Marketing Operators E028 Summary: Pre-BFCM Targets, Marketing Spend, Shifting from Amazon to DTC & More

In Episode E028 of Marketing Operators, hosts Connor Rolain, Connor MacDonald, and Cody Plofker dive deep into strategies essential for e-commerce businesses gearing up for the high-stakes Q4 season. Introducing their new segment, "MOperators Hotline," they address listener-submitted questions, offering expert insights on optimizing marketing spend, transitioning from Amazon to Direct-to-Consumer (DTC) models, and tackling advertising challenges.

1. Introduction to MOperators Hotline

At the outset, the hosts announce the launch of the "MOperators Hotline," a dedicated segment where they answer questions from their audience. This initiative stems from positive feedback and engaging interactions at events like the All In Summit, showcasing the community-driven approach of the podcast.

Connor McDonald [00:12]: "What we have today is a couple of those questions, which we answered."

2. Setting Marketing Spend Targets Leading Up to BFCM

One of the primary questions addressed focuses on adjusting marketing spend before Black Friday Cyber Monday (BFCM) with the expectation of improved Return on Ad Spend (ROAS) during the holiday season.

Key Insights:

• Historical Data Utilization: Cody emphasizes the importance of leveraging past performance metrics to set realistic monthly and daily targets.

  Cody Plofker [12:11]: "This is where it's really helpful to have a monthly, weekly daily plan versus actual that you can compare back to for previous years."

• Seasonal Adjustments: Connor highlights the role of seasonality in planning, ensuring that targets align with expected fluctuations in consumer behavior.

  Connor McDonald [13:49]: "We start with this year end target, and then we just get more and more granular with it. And we're using like, like Cody said. Exactly. Seasonal data to."

• Flexibility in Projections: Both agree that while historical data provides a foundation, flexibility is crucial to accommodate unforeseen changes in the market landscape.

3. Determining the Point of Diminishing Returns in Marketing Spend

Another significant discussion revolves around identifying the threshold where additional marketing spend no longer yields proportional returns, ensuring that budgets are allocated efficiently.

Key Insights:

• Unit Economic Profitability: Connor introduces the concept of evaluating profitability on a per-unit basis to determine optimal spend levels.

  Connor McDonald [26:59]: "If we can spend $0.50, if we get a 2x incremental ROAS, then in theory we could spend an infinite amount of money. At that rate, we're unit economic profitable."

• Sensitivity Analysis: Utilizing tools like sensitivity charts helps in visualizing how incremental spending affects overall ROAS and profit margins.

  Connor McDonald [29:07]: "We have a spreadsheet that uses that exact variable... you can calculate."

• Avoiding Non-Incremental Spending: The hosts caution against increasing budgets without validating results, which can lead to diminishing Returns on Advertising Spend (ROAS).

  Connor McDonald [32:07]: "Marketers understanding this concept is essential."

4. Scaling DTC from Amazon: Advice for a HomeGoods Brand

A listener's query about transitioning from a predominantly Amazon-based sales model to a robust DTC strategy is explored in depth, providing actionable steps for brands with extensive product catalogs.

Key Insights:

• Focus on a Hero Product: The hosts stress the importance of identifying and scaling a flagship product to drive DTC success.

  Connor McDonald [38:34]: "If you want to scale in DTC you have to find like a thing that works... zero in, find the thing that works and then focus on that scaling."

• Leveraging Existing Demand Capture: Cody suggests utilizing established channels like Google Ads to capture existing demand before expanding into demand generation.

  Cody Plofker [39:48]: "Maybe they shouldn't do demand gen at first. Maybe they should do demand capture because there's clearly demand already by people searching on Amazon."

• Data-Driven Owned Media Strategies: Emphasizing the value of CRM data, the hosts recommend setting up post-purchase automations to enhance customer retention and cross-selling.

  Connor McDonald [41:18]: "Using the data clarity they get that you just can't really do with Amazon because you're not getting those emails or phone numbers and they're not opting in for owned media."

5. Addressing Declining New Reach in Facebook Ads

The episode also tackles a common challenge: declining percentages of new reach in Facebook advertising campaigns, which can hinder growth despite high ad spend.

Key Insights:

• Creative Diversity: Cody points out that repetitive ad creatives can lead to audience fatigue, reducing the effectiveness of campaigns.

  Cody Plofker [43:27]: "I would say creative diversity. I would be shocked if you looked in their ad library and all the ads didn't look the same."

• Exploring New Audience Segments: The hosts suggest diversifying ad content and targeting to tap into new pockets of potential customers.

  Connor McDonald [43:38]: "These ads are getting a really high click-through rate... but an incredibly low time on site. I don't know what to make of it."

• Optimizing Ad Structure: Adjusting the placement and messaging within ads, especially those featuring celebrities, can improve engagement metrics and ensure that new audiences are genuinely interested in the product.

  Connor McDonald [45:56]: "Maybe like if you didn't open with him... and it's going into this like low intent, like Sean O'Malley fanboy audience."

6. Insights on Marketing Tools and Strategies

Throughout the episode, the hosts discuss various marketing tools that have significantly impacted their strategies and outcomes:

• Prescient AI: Highlighted for its effective media mix modeling, particularly in evaluating the performance of TV and YouTube ads.

  Cody Plofker [19:02]: "Prescient AI... it's really going to help us lean into Q4."

• Rich Panel: Praised for enhancing customer experience management, offering seamless migration, and improved reporting capabilities.

  Cody Plofker [33:08]: "It's really helped our team our CX function and I'm super happy with it."

These tools are recommended for their ability to provide actionable data and streamline marketing operations, making them invaluable for scaling and optimizing campaigns.

Notable Quotes

• Connor McDonald [03:53]: "It's the super bowl of e-commerce."
• Cody Plofker [25:23]: "Marketers understanding this concept is essential."
• Connor McDonald [38:34]: "Find the HERO product and then scale up around that."
• Cody Plofker [43:27]: "Creative diversity is crucial to avoid audience fatigue."

Conclusion

Episode E028 of Marketing Operators delivers a wealth of knowledge for e-commerce marketers preparing for the pivotal Q4 season. By addressing listener questions through the "MOperators Hotline," the hosts provide practical solutions and strategic insights that empower brands to optimize their marketing spend, effectively transition to DTC models, and overcome advertising challenges. The integration of powerful tools like Prescient AI and Rich Panel further underscores the importance of data-driven decision-making in achieving sustained growth and profitability.

Listeners are encouraged to engage with future episodes by submitting their own questions, fostering a collaborative environment for continuous learning and improvement in the ever-evolving landscape of e-commerce marketing.

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