In this social media advertising case study, we're going to take a look at how I was able to get a 2166% return on investment (ROAS) on Facebook Ads, for a BRAND NEW blockchain company selling turnkey GPU mining machines to retail investor consumers.
One important thing to understand is this was back in late 2021 during the bull market, so crypto was trending and there was a lot of excitement around GPU mining. Basically everyone who bought in during that time was making money. I could make a facebook post in a group saying I had GPUs at wholesale prices and within minutes I would have a dozen messages. I started by scalping GPUs and then eventually started building mining platforms. GPUs were hard to get but I could buy the mining platforms and install of the software so all someone had to do was plug a GPU into the machine and it would start mining.
Things are much different now after the ETH merge has basically ended mining and the crypto market cap has fallen substantially. But the principals I used to grow this business - of how to acquire customers from the internet are still the same.
Another important thing to understand is that the only reason advertising like this works is because of the CONTENT thats published online. If I would have had some vague generic website with little to no information, I wouldn't have had these results. But I spent a long time developing my blog and content, which gave people shopping around plenty of stuff to look at. Then by the time someone sent me a message they were basically sold already. So if you like what you see, hire me to create an online ecosystem of content like this for your business.
A total of $600 was spent on Facebook Ads to acquire 7 customers bringing the average cost of customer acquisition to $85. The average profit per customer was $2200. The ROI on facebook advertising cost was 2166%
I created the brand, website, graphics, videos, social media accounts, analytics, and everything the business needed to go from ZERO on the internet to generating tons of leads.
The first step was to create a social media accounts on facebook and instagram and then load up those channels with at least 10+ good posts explaining every detail that someone might want to know. Included in the posts are tons of photos, hashtags, long captions...
After that I created a website with google analytics, facebook pixel, chat integration, and form submission automations with Zappier so that when someone filled out the form on my website they would automatically get follow up emails. Customers can also ask questions while they browse my website so I can direct them to my articles.
I made sure to put a LOT of information on the website.
Personally I won't buy from some vague website that doesn't give me very much information. I'll virtually always buy from the resource online that gives me the MOST information. Thats just me. But I think a lot of people who do research online before they take action appreciate having a lot of information.
The next part was to create the articles. I created several 1000+ word blog articles with overwhelming amounts of information. More than anyone would possibly read, but I found that because I did this, a lot of people who were shopping online were "sold" on the company since this was the only mining company online that went into that much depth with showing people data and charts. None of my competitors have articles like this.
After all that content was deployed on the internet I started running facebook ads.
Below you can see screenshots from facebook showing how much was spent and how many clicks my ads got. Some people I directed to blog articles, and others were directed the home page.
Because I had analytics and pixel installed, I could see how many people were going to my website and confirm that the data from facebook was correct. I could see each person spent about 48 seconds on my website. That's pretty good!
I did a few small tests with videos and simple ads. I found that the simple image just like my competitor was running performed the best.
I started getting dozens of messages
GPU Crypto mining is a complex subject with a lot of variables, and it's also quite expensive. The biggest challenge I faced was that a lot of the people messaging me only had a few hundred dollars to invest, but mining rigs cost tens of thousands. Most people also didn't understand the complex math behind how to calculate the returns, or were misinformed about the profitability. Others were scared off by the impending ETH2.0 "merge". Crypto Mining is not something just anyone can start doing. It takes a lot of money to get started which people don't realize. So a lot of the leads were "tire kickers" or a waste of time. But despite these time wasters there was still plenty of interest from serious investors.
From the $600 dollars I spent on facebook ads - over the next month I acquired 7 customers that bought rigs for between $5,000-$15,000. I ended up making about $13,000 profit from those 7 customers. So my average profit per customer was almost $1,857. That's a 2166% ROI on adspend!
Now as you can imagine at this point I was over the moon with excitement. I thought, "I've finally made it". I could just spend 10X more money on ads and get 10X the amount of sales right?
Being able to get new customers just from the internet was a game changer. People were now coming to me I no longer had to go out and try to "hustle" to get sales. I had multi-millionaire investors and CEOs calling me - it was a rush of excitement. But that excitement wore off once I realized I couldn't really scale the business.
The challenge I faced in scaling the production was I had a several people that wanted to buy mining rigs, but at that time GPUs were scare. I need dozens of GPUs but couldn't buy more than 2 or 3 at a time, and only at super inflated prices.
I couldn't keep up with the demand and get GPUs fast enough to fulfill any more orders. So I had to shut down my ad campaign because if I got any more leads I couldn't fulfill those orders anyway. It was frustrating because if I could just acquire GPUs I had millions of dollars lined up to build Mining Rigs.
Shortly after this Meta shut down advertising for any kind of cryptocurrency related products or services. This brought my lead flow to a halt - and it was back to trying to get sales the old fashioned way since Google and Meta don't allow any kind of crypto related ads.
I managed to sell more rigs just from flyering. I would go out and leave hundreds of my flyers around some nice areas in Denver. Several weeks later someone called me and bought a rig. Then referred one of their friends, and because of my Google My Business presence I had (and still have) people calling me for mining advice because they found me on local search.
Since the crypto market crashed in 2021 profitability for mining went way down. Less people became interested in it, and the ETH merge scared most people away.
I basically gave up on trying to get more customers and walked away from this business. I still get regular calls from just being on Google, but I'm not actively promoting it anymore.
Even though crypto mining isn't booming anymore, the principals behind building an online lead generation funnel remain the same for any business. The social media content, website, analytics and automations are the foundations.
Once those foundations are in place, one can acquire customers for a low cost using paid facebook traffic.
