As easy as it might be for some people to buy into your narrative, on HN, it realllllly isn't true.
The basic statistics to calculate the RoI on a banner ad spend isn't particularly difficult when you have a software dev/web dev available.
No matter how much click/impression fraud there is...you are trying to track conversions not clicks/impressions at that scale.
If I know I spend $500 and get 10 sales, it isn't a statistically valid sample but its pretty clear if I break even on that $500...I should keep doing it since its essentially free marketing. Similarly, if I'm willing to eat $N per customer acquired via marketing, the same is true as long as $50/customer is equal to or less than my margin per sale + $N. "Sale" in this context is tracking what exactly those 10 people bought over the lifetime of them being a customer, generally.
The only real thing the "already successful" people have is a bunch of smoke and mirrors that honestly doesn't have verifiable value that they use to bullshit clients. Conversion rate is literally the only statistic that is verifiable, cost effective to verify, and able to give you a concrete idea of whether or not the RoI of the campaign is worth it.
We have an on staff statistician and his primary job is just automating the conversion rate calculations, the return-per-ad-campaign, etc. We spend enough money its worth hiring a staff statistician to do that but honestly any programmer with a book on statistics would 90% as good.
I am talking about ROI. If you're bootstrapping a project, I doubt you can get a good enough ROI in online advertising for your first 100 sales. If I had the kind of money to make online advertising work for the conversion rates I've seen on my projects, I wouldn't be trying to start a business in the first place.
If you were starting a project on your own, tomorrow, and the only money you had was the money in your own savings, what would you do? You said $500 gets you 10 sales. Where? How?
The math is the same whether you have a company going through $500 a month in marketing or $5 million a month.
Yes, if your conversion rate doesn't make sense for you, don't do it.
I'm not going to go arguing how to make $500 into 10 sales. It depends on what you are selling, what the competition is bidding for ads, your lifetime value of a customer, etc.
This is really not a strange/weird/unusual scenario for a combination of 20+ low competition CPC ads on Bing, Google, etc. Given small budgets, that is what you'd aim for as you don't have the money to compete with the high cost keyword bidders.
I'm confused why you think that is hard to achieve?
These numbers aren't particularly optimistic given most people aim/expect a ~1% conversion rate, so if it was .8%, you could double your CPC, etc.
I'm not disputing your formula, I'm disputing your inputs. It's the part you've explicitly dismissed that is the problem. You can't say "our $5 million/month spend for 100,000 users proves that you could spend $50/mo and get 1 user."
You keep throwing theoreticals around, inventing numbers to match your narrative. "If horses were 10 feet tall, then we'd be able to ford this river." A 10 foot tall horse is called an elephant, and we can't afford elephants. How do we ford this river with the one horse we have? And your answer is, "well, if animals were 5 times larger than they usually are, then I don't understand how you don't understand."
...yes its actually easier with less money as 83 clicks a day is all you need so you aren't competing with high cost keywords which tends to start being unavoidable somewhere past 100+ clicks/day.
And yes, I've done this with $500/month as the spend. If you go through my comment history you'll notice I used to work entirely with small businesses as a contractor which I've mentioned at least a couple times I believe.
I wouldn't use up-to-date hypotheticals from my current job given its a scale almost no one on HN would operate at. :/
I'm not really sure what your conviction this isn't possible comes from?
Obviously, $50/month/sale is not going to work out for a book that sells for $10 but that is a different problem.
The basic statistics to calculate the RoI on a banner ad spend isn't particularly difficult when you have a software dev/web dev available.
No matter how much click/impression fraud there is...you are trying to track conversions not clicks/impressions at that scale.
If I know I spend $500 and get 10 sales, it isn't a statistically valid sample but its pretty clear if I break even on that $500...I should keep doing it since its essentially free marketing. Similarly, if I'm willing to eat $N per customer acquired via marketing, the same is true as long as $50/customer is equal to or less than my margin per sale + $N. "Sale" in this context is tracking what exactly those 10 people bought over the lifetime of them being a customer, generally.
The only real thing the "already successful" people have is a bunch of smoke and mirrors that honestly doesn't have verifiable value that they use to bullshit clients. Conversion rate is literally the only statistic that is verifiable, cost effective to verify, and able to give you a concrete idea of whether or not the RoI of the campaign is worth it.
We have an on staff statistician and his primary job is just automating the conversion rate calculations, the return-per-ad-campaign, etc. We spend enough money its worth hiring a staff statistician to do that but honestly any programmer with a book on statistics would 90% as good.