The BIGGEST Illusion That F*cks You From Scaling Paid Ads

SUMMARY

Jeremy Haynes discusses the "trough of scaling" in paid advertising, an illusion where ROAS drops during expansion, urging advertisers to push through for higher profits despite lower returns.

STATEMENTS

• When scaling paid ads, ROAS often decreases slightly, leading many to pull back spend and mistakenly believe that's their maximum potential.
• The trough of scaling reveals the true baseline ROAS as daily spend increases, but it doesn't drop indefinitely—there's a floor where it stabilizes at higher volumes.
• Ad platforms like Meta prioritize high initial results for new advertisers to encourage retention, biasing early campaigns toward low-cost conversions from in-market audiences.
• In-market demographics represent 3-4% of a market and yield the highest ROAS, but scaling exhausts this group, shifting to colder audiences with lower returns.
• Needs-convinced audiences, up to 30% of the market, require more persuasion and result in progressively lower ROAS compared to in-market buyers.
• Mass market and non-customers form broader layers that demand significant convincing, further reducing ROAS as ad reach expands beyond warm leads.
• Niche size and geographic restrictions limit the in-market pool; small markets deplete quickly, accelerating the ROAS drop during scaling.
• Comparison bias tricks advertisers into reverting to lower spends after seeing ROAS decline, preventing them from realizing profits at higher volumes.
• Even with lower ROAS, increased daily spend can generate more overall revenue if basic math justifies pushing through the trough.
• Continuous improvement actions, like conversion rate optimization, must accompany scaling to mitigate ROAS drops and maintain performance.

IDEAS

• Ad platforms algorithmically favor new advertisers with optimal targeting to hook them early, creating artificially inflated ROAS that isn't sustainable at scale.
• Exhausting the tiny in-market audience first leads to a rapid shift to colder prospects, explaining why even small spend increases can spike costs dramatically in narrow niches.
• The illusion of permanent ROAS decline ignores the "floor" effect, where high-volume spending stabilizes returns at a viable baseline for massive profit growth.
• Geographic and demographic specificity shrinks the viable customer pool to mere dozens in local services, making scaling feel impossible without expansion mindset.
• Painters or similar local pros at $10-20 daily spend can clear in-market leads quickly, but comparison to initial highs halts growth despite ongoing profitability.
• High-ticket businesses across info products, services, and e-commerce routinely hit this trough, yet overlook that "both" scaling and optimization yield riches, not "either/or."
• Platforms limit new accounts to $50-250 daily to match small business norms, ensuring early wins that mask the true market dynamics revealed at higher spends.
• Chet Holmes' pyramid model illustrates how scaling inherently cools audiences, dropping ROAS predictably unless countered with aggressive funnel fixes.
• Even at $17 leads versus $2 initials, math shows painters could build empires by sustaining spend, expanding territories instead of retreating.
• Handsoff campaigns inevitably degrade; scaling demands ongoing CRO and bottleneck analysis to prevent troughs from becoming permanent barriers.

INSIGHTS

• Scaling paid ads uncovers authentic market potential by depleting easy wins, forcing a pivot to broader persuasion that ultimately unlocks exponential revenue if endured.
• Initial platform favoritism creates a false peak of performance, training advertisers to fear natural audience cooling rather than embracing volume-driven profitability.
• Narrow niches amplify the trough's intensity, highlighting how geographic limits demand mindset shifts toward expansion before optimization alone suffices.
• Comparison bias perpetuates small-scale comfort, blinding entrepreneurs to the arithmetic truth that lower ROAS at higher spend multiplies net gains.
• Wealth-building rejects binary choices; simultaneous aggressive scaling and funnel improvements compound returns, turning illusions into scalable realities.
• Ad ecosystems prioritize retention over truth, coding for quick successes that sustain the platform's revenue while challenging users to adapt beyond the honeymoon phase.

QUOTES

• "There's a big problem that happens a majority of the time where when you start scaling up, your rorowaz will start to creep down a little bit."
• "The illusion is that it just continues to push down forever. It does not."
• "Inmarket demographics usually this is about 3 to 4% of a given market."
• "When you're rich, life is not about either ors, my friend. You get to do boths when you're rich."
• "Something is always probable to need improved. Something's always probable to have to require attention to flow towards it to keep the statistic at the level that it's currently at."

HABITS

• Regularly perform bottleneck analysis on ad funnels to identify and fix contractions that lower ROAS during scaling.
• Justify scaling decisions with financial math, calculating net profits even at reduced ROAS to push beyond the trough.
• Aggressively pursue conversion rate optimization (CRO) actions alongside increased spend to counteract natural performance dips.
• Watch for platform updates like Meta's Andromeda algorithm and adapt best practices to maintain ad efficiency.
• Avoid handsoff management by dedicating ongoing attention to key metrics, ensuring campaigns evolve rather than stagnate.

FACTS

• Ad platforms cap new accounts at $50 to $250 daily spend to align with small business starters, fostering early positive results.
• In-market audiences comprise just 3-4% of any market, the most conversion-prone segment before scaling hits colder layers.
• Needs-convinced prospects can reach 30% of a market, but require more ad investment for lower ROAS than in-market buyers.
• A Miami painter's in-market pool for local commercial and residential jobs likely numbers only dozens at any time.
• Local service ads at $10-20 daily can exhaust in-market leads in days, shifting costs from $2 to $17 per lead as reach broadens.

REFERENCES

• The Ultimate Sales Machine by Chet Holmes (pyramid model for audience layers).
• Jeremy's Inner Circle program (one-on-one coaching, group calls, masterminds, training library, Jeremy AI, SOPs).
• Master Internet Marketing program (7-week class with lifetime access, annual updates, preview of week one).
• Meta's Andromeda algorithm (recent platform update affecting ad performance).
• YouTube channel videos (free resources for ROAS improvement and paid ad basics).
• Megalodon Marketing agency (application to work with for scaling support).

HOW TO APPLY

• Monitor ROAS closely when increasing daily spend, recognizing initial drops as the trough rather than failure, and commit to a 1-2 week observation period before adjustments.
• Map your audience using the in-market pyramid: identify your 3-4% hot leads first, then prepare messaging for the 30% needs-convinced layer to ease the transition.
• Run basic financial modeling: calculate projected revenue at 20-50% lower ROAS with doubled spend to confirm profitability, using tools like spreadsheets for daily projections.
• Conduct weekly bottleneck audits on your funnel—review page rates, opt-ins, show rates, and conversions—to pinpoint and optimize weak steps amid scaling.
• Layer free YouTube learnings with paid programs: start with video strategies for basics, then join structured courses for advanced CRO and accountability in pushing spend.

ONE-SENTENCE TAKEAWAY

Push through the scaling trough's ROAS dip with math and optimization to unlock true high-volume profitability.

RECOMMENDATIONS

• Embrace the trough as a signal to expand geographic or demographic targeting, turning local limits into national opportunities.
• Integrate continuous CRO habits early to flatten ROAS declines, ensuring scaling amplifies rather than erodes margins.
• Reject either/or thinking by hiring teams or using AI tools for dual focus on spend growth and performance tweaks.
• For niche businesses, start small to validate in-market wins, then aggressively scale while monitoring audience cooling via analytics.
• Leverage free resources like updated YouTube videos before investing in programs, building foundational knowledge to avoid common scaling pitfalls.

MEMO

In the high-stakes world of paid advertising, a deceptive dip often derails ambitious entrepreneurs just as they edge toward seven-figure months. Jeremy Haynes, a digital marketing veteran based in Miami, calls it the "trough of scaling"—a predictable plunge in return on ad spend (ROAS) that lures advertisers back to safer, smaller budgets. Drawing from client war stories and platform mechanics, Haynes argues this isn't a flaw but a feature of how ad giants like Meta engineer early successes to hook users, only to reveal harsher market realities at volume.

The phenomenon strikes universally, from organic starters to ad pros plateauing below millions. At low spends—say, $50 to $250 daily, the entry-level caps for new accounts—platforms serve up prime prospects from the "in-market" crowd, a mere 3-4% of any audience primed to buy. ROAS soars, often hitting 20-to-1 ratios, fostering illusions of endless gains. But as spend climbs, that hot pool exhausts fast, thrusting campaigns into "needs-convinced" layers (up to 30% of the market) and beyond, where colder leads demand heavier persuasion and yield slimmer returns.

Haynes illustrates with a local painter in Miami, targeting waterfront commercial jobs in a hyper-specific zone. At $10 daily, leads cost $2 apiece from eager in-marketers; doubling to $20 barely budges it to $3-5. Yet pushing to $50 floods the feed with thousands of impressions, spiking costs to $17 as mass-market skeptics enter the mix. The painter, blinded by comparison bias, retreats—missing the math showing sustained scaling could birth a statewide empire, even at higher per-lead prices.

This trap thrives on mindset: the false binary of scale versus stability. True wealth, Haynes insists, demands "boths"—ramping budgets while wielding conversion rate optimization (CRO) like a scalpel. Audit funnels for bottlenecks, adapt to updates like Meta's Andromeda algorithm, and model finances rigorously. Handsoff dreaming dooms campaigns; perpetual tweaks keep ROAS from cratering.

For those ready to break through, Haynes offers a ladder: free YouTube deep dives for tactics, his Master Internet Marketing program for structured training, or the elite Inner Circle for masterminds and AI-driven tools. In a landscape rigged for retention over revelation, surviving the trough means rewriting the rules—scaling boldly, optimizing relentlessly, and claiming the millions beyond the illusion.