organic vs paid traffic, what actually works in 2025

Summary

the organic vs paid debate is a fake debate. the answer is both, in the right sequence, with the math doing the talking.

here’s the order:

1. organic first. prove the offer converts with content and audience. if you can’t get organic traffic to buy, paid traffic won’t fix that. paid is an amplifier, not a savior.

2. paid second. once the funnel converts on organic, paid is how you scale it past your reach. this is where most business owners chicken out because spending money on ads feels worse than spending years on content. it shouldn’t.

the math is the unlock. two numbers run the whole game:

• cost per lead (CPL). how much it costs you to acquire one prospect.
• lifetime value (LTV). how much revenue that prospect generates over the relationship.

if LTV beats CPL by enough margin to cover your fixed costs and leave profit, you have a printer. if not, you fix the funnel before you fix the spend.

business success is not a popularity contest. it’s a math problem. the operators willing to actually run the spreadsheet, eat the short-term ad costs, and trust the numbers are the ones who scale. everyone else stays small and calls it “staying organic.”

I built a simple calculator for CPL and LTV. plug in your numbers. let the math tell you which channel to feed.

Transcript

the fake debate, organic vs. paid

business is math not popularity and I think if more business owners knew how to do the business math their businesses would grow faster so today let me show you how to do all the business math so you can scale your business faster and I’ll also give you some tools to make it a whole lot easier so I’m relatively new to creating content on YouTube and video content on Instagram things like that but I’m not new to

running online businesses I’ve been doing it since 2011 generated nearly 30 million dollars in revenue since then and a lot of that in the last few years and the reason I’ve been able to grow businesses is not because I just was doing everything behind the scenes I was predominantly doing it through Facebook advertising Google advertising email newsletters and then also audio only podcasting which doesn’t get your face out there as much but can still grow a

massive audience anyway that’s how I’ve been doing it now that I’m switching gears a little bit I’m realizing there’s a lot of content out there of people who saying like hey all you need is organic content and you can grow your business and then they kind of brag that they’ve never had to pay for leads or pay for customers and I think that’s great for these top one percenters who are creating content doing those things but

that’s not the reality for everyone else in fact I’ve done it in reverse for the last 10-15 years and now I’m going more organic content heavy just to really have a pole in the water everywhere so I’m doing a little bit of everything and have all my bases covered but here’s the deal I have seen and I know these teams people who create organic content they will spend six figures a year on a media team and

I’ll spend 60 hours a week researching ideas scripting doing all these things for their content and then they’ll brag that they’ve never spent a dollar on leads but do you see the disconnect there between time and money and what they’re actually investing to get the leads and customers advertising on the other hand is kind of the opposite it does take a little bit of time but after you have the ads on if they’re effective you can

get leads and customers without having to use your time as much and you can go do other things and that’s what I’ve been doing over the years I think a combination of both a hybrid approach is the future and if you really want to grow your business it’s not do ads and it’s not do organic content it’s do ads and organic content and I think if you can understand some very simple business now which I’m going

to go over and I’m also going to give you some very simple tools that you can use so you don’t have to write all this stuff down you just use my tools and you can know hey how do I scale how much can I pay for customer how much can I pay for an email subscriber I’m gonna give you all that for free today in this video and stick around and this is how you actually grow

why organic comes first

a company okay so I’m going to do two things right now one I’m going to show you exact math and one of the brands that I currently run to help you understand how this kind of business scaling math works and then I’m going to show you a calculator of you know interactive form that I created just for you so you can do this in your own business one of the questions I get all the time when

people start advertising or correcting collecting leads for newsletter or collecting leads for whatever reason for their business and they’re paying for them the question is always how much can I pay for a lead and the answer is it depends so in my fitness brand garage gym athlete right now we collect email subscribers for about a dollar a piece which is incredibly low for my personal brand everything that you know my current newsletter that you’re probably subscribed

to if you’re not go into the description of this episode and make sure you sign up for that well anyway we’re getting subscribers for that newsletter at about two dollars and fifty cents to three dollars per subscriber and then some of my b2b brands we’ve ranged anywhere from ten dollars to fifty dollars to a hundred dollars per lead and so which one’s good which one’s bad there is no good and bad there’s only when the math

maths that’s all there is and so there’s not a bad cost per lead there’s only bad scaling math so let’s get into it let’s break it down so I can show you exactly how this looks again I’m gonna be doing this for my fitness brand garage gym athlete kind of show you how that works and then we can talk about how it might look in your business so diving right in so in this business so in

this business we have leads we have trials so people signing up for a free trial to try out the service and then trial to paid and then also LTV so it’s cost per subscriber to trial to paid and then lifetime value that’s something that you need to know right off the bat like I said I’ll make this very make a lot of sense for your business by the end of this video so our current cost per

subscriber already mentioned is about a dollar and the subscriber to trial is 30% so of all the people who subscribe to the email newsletter for this fitness brand about 30% of them are going to end up becoming you know starting a trial within the first 30 days of signing up and of the people who start a trial 33% of them will convert to paid in the lifetime value of one member is roughly a hundred and fifty

when to layer in paid

dollars now this averages out with some people being really high and some people being really low some trials not converting it all just goes into the big wash for all these things and so I’ll talk about all this a little bit more before this specific brand that’s kind of what it looks like dollar for a subscriber dollar for a lead 30% of them are going to start a trial 33% of those trials will convert to paid

and then $150 is the lifetime value so let’s see what that actually looks like when we break it down okay so let’s say I spend $100 I get 100 leads people who are interested in this product or service now of those you know it’s going to be very simple math from there of those hundred leads following this that 30 are going to become trials okay and then 33% of them are going to end up paying so

when we jump to that we now have 10 paid members and then I’ll talk about LTV in a minute but ultimately let’s talk about the cost of all of these things so if I have a hundred leads at a at a dollar piece I’ve spent $100 subscriber to trial really cost me nothing they just have to go through it and then trial the paid how much money do I actually make well if I have 10 paid

and it’s $25 per month that means I’m gonna make 250 bucks at the end of that trial so this is costing me a hundred and I’m making 250 so most business owners can do this math they’re like okay I made 150 bucks and that’s good because I’m getting a hundred and fifty dollars profitably to get new people into my ecosystem and this I could sell them other things we could do other things over time they get

more bought in they could stick around for longer than the average LTV all these things need to be factored in but what people don’t actually look at is the LTV so you look at this and I in my mind it’s already good but a lot of business owners even quit here because they’re like oh you spent a hundred bucks and you’re only making 150 and I’m like where else can you can you do that in the

stock market can you go can you don’t go do that in the next week where you put in a hundred and get 150 bucks in the stock market with it being relatively hands-off and the answer is most likely no unless you really know what you’re doing but the LTV of these ten people equals 1,500 bucks right so that changes the math dramatically right so I’m making 1,500 bucks so that counts all this so it’s really I’m

the two numbers that run the game

spending a hundred to make 1,500 spending a hundred to make 1,500 that is the most scalable business model you could think of it’s not it’s not massive like it depends on how what you’re selling right I don’t recommend most people doing what I do or have done a garage gym athlete with a $25 month membership and the main reason being is because we have such high volume and traffic from having had a website for 10 or

15 years and a podcast all these other things we have a higher volume lead volume than most people so I don’t recommend a $25 month membership so if you’re selling something more expensive which is what I typically recommend the math gets even better and so that’s what I want to dive into next and what this could look like for your business but you see how the simple scaling math of taking into account your LTV changes everything

so if you can stomach the LTV because I could even spend if my cost per subscriber went up to $3 cost per subscriber and this cost me $300 to get a hundred new leads and I still only made 250 bucks I’m gonna lose 50 right I’m gonna lose 50 bucks in the short term in the long term I’m still gonna be making money and that’s why most business owners can’t really scale through advertising is they don’t

do this math or they don’t trust and believe that it’s actually possible for them so let’s look at this for your specific business and I can show you what to do to make sure that you’re on a safe scaling path alright so now let’s take a completely different business model and we’re gonna start with your LTV because most people don’t know how to do this and we’re gonna be doing back of napkin math LTV here so

let’s say the total revenue you’ve made as a company is $600,000 all right and then of that $600,000 that was across 400 customers so this is really simple all right we are saying all the money you’ve ever made in your business that’s the revenue amount you want to take and then all of the customers you’ve ever had and then you divide the total revenue by the total customers and now you have your LTV now you could

do this in other ways but I think that this is the easiest way to do it for most people so in this example if I have $600,000 in total revenue and I’ve had 400 total customers my LTV is $1,500 per customer way better than what we’re looking at in a low ticket $25 a month membership all right so $600,000 total made in the lifetime of this company 400 total customers now one thing that we’re gonna do

the calculator for CPL and LTV

is how much are you willing to spend to acquire a customer okay so you could go the full 100 amount meaning if I’m gonna make $1,500 from a customer I’m willing to spend $1,500 to acquire a customer I don’t recommend most people going there unless you’re trying to scale really fast and you’re in a very competitive market so let’s say that you’re willing to do 50% of your LTV so 750 bucks so let me just break

this down again so you have a lifetime value of $1,500 for a customer in this example and you’re you’re willing to you’re you’re willing to spend half of what your LTV is meaning you’d still make the other half in profit but you’re saying hey I will I will spend $750 to acquire a customer and where you actually need to adjust this is how much your expenses are in your business because this doesn’t take into account your

team and other expenses like that and so typically a safe profit margin for cost to acquire is going to be 20 to 30 50% kind on the high end again if you’re so low or trying to scale really fast you can go up to a hundred and you’ll scale really fast and it’ll work out mathematically it’ll just be a little bit uncomfortable so let’s say you’re willing to spend 50% which is 750 bucks and if you’re

listening audio only I’m still trying to make this all make sense for you but there is a video version of this that you can watch and also get the calculator so let’s go back down to your collecting lead and your email conversion rate so whatever your email conversion rate is when you’re making an offer so if you have a hundred people on your list and you send out an offer and five of them decide to take

you up on your offer that’s a 5% conversion rate and that’s what I have in here and so what this calculator spits out is you can afford to pay $37 and 50 cents per email subscriber in your business specifically okay that’s what you can spend $37 and 50 cents and that’s what’s still being profitable and this change is quite dramatically based off of how good you are at email marketing conversion all these kind of things so

say you could convert 10% so say I had a hundred person email list and I converted 10% of them to buying my thing when I email out an offer now I can pay $75 for an email subscriber online do you see how the math really maths here and you are still scaling you are still profitable and if you really want to do this you really want to scale you have to get slightly uncomfortable and how much

why most owners stay small

you’re willing to spend to acquire leads because it’s getting more expensive but if it’s still something you can afford you ultimately should be doing it and so enter in your numbers and see what it looks like for you but here’s the deal most people I know running businesses in this size they’ve made 600,000 maybe they’re making a couple hundred thousand dollars a year maybe they’re making a million dollars a year if I told them hey you

can go spend based off of your math you can spend $75 for an email subscriber they would never do it because it feels too uncomfortable for them they don’t understand the full math and how it actually will work out in where it doesn’t work out is typically in the short term and most entrepreneurs cannot stomach the short term of running traffic paid traffic and so they turn it off here’s the deal I have never turned off

ads I’ve been running online businesses since 2011 I’ve never once turned off ads never done it and the reason being is because there has to be some level of organic content and then what you’re doing online and everything but people need to be seeing offers whether that’s just a sign up for an email newsletter whether that’s to buy a thing I’ve never turned off ads now budgets have changed they fluctuated up they fluctuated down campaigns change

creative changes everything’s changed that even the platforms have changed but ads themselves have never been fully off in any of my companies they are always running to some degree and so if you can take that mindset of it’s an investment an actual investment and you can do some math like I have here for you and a nice little calculator that I do the math for you can realize that you can actually scale your business and it’s

not all that difficult it’s just math so going back to where we started this episode business is not a popularity contest whether you’re trying to get viral on tick tock or you know create more organic content that’s all well and good but ultimately business is math and if you can understand scaling math you can actually scale your company but in order to do that you have to be willing to go through the uncomfortable stages of spending

the money but understanding the mathematics behind it that it will work out and you’ll actually be able to scale your company a whole lot faster when you understand all of this you’re gonna have to try hard to do it all