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- [00:00]
Hunter
What are the biggest mistakes you guys have made in channel expansion?
- [00:02]
Cody
One of our biggest mistakes, we were leaning way too heavy into Organic Influencer and trying to like make that work when in reality we should have been leaning paid first, organic second.
- [00:12]
Connor McDonald
We diversified before we got good at Meta and I would have in hindsight have just said, hey, let's really develop the skill sets and simply gotten really good at Meta. Your ability to acquire the first 10 customers on TikTok more profitably is actually dependent on you having maximized the channel of Meta.
- [00:28]
Hunter
Today we're going to get into channel diversification. The biggest mistakes we have made when we have been diversifying channels. Some frameworks that Connor McDonald does a great job talking about and what we would do differently if we were going to launch today. It's a great episode, really excited for you guys to listen to it and can't wait to hear what you think. As always, thank you so much to our sponsors, Motion Rich panel after Cell House and Prussian. We really appreciate it. Can't wait to hear what you guys think of this one. As always, if you enjoyed it, please subscribe, tag us on x comment on YouTube, let us know what you think, give us a review, share it with a friend. We see it and we appreciate it all. Talk to you guys soon. All right, so Connor McDonald, we got to talk about other things that are on brand to us before we get into it. David Protein saga, How you feeling about that? Are you all caught up on that?
- [01:06]
Connor McDonald
Well, it was one of those moments where I realized too many people know that I eat a bunch of David protein bars because I probably got sent that, you know, the article and the tweets from like six different people, learned all about bomb colonometry. Don't know how to say that one either, but learned about that.
- [01:23]
Hunter
Can you summarize it? Like I, I, I am curious on it and then I actually think there are some good marketing lessons. Oh yeah, you can talk about as well. So what's the, what's the tldr?
- [01:30]
Connor McDonald
Well, you know, there's a class action lawsuit that says, you know, the bars aren't 150 calories and 28 grams of protein, that they're actually closer to like 300 calories and it's got way more fat than they anticipated. And you know, it's Peter is the founder at David. He's done a fantastic job I think of like trying to navigate the like online discussion, being very forward about it. But their defense or their like scientific explanation is that the class action lawsuit is based on something called bomb calorimetry. And I think I got it right there. And it's that they, you know, they're measuring calories by what is burnt, like the energy produced by the bar. But the difference with the way that the 150 calories that David reports on is actually your body's not consuming many of those calories. So if your body's not consuming them and that's really that EPG ingredient and they had acquired the manufacturer for that. So it's like a key part of their entire strategy. You're not consuming calories from that ingredient, therefore that shouldn't be counted in the 150 calories on the label. So that's, that's their explanation for it. You've got the class action lawsuit that, that's using a different form of measurement. That's my, that's my layman's explanation for you.
- [02:42]
Hunter
Yeah, that, that was my, my understanding. It's kind of like, it's like when like there's like carbs and then fiber, it's like net fiber. It's like, you know, I think the, the difference is that's like you have to put the full carbs and then you do like the net carbs later. Cuz you take like subtract fiber out cause your body doesn't digest it. This one, they're obviously not putting the 300 on it. They're putting 150. So I am not an expert. I would be so curious to see what, you know, what the lawsuit actually shows and if they are gonna have to put the 300 or not. But has it affected your consumption habits at all?
- [03:11]
Connor McDonald
No.
- [03:11]
Hunter
Are you doubling down?
- [03:12]
Connor McDonald
I don't think it will, no. Yeah, I've just got more resolve pressure. Pressure makes diamonds.
- [03:18]
Hunter
Are you more of a regular David or a, a bronze?
- [03:22]
Connor McDonald
I'm just doing the regular ones. I haven't even tried the bronze yet.
- [03:24]
Hunter
Oh, I'm on bronze. I'm big bronze guy. I actually think they're delicious. I love them.
- [03:27]
Cody
So what's the wrong, what's the difference between the bronze and the regular? Got them.
- [03:34]
Hunter
They, they're like a different texture. They have like, they're kind of more like a bare bell. They have like the, like a little like outside crunchy stuff. And then they got the nougat so the macros aren't quite as good. I think they're 20 grams of protein instead of 28.
- [03:50]
Cody
I'll take protein bar is so insane. I got, I got, I got to give a shout out to my guy. Jacob Levy from Jacob Bar, favorite bar in the game right now and he's also a listener of the marketing operator. So Jacob, if you're listening to this, keep making delicious real food ingredient bars. Have you guys had the Jacob bars? No, they're great. I mean you have to like, you have to be into the date based bars. So if you're not into the date based bars you probably won't like it. But I love dates so I think his are, his are primo and they, and they use a lot of good stuff. Did you guys see what going back to David real quick? Did you see what they did during Expo West? It was really brilliant.
- [04:26]
Hunter
No. And I also do want to talk about how they marketed this scandal, how they respond because I know that people tune in this for the protein content but I think we still have some listeners that come for the marketing. So I do want to talk about that. But yeah, what do they do for Expo?
- [04:38]
Cody
So, so for Expo. So. Because Expo west is like it's, it's, it's natural foods only, right? So David did not qualify because they use epg that, that like fat ingredient or whatever. What? Or fat. It's not, it's like a, it's making up the fat. I don't know, whatever. They use EPG so they couldn't be in it, but they basically wrapped a truck or multiple trucks and like were driving around Expo west and they were previewing their new protein ice cream that is not live yet but they're dropping presumably soon. And it was, it was awesome. They had this like really off putting like jacked cow is like big and bold on, on the truck and then to the right of it was like marketing the new ice cream that didn't have a launch date or anything like that. But I, I thought it was so good because a, they positioned around Expo west and, and I just thought like the jacked cow is so attention grabbing. It was amazing. So I'm actually going to be in Adidas ski in a couple of weeks with and I think one of the marketing guys from, from David's going to be there. So I'm excited to ask him about it. But it was really cool. I thought it was really brilliant and very funny.
- [05:46]
Hunter
I think their marketing is phenomenal. I don't know about you guys. I think their, their brand stuff has been really great. They, they are not afraid to take a really bold stance and I think that what, what is great. Did you guys see the video that they posted on Instagram in response to, to the lawsuit? Yeah, it was clever and it was like. It was a produced video and maybe they knew about the lawsuit for longer until they had time to prepare, but it was a produced video. Essentially a bunch of people, maybe like five, six people, reading lines that were kind of like, you know, a myth. And the punchline in the end was, you can't believe everything you read.
- [06:18]
Connor McDonald
It was fantastic. And to your point, it was within like 36 hours. I feel of, like, it really blowing
- [06:23]
Cody
up online and they've done production value so, like, they like, clearly like set something up and like, did like a little responsive shoot.
- [06:32]
Connor McDonald
Yeah. The response had like a concept which I typically, you'd see like, oh, you'd get a founder video. At best. A founder video would be a fantastic response of like, hey, I'm going to put my record. It's going to be more personal. I'm going to go direct and speak to my customers. But this was like, yeah, you say six people, it might have even been more. It had a very unique pov. They get it out really quickly. It's well produced. The video itself was fantastic and the fact that they did it in such a short period of time is extremely impressive.
- [06:58]
Cody
All right, can I ask a question about. I saw this a few weeks ago and I was like, wait, what's going on here? And then I'm seeing it now and I'm still like, what's going on here? Why are they selling code and protein bars? Oh, like, what. What is the. Like the.
- [07:16]
Connor McDonald
The CO. CODs are like the most efficient form of protein from like a macro perspective. I think it's slightly better than David Bars and they used. When they originally launched, that's how they had it positioned. They would say like, you know, protein to. To calories or whatever, and they would. They'd show it against competitor bars and then they'd have COD on there. And COD was slightly better, but the idea that you can have this protein bar that is even close to like plain COD from a. From like a macro perspective is extremely impressive. So they used it early on as like a way to explain how efficient it is to consume protein. And then them launching COD is just a way to further highlight that. And I do think you saw everybody discuss it online because it is kind of an absurd thing for them to have launched, but I think it was really just to highlight the efficiency of the original bar.
- [08:04]
Cody
They're just leaning so hard into the bit always.
- [08:07]
Connor McDonald
Yeah, fantastic.
- [08:08]
Cody
That's their. That's their strategy. I like it.
- [08:12]
Connor McDonald
Motion just dropped their 2026 creative benchmarks report and it's been getting shared everywhere. Slack channels, LinkedIn, Twitter, sharing it in our private group chats. And it's great because everybody's been asking the same four questions forever. What is normal? How many ads should we actually be shipping? What is a healthy hit rate and which formats really win? The report analyzes over 575,000 creatives from 6,000 advertisers and over $1 billion in ad spend to answer these exact and the report has some really interesting findings, like the fact that only 4 to 8% of ads actually become winners and over half of ads actually lose. And for Motion customers, this report is especially helpful. You can upload it into your Motion dashboard with their runneth AI chat and compare it directly against your vertical benchmarks. Hit the link in the show notes. I promise you won't regret it. And as always, go to motionapp.com and tell the marketing operator sent you.
- [09:04]
Hunter
Let's start with Connor McDonald. Channel expansion. Let's tee it up. Where Tell me about your framework for channel expansion. You've talked a lot about it. I know you're just on Andrew Farris's podcast. You had a really, really cool graphic that I think you made with Claude at like the end of the year talking about different channels. I know you guys were early to channel expansion. Like just, I'll tee it up for you and you could take it wherever.
- [09:27]
Connor McDonald
Yeah, that, that, that works great. And the way the, the place that this conversation comes from is I was on the Andrew Ferris podcast. I talked about it. I'm doing a keynote. I've got the 15 minute keynote presentation on the Live Operators event today, which will have happened once this episode airs. And I'm at the point where like I feel like I've been talking about this a lot, but as I've thought through it and talked about it more, I've got like maybe three points here that are like slightly more novel than the way that I've discussed it in the past. I'd love to toss those out there and then I'd love your guys's feedback on them. So the first one is we often talk about, we often talk about channel strategies or channel diversification or the needs of a business on a revenue basis. We say, hey, yeah, this is really for brands doing sub $10 million or this is for brands going from 10 to $50 million or 50 to $100 million, et cetera, et cetera. And I do think that's extremely, it's, it's helpful to be thinking about the needs of the business from a maturity perspective. But I think we're off base to a degree and thinking about it from a revenue perspective. And the example I brought up is like, I'm not sure if it's the case today, but for many years Hexclad and Ridge would acquire the exact same amount of customers. Just hexclad has like 7 times the average order value. So they were about 7 times bigger than Ridge. But because we were acquiring the same amount of customers and we're trying to get our 10 millionth customers around the same time, our channel strategies often looked very similar. And it's why Connor and I have a lot to discuss from a team building perspective or a tactic perspective. So that's number one that I've got here is like just as we talk about channel divers diversification, it feels like it's more accurate to be speaking on it from a customer acquisition perspective, the number of customers you need to acquire rather than a revenue one. Do you guys think I'm off base or on base on that?
- [11:11]
Hunter
Yeah, it's a more nuanced answer than just oh, if you're 50 million you should be on this number of channels and if you're not, it depends on many things.
- [11:19]
Cody
I, I mean I, I agree with that. I think what I liked about your, your answer on, on Andrew's podcast was it was very, I think a lot of times when people start talking about channel expansion, they like lean so far into intuition and not enough and not enough into like the rational, analytical brain. And that's what I liked about your answer on, on Andrew because you were like, there's two things that are, that should indicate that you need to expand here. Like once you believe that the next customer is more profitable to acquire on the new channel compared to your hero channel, that's presumably scaled up. And once you have the, the resources to do these things, like, these things like we're, I'm getting, I'm getting videos sent to me from some of our creative strategy team right now. And, and we have like one creative strategist specifically on our team who like really focuses on a lot of our net new swings because she's just like really creative and really good at, you know, seeing the whole process through these, these assets are taking like four or five, six months to produce because they're big net new swings and like we're, they're very brand forward ads. So I just thought that was like, it's very practical. Right? It was not gut, it's not, not gut instinct at all like, there are data points and like, team resources that you can lean into to understand when to, to make that next move. So I thought that it's just like very, it can be very data driven. You don't have to, like, I mean, of course it should be somewhat into it intuitive. Like, you should have an intuition whether or not your customers are, prospective customers are on a certain channel, of course. But then let the data decide, like, when is the right time. Like, I have my, my buddies that live out in Denver, they run this brand called Highland Style, you know, men's hair care brand, really leaning into, like the, you know, the good ingredients ethos. And they're cruising right now like, they, they had a great year last year, they're having a great start to the year this year. And like, we talk about channel expansion here and there. I'm like, you know, why would, why, you know, that's why I always ask them, like, why would you even do that? You know, you're, you're cruising on Meta right now and they still have a lot of levers to be pulled. I'm like, I would just keep. Keep tripling down 100% and, and I've
- [13:24]
Connor McDonald
hit that point a lot that, like, diversification should be driven by having maxed out your core channels and like, really putting yourself in the mindset of, or having the constraint of. Let me, let me really maximize Meta as much as possible before I start dabbling in other new channels. The other thing that, that came up on the pod, which I think is interesting because you say it can be data driven. It should be data driven. It's definitely not a hard science. Like, you're not, you're not going to have a single metric that's like, now is the time to diversify. One of the things that Andrew asked was because we say. I was, I was saying our wallet business is pretty diversified at this point. We're spending across a lot of paid social channels. We do partnerships, we do tv, et cetera, et cetera. It is far more diversified than one of our younger lines of business like travel, which has 75% of our total travel budget going to Metastill. And he was like, if the optimal budget is very diversified, then why. He just wanted me to think through or explain like, why we wouldn't launch in that way. Why don't you get to that diversified budget sooner? And the point that I made was, conceptually, you should be diversifying as the next marginal dollar is best spent on a new channel rather than the original channel. And that makes A lot of sense. I think in many ways getting your first 10 customers on TikTok might be more affordable than getting your 1 million and one customer on Meta. But then the other thing about that is if you've acquired a million customers on Meta, you obviously have developed, you've put yourself in that constraint, you've done all the hard work to scale that on Meta. You have the content, the offer, the landing pages that can work and then building that like redundancy into other channels is actually far more straightforward at that point. And I think that's another like, nuanced point that I maybe haven't been as clear about in the past in that your ability to acquire the first 10 customers on TikTok more profitably is actually dependent on you having maximized the channel of Meta. And I just think taking that approach and like really being deliberate about the efforts you're putting into your core channels and then deciding when to diversify and is maybe helpful guidance for people kind of thinking through these topics.
- [15:32]
Cody
Are, are you saying that. So that. So you just said acquiring your first 10 customers on Tik Tok's easier because you've acquired your first million or whatever on Meta. Is that I. Yeah.
- [15:45]
Connor McDonald
So like, another way to say this is from an ad platform perspective. I don't think anything is as efficient as Meta. Whether that's true or not, that's going to vary by businesses or whatever else. But like, like let's, let's think through that scenario. It's obviously where the majority of most brands budgets go. So I don't think it's a crazy thing to say that Meta is the best performing ad platform that we have available to us today. If you're deciding to spend your first dollar today, the odds that it's best spent on Snapchat versus Meta feel very, very low. We just said Meta is the best ad platform that you'd be spending dollars on. So you want to spend your first dollar there, you want to spend your first as many dollars as you can there to my earlier point. And in order to spend more dollars, you have to like battle test all the touch points of your funnel, your creative, your offer, your landing pages, your margins, your ltv, your aov, et cetera. As you've done all those things, you're actually building up leverage to now go expand into other channels. And Snapchat can be a far less effective ad platform in the sense of being able to find customers who are willing to buy your product. But it's far easier for Snapchat at that point, because you've already battle tested it on Meta. So it's just that order of operations and yeah, it's that order of operations that I think is maybe helpful to consider as people think about where to spend their money.
- [16:59]
Cody
Yep, yep. Because. Because now, and this is the other point you made on Andrew's podcast is like, you can now go into these other channels, a lot of which require the same format, 9 by 16 short form vertical video. And now you have winners to roll out into those channels and that's going to increase your surface area, your chances of, of succeeding, which I thought was also a great point. The other one of like a third avenue that I thought about and I'm, I'm like leaning on our experience at Hexclad is your, your total scale plans and like how aggressively you're trying to scale. Like when I, when I got to hexclad in 22 and then full time in 23, you know, I'm sitting down and not that, not that like Meta was necessarily fatiguing, but, you know, I'm sitting down with Jason and like we're talking about the revenue targets he wants to hit. And I'm like, okay, like, we absolutely need to expand channels if we are going to scale this aggressively. Like, if, if we were going to scale much less aggressively, we could probably could have expanded way slower and continued to lean into Meta. But so that was a situation where we weren't necessarily saying, oh, wow, our CAC and Meta all of a sudden went up by 30%. Oh, wow, we need to go and expand to find more efficiency. It was all right. Meta is looking fine. However, we just cannot hit these revenue targets, I don't think, unless we're reaching more people in more places, which is tricky because now you're like trying to launch a bunch of new channels at once and that, that makes measurement hard. But I think that's the other, the other thing to think about is like, if you found product market fit and you're like, okay, cool, we're at 10 million and we want to go to 50 in the next year and a half. Like, you probably need to expand channels to do that. I would be. It's gonna be tough to do that with only Meta and not see a bunch of. Like, that's totally. You actually have to look around a corner and say, okay, in order for us to hit 50 just on Meta, I know CPA is going up, so I need to get ahead of that and be on more channels, which is more complicated from like a measurement standpoint, but it's kind of what you just have to do if you're going to try to scale super aggressively.
- [18:55]
Connor McDonald
So I was, I was thinking about that a little bit more because what I just laid out is very much influenced by our experience at Ridge. Right. And I've been here 10 years and it's just been slower and more methodical and we've had a number of 30 and 40% year over year growth years to get to where we're at. I was thinking about it similar to the example that you just brought up. But Grooms, right, Groons is two years old. Like, they launched immediately, before they even launched, they spent like $300,000 on Raindrop Hero videos because they were like, we were going big on TV and YouTube. They're obviously like the best tacticians in direct to consumer E commerce. So I think they knew what they were doing, but they obviously said, hey, we need to be scaling extremely quickly. We're not going to wait around to see the diminishing returns on Meta and methodically move into each channel. We're basically going to go scorched earth across, like all the things that we think we can win on, which is a different approach and I think is more the exception than the rule.
- [19:51]
Hunter
Yeah, totally agree with that. And I think like, your. Because I know you guys expanded channels early and so you're, I think you're, you're very much like. And it's not wrong at all. Like, stick to meta, get really good at that. There's leverage in that. Don't do later. We were late to expand and it kind of hurt us.
- [20:06]
Connor McDonald
Right.
- [20:07]
Hunter
And so it's like there's probably somewhere in between. And I think the challenge is like, you don't want to do it too early. And I think probably my guess is more brands try to do it too early, like make that mistake and you know, they should just get better at, get, getting really good at the skills on Meta because those skills will transfer, as you said. But like, I have been in this situation where it's like, crap, this channel. We just hit a wall. We can no longer just scale it here. And it would have been really nice to find something else that worked before I needed it. Yeah, totally. I think it's like, it's like, it's just finding that like Connor's point, seeing around the corner, that's like a very fine line.
- [20:42]
Cody
It feels like, well, that's the tricky. I mean, that's like going back to the Highlands example. Like, that's what they need to that's what they need to figure out, right? They need to, they need to keep investing in Metta. But they also, because to your point, Cody, when that happens and you're not ready to go into a YouTube or a CTV or whatever, now you have this like three month period where like crap. Now we need to like spend a bunch of time like figuring out how to produce the assets that will work for these new channels. The tricky part is like let's, let's start that process before Meta starts to fatigue. So when Meta does fatigue, we have it ready and now we're, and now we're launching. And that's the hard part about our job. And I think with like the Groons and the hexclads examples, like yeah, you have to do that to like hit that, that revenue like trajectory that you're on. That's also, you know, Taylor talks about like wasted, like the bigger the brand, the more wasted media spend there is. And like that's totally true. Like if you are going to try to double or triple or quadruple your revenue or whatever and like roll out 10 different channels to do that, like, yeah, you are gonna grow revenue quicker than if you didn't do that. But you're also gonna have some more wasted media. Right. Like you're gonna take some bets on some channels that just like don't pay off. So there is a trade off there. Like yeah, you're gonna grow revenue but you're also gonna probably, you know, and I know Sean talks about this as well, right. That he like, you know, he says he wastes it but. Right. He's just taking swings every year on certain things and they don't always work. And like that's definitely going to happen if you are trying to like roll out five new channels in a single year because you need to double your top line revenue. Like that's just, that's part of it as well.
- [22:21]
Connor McDonald
All right, so I've got some interesting numbers to share from Ridge from our beloved sponsor Rich Panel. We switched our support stack at Ridge to rich panel about 15 months ago and our cost per ticket has dropped over 70%. That means same team, same volume and over $500,000 in annual savings. CSAT have not changed. We've been sitting at 96% week after week. So the automations did not come at the cost of customer experience. Our last platform talked a lot about AI, but nothing was really changing under the hood. Rich Panel is genuinely AI. First they came in, they rebuilt our workflows and we were live in under two weeks with basically no lift on our side. And they're about to roll out a returns portal which for us is huge because if they can do the same thing for returns as they did for customer service, that would be sick. If you want to cut down your support cost now and save on returns platform with an AI first platform, talk to Rich Panel. Go to richpanel.com demo take them connor from marketing operator sent you and they'll take good care of you. Thank you.
- [23:11]
Hunter
A lot of it is hindsight. You know, it's like, all right, Connor wishes I kind of diversified later. I wish we diversified earlier where like Chad had, you know, seen into so many different businesses, you know, for, for his kind of VC work prior to it. Jordan Minard has done a great job of scaling other businesses so has kind of seen them and there's just some, some growing pains that are. That are involved as well. So some of it is a little hindsight. Unless you have like agency experience or other brand experience be like, oh, I've like it's like pattern recognition but you don't get that until the first time. And that's where, that's where it's a little, little tricky. So that. But also kind of to your point on like here you go ahead and then I just, I want to respond to your first original point as I've thought through it a little bit.
- [23:49]
Connor McDonald
Cool. Yeah. You know, one thing I want to add is or one common point that I'm hearing with all of our, our comments here is maybe the speed to which you can get good at a channel really dictates it. Like at least from Ridge's experience, we diversified before we got good at meta. And I've said that many times and I would have in hindsight have just said, hey, let's like let' really develop the skill sets. Let's put the constraints on of let's not focus on like super undervalued attention on all these other platforms and simply gotten really good at meta. And there are many examples of brands scaling very efficiently with that approach versus ours which was like this rapid diversification. Someone like Chad at Grooms, I think he knew that they could be really good at meta and YouTube and TV or whatever else really right off the bat. And that comes from pattern recognition and that comes from experience and having the confidence that like, hey, we are not diversifying out of like shiny object syndrome. We are diversifying out of. I know that I'm going to be able to maximize meta and YouTube and these other channels. So let's approach with that immediately divert. Let's, let's start with that immediately diversified approach. And I just think that is, that's why it's more of the exception than the rules. Like you literally have to be an experienced, you know, best in class operator to really nail that balance.
- [25:00]
Cody
Early when in Connor, in your, I think when you were talking about being everywhere early, I think if I remember correctly you guys like found a bunch of winners on meta and then you scaled those to all these other channels. But I don't think you guys had built like your flywheel yet. Right? So then when you started to see fatigue, you were like, oh crap, we don't like have the operation in place to like have this like constant. And I think you're way better off expanding channels once you've built that muscle. Like if you can really dive deep on Meta and build a creative flywheel and then go expand to TikTok and Snapchat and then these other channels like YouTube pre roll, mid roll, where it's a lot harder to produce that creative butt. If you already have a really good paid meta flywheel and operation, then like you should be able to, you know, make that transition a lot easier versus oh, we like got 50 ads built. Great. We launched them, some of them worked, we expanded channels, but it was like a one off Sprint. We didn't actually build like a recurring flywheel. And now you see fatigue and you're like, oh, we don't have like this totally. This engine filling, filling, you know, dropping gas on the fire. And I think that's what you were kind of saying early on in the ridge days. And then you guys, now you guys obviously have a great creative flywheel. Is that true? Is that what you were kind of referring to early on?
- [26:18]
Connor McDonald
Totally, yeah. I mean we were running static ads on Snapchat, like Snapchat video platform and we were running static ads. And it worked incredibly. But it just shows like it only worked because, not because we were extremely good at it, but because we were very early to it. And that was our approach. That was why we were early to the YouTube sponsorships, the Native email newsletter sponsorships, the random forums that we would sponsor was all just like underpriced attention at the time and none of it was like, oh, let's actually get tactically good at developing the content that's going to scale and much less build a flywheel to produce that consistently over time.
- [26:53]
Cody
It'd be interesting to have like some of the groons team on and ask them like, where have you guys wasted, spend, you know, because from outside looking in, it's like everything they do, it seems to be working. But I'm sure they. I'm sure they have. You know, I look back at some of the things we've done at Hexclad and I'm like, oh, God, we just burned a quick $150,000, you know, on this thing or that thing we should do.
- [27:14]
Hunter
We should do an app on that.
- [27:15]
Cody
Yeah. Where'd you up, Map?
- [27:17]
Hunter
Oh, yeah, I'll. I'll just. Biggest, worse, worst house incrementality test episodes. Yeah. So, Connor, to your point, a lot of this actually your framework applies for channel expansion, like actually distribution. If you think about a business like kitsch, that's very low AOV, I think Jeremy posted. They have like 10 million customers. They kind of have to be everywhere. They can't hit the scale that they're at just D to C just based on obviously the unit economics, but also just the volume of customers they need to, you know, the business. Like, they have to be absolutely everywhere. You know, Maybe that's why AG1 was able to do pretty well. It's not the highest aov, but it's high aov. Super high ltv. Like, maybe one of the reasons they were able to get as big as they did with, you know, only DTC. Right? Absolutely. Yeah.
- [28:05]
Connor McDonald
1,000%.
- [28:06]
Hunter
So it applies like the framework applies to, you know, not, you know, there as well. So I. I think somewhere. Yeah, somewhere in the middle. But I just. I just thought it kind of was a good point. I think you have a really good job of. Don't take us the wrong way. Saying really, really simple things, but making it like, totally make sense. It's like it's not a novel concept. Like, hey, the more people you need to acquire based on your aov, the more places you have to be. But it's like, yeah, that's like, that's a good way to think about it.
- [28:29]
Connor McDonald
Well, thank you, I guess.
- [28:33]
Hunter
All right, anything else on this you guys want to touch on before we switch gears to next next topic, which is actually probably a little bit related to this.
- [28:43]
Cody
Operators. Quick gut check here. Q1 is when everyone realizes the same thing at once. Traffic gets more expensive, growth slows down. So the question isn't how do I drive more demand, it's how do I make more money from the demand I already have? That is exactly why we use after sell by rocked. Most brands think upsells are about being aggressive, but they really aren't. They are about timing and the best time to upsell someone is when they're already in buying mode, which is when it's right after someone buys. So after sell it lets you put the right offer at the right moment with one click. There's no reentering payment info, there's no extra checkout steps. Brands using after sales see around a 30% lift in AOV. And when you're running real volume, that adds up fast. But here's the part most people miss. It's not just upsells that after sell ads once you're live, you unlock the entire ROKT monetization suite. Rock thanks monetizes your thank you page with premium non competing offers. Think Disney plus HelloFresh and brands are saying 30 cents to 50 cents in pure profit per order Rock Pay plus as a clean wallet placement at checkout and kicks back another 10 cents to 15 cents in profit per order without hurting conversion. And in some cases it actually improves conversion. No inventory, no new ads, no operational lift, just margin. This isn't growth hacking, it's just found money. If Q1 is about tightening margins and getting paid more for the the traffic you already earned, go to aftercell.com operators, activate Rock thanks or Rock Pay plus and you'll get the full after sale suite free for a year or an extended 60 day trial for post purchase upsells. The only thing I would add is just like having a model in place for when you do expand channels. Because if you don't like if you have this way of measuring meta in search and those are your two hero channels and then you're like oh we're going to go roll out YouTube but you don't have that measurement model in place. It's going to fail even if it doesn't fail, if that makes sense. Like it's going to fail in your eyes if you're not thinking about like how to measure YouTube versus versus meta and how to get like a good apples to apples read. So that's the other I think really important thing to think about before you launch a new channel is like literally put pen on paper or hands on keyboard in a Google Doc and like think about all the measurement tools that we have at our disposal and think about what makes sense for that channel and how you're going to compare it and like get that like marginal comparison to your hero channels so you can actually decide if it's working or not. Because I, I can't tell you how many times I've been involved in like a new channel test or just A new tactic test in general and you get to the end of it and then no one really thought about how they were going to measure it. And like, okay, so what do we do here? And their answer is like, you have to do it again. So I think that's, that's an important bit here.
- [31:27]
Hunter
All right, so if we like, let's actually do a little bit of an audible. Let's. I wanted to talk about biggest mistakes we made while building, like what we would do differently if we were building today. But let's keep it specific to actual channel expansion because I think this will be interesting. Like, what channels do you guys feel like you would have started earlier? Like, what are the biggest mistakes you guys have made in channel expansion? I know, like kind of. We just talked about it a little bit. Like, I'm curious, like, you know, do you feel like you wish you started podcast earlier, YouTube earlier? You did TV too? Too late, something like that? Like, are there, is there one to two that sticks out for you guys? I'll go with Congress.
- [32:00]
Connor McDonald
Oh yeah, actually, let me throw it back to you.
- [32:02]
Hunter
All right. You know, usually I'll do it. I would say we were late to it. I would be on more channels. I think I would do TV earlier because when we did it, it launched massively. So my learnings for TV as I would be, I for some reason just got to be like a big scale brand to do tv. I just like didn't know, like, I didn't have the hindsight of, you know, Chad seen under a business. So I was just like, oh, meta's works. It's what got us to 50 million. It'll take us to 200 million. Like, you know, hit. We got to 50 million and that's where reach issues started. And that's where we started. Like, I was like, all right, I don't really have the skill set or bandwidth to do all these other channels right now. Let's just try Reach on meta. And we were able to like get to like a hundred million with like meta plus like YouTube being a small amount plus some like TikTok, you know, like small amounts. But I couldn't see around that corner like Hunter said. And I think, you know, it was around the unfortunate timing, like we hit a little plateau and then we launched TV and we just exploded. You know, it was just like net new eyeballs crazy. Part of the challenge was, I guess my, my pattern as I'm talking through it, it's like, oh, that worked before. I'm just going to keep doing it. You know, and so we then launched tv. It was crazy out the start. Did really well. We scaled TV pretty aggressively and I think like scaled it too high. There was like just diminishing returns. It was, it was so incremental, so good at first. So that was my mistake with, with TV is just getting it to too high and seeing thinking that would, you know, continue to do it. You know, the chances.
- [33:36]
Connor McDonald
Where is TV at today for you guys?
- [33:38]
Hunter
Like, as a percentage, linear is like almost nothing. We're like last. This time last year, linear was like 15%. Um, linear is like almost nothing. CTV is probably 9, 8%. Um, usually it's like I always try to have some upper funnel that's high. So whether it's YouTube or TV, like depending on how the reads are, you know, trying to get like 20% into those. I wish, I wish we started a podcast earlier and I wish we scaled Influencer harder. I think I've been decent at stuff that you can run like a geo on. You know, talked about before about the channels where it's like a little more, a little hairier and harder to measure, but still has clear value. Like, that's probably my biggest mistake because like Influencer, right? Like if you're starting and you're a new brand and you have an influencer pop off, like, you can see that in the business immediately. If we do it, unless we're paying the biggest influencer in the world, it's like, all right, we made an extra 10 grand. Like, I'm not like, that could just be a daily fluctuation. And so I think it's easier with a not crazy budget to kind of see the impact a little sooner. So that those are two. I really wish we started earlier.
- [34:38]
Cody
Those are good ones.
- [34:40]
Connor McDonald
I, I, so I would agree, I would do. I'm just going to hit a couple of the points that I've, that I've said before. We were really early to YouTube partnerships and influencer generally. We probably could have gone harder there. I was just looking. Historically, I think we spent $14 million on YouTube partnerships, which is a, like, it's a lot for sure. And we had like a pretty big team at the time and, and it was a pretty decent percentage of budget early on. In hindsight, we probably could have gone even harder. Like brands that were like defined by podcasts. Like, who's the, who's the, like the original mushroom coffee brand that I'm thinking of.
- [35:20]
Cody
Not, not Mud, Water or Rise.
- [35:24]
Connor McDonald
No, it was another mushroom. It was another mushroom.
- [35:28]
Hunter
I didn't know they were big on podcasts.
- [35:30]
Connor McDonald
See, I was thinking about the brands that were, like, defined by podcasting. Four Sigmatic was, like, 80% of their budget early on, was just on podcasting. And it's like, Ridge probably could have gone that route in hindsight, if we'd, like, really had conviction around it. So that would have been a good. I think it would have been a really meaningful path to even further growth early on. And rather than, like, again, to my point earlier, like, kind of doing everything okay, we could have just gotten extremely good at YouTube partnerships. That would have been one route. And then the other one was, like, diversification. There were a lot of benefits, diversification early from, like, a arbitrage perspective, just, like, underpriced attention. And if we'd only gotten better at, like, the content piece in, like, 2017, 2018, we could have taken even more advantage of all those channels. Like I said, we really only benefited from having been there early, which was fine, and we grew the business that way. But if we'd been there early and had been good, Ridge is probably, you know, twice the size four years earlier or something. So those are. Those are the two.
- [36:27]
Hunter
Get good at content. Just.
- [36:29]
Connor McDonald
That's what I talk about, like, and that's why I talk about it all the time, is like, I think there's a lot of learning lessons in hindsight, and those. And. And like, doing. Doing a retrospective on it. I think those would have been two very meaningful paths to, like, significantly further growth. And then I guess in the inverse of that is I would have never really screwed around with, like, email newsletter sponsorships. I'm like, yeah, I don't think. I don't think we'd ever have built that big of a business. We had a dedicated person doing that, which was fine and worth it, but it's just really hard to spend any more than a couple million dollars a year sponsoring the morning brews and, you know, the hustles of the world.
- [37:05]
Hunter
You're all into leverage. It's not that high leverage.
- [37:08]
Connor McDonald
Yeah, that's what I'm saying, dude. I'm. I'm. I'm older and wiser now.
- [37:12]
Hunter
Connor. Connor R. How about you?
- [37:15]
Cody
Yeah, well, luck. Luckily, me and Jason have always really been on. Like, when. When I was in 2022 freelancing, and, like, I was talking to Jason about joining full time. My big thing with him was like, we need to build, like, an insane content engine, and not just like a paid social engine, but, like, across the board. And he really agreed. He's like, yep, I'M fully with you. So like the same day I started like two months later, are very talented, had a content started. And like we've been building that content team for the, you know, pretty much since the beginning of 2023. And Jason and I have always been really aligned on that. And because of that, like I feel good about how early we were able to get going in CTV and in YouTube and linear TV. I think the only regrets I have are not scaling up more aggressively because now we've run some holdout tests that just show how profitably incremental it has been. So I think that's, in retrospect, I think we could have probably could have been spending more on like CTV and YouTube and linear TV earlier. But I, you know, I, I feel pretty good about where we're at now. Although I will say like, I think we have a pretty good way of measuring like linear TV spots against one another. But it's still really hard to really know like how much should we be there? Like we just ran a bunch of, a bunch of sports stuff in the last week. We did that. We had a spot yesterday in the World Baseball Classic championship game that, that I think did pretty well. And I'm like looking at our, our like direct to site and like through Google Ads and through meta actually traffic and it's way up and I'm like, dang, should we be investing even? Like we have a nice budget there. They should probably. Should we be investing more there? But it's hard just to know like what that, that mix should be exactly. So that's kind of challenging. What I will say is one of our biggest mistakes that we've totally shifted on how we're thinking is Influencer. You know, early on in like 2023, we were leaning way too heavy into Organic Influencer and trying to like make that work when in reality we should have been leaning like paid. Paid, Paid first, organic second. So like we did this deal with Benny Blanca, it was like a six fig low six figure deal. Made this gorgeous landing page, custom products. You know, he had like four posts or something driving to this landing page. And I think we drove like, I don't know, 20, $25,000 in revenue on the products that were on that page. And I was like in retrospect, sitting here today, I would have flipped that on its head. I would have been like, yeah, we got to like make paid ads with Benny and like have a paid media landing page. Same with Hailey Bieber. Like it was way too organic and we didn't See that much revenue from it because of that. So I think that's one of our bigger mistakes is like not making these paid deal, these bigger paid deals be like 75% paid, 25% organic. Early on there were kind of like 85% paid, 15 or 85% organic, 15% paid. And we just took some swings that didn't connect. But I do think like I think that Benny Blanco deal, I think we would have seen a huge ROI if we would have like flipped the script and been more paid driven versus organic. And now that is how we structure deals. And then the other thing I would say is doing less long term deals upfront. Early on we were signing like six month deals, one year deals, you know, big deals. And now we are saying we're going to do a, you know, like a very specific list of deliverables for paid with like three to four months of usage and then get a bunch of juice out of it, test it and then we'll extend it. So I think that's the, those are the two big things on influencers, like shorter term deals up front, like with a smaller list of deliverables, like validate the influencer and that and that the funnel then expand it to a longer term deal and then just like wait, like 80% paid, 20% organic. Those are the two influencer mistakes I think we made early on that we've, that we've course corrected for.
- [40:59]
Connor McDonald
I feel the paid focus for influencers right now is still like an undervalued form of partnership where it's like literally. I just think a lot of these people are still recognizable. They're just not getting the distribution and you're not going to see that ROI off of the organic post specifically. So it's like yeah, being able to run partnership ads, get content that you think will perform enough from an ad perspective, you can focus on the landing pages. We've been all about that too. Just like more strategic, larger, deeper integrated deals I think is like the way to, the way for influencer to really work today for larger influencers, the micro influencers is like completely different. It's like you can still kind of
- [41:37]
Hunter
spray the cost, just don't pencil. Yeah, we look at them together. But if you just looked on, you know, a paid posting site, it's almost impossible to make it work.
- [41:48]
Cody
It. Yeah, I mean some of our deals now like, I mean whenever we're getting a rate back, we want to negotiate the first thing we access any organic deliverables, like all right, get rid of all the organic stuff and like, let's knock it down 10k for that. But honestly, a lot of these deals, they're all paid. I don't even, I don't even want to do an org. Like, we have an organic influencer budget, which we also have knocked down year over year for the reasons that we're talking about. But oftentimes these are like pure paid deals. And if they are organic and paid, we're now sending them two totally separate briefs. Like they're getting a paid ad brief in an organic post brief. And, and it's very distinct from one another. So that's been. And like, we get, I think, the ROI we're getting on our influencer program last year and this year is way, way bigger than it, not than it was in 2022 and 2023, because we've made that shift.
- [42:38]
Hunter
Yeah, we look at it as icing on the cake. So let's say somebody's like 30 grand and they post like a story. So we'll get like 30, like a story or two stories and then plus like 30 days whitelisting. Let's say they're 30 grand and they make 10 grand. So we're going to call their cost of content 20. And then we have to, we have like a certain spend number that we want to hit. So it's almost just like a net number that p. But like, we're not expecting to like be profitable on that number. And we'll allocate, you know, that portion to kind of influencer and then we'll allocate like the majority of it to like our ad content bucket. But we, you know, we try to shoot for like 10 times the content to media spend. And so, you know, if, if they drove zero revenue, we got to spend 300 grand on it. If they drove 10 grand, now we got to spend 200 grand on it. So that's how we look at it. But if we were to just go like, we would never work with that influencer if we had to be profitable just on the organic.
- [43:29]
Connor McDonald
Lately every market I talked to says the same thing. Budgets are tight, goals are higher than ever, and I have to prove what's working, not just report it. And that is the new reality of marketing. If you can't afford to rely on guesses or platform reported results, you need clear causal proof of what's actually driving growth. And that's exactly where House comes in. Incrementality testing is the new scientific way to measure true impact to see what's moving the needle and what's Just noise. So you can reallocate spend based on fact and not faith. Cody, Connor and I all use House for incrementality testing and it's become a core part of the modern measurement stack. They're now working with more than 40 of the top 100 DTC brands, which shows just how quickly this approach is becoming the new standard for serious growth teams. Houzz helps you run real experiments across your channel so you can answer questions that actually matter, like which channels are truly driving incremental revenue. How much should I really be spending on Meta, Google or YouTube? And what's the halo effect of my ads on Amazon or retail sales? What sets House apart is the combination of rigorous science and marketer friendly design. The math under the hood is complex, built on causal inference and experimentation. But the platform itself is simple. You can choose your questions, launch a test in minutes and get clear, actionable results you can actually use. Plus, every customer gets a dedicated measurement strategist, someone who's lived in the world of growth and knows how to translate data into strategy. They'll help you design smart tests, interpret the result, and build a repeatable culture of experimentation across your team. With Houzz, you aren't just buying a tool, you're buying the growth marketing team that can help you make the most of it. In a world where every marketing dollar is under a microscope, you need to know what matters with House by going to House IO operators, that's H A U S IO slash operators and start allocating your budget with confidence. One thing, Cody, I'm curious if you've thought about this. We're trying to scale up the like affiliate program and a lot of that comes with like retainer deals or like some sort of guaranteed cost. So we've got, we've got a number of deals that are like, we'll give someone $300 for six videos or something. And let's say we're doing that at a really high scale. We're not right now. How would you, would you count that as ad spend at any point? Or like how would you think about that cost? Is it just a creative cost? There's distribution attached to it because people are posting that are driving revenue. What do you think we should do?
- [45:39]
Hunter
I know it gets so complicated because, and I was going to talk about like Tic Tac Shop because that's obviously one thing I would do differently. I feel like it depends. So the way that we do it, this is for our like Super Bloom influencer program. If they are, if they are creating stuff that's not posting at all. 100% of it goes to our Ad Creative bucket. If they are creating stuff that then gets 30 days whitelisting, we go 80, 20. So 80% of that goes to the influencer spend. 20% goes to ad creative. And most people, a smaller 3K 5K influencer, we can actually break even or be profitable on that as a whole in the program. It's just the 30, 40K that we can't. So that's normally how we split it up. If it's just a YouTube where you don't get rights for that, that just goes to, you know, that influencer bucket for affiliate. That's a good one. Is this TikTok Shop or it's just. It's just kind of general affiliate?
- [46:29]
Connor McDonald
Uh, no, let's say it's TikTok Shop.
- [46:33]
Hunter
The way that we are doing is we just launched is. I guess we are not having any, like retainer deals currently. It's. It's affiliate stuff. That's a good question. Maybe split it. There's a little bit of arbitrary accounting in there. Just like how you guys want to look at it. I'd probably split that just where you think the value goes and just have a rule that's like, all right, we're going to go 50, 50 on this or something like that.
- [46:50]
Connor McDonald
Well, because it's also interesting because. And we've talked about this and actually it's Connor's point reminded me of it of like the paid focused partnership deals is like the majority of TikTok Shop revenue of the brands I speak to comes from GMV Max. So you're paying an affiliate commission. You're often paying some sort of retainer fee. So there's a fixed cost to it. And then you're turning around and you're spending dollars on it. And it's like, how do you build the. How do you want to like, attribute cost and how do you want to build the P and L not only for that channel, but how do you want to think about it blended for your whole business? And I don't think anybody has a great approach. I think it's extremely arbitrary.
- [47:23]
Hunter
Well, I mean, we. So we just launched TikTok shop two weeks ago and so very, very much the same thing. All trying to learn it. We have to create new GL classifications and build out a separate P and L and like try to fill the. Try to build a model to understand how this is impacting the business. So it's totally arbitrary. We are. I know you're. You Guys still using Refunnel.
- [47:42]
Connor McDonald
Right.
- [47:42]
Hunter
We just started using refund just for like the requesting rights. So we're just in the process of getting like, of getting rights for that. And that'll be like a different bucket. But like, that's one of what we think is a major value add is just all of this obviously total content.
- [47:56]
Connor McDonald
Yeah. And that's what I. That's what I've been saying. That's why it's top of mind is like the idea that affiliates and GMV Max on their own are going to be like, profitable, I think is relatively low. And that the way that we are really going to generate value from the program is generating a bunch of content that we'll be able to utilize on other channels. So it's like some amount of that cost, if that's the way we're thinking about it, and if that's the way that it pans out, then a significant percentage of that cost of that program should actually be thought of as just ad creative production.
- [48:26]
Hunter
Absolutely. Totally. I mean, we're doing. We're doing that and so that's a big focus and we, you know, just launched on and we're doing a lot of the organic social creator stuff on different handles and that also we're running a lot of that as ads as well. You know, so there is a little bit of just like how you want to handle the accounting side internally. But yeah, there is. And that's. So that would be one last question on this. So like, all right, these are the mistakes that we've made. You know, we feel like if we were going back to Ridge 2020 or Jonesboro 2022, we would do differently. But what about if you were launching today? Like, the biggest one for me, if I'm going to kick it off, is like creator, organic creator, community distribution. Right. Like, when Sean was on open residency, he talked about it of like, you know, Facebook ads with an arbitrage. Like, he would get really good at organic. I would again, maybe that's TikTok shop. Maybe that's organic social. Like, I would. That would be my biggest focus today. I'm not saying I wouldn't run meta ads, but like, even that would be my flywheel. I wouldn't like try to scale meta ads with just like statics or something. Like, I would get really good and have some type of a creator creative flywheel that is not just, hey, I'm going to script you and pay you to post, but is actually like, there's some type of an organic creator program that Then flywheels into an ad account. Like maybe it's like a comfort light or something like that. That's the biggest thing I would do today. And obviously we just launched, but we're way behind. But that would be my biggest focus if I was launching from the beginning is just building that community and just allowing that to snowball and halo into bigger things.
- [49:53]
Connor McDonald
So I totally agree. And I was thinking about this as I was like I'm preparing for this keynote today and things like that because when I think about it, it's like content creation isn't a channel, but it feels like everything. And I can't tell if this has always been the case or if it's become the case. It probably hasn't always been the case because I do think years ago so much of the value could just come from underpriced attention. We're in just a far more like efficient market. Like there are far more advertisers online. E commerce has grown a lot. We're post pandemic. Everybody's shopping online. Like it is, it is the, the, the ad auction system is far more efficient than it used to be. So you're not going to find wins there. So then it just comes down to actually like taking a step back and at a more fundamental level. It's like how do you get really good at developing content? That's the 8020 of like quote unquote. Getting good at meta is like producing really fantastic content. And I think what you're laying out is probably it's one path, it's potentially the best path to getting really good at content today. So I, I, I totally agree with that. I don't know. I don't think the affiliate organic flywheel is necessary like it today. I think you could totally build a great content program with great briefs and just, and sending that out to people and getting that content back and building great editing similar to what the ridge system looks like today. It's not the perfect system but like you could totally build the business that way. So anyway, I, I agree with the general point of just the extreme focus on content.
- [51:22]
Hunter
And, and it would be, would it be like whether it's, we'll call it earned, which is like TikTok shop, whether it's organic, right. Whether it's paid. Would you agree it's, it would be largely creator focused for you if you were to do it like even if it's paid?
- [51:34]
Connor McDonald
Yes.
- [51:35]
Hunter
Cause if you look at like instant hydration that, I mean that was theirs. It's like they they scaled super hard via whitelisting, you know, and I think it was mostly on the paid side. So I, I agree with you. I think there's like a few good examples of, you know, different brands doing that. It's harder to find brands that like scaled from like organic, but there's a lot of like, you know, Clue's and tech ones like that. But, but I agree with that.
- [51:57]
Cody
But, but Cody, I think I, I fully agree with your, I mean I agree with everything you guys, you just talked about from like a content engine, like production engine standpoint, but just from an organic distribute, like a, like a. Not even organic, just from a distribution standpoint. I would really be focused on organic social out of the gate if I were a brand new brand. Like if you can, if you can get distribution from organic and not have, you know, paid be your number one source of distribution and traffic. Like I think paid becomes way easier if you're driving traffic from organic social. You're not competing in a, in a, in a ad auction that just has larger and larger and larger CPMs. I just think that foundation is so much stronger to build off of with paid. Not to mention all the learnings you like. You know, organic social is such a great place to test ad hooks and narratives and, and all that jazz. So not only will you add in a new, a new like distribution channel which will make paid just work better because now you're getting organic traffic and now those ads will serve to those people and now it's not your only traffic source. But also to Connor's point earlier about like you're going to be better in TikTok and Snapchat, etc. All these short YouTube shorts. If you know what works in meta. It's the same thing with taking organic social learnings probably and bringing it to the ad account. Like you can learn what hooks work best, what narratives work best and now you're like launching on, on level three or four instead of zero. Like I just think that foundation is so valuable for brands nowadays and not just like all right, here we go. Launch paid. It's like, all right, well your, your CPAs are going to be ch tough if that's your, if that's kind of like the lowest level of the food pyramid.
- [53:34]
Connor McDonald
I agree. I, I do think what we're discussing is like inorganic first approach to developing ad content because I think all roads lead back to paid eventually. Like, like, if you are good at creating content that is successful organically in a sense that it generates sales for your business, then the best thing you possibly do is just pay some dollars to get that in front of more people. Like, like remove your dependency on the organic algorithm and just figure out how to get A$10,$15 cpm to work. And that's where like, you know, we talk a lot about comfort hoodies and people like that. I don't know the comfort hoodies business, but I've talked to a number of really big TikTok shop brands recently where 70, 80% of their revenue is coming from GMV Max. So it's just a matter of creating organic first content that they are then promoting heavily via GMV Max. And there are benefits to it succeeding and existing on an organic basis first. But at the end of the day it's like it comes down to spending dollars to scale. So that's where I would, I just, I would, I put those like, I like the sequence of being good at organic first, but like if you are organic first and you want to get bigger, you very quickly land on the conclusion that you need to be spending ad dollars.
- [54:46]
Hunter
Yeah, there's just a little bit of a. So I think the difference is like five years ago it was more of like the follower based stuff, so it was less of like a, you know, merit, you know, distribution. Like you can definitely get some outsized distribution. Again, there is limitations of it without paying just based on how the business models of these platforms work, but with the way of the algorithms and followers that matter, like there is some amount of distribution you can get that I think has value. But also that's just an insight that's a big learning that can kind of speed up the creative flywheel to get it better by the time you put it in an ad account, if that makes sense. Like you do have some type of insight on, hey, this is what's working.
- [55:24]
Connor McDonald
Yeah, I 100% agree.
- [55:26]
Hunter
It's like a little bit more of a cohesive flywheel where like you're putting GMV Max behind the top. Stuff that's done well, you know, organically, affiliate wise versus just like, oh, let's just put a bunch of stuff in our ad account and see how it does. I agree.
- [55:39]
Cody
Have you guys heard Matt, Matt Bertulli's theory that launching new channels makes your hero channels, I. E. Meta better? Because you're now giving meta a better, a new signal, a new audience and then it's kind of functionally going and like targeting prospective people, like a look like audience. Have you guys heard, have you heard him talk about that before?
- [55:57]
Hunter
I've talked to him a lot about it because we've seen the same, I
- [56:00]
Cody
think it's the same thing with organic social, right? Like if you can, if you can drive a lot of traffic to your website with because you're, you've cracked this organic social distribution and now you're getting, you know, hundreds of thousands and millions of impressions on organic social content and that's naturally going to drive some traffic. Like yes, you're going to have a remarketing pool which is great and that's, that's going to help for a short period of time. But hopefully like when you do launch paid, your pixel's more seasoned because you're driving traffic from organic social. So I think it also will again there's, there's probably no way to like truly split test this, but I think it makes sense that you would have a much stronger launch with paid if you've driven, you know, a hundred thousand people to your website from organic social distribution. Like I would hope. Unless you're, unless the organic social content you're putting out there is like totally attracting the wrong, the wrong type of person and it's like clickbaity, you know, bs. But assuming that's not the case, I think you're, it's going to support that pixel seasoning in a way that you wouldn't have without organic social distro.
- [57:01]
Hunter
Yeah, no, I, I, I agree. When we launched TV we saw like without really any other changes, just like massive net new reach increase. Massive just like percent new visits increase. I think it was just this like flooded new signal. So I, I, I, I do agree with that theory.
- [57:17]
Connor McDonald
Do you think Cody, that it would have had that same impact today? Well, do you think that part of the reason you saw that was because you guys, you know, maybe weren't as properly diversified within Meta on like a creative basis? You weren't thinking about CPMR when you launched tv. So let's say you just launched TV today. Do you think it has as big of an impact on Meta considering you guys are in a better spot in terms of net new reach?
- [57:41]
Hunter
That's a good question. I don't know. I still, we still struggle with it and so there's still a lot and so I think there's even more that we have to do for signal and it's, I don't think it should be just other channels but it's like I do find that we for whatever reason have to go much harder at like signal engineering and kind of like more than maybe some other brands have to, to, to succeed. But it's based on past tests for us and stuff like that. It's like very clear. Like when our reach is not good, we really struggle. And so I am bullish on doing as much as we can outside the ad account to get organic traffic to, you know, get signal. It's not, it's not the only thing. But so I don't know what you know because we're changing a lot, what makes sense. But I am curious to see even as like TikTok picks up or we're about to do a lot of out of home if like just more new audiences getting in are beneficial to that versus maybe some audience, some brands naturally, like Ridge naturally has been everywhere. You guys have all have, you know, been very early. Like maybe that's one potential reason why you do you do a better job with that of reaching new people on that totally.
- [58:49]
Cody
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- [60:13]
Hunter
Okay, I
- [60:14]
Connor McDonald
want to jump back quickly. Connor, you talked about you guys hit the World Baseball Classic last night and we just talked about this with our agency. I feel like baseball on linear TV is super underrated right now. Are you guys making like a dedicated effort to try to tap into that, that content?
- [60:30]
Cody
Yeah, yeah. Well, we've, so we've bought, we've had like fire sale opportunities come up in the past couple years to buy some, some baseball playoff spots. And you know, one of the, I think the number, the first KPI that we look at when we're trying to like compare spot spot to spot is what's the immediate lift in traffic. I think that's a great KPI to measure when you're measuring linear tv because I think that's indicative of, of the intent and quality of the audience relative to your brand. So we have always seen that like baseball has always been on the higher end of, of hour over hour lift in sessions. So. Yeah, and then the World Baseball Classic, you know, that happens once every four years. Four years, yeah, exactly. It's before for the MLB regular season. So I just feel like people are kind of hungry. Baseball fans are hungry for like good competitive baseball. So like when we got the opportunity to, to buy some spots there through Fox, we, we jumped on it. So yeah, baseball is definitely one that we're, that's going to show up in our, in our sports buys this year. And yeah, like last night we had a really solid hour over hour lifting sessions and, and also a really good cpm.
- [61:37]
Connor McDonald
Yeah, we, I was just looking at the rates. I mean there were, there were preemptible 15 second spots for the World Baseball Classic last night for a $10 CPM. I'm like, that's a great value. It cost like it was like $60,000 or whatever, but we didn't do it. That's a great value. We're gonna hit some of the, the opening weekend games next week, which will be exciting. I think. The other thing is, I think, I think baseball viewership is up. Like it actually outperformed last year. One of the reasons we got effectively lower CPMs than the rates that we were buying them for was because viewership's up. And I think a big piece of this that came up in a conversation recently is that the change in the rules of the game, right, it's a shorter game now. I think it's easier to watch more baseball. And I think that's like trickling its way down to like an opportunity from a, from a marketing and media buying perspective. So that's been our thing. We've similarly seen great responses from baseball on tv. We did some preemptible spots during the playoffs last year that came at great rates. We landed in that, like, Brewers, Dodgers, an LCS game or something, which was really good. There's some great Apple TV spots, I think CPMs, by and large, are just lower than you're getting from other professional sports leagues. So we're, we're making a dedicated effort there. I'm kind of excited about it. We'll probably spend a couple hundred grand on baseball stuff this year. It's like. It's like one of my tent pole strategies for linear tv.
- [63:01]
Cody
Yeah, I think when we bought. When we. We bought. I forget which series I. It was. It was. Is it the. What's the one right before the World Series at the nlds? It was Dodgers. I think it was Dodgers, Brewers, I forget. No, it was one series after that, anyways, that we bought like, two spots back to back. And the second spot was one of our best lifts in traffic. It was. It was insane. I'm. I'm like, really, really bullish on the intent of. Of that audience. And it's also fun to, like, we had a floater spot last night, so I didn't know when it was, when it was going to go. And I'm like, turned the game on and literally, like, like the commercial break before the first pitch, I, like, heard Gordon Ramsay's voice from my kitchen. I run in and I'm like, pulling up Shopify and going to the Live View. And it's fun to, like, you know, I'm texting Jason in London in a group chat, like, all right, we're up to 2,000 on site, 3,000 on site, 3, 500 on site. It's just like a fun. You. It's fun to see it in real time like that and then go to your Shopify once the data pulls in and see that uptick.
- [63:54]
Connor McDonald
Do you guys get the. So the preemptible spots are the ones where you don't know if you're going to land in the game. And then the non preemptibles come at a much higher cpm, but you're guaranteed to land in the game. Like, if you guys want to have a presence in World Baseball Classic, which route have you guys been going?
- [64:08]
Cody
So we bought some non preemptible, like a few weeks back. So that. And that was. I forget exactly how many, but, you know, we bought a bunch of different spots across a bunch of different games. And then this one that we bought last night was a fire sale. That was big. Yeah, we use the term Floater preemptible. It just means it's not guaranteed. So basically there's like, like, as you can imagine during a baseball game, there's all sorts of like unplanned breaks. So that's how the floaters work is like if the unplanned breaks, you know, hit, then you get your ad placed. So yeah, last night was, was exactly that. It's like you might spend this, you might not, but you have to be okay with, with it either way.
- [64:43]
Connor McDonald
Totally. Yeah. So you guys probably use. And I don't know, you guys run a 15, 30 second spot. So it's a 1020 CPM, something like that probably. I was looking and the NBA Prime. NBA on Prime. Amazon's got the NBA games this year. You know, it was $30 CPM to land in like Kings Pelicans last night or something. And it's like, it's just, I mean, it's just insane. The difference in quality of the content, the scale of it. I think people are more bought in. So anyway, I, I think TV is an extremely interesting channel right now, especially once you get into the nitty gritty of it and start thinking about like diversifying across different networks and programming and things like that.
- [65:21]
Hunter
Yeah, I think NBA is super down though. So to. To your point on baseball, I think NBA ratings are not, not very good right now. Total, you know.
- [65:28]
Cody
Yeah, well, we got, I mean, I think I want to say our CPM last night was like, it was between 20 and 25. I was like, God, that's crazy cheap for, for this inventory and like this game. I wonder if it is just because it's once every four years. So it's not part of like, you know, a lot of brands or like larger companies, like kind of always on stack and maybe that's why the inventory didn't get, you know, bought up and there wasn't as. And I don't know, but I was like when I saw that cpm, it was like an immediate yes, let's do it.
- [65:59]
Connor McDonald
Totally.
- [66:00]
Hunter
Look at this range. We talk about, you know, protein, we talk about AI, we talk about channel incrementality, we talk about baseball, basketball. Love the range. We should. We might have to change the name to just, I don't know, not marketing operators, podcast. But no, obviously we'll always be here for the good stuff. All right, well, that, that was a good one. Excited for that one to come out as always enjoyed it as always. Want to thank our sponsors. Thank you so much to Motion Rich panel after Cell House. Prescient this is episode 105. If you enjoyed it, please give it a like, give it a review, please share it. We appreciate all of it and we'll see you guys on the next one.