Advanced Ch. 4: Budget, Rhythm, and Risk Management — Spend Like an Investor

1. Budget is Investment, Not Cost

A beginner thinks “I spent $1000 today.” An advanced player thinks “I allocated $1000 in position X with a 2x risk-reward ratio.”

2. The “Three Buckets” Strategy

• A. Testing Bucket (10-20%): For new creatives/audiences. Expect to lose it—it’s the cost of Information.
• B. Scaling Bucket (20-30%): For winners only. High confidence, high gas.
• C. Stability Bucket (50-70%): The “Evergreen Core” that pays the rent.

3. The Truth of Scaling: It’s an Amplifier

• If you spend $100 and make $200 (ROI=2), your system works.
• If you spend $100 and make $50 (ROI=0.5), spending $1000 won’t “teach” the AI. You’ll just lose $500 instead of $50.

4. Brand in Action: Wish’s “Aggressive Scaling” Disaster

Wish burned billions on Facebook ads by hitting the gas on everything. They ignored traffic quality and relied solely on cheap, low-LTV buyers. When privacy laws (iOS 14) changed, their “accelerator-only” system crashed, and market cap dropped 90%.

Lesson: If you know how to hit the gas but don’t know how to fix the brakes, you will eventually crash.

Next Chapter: Advanced Ch. 5: From Demographics to Intent-based Audience. Capturing the “Soul,” not the “Shell.”