's a huge challenge for brands that are selling products that aren't highly differentiated too - I had the benefit of selling a niche product that's partially built on scarcity. Commercial products are tougher, but they also have agencies whose job it is to spend time and money figuring out how to reach people. As I said, I spent about 30 minutes creating these ads. A big part of what I like about Facebook is that it enables me, as a business owner, to compete on an equal playing field with massive Fortune 500 companies, and in this case benefit even more from Facebook Ads than they do. That's huge for anyone doing anything disruptive, whether it's a startup, a local business, or anyone competing with the status quo.
  - vavb 14y ago
    Which massive fortune 500 company were you competing with for your yard sale? I don't get how your facebook event levelled the playing field for you in any way - it just let you clear your stock
executive 14y ago
coming from the guy who sells a Facebook analytics service
- human_error 14y ago
  The entire post looks like an advertisement.
  - Draiken 14y ago
    He's simply profiting on the bots article's fame. If the facebook bots article never existed, this advertise wouldn't exist too.
    - huggyface 14y ago
      He's "profiting" from a conversation. That's how things go around these parts (things always come in waves, and the people looking for hits will quickly get an opinion out. By the way, would you like to hear what I think of the new Apple ads?)
      - Draiken 14y ago
        Yeah unfortunately it's how things work. I'm not criticizing, lots of people do it, but in this case I just felt it was a little bit too forced.
- vavb 14y ago
  Oh wait so we shouldn't trust the guy whose livelihood depends on people buying FB ads when he says FB ads are fantastic and definitely not a scam cos they worked for him? Oh.
  - vavb 14y ago
    And on a side note, I'm not 100% convinced FB ads are going to be very efficient for a someone selling analytics software to multinational companies. So it'll be a different platform then.
rizz0 14y ago
What did the records cost you in the first place? Speaking of ROI, that's part of your investment as well ;-)
- rm999 14y ago
  Decent point, but the records were a liability for him, their value to him was probably ~0. From that context the revenue was almost pure profit.
  - pavel_lishin 14y ago
    So he lost the original amount he paid for the records, because the value went from $COST_OF_RECORDS to 0. That still has to be considered.
  - briandear 14y ago
    Those records were an asset. He paid $2000 or so for the records and they had a demonstrable market value of $10,000 (he sold them.) The liquidity could be questioned, but it wasn't a liability.
Avalaxy 14y ago
How did you manage all those people? If there are so many people at the same time looking through your stuff, how can you be sure they don't run off and steal something?
- pavel_lishin 14y ago
  It looks like it's his back yard. Seems like it would be simple enough to simply stand at the entrance and make sure nobody walks out without having paid.
- NathanKP 14y ago
  I think the type of people who are interested in old records probably aren't the type of people who would consider shoplifting. I'm not saying that there is no possibility of it happening, but if I was running the event I wouldn't be too worried about theft.
citricsquid 14y ago
This is a nice happy story, but how can you be sure the attendees came from the Facebook adverts and not word of mouth / recommendations that Facebook displays about events friends are attending? That seems much more likely to me as the source of your success.
- pavel_lishin 14y ago
  Those friends wouldn't have attended if they hadn't seen the ads, right? At least some of them must have clicked the ads. If Billy is the only person who saw the ad and clicked "yes, I'm going", and 299 of his friends show up as well, I'd say that the ad is the original cause of 300 people showing up.
  - parsnips 14y ago
    In that case, it sounds like a fantastic deal. Network effect.
- MrDOS 14y ago
  How is that not a side-effect of the ads?
  - citricsquid 14y ago
    The original criticisms of the Facebook advertisements are for adverts to off-Facebook destinations, adverts that do not feed back into Facebook in any way, so to compare them is unfair. This post proves that using Facebook adverts to increase Facebook engagement work, but not that off-site adverts aren't bad, which is what the majority of complaints from the last ~day are.
kposehn 14y ago
Brilliant! Facebook events are a fantastic way to profit and you hit the nail on the head. Glad to see you succeed so well with that effort :)
yaix 14y ago
> calculated ROI, 2000%? 3000%? You do the math. We can't, because we have no idea what you paid for those LPs when you bought them. $10 each? You're confusing turnover with earnings (and "we're" with "were", btw).
micheljansen 14y ago
So revenue equals profit now? You didn't "make" $10k, you sold 3000 records for $10k. I'm assuming those records were not created out of thin air?
CaveTech 14y ago
Lots of talk about the gross money coming in. But it seems to skim over the fact that there's a real product being exchanged. Records being sold at $3 seems like a bargain, but what was the cost of these records to begin with? Sure you made $10,000 in sales, but that's not $10,000 profit, and definitely not a ROI of 2000-3000%.
- parsnips 14y ago
  If he "inherited" the inventory from a firm that no longer exists, it could very well be profit. Think of how debt collection firms make money.
  - s_henry_paulson 14y ago
    You can see in the ads that the inventory came from his own business, so he must have paid for them at some point.
- brendanib 14y ago
  It's true, this was a liquidation sale, but most of the records came from a batch of 8000 records that I bought for $2000. I was being a bit flippant with the ROI percentage, sorry about that - just trying to stress how easy the process was - I really was blown away when I kept asking people how they found out about the event, and they said they saw an ad for it on Facebook. One thing to keep in mind, as far as calculating ROI, is that if I were to continue to run the business, these are all new customers that I could continue to sell to, so the return on investment isn't purely a one-time thing - the LTV of each customer is way more than they spend in one day.
  - veyron 14y ago
    A quick scan on ebay shows that you were charging less than the buy-it-now prices. One other difference is that you were advertising for an event on facebook (as opposed to an external site). Do you pay per click to the facebook page or pay per action (attend or won't attend)?
tazzy531 14y ago
So, wait... If I sell my car using a Facebook ad, I can claim I made $17k in one day?
- MiguelHudnandez 14y ago
  I suppose you could. It may also help you out if you are selling a Facebook analytics system and you plug it at the end of your claim.
- vavb 14y ago
  Not only that, you can make a 100000% ROI while you're at it.
carsonm 14y ago
It may not be the author's intention to imply this, and I'm glad he had a good experience, but it's worth mentioning that this is a single experience, and not necessarily evidence that some Facebook ad campaigns aren't being hit with false clicks.
codegeek 14y ago
You made 10K in revenue or profits ? If revenue, tell us your cost as well. if profits, kudos and congrats for smashing success (no pun intended)
moron 14y ago
The point of the post is about the efficacy of the Facebook ad, not revenue vs. profit. Come on, folks.
lalitm 14y ago
In no way can this be called a reply to the "bots" post.
padobson 14y ago
This Facebook promotional campaign (events + targeted ads) was successful, questionable accounting or no.
clarky07 14y ago
As has been pointed out the 10k is revenue, not profit. At $3 a record I doubt there was much profit at all, though it sounds more like a liquidating event so it is still a happy result. To the point of the article though, he advertised on facebook and people showed up and gave him money. Whether or not he is actually profiting from the business isn't really relevant. His ROI is clearly wrong, but the ads had the desired effect of bring in customers. I really hope he doesn't report 10k in profit to the IRS though as he would then be losing even more money than he probably already did on that sale.
- unreal37 14y ago
  He paid $2000 for 8000 records, so at 25 cents each, most of the $3 was profit.
markokocic 14y ago
Sold 3000 records fro 10k$. I bet he spent much more when he was buying all those records, say 20k$? So, I could read the story as someone lost 10k$ in 10 years because of Facebook ads. And I'm sure someone creating facebook ad analytic service would claim that facebook ads are effective.
mladenkovacevic 14y ago
Brilliant marketing play for PageLever :) Not saying his story isn't genuine.. just saying it's a perfectly timed post targeted at the perfect audience for the product. He knows what he's doing so definitely not surprised he can put together a successful Facebook campaign.
- vavb 14y ago
  It will definitely drive up traffic, but I don't think that the story is anywhere near convincing enough to undo the damage that has occurred after the clickfraud claims. Would be interested to know how many people from HN would sign up based on this post.
dionidium 14y ago
The point about revenue != profit isn't very clever, though 1/3 of the existing comments are making it. The actual point is that he was able to successfully drive traffic to his event using FB ads. Every comment addressing profit vs. revenue entirely misses the point.
- jmduke 14y ago
  The argument OP makes is 'I made $10,000 in one day thanks to Facebook, thus Facebook is a superior platform' which is undeniably faulty. 1. The OP did not make $10,000 in one day. 2. We don't know how well this would have done on a non-Facebook platform. My point is that this is like arguing that Facebook is a wonderful platform because Apple makes a lot of money and Apple uses Facebook to advertise. Apple would be making a lot of money without Facebook ads, too; if a company using Facebook ads generates $X revenue, that doesn't mean those Facebook ads were responsible for a specific amount of the revenue. In short: congrats to the author! But this doesn't really prove anything.
  - dionidium 14y ago
    The OP did not make $10,000 in one day. Now you're almost willfully missing the point.
    - vavb 14y ago
      You're almost wilfully ignoring that the poster is claiming that he's devised a way of making $10000 profit at 3000%+ ROI but decided instead to make a startup aimed solely around facebook ads - which coincidently were the things he took advantage of to achieve this massive product. Surely something with stats as lucrative as this yard sale would mean that he would create a startup based around selling other peoples stuff after advertising through FB events instead??
      - brendanib 14y ago
        It's actually an idea that I've entertained before, and I think there's tons of businesses that could be built in this space (for example, I'm a huge fan of Yardsale, and this could be an interesting growth strategy for them, to build Facebook Ads directly into their platform). Right now though, I'm having a blast working on Facebook Analytics with my team at PageLever.
charonn0 14y ago
And just yesterday there was a guy on HN claiming that FB ad clicks were 80% bots.
Gertig 14y ago
The author points out that Limited Pressing should be using UTM tags and Mixpanel to track visitors to their site from Facebook, which was not at all the issue that Limited Pressing was concerned with. The issue they had was with paying for those visitors when they shouldn't have to. As the author's current company is based on providing a layer on top of Facebook Analytics/Insights I could see how hearing that 80% of clicks may be bots could be disheartening, but there is no need to lash out at Limited Pressing for presenting their own perspective.
rondon1 14y ago
I just sold a car battery on craigslist for $50. It cost me $0.00. My ROI is well over 3000000%.
polshaw 14y ago
Lesson: facebook ads work great for selling items at below cost. I'm not sure ads were needed in the first place; an event and posting on the pages he talked about /a couple of forums may well have had a similar result.
executive 14y ago
> so what is the calculated ROI, 2000%? 3000%? You do the math. over 9000%
aMtnViewer 14y ago
this is just a shameless plug for his company
callmeed 14y ago
It's funny reading this because our community is having a giant yard sale and I just created an FB event and some ads for it.
danso 14y ago
It's worth noting that this was a local ad in the Bay Area, near Berkeley. http://g.co/maps/6vmc6 http://g.co/maps/6vmc6 i.e. the garage sale took place in a highly-cultured, net-savvy area full of people who do bargain/antique shopping. Back in the late 2000s, my friends in the same area put a cheap 30 word ad in the local newspaper for a garage sale and got dozens of visitors. I don't know how much the ad cost but probably something like 50 to 60 dollars. It's hard to gauge how much of a "success" this is when a Craigslist ad, plus some postings on large music mag forums (and I'm sure SF/Berkeley have their own large local websites) would've drawn the same attention...with a little more handiwork on the seller's end, but without costing $150. * edit: I'd even argue that he might have drawn more people in with Craigslist and a few other nichey-type posts. I'm not a record-collector myself, but I'm guessing that there's a fair amount of them who are used to "digging" to find gems, as opposed to checking out ads/events on Facebook...antique collectors regularly scour the old-fashioned newspaper ads for garage sales because they know the type of old-fashioned people who might have undiscovered antiques are also the type to advertise in newspapers.
- brendanib 14y ago
  Absolutely - there's a huge competitive advantage being in the Bay Area, and Craigslist ads can get you pretty far. In the past, I'd used Craigslist ads for selling records and seen an okay response - maybe 20-30 people or so, but nowhere near what I saw for this. The other advantage that I didn't fully realize until I started running the ads is how the activity within the Facebook Event serves as a reminder for people to show up - we see tons of ads for events every day that we want to go to, but very few of them ever make it onto our calendar the way that Facebook Events do with one click. My argument isn't that Facebook Ads are the be-all end-all marketing channel - just wanted to share my experience with them. YC folks - feel free to ping me if you want help spinning up some Facebook Ads - always down to help folks out.
  - danso 14y ago
    > The other advantage that I didn't fully realize until I started running the ads is how the activity within the Facebook Event serves as a reminder for people to show up - we see tons of ads for events every day that we want to go to, but very few of them ever make it onto our calendar the way that Facebook Events do with one click. That's a very legit point. The various features of FB events make them "stickier" (or whatever the buzzword is) than regular advertising...the feedback options, with prospective attendees asking questions and seeing how you respond to them, is also likely to boost interest. It's not quite fair to say "Oh, this is the same as Craigslist ad postings, except you paid" just as it would be silly to ignore Airbnb because it seems just like paid Craigslist ad postings. That said, given the nature of the niche market here (though you probably know better than anyone), it's not clear that the success would easily apply to other kinds of businesses...or phases (i.e. a startup trying to get attention vs. a business having a out-of-business clearance sale).
dev1n 14y ago
I would be interested in seeing the statistics on the advertisements themselves. Did the OP see an 80/20 response rate like Limited Run? What was the ratio of people who showed up to the event versus the ratio of clicks on the ads versus the number who said they would attend the event on facebook versus actually showing up. Please provide more information, otherwise I see this article as useless babble with a plug at the end.
dlikhten 14y ago
You created an EVENT. The EVENT cannot be added via a bot, so facebook was protecting itself essentially. Event invitations and click-through are different. Just sayin'
MetalMASK 14y ago
There is only one thing I want to know behind the story is if the author has purchased facebook stock or not. Just some background info might help understand the motivation.
iamzen 14y ago
I work in the marketing department of one of the biggest nightlife companies in the world. Facebook ads for our events/nights have been so successful for us that we stopped doing google ads.
Juuumanji 14y ago
Nice linkbait article here. What about the real costs? yea, lets just omit those and hope to get some media traction. weak.
baby 14y ago
Okay, I need a way to get 3000 vinyles now.
spaghetti 14y ago
The article reminded me of a thought I had regarding FB's monetization strategy: strictly local advertisements. The ad matching algorithm would place the most weight on geographical distance then interests etc. FB's ubiquitous nature today could make this work. Here's a use case that motivated the idea: I live in a densely populated area where everyone around me has a car. Say I wake up to a flat tire. I'd much rather pay someone $20 to just fix it in 10 minutes than get the car towed or figure out how to do it myself. Imagine searching for "fix spare tire" on Facebook and receiving search results for five people that all live with-in two blocks. Choose a person, agree to pay with cash, they show up and fix the tire. The service FB provides in this example has real value. If this service existed I'd actually use Facebook, take a good look at the ads and perhaps even pay a small monthly fee. To use an over-used term I see this as "the Airbnb of everything else". It could be applied to simple plumbing tasks like fixing the toilet (which was a real pain-in-the-ass to figure out). It could even apply to borrowing vacuum cleaners! The point is there's under-utilized resources around people. Imagine FB helping people utilize these resources like Airbnb helps people utilize extra living space.
- stonemetal 14y ago
  several of these exist, not on FB though. Taskrabbit is the first one that comes to mind.
  - brendanib 14y ago
    Yeah, I can't imagine Facebook building exactly what the commenter described, but it'd be interesting for a company like TaskRabbit to integrate their product with the Facebook Ads API, such that if you posted a task, you could pay a few bucks to run local, targeted ads to folks in order to make sure that your task reached the right people.
dc-tech-fan 14y ago
$10,000 at $3/album means over 3000 albums were sold that day, out of 6000 available (according to his ad). So more than half of this random collection was worth buying, and if lets say each person buys three albums, over 1000 people came to his house?
sytelus 14y ago
A basic question: How does the bot owner gets benefited by driving up clicks on FB ads? I understand in case of AdSense, the owner of the site would get cut. But how does the bot owner gets cut from the ads that are displayed on FB pages?
brunorsini 14y ago
Cool story, but he should have mentioned his other business does "better Facebook Analytics than you ever thought possible". The fact that he didn't makes my bias radar beep.
larrys 14y ago
"I counted $10,000 in cash (and some payments accepted via Square - yes, I’m reporting the income, IRS" As an aside the only reason he owes taxes to the IRS would be if this was inventory that he purchased and expensed for the business. If you pay money out of your pocket for some CD's and sell the CD's and assuming you recoup only the amount paid you don't owe taxes on the money that you collected. You haven't made a profit. There aren't enough details in the OP to determine the proper tax treatment of the sale of these records. But typically if he was in business he would have bought records and they would be inventory. When he closed down the business he would have had a taxable event and had to dispose of the inventory and there might have been a loss. He could have purchased that inventory as a private person for any amount and then he becomes the owner. At that point typically any gain over what he paid he might owe taxes. The IRS is not trolling around looking for people who post stories and spending time to see if they reported the income. Besides this would relate to 2012 income which wouldn't be reported until April 2013 and with an extension the return wouldn't be due until Oct 2013. And lest you think someone could turn him in or tip the IRS off - not going to happen. If you don't believe me try to contact the IRS and tell them your neighbor is cheating on their taxes. They want tangible proof. Proof enough to open a case which involves access to actual numbers and records. Like you worked in the office not "I know he's cheating" type info. A story is not enough to get them to investigate. Besides there is nothing they can do until he doesn't pay the taxes by the above dates. Side story: I know of pharmacist locally who dealt in drugs (and went to prison) who was found with $200,000 in cash in his home safe. Eyebrows were raised. Oh boy cash! Did he report it! No problem he went to jail for the drug charges but had no problem with the $200,000. He just reported it on his next tax return that was due. Problem solved.
- rprasad 14y ago
  You've got the right conclusion but the wrong reasoning. Non-inventory sales result in taxable gain if the sale price exceeds the seller's "adjusted basis" (i.e., tax-adjusted cost) in the item sold. For personal property that isn't subject to depreciation (basically, stuff you would sell at a garage sale), the seller's adjusted basis usually exceeds the sale price, so the seller recognizes a loss on the sale. Consequently, the money earned from the sale does not result in taxable income for federal income tax purposes. State income tax laws vary.... Also, income taxes are actually owed at least quarterly. The self-employed and contractors must deal with this timing issue, which can result in penalty interest rates on taxes not timely paid. Employers withhold and remit the taxes with each paycheck using automated payroll systems. April 2012 is the due date to settle up all income taxes for the entire 2012 tax year. In most cases, people will have overpaid taxes b/c remittances over the year were based on estimated income (i.e, prior to deductions and credits).
joelrunyon 14y ago
You sound personally offended that someone didn't find facebook ads profitable. Sure, you may have experienced some sort of success, but you made 10k revenue - not profits (without directly correllating facebook visitors to purchases) and running a garage sale is an entirely different case study than selling an app or online product.
rorrr 14y ago
No, you didn't "made $10K". You basically sold records that you paid for previously. Not only that, but most likely you sold them at a loss. I doubt you paid $3 for them.
w33ble 14y ago
This mirrors my (extremely limited) experience with Facebook ads. They really suck for driving traffic to your site, and you'll see an obscenely high bounce rate. But, if you're trying to drive traffic to something ON Facebook (like this event), they work pretty well.
victorbstan 14y ago
You are not quite right, for you, yes, your clicks may be real, because frankly you're small fry. You aren't managing a brand, there is no one's job hanging on the success of your campaign, no one needs to prove anything to you. So no bot is going to click on your links. However, for ad-agencies, and other big marketing companies, I know for a fact, that some of them engage in purchasing clicks for the marketing campaigns they do for their clients. Why? Because their reputation hangs on the success of the campaign. Slow campaign? Buy a 1000 clicks! I KNOW it is done.
binarysolo 14y ago
"No optimization, no professional consultant, no special relationship with an account manager." Mildly disingenuous to not mention your own expertise, given that you're plugging a Facebook optimization platform that you created at the end of your post. Also mildly linkbait-y title given the whole "made $10k" text -- if I sell a crate of contents worth $20k+ market value for $10k... but others have commenting on that already.
dstroot 14y ago
Look at those guys! Look closely... Definitely bots.
josephcooney 14y ago
2000% - 3000% profit. if you inventory costs are zero.
hluska 14y ago
For fun, let's look at the net income from this venture. The seller sold about 3,300 records. Let's say that he paid an average of $0.60 per records. That's a cost of goods sold of $1,980 and a gross margin of $8,120. The Facebook ad cost $150, which brings net income in at $7,970. Not bad, hey? As per return on investment, let's toss in a measure of time. Let's say that, over the years, the seller spends an average of two minutes on each piece of vinyl he sell. That means that he spent 6,600 minutes (110 hours) on these 3,300 pieces of vinyl. Add in another 6 hours for the sale and the seller still made over $69/hour off of this venture. This analysis ignores all the time it takes to become good enough to actually deal records.
feralchimp 14y ago
My sense is that if you can regularly acquire and store thousands of vintage LPs for less than $3 per record, it doesn't matter where you advertise the yard sale. Glad to hear Facebook ads resulted in greater than zero hits, but I'm guessing so would CL, posters in coffee shops, a sign taped to the back window of a car...
mochizuki 14y ago
You're hosting your blog on Tumblr and the Facebook ad had your address on it, you can't really have input on the allocation of ad clicks if you don't have the server logs to show it.
ck2 14y ago
Was it $10k net or gross? If you are counting your inventory as "free" or written-off already, and you sell cheap, I guess it would be easy to have sales?
enigmabomb 14y ago
The best way to make a small fortune selling records is to start out with a large one. This is a great story, but there is a value proposition here most ads don't have.
89a 14y ago
Headline sounds impressive till you realise it's probably over $30ks worth of records
ozataman 14y ago
Did I understand correctly that the "other business he is growing" is an analytics platform for Facebook ads? Here's the link I got from the post: http://pagelever.com/ http://pagelever.com/ If so, so much for impartiality.

273 points by patrickod 14y ago

You brought in $10k in revenue. That's not the same as "made $10k", at least as I understand that term.

mtkd 14y ago

I can see this scenario working - local event, targeted adverts, non-commodity product. The concern with FB (and other social platform advertising) is around 'intent' and whether you can viably sell commodity product to visitors not actively searching for the commodity product in the way you can by advertising on a search platform - and whether the pricing on a social platform should reflect a different quality of referral.

brendanib 14y ago
Totally agree. It's a huge challenge for brands that are selling products that aren't highly differentiated too - I had the benefit of selling a niche product that's partially built on scarcity. Commercial products are tougher, but they also have agencies whose job it is to spend time and money figuring out how to reach people. As I said, I spent about 30 minutes creating these ads. A big part of what I like about Facebook is that it enables me, as a business owner, to compete on an equal playing field with massive Fortune 500 companies, and in this case benefit even more from Facebook Ads than they do. That's huge for anyone doing anything disruptive, whether it's a startup, a local business, or anyone competing with the status quo.
- vavb 14y ago
  Which massive fortune 500 company were you competing with for your yard sale? I don't get how your facebook event levelled the playing field for you in any way - it just let you clear your stock

executive 14y ago

coming from the guy who sells a Facebook analytics service

human_error 14y ago
The entire post looks like an advertisement.
- Draiken 14y ago
  He's simply profiting on the bots article's fame. If the facebook bots article never existed, this advertise wouldn't exist too.
  - huggyface 14y ago
    He's "profiting" from a conversation. That's how things go around these parts (things always come in waves, and the people looking for hits will quickly get an opinion out. By the way, would you like to hear what I think of the new Apple ads?)
    - Draiken 14y ago
      Yeah unfortunately it's how things work. I'm not criticizing, lots of people do it, but in this case I just felt it was a little bit too forced.
vavb 14y ago
Oh wait so we shouldn't trust the guy whose livelihood depends on people buying FB ads when he says FB ads are fantastic and definitely not a scam cos they worked for him? Oh.
- vavb 14y ago
  And on a side note, I'm not 100% convinced FB ads are going to be very efficient for a someone selling analytics software to multinational companies. So it'll be a different platform then.

rizz0 14y ago

What did the records cost you in the first place? Speaking of ROI, that's part of your investment as well ;-)

rm999 14y ago
Decent point, but the records were a liability for him, their value to him was probably ~0. From that context the revenue was almost pure profit.
- pavel_lishin 14y ago
  So he lost the original amount he paid for the records, because the value went from $COST_OF_RECORDS to 0. That still has to be considered.
- briandear 14y ago
  Those records were an asset. He paid $2000 or so for the records and they had a demonstrable market value of $10,000 (he sold them.) The liquidity could be questioned, but it wasn't a liability.

Avalaxy 14y ago

How did you manage all those people? If there are so many people at the same time looking through your stuff, how can you be sure they don't run off and steal something?

pavel_lishin 14y ago
It looks like it's his back yard. Seems like it would be simple enough to simply stand at the entrance and make sure nobody walks out without having paid.
NathanKP 14y ago
I think the type of people who are interested in old records probably aren't the type of people who would consider shoplifting. I'm not saying that there is no possibility of it happening, but if I was running the event I wouldn't be too worried about theft.

citricsquid 14y ago

This is a nice happy story, but how can you be sure the attendees came from the Facebook adverts and not word of mouth / recommendations that Facebook displays about events friends are attending? That seems much more likely to me as the source of your success.

pavel_lishin 14y ago
Those friends wouldn't have attended if they hadn't seen the ads, right? At least some of them must have clicked the ads. If Billy is the only person who saw the ad and clicked "yes, I'm going", and 299 of his friends show up as well, I'd say that the ad is the original cause of 300 people showing up.
- parsnips 14y ago
  In that case, it sounds like a fantastic deal. Network effect.
MrDOS 14y ago
How is that not a side-effect of the ads?
- citricsquid 14y ago
  The original criticisms of the Facebook advertisements are for adverts to off-Facebook destinations, adverts that do not feed back into Facebook in any way, so to compare them is unfair. This post proves that using Facebook adverts to increase Facebook engagement work, but not that off-site adverts aren't bad, which is what the majority of complaints from the last ~day are.

kposehn 14y ago

Brilliant! Facebook events are a fantastic way to profit and you hit the nail on the head. Glad to see you succeed so well with that effort :)

yaix 14y ago

> calculated ROI, 2000%? 3000%? You do the math. We can't, because we have no idea what you paid for those LPs when you bought them. $10 each? You're confusing turnover with earnings (and "we're" with "were", btw).

micheljansen 14y ago

So revenue equals profit now? You didn't "make" $10k, you sold 3000 records for $10k. I'm assuming those records were not created out of thin air?

CaveTech 14y ago

Lots of talk about the gross money coming in. But it seems to skim over the fact that there's a real product being exchanged. Records being sold at $3 seems like a bargain, but what was the cost of these records to begin with? Sure you made $10,000 in sales, but that's not $10,000 profit, and definitely not a ROI of 2000-3000%.

parsnips 14y ago
If he "inherited" the inventory from a firm that no longer exists, it could very well be profit. Think of how debt collection firms make money.
- s_henry_paulson 14y ago
  You can see in the ads that the inventory came from his own business, so he must have paid for them at some point.
brendanib 14y ago
It's true, this was a liquidation sale, but most of the records came from a batch of 8000 records that I bought for $2000. I was being a bit flippant with the ROI percentage, sorry about that - just trying to stress how easy the process was - I really was blown away when I kept asking people how they found out about the event, and they said they saw an ad for it on Facebook. One thing to keep in mind, as far as calculating ROI, is that if I were to continue to run the business, these are all new customers that I could continue to sell to, so the return on investment isn't purely a one-time thing - the LTV of each customer is way more than they spend in one day.
- veyron 14y ago
  A quick scan on ebay shows that you were charging less than the buy-it-now prices. One other difference is that you were advertising for an event on facebook (as opposed to an external site). Do you pay per click to the facebook page or pay per action (attend or won't attend)?

tazzy531 14y ago

So, wait... If I sell my car using a Facebook ad, I can claim I made $17k in one day?

MiguelHudnandez 14y ago
I suppose you could. It may also help you out if you are selling a Facebook analytics system and you plug it at the end of your claim.
vavb 14y ago
Not only that, you can make a 100000% ROI while you're at it.

carsonm 14y ago

It may not be the author's intention to imply this, and I'm glad he had a good experience, but it's worth mentioning that this is a single experience, and not necessarily evidence that some Facebook ad campaigns aren't being hit with false clicks.

codegeek 14y ago

You made 10K in revenue or profits ? If revenue, tell us your cost as well. if profits, kudos and congrats for smashing success (no pun intended)

moron 14y ago

The point of the post is about the efficacy of the Facebook ad, not revenue vs. profit. Come on, folks.

lalitm 14y ago

In no way can this be called a reply to the "bots" post.

padobson 14y ago

This Facebook promotional campaign (events + targeted ads) was successful, questionable accounting or no.

clarky07 14y ago

As has been pointed out the 10k is revenue, not profit. At $3 a record I doubt there was much profit at all, though it sounds more like a liquidating event so it is still a happy result. To the point of the article though, he advertised on facebook and people showed up and gave him money. Whether or not he is actually profiting from the business isn't really relevant. His ROI is clearly wrong, but the ads had the desired effect of bring in customers. I really hope he doesn't report 10k in profit to the IRS though as he would then be losing even more money than he probably already did on that sale.

unreal37 14y ago
He paid $2000 for 8000 records, so at 25 cents each, most of the $3 was profit.

markokocic 14y ago

Sold 3000 records fro 10k$. I bet he spent much more when he was buying all those records, say 20k$? So, I could read the story as someone lost 10k$ in 10 years because of Facebook ads. And I'm sure someone creating facebook ad analytic service would claim that facebook ads are effective.

mladenkovacevic 14y ago

Brilliant marketing play for PageLever :) Not saying his story isn't genuine.. just saying it's a perfectly timed post targeted at the perfect audience for the product. He knows what he's doing so definitely not surprised he can put together a successful Facebook campaign.

vavb 14y ago
It will definitely drive up traffic, but I don't think that the story is anywhere near convincing enough to undo the damage that has occurred after the clickfraud claims. Would be interested to know how many people from HN would sign up based on this post.

dionidium 14y ago

The point about revenue != profit isn't very clever, though 1/3 of the existing comments are making it. The actual point is that he was able to successfully drive traffic to his event using FB ads. Every comment addressing profit vs. revenue entirely misses the point.

jmduke 14y ago
The argument OP makes is 'I made $10,000 in one day thanks to Facebook, thus Facebook is a superior platform' which is undeniably faulty. 1. The OP did not make $10,000 in one day. 2. We don't know how well this would have done on a non-Facebook platform. My point is that this is like arguing that Facebook is a wonderful platform because Apple makes a lot of money and Apple uses Facebook to advertise. Apple would be making a lot of money without Facebook ads, too; if a company using Facebook ads generates $X revenue, that doesn't mean those Facebook ads were responsible for a specific amount of the revenue. In short: congrats to the author! But this doesn't really prove anything.
- dionidium 14y ago
  The OP did not make $10,000 in one day. Now you're almost willfully missing the point.
  - vavb 14y ago
    You're almost wilfully ignoring that the poster is claiming that he's devised a way of making $10000 profit at 3000%+ ROI but decided instead to make a startup aimed solely around facebook ads - which coincidently were the things he took advantage of to achieve this massive product. Surely something with stats as lucrative as this yard sale would mean that he would create a startup based around selling other peoples stuff after advertising through FB events instead??
    - brendanib 14y ago
      It's actually an idea that I've entertained before, and I think there's tons of businesses that could be built in this space (for example, I'm a huge fan of Yardsale, and this could be an interesting growth strategy for them, to build Facebook Ads directly into their platform). Right now though, I'm having a blast working on Facebook Analytics with my team at PageLever.

charonn0 14y ago

And just yesterday there was a guy on HN claiming that FB ad clicks were 80% bots.

Gertig 14y ago

The author points out that Limited Pressing should be using UTM tags and Mixpanel to track visitors to their site from Facebook, which was not at all the issue that Limited Pressing was concerned with. The issue they had was with paying for those visitors when they shouldn't have to. As the author's current company is based on providing a layer on top of Facebook Analytics/Insights I could see how hearing that 80% of clicks may be bots could be disheartening, but there is no need to lash out at Limited Pressing for presenting their own perspective.

rondon1 14y ago

I just sold a car battery on craigslist for $50. It cost me $0.00. My ROI is well over 3000000%.

polshaw 14y ago

Lesson: facebook ads work great for selling items at below cost. I'm not sure ads were needed in the first place; an event and posting on the pages he talked about /a couple of forums may well have had a similar result.

executive 14y ago

> so what is the calculated ROI, 2000%? 3000%? You do the math. over 9000%

aMtnViewer 14y ago

this is just a shameless plug for his company

callmeed 14y ago

It's funny reading this because our community is having a giant yard sale and I just created an FB event and some ads for it.

danso 14y ago

It's worth noting that this was a local ad in the Bay Area, near Berkeley. http://g.co/maps/6vmc6 http://g.co/maps/6vmc6 i.e. the garage sale took place in a highly-cultured, net-savvy area full of people who do bargain/antique shopping. Back in the late 2000s, my friends in the same area put a cheap 30 word ad in the local newspaper for a garage sale and got dozens of visitors. I don't know how much the ad cost but probably something like 50 to 60 dollars. It's hard to gauge how much of a "success" this is when a Craigslist ad, plus some postings on large music mag forums (and I'm sure SF/Berkeley have their own large local websites) would've drawn the same attention...with a little more handiwork on the seller's end, but without costing $150. * edit: I'd even argue that he might have drawn more people in with Craigslist and a few other nichey-type posts. I'm not a record-collector myself, but I'm guessing that there's a fair amount of them who are used to "digging" to find gems, as opposed to checking out ads/events on Facebook...antique collectors regularly scour the old-fashioned newspaper ads for garage sales because they know the type of old-fashioned people who might have undiscovered antiques are also the type to advertise in newspapers.

brendanib 14y ago
Absolutely - there's a huge competitive advantage being in the Bay Area, and Craigslist ads can get you pretty far. In the past, I'd used Craigslist ads for selling records and seen an okay response - maybe 20-30 people or so, but nowhere near what I saw for this. The other advantage that I didn't fully realize until I started running the ads is how the activity within the Facebook Event serves as a reminder for people to show up - we see tons of ads for events every day that we want to go to, but very few of them ever make it onto our calendar the way that Facebook Events do with one click. My argument isn't that Facebook Ads are the be-all end-all marketing channel - just wanted to share my experience with them. YC folks - feel free to ping me if you want help spinning up some Facebook Ads - always down to help folks out.
- danso 14y ago
  > The other advantage that I didn't fully realize until I started running the ads is how the activity within the Facebook Event serves as a reminder for people to show up - we see tons of ads for events every day that we want to go to, but very few of them ever make it onto our calendar the way that Facebook Events do with one click. That's a very legit point. The various features of FB events make them "stickier" (or whatever the buzzword is) than regular advertising...the feedback options, with prospective attendees asking questions and seeing how you respond to them, is also likely to boost interest. It's not quite fair to say "Oh, this is the same as Craigslist ad postings, except you paid" just as it would be silly to ignore Airbnb because it seems just like paid Craigslist ad postings. That said, given the nature of the niche market here (though you probably know better than anyone), it's not clear that the success would easily apply to other kinds of businesses...or phases (i.e. a startup trying to get attention vs. a business having a out-of-business clearance sale).

dev1n 14y ago

I would be interested in seeing the statistics on the advertisements themselves. Did the OP see an 80/20 response rate like Limited Run? What was the ratio of people who showed up to the event versus the ratio of clicks on the ads versus the number who said they would attend the event on facebook versus actually showing up. Please provide more information, otherwise I see this article as useless babble with a plug at the end.

dlikhten 14y ago

You created an EVENT. The EVENT cannot be added via a bot, so facebook was protecting itself essentially. Event invitations and click-through are different. Just sayin'

MetalMASK 14y ago

There is only one thing I want to know behind the story is if the author has purchased facebook stock or not. Just some background info might help understand the motivation.

iamzen 14y ago

I work in the marketing department of one of the biggest nightlife companies in the world. Facebook ads for our events/nights have been so successful for us that we stopped doing google ads.

Juuumanji 14y ago

Nice linkbait article here. What about the real costs? yea, lets just omit those and hope to get some media traction. weak.

baby 14y ago

Okay, I need a way to get 3000 vinyles now.

spaghetti 14y ago

The article reminded me of a thought I had regarding FB's monetization strategy: strictly local advertisements. The ad matching algorithm would place the most weight on geographical distance then interests etc. FB's ubiquitous nature today could make this work. Here's a use case that motivated the idea: I live in a densely populated area where everyone around me has a car. Say I wake up to a flat tire. I'd much rather pay someone $20 to just fix it in 10 minutes than get the car towed or figure out how to do it myself. Imagine searching for "fix spare tire" on Facebook and receiving search results for five people that all live with-in two blocks. Choose a person, agree to pay with cash, they show up and fix the tire. The service FB provides in this example has real value. If this service existed I'd actually use Facebook, take a good look at the ads and perhaps even pay a small monthly fee. To use an over-used term I see this as "the Airbnb of everything else". It could be applied to simple plumbing tasks like fixing the toilet (which was a real pain-in-the-ass to figure out). It could even apply to borrowing vacuum cleaners! The point is there's under-utilized resources around people. Imagine FB helping people utilize these resources like Airbnb helps people utilize extra living space.

stonemetal 14y ago
several of these exist, not on FB though. Taskrabbit is the first one that comes to mind.
- brendanib 14y ago
  Yeah, I can't imagine Facebook building exactly what the commenter described, but it'd be interesting for a company like TaskRabbit to integrate their product with the Facebook Ads API, such that if you posted a task, you could pay a few bucks to run local, targeted ads to folks in order to make sure that your task reached the right people.

dc-tech-fan 14y ago

$10,000 at $3/album means over 3000 albums were sold that day, out of 6000 available (according to his ad). So more than half of this random collection was worth buying, and if lets say each person buys three albums, over 1000 people came to his house?

sytelus 14y ago

A basic question: How does the bot owner gets benefited by driving up clicks on FB ads? I understand in case of AdSense, the owner of the site would get cut. But how does the bot owner gets cut from the ads that are displayed on FB pages?

brunorsini 14y ago

Cool story, but he should have mentioned his other business does "better Facebook Analytics than you ever thought possible". The fact that he didn't makes my bias radar beep.

larrys 14y ago

"I counted $10,000 in cash (and some payments accepted via Square - yes, I’m reporting the income, IRS" As an aside the only reason he owes taxes to the IRS would be if this was inventory that he purchased and expensed for the business. If you pay money out of your pocket for some CD's and sell the CD's and assuming you recoup only the amount paid you don't owe taxes on the money that you collected. You haven't made a profit. There aren't enough details in the OP to determine the proper tax treatment of the sale of these records. But typically if he was in business he would have bought records and they would be inventory. When he closed down the business he would have had a taxable event and had to dispose of the inventory and there might have been a loss. He could have purchased that inventory as a private person for any amount and then he becomes the owner. At that point typically any gain over what he paid he might owe taxes. The IRS is not trolling around looking for people who post stories and spending time to see if they reported the income. Besides this would relate to 2012 income which wouldn't be reported until April 2013 and with an extension the return wouldn't be due until Oct 2013. And lest you think someone could turn him in or tip the IRS off - not going to happen. If you don't believe me try to contact the IRS and tell them your neighbor is cheating on their taxes. They want tangible proof. Proof enough to open a case which involves access to actual numbers and records. Like you worked in the office not "I know he's cheating" type info. A story is not enough to get them to investigate. Besides there is nothing they can do until he doesn't pay the taxes by the above dates. Side story: I know of pharmacist locally who dealt in drugs (and went to prison) who was found with $200,000 in cash in his home safe. Eyebrows were raised. Oh boy cash! Did he report it! No problem he went to jail for the drug charges but had no problem with the $200,000. He just reported it on his next tax return that was due. Problem solved.

rprasad 14y ago
You've got the right conclusion but the wrong reasoning. Non-inventory sales result in taxable gain if the sale price exceeds the seller's "adjusted basis" (i.e., tax-adjusted cost) in the item sold. For personal property that isn't subject to depreciation (basically, stuff you would sell at a garage sale), the seller's adjusted basis usually exceeds the sale price, so the seller recognizes a loss on the sale. Consequently, the money earned from the sale does not result in taxable income for federal income tax purposes. State income tax laws vary.... Also, income taxes are actually owed at least quarterly. The self-employed and contractors must deal with this timing issue, which can result in penalty interest rates on taxes not timely paid. Employers withhold and remit the taxes with each paycheck using automated payroll systems. April 2012 is the due date to settle up all income taxes for the entire 2012 tax year. In most cases, people will have overpaid taxes b/c remittances over the year were based on estimated income (i.e, prior to deductions and credits).

joelrunyon 14y ago

You sound personally offended that someone didn't find facebook ads profitable. Sure, you may have experienced some sort of success, but you made 10k revenue - not profits (without directly correllating facebook visitors to purchases) and running a garage sale is an entirely different case study than selling an app or online product.

rorrr 14y ago

No, you didn't "made $10K". You basically sold records that you paid for previously. Not only that, but most likely you sold them at a loss. I doubt you paid $3 for them.

w33ble 14y ago

This mirrors my (extremely limited) experience with Facebook ads. They really suck for driving traffic to your site, and you'll see an obscenely high bounce rate. But, if you're trying to drive traffic to something ON Facebook (like this event), they work pretty well.

victorbstan 14y ago

You are not quite right, for you, yes, your clicks may be real, because frankly you're small fry. You aren't managing a brand, there is no one's job hanging on the success of your campaign, no one needs to prove anything to you. So no bot is going to click on your links. However, for ad-agencies, and other big marketing companies, I know for a fact, that some of them engage in purchasing clicks for the marketing campaigns they do for their clients. Why? Because their reputation hangs on the success of the campaign. Slow campaign? Buy a 1000 clicks! I KNOW it is done.

binarysolo 14y ago

"No optimization, no professional consultant, no special relationship with an account manager." Mildly disingenuous to not mention your own expertise, given that you're plugging a Facebook optimization platform that you created at the end of your post. Also mildly linkbait-y title given the whole "made $10k" text -- if I sell a crate of contents worth $20k+ market value for $10k... but others have commenting on that already.

dstroot 14y ago

Look at those guys! Look closely... Definitely bots.

josephcooney 14y ago

2000% - 3000% profit. if you inventory costs are zero.

hluska 14y ago

For fun, let's look at the net income from this venture. The seller sold about 3,300 records. Let's say that he paid an average of $0.60 per records. That's a cost of goods sold of $1,980 and a gross margin of $8,120. The Facebook ad cost $150, which brings net income in at $7,970. Not bad, hey? As per return on investment, let's toss in a measure of time. Let's say that, over the years, the seller spends an average of two minutes on each piece of vinyl he sell. That means that he spent 6,600 minutes (110 hours) on these 3,300 pieces of vinyl. Add in another 6 hours for the sale and the seller still made over $69/hour off of this venture. This analysis ignores all the time it takes to become good enough to actually deal records.

feralchimp 14y ago

My sense is that if you can regularly acquire and store thousands of vintage LPs for less than $3 per record, it doesn't matter where you advertise the yard sale. Glad to hear Facebook ads resulted in greater than zero hits, but I'm guessing so would CL, posters in coffee shops, a sign taped to the back window of a car...

mochizuki 14y ago

You're hosting your blog on Tumblr and the Facebook ad had your address on it, you can't really have input on the allocation of ad clicks if you don't have the server logs to show it.

ck2 14y ago

Was it $10k net or gross? If you are counting your inventory as "free" or written-off already, and you sell cheap, I guess it would be easy to have sales?

enigmabomb 14y ago

The best way to make a small fortune selling records is to start out with a large one. This is a great story, but there is a value proposition here most ads don't have.

89a 14y ago

Headline sounds impressive till you realise it's probably over $30ks worth of records

ozataman 14y ago

Did I understand correctly that the "other business he is growing" is an analytics platform for Facebook ads? Here's the link I got from the post: http://pagelever.com/ http://pagelever.com/ If so, so much for impartiality.