E046: Matt Bertulli: Is Meta Still Incremental? How Paid Media is Changing & Scaling Beyond Facebook Ads

Summary

Marketing Operators Podcast: Episode E046 Summary

Title: E046: Matt Bertulli: Is Meta Still Incremental? How Paid Media is Changing & Scaling Beyond Facebook Ads
Release Date: February 11, 2025
Hosts: Connor Rolain, Connor MacDonald, Cody Plofker
Guest: Matt Bertulli

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I. Introduction and Context

In Episode 46 of the Marketing Operators podcast, hosts Connor Rolain, Connor MacDonald, and Cody Plofker welcome Matt Bertulli to discuss the evolving landscape of paid media, particularly focusing on Meta (formerly Facebook) and its role in modern marketing strategies. The episode delves into whether Meta remains an incremental platform for advertisers and explores alternative avenues for scaling beyond traditional Facebook ads.

II. The Challenge of Meta's Incrementality

The conversation centers around a provocative tweet by Sean (a notable figure in the marketing community) questioning Meta's incremental value: "Is Meta Still Incremental?" This sentiment reflects widespread concerns among marketers about Meta's diminishing returns in reaching new, non-overlapping audiences.

Jason:
"Sean's asking if Meta is incremental anymore. Last year was tough for Meta for most brands."
[Timestamp: 13:50]

Both hosts and Matt agree that the past year presented significant challenges for Meta, with many brands experiencing decreased effectiveness in reaching new customers. Matt elaborates on the complexity of the issue, highlighting that it's not solely about revenue but also about the sheer number of customers acquired over time.

Matt:
"For us, it's hard to find new customers once you've scaled into the millions. Meta just loves to go after who it knows will make us happy, and it's a lot of work."
[Timestamp: 15:32]

III. Definitions and Nuances of Incremental and Profitable Outcomes

A critical distinction made in the discussion is between "incremental" and "profitable" outcomes. Incrementality refers to Meta's ability to generate additional sales that wouldn't have occurred without its advertising, whereas profitability considers the return on ad spend (ROAS).

Connor:
"Incremental and incremental and profitable are two different things... Meta is the only ad platform that has an ad setting you can optimize for incremental outcomes."
[Timestamp: 17:20]

This differentiation is crucial as it underscores that while Meta might still drive extra sales, those sales may not always translate into profitability depending on the cost and efficiency of the campaigns.

IV. Strategies to Address Meta's Declining Incrementality

In response to Meta's challenges, the hosts discuss various strategies to mitigate reliance on the platform:

1. Diversifying Paid Media Spend:

   • TV Advertising: Leveraging traditional television as a trusted channel to reach broader, often older demographics.
   • YouTube and Streaming Services: Utilizing long-form content to engage users actively seeking information or entertainment.
   • Influencer Marketing: Collaborating with creators to tap into their dedicated audiences.

2. Adjusting Campaign Objectives:

   • Moving from purely purchase-optimized campaigns to objectives that foster engagement and brand awareness, such as "view content" optimizations.

Matt:
"We've started creating ads based on our best organic content. This alignment between organic and paid strategies has led to significant growth."
[Timestamp: 50:13]

This shift emphasizes creating high-quality, engaging content that resonates with audiences, rather than solely focusing on direct conversions.

V. Importance of Content Quality and Creator Partnerships

The discussion highlights the convergence of organic and paid strategies, emphasizing the role of authentic, high-quality content in driving successful advertising campaigns. Matt shares his experience of leveraging organic content that naturally performed well and then amplifying it through paid channels.

Matt:
"Our best ads started out as organic content that we created. They went viral, and then we turned them into ads, spending millions on individual ads that performed exceptionally well."
[Timestamp: 47:58]

Additionally, the importance of deep integrations with creators is underscored. Partnering with influencers who align closely with the brand's values and products can lead to more meaningful and impactful campaigns.

Matt:
"We have creators who think deeply about being creators on the Internet. They're aligned with our products and help us craft stories that resonate."
[Timestamp: 84:06]

VI. Measurement and Attribution Tools

Accurate measurement of campaign effectiveness is paramount, especially in a shifting landscape where traditional metrics may no longer suffice. The hosts mention reliance on tools like NorthBeam, a multi-touch attribution platform that provides standardized measurement across various channels.

Connor:
"NorthBeam offers a standard form of measurement across all channels. It provides confidence that we're comparing things accurately and honestly."
[Timestamp: 62:40]

Such tools enable marketers to assess the true impact of their campaigns, distinguishing between mere engagement and actual incremental sales.

VII. Future Directions in Paid Media Strategy

Looking ahead, the hosts discuss plans to further diversify their media mix and reduce reliance on Meta:

1. Increased Investment in TV and YouTube:

   • Allocating a larger portion of the budget to traditional and digital long-form advertising.

2. Enhanced Partnerships and Influencer Collaborations:

   • Focusing on deeper, more integrated collaborations with creators to drive brand awareness and engagement.

3. Exploring New Objectives on Meta:

   • Experimenting with different campaign objectives, such as "quiz completions," to better capture engaged and interested audiences.

Connor:
"We're shifting our budget allocation to partnerships, TV, streaming, and sponsored influencer content to build top-of-funnel awareness."
[Timestamp: 55:43]

These strategies aim to create a more balanced and resilient media mix, ensuring sustained growth even as Meta's efficacy wanes.

VIII. Advice for Marketers and Smaller Brands

For smaller brands or those with limited budgets, the hosts offer actionable advice:

1. Leverage Influencer Marketing:

   • Influencers offer scalability and can be a cost-effective way to reach new audiences without the hefty investments required for TV or extensive Meta campaigns.

2. Focus on Content Quality:

   • Prioritize creating authentic and engaging content that naturally attracts and retains audiences across multiple platforms.

3. Diversify Channels Early On:

   • Avoid putting all ad spend into a single platform. Early diversification can help mitigate risks associated with platform-specific challenges.

Jason:
"Influencer marketing is the most scalable channel at every level. You can start small and scale up without the significant upfront costs associated with TV."
[Timestamp: 71:32]

This guidance emphasizes flexibility and adaptability, encouraging marketers to explore multiple avenues to connect with their audiences.

IX. Conclusion

The episode concludes with the acknowledgment that the paid media landscape is evolving, necessitating a shift in strategies to maintain effectiveness. While Meta remains a significant player, its incremental value is under scrutiny, prompting marketers to explore and invest in alternative channels. The emphasis is on creating high-quality content, building meaningful partnerships, and employing robust measurement tools to navigate the complexities of modern advertising.

Matt:
"Great marketing aligns closely with how users interact with platforms. If we focus on earning our place in someone's feed and being relevant, we likely win more than we lose."
[Timestamp: 22:18]

Jason:
"Channels like prescient and NorthBeam have been instrumental in helping us measure and optimize our media mix effectively."
[Timestamp: 63:51]

Ultimately, the episode serves as a comprehensive exploration of the current challenges and opportunities within paid media, providing listeners with valuable insights and practical strategies to adapt and thrive in a dynamic marketing environment.

---

Notable Quotes with Timestamps:

• Matt Bertulli:
  "For us, it's hard to find new customers once you've scaled into the millions. Meta just loves to go after who it knows will make us happy, and it's a lot of work."
  [15:32]

• Connor Rolain:
  "Incremental and incremental and profitable are two different things... Meta is the only ad platform that has an ad setting you can optimize for incremental outcomes."
  [17:20]

• Jason:
  "Influencer marketing is the most scalable channel at every level. You can start small and scale up without the significant upfront costs associated with TV."
  [71:32]

• Matt Bertulli:
  "Our best ads started out as organic content that we created. They went viral, and then we turned them into ads, spending millions on individual ads that performed exceptionally well."
  [47:58]

• Connor Rolain:
  "NorthBeam offers a standard form of measurement across all channels. It provides confidence that we're comparing things accurately and honestly."
  [62:40]

• Connor Rolain:
  "We're shifting our budget allocation to partnerships, TV, streaming, and sponsored influencer content to build top-of-funnel awareness."
  [55:43]

• Jason:
  "Channels like prescient and NorthBeam have been instrumental in helping us measure and optimize our media mix effectively."
  [63:51]

• Matt Bertulli:
  "Great marketing aligns closely with how users interact with platforms. If we focus on earning our place in someone's feed and being relevant, we likely win more than we lose."
  [22:18]

---

This comprehensive summary encapsulates the key discussions, insights, and strategic conclusions from Episode E046 of the Marketing Operators podcast. It provides a valuable resource for marketers seeking to understand the current dynamics of paid media and the shifting role of platforms like Meta in their advertising strategies.

Transcript

[Matt]

I don't know which one of my chats. I got so many chats with Sean. Yeah. And you guys had your retreat last week. And he said something and it's in a group with Katie about having everybody together. And I only respond it was like he was bitching about something. The only thing I could think is, like, sean, those are called people, dude. Like, you don't see them very often. Like, those are humans, you guys do. I have a question, though. Do you. How often do you guys do retreat with your team? Like, is it a once a year thing or is it twice? Like, what's that?

[Connor]

We do. Yeah, yeah, we do once a year with the whole organization. So we're at like, I think 60 and change us staff. And then we bring in some of the international staff too, which we've only done two years. It's awesome. We had people from Ecuador, we had people from Albania, we had people from Romania all over the place. A very global event.

[Matt]

Is it like a grade 8 dance? At first, like, it's kind of awkward because, like, nobody's in person, so everybody's sort of like. Like, do you have factions that kind of stand on the opposite side? Not really.

[Connor]

Not really. I mean, yeah, you made it. I don't know what Sean said in your group chat. It was frankly a fantastic.

[Matt]

Repeat it.

[Connor]

Yeah, yeah, no, it was an awesome week. I mean, this is. This has been the review that I've been giving everybody. It was in Vegas. It was our third year in Vegas. It'll be our last year in Vegas. We got there and we're like, this has been. This has been enough. It was a great balance of productivity and also like, leisure. So it's like, well programmed. Between we have presentations, we review 2024, we talk 2025. We get like, some key initiatives that we discuss. We get some breakouts, etc, and we do like a fun day on Thursday. Some. Some people go karted. We had a big group that wanted to play basketball, so flying from all over and we just went to, like, play pickup basketball. Shoot guns. Nobody shot guns.

[Matt]

Come on, you're in Vegas as a kid. I go to Vegas. I want to shoot some.

[Connor]

Yeah, it's been discussed, but I think probably the better decision was to leave that off of the basketball. Yeah, yeah, yeah. Although basketball is probably more dangerous.

[Matt]

You.

[Connor]

You had someone on the, you know, paid media team tearing an ACL or something.

[Matt]

It's not part of their job. You're fine.

[Connor]

Yeah, yeah.

[Matt]

Do you do a ton of prep going into that?

[Connor]

Yeah. So we. We have a director of remote and a director of people. And they both spent a lot of time like preparing all of that.

[Matt]

No, I mean like you as the cmo, like how much work do pre work do you going in to talk?

[Connor]

I had, I had basically one presentation so I had to prepare for that. But it wasn't too much time. I mean, yeah, we don't do. It's not super productive. It's a balance of productivity. So I'm not like. But I mean that's like, that's. I mean, Sean will say the same thing. Like, our goal is not necessarily like, let's get all the work done that we can't do remotely. It's mostly like, hey, we never get to see each other in person. Like, let's build relationships, have fun, trust. Like leave this knowing people we didn't know previously, which requires like going cross department. So it's like immediately. It's hard to be more productive if I'm hanging out with someone on the finance team and someone on the planning team. It's like we don't have a lot to talk about and so that's really how we prioritize the event. And I honestly think we're probably more productive remotely afterwards. And that's how, that's how we think about it.

[Matt]

Cool.

[Cody]

Motion just sent us their latest research on how our e commerce brands can make incredible meta ads in 2025. I've shared it with my team at Hexclad, as this report is basically the jumping off point to guiding our 2025 paid media production roadmap. Motion, as you know, is the creative analytics and research platform used by brands like hexclad, True Classic, Ridge Wallet, Jones Road Beauty, Viori, and many, many more. And they actually dug into over $100 million in ad spend, surveyed 500 DTC advertisers, and a deep dive with 12 legendary DTC experts to guide this report. Some of the people that contributed are Dara Denny, Savannah Sanchez, Barry Hot, Nick Sharma, Aaron Orendorf, Sarah Levenger, Joanna Wallace, Shadow hexclad, Hannah Ho and Gil Chamofsky. This is an amazing resource to help guide your 2025 paid media production roadmap. So generally, a lot of creative strategists, a lot of teams, they come up with a lot of hypotheses about what isn't or is not going to work. And then they build ads around it and then they launch it and they use the data to inform whether or not that's working. Well, what this report allows you to do is instead of starting at ground zero, you're actually able to start at ground level. 5 Because this report is looking at a bunch of advertisers data and consolidating information about what has and has not performed performed well in 2024. So as an example, this report concludes that ads are getting longer and longer and longer in 2024. And what does that mean? It means that education is becoming more and more prevalent in ads. There's some very, very natural next steps that that you can action on for your brand based on this information. Another finding that generally ads as a whole under index on taking a comedic angle. But some of the top performing ads, 25% of them had some sort of comedic element in 2024. So what does that mean? Maybe you should introduce more humor into your into your paid media creator strategy this year. Maybe you should introduce more long form educational content into your paid media creator strategy this year. This is a great jumping off point. This is a great document to have pulled up as you're working out your production roadmap for 2025. By referencing this report, you're going to have a much better chance of having higher hit rates because you are leaning on 2024's actual data instead of just your gut instinct about what will or will not perform well. So this is a super tangible piece of research. It is based on over $100 million in ad spend and the surveys of 500 DTC advertisers. If you have not read it yet, this is going to be super valuable for you. I highly recommend reading this or having it open as you're building out your 2025 paid media creative production roadmap. It's just going to give you a much better jumping off point than not having a piece of research like this. So if you want to check it out, go to motion app.com forward/creative trends. That is motion app.com forward/creatual-trends.

[Jason]

Before we get into today's episode, I want to thank our sponsors, Motion, Prescient Rich Panel and North Beam.

[Matt]

So I'm hijacking your show here, guys. What are we doing?

[Jason]

Dude, I love that by the way. Like I, I hate intros. So I love that you just hopped right in. I appreciate that.

[Connor]

Natural. Natural moderator.

[Jason]

Great. I. I mean I feel like. Yeah. Are you going to moderate this as a guest?

[Matt]

No, I am here to like, you guys lead. I am just gonna have some fun. This is gonna be great.

[Jason]

All right, so Connor, Connor R. Is out skiing in Japan right now. I don't Know if it's a work.

[Matt]

Oh, come on. Is he really?

[Jason]

I don't. I never know if it's a work trip or just a fun trip when he goes, what a great place to go ski. But I saw his skiing.

[Connor]

He was in Tulum a couple weeks ago. I mean, he's been. He's a spotty track record showing up to marketing operators.

[Matt]

Yeah, put that kid on in. Put him on blast, man. Tulum and then Japan. Like, he's doing Japanuary. That's a. That's an epic ski trip.

[Connor]

And I don't know who's approving these time off requests. That's my big thing.

[Matt]

I got all. I'll text Jason.

[Jason]

I think Jason's gonna talk maybe. But. Awesome. All right, we got a Good episode. Episode 46. We have man who needs no introduction. Matt from Oper from Operators podcast, here to talk about all things marketing with the mops today. Matt, what's going on?

[Matt]

I'm good. I'm happy to be the dumbest person in the room today. This is great.

[Jason]

I don't know about that.

[Matt]

Not everything's going on, man. It's January 28th. We're recording this, and it's been a good start to the year, but it's definitely been a.

[Jason]

It's been.

[Matt]

It's been a fun one. I think we're going to talk about some things.

[Jason]

I was thinking like today because I've. I've been a CEO now for what, like, four months? I was like, I don't know how Matt does two companies.

[Matt]

I don't. So, like this. I. It's a. I run a holding company. So, like, we have one company, one cap table, one set of shareholders. Like, there's two brands, but it's still one company. Like, I got one consolidated set of financials. I look at. I'm managing cash across the whole hold company. So, like, there's two brands. I have to think about two brands, kind of two customers. There's a lot of overlap. You know, there are, like, people who just work on Lomi, and there's people who just work on Pela, but then there's also, like a bunch of shared people. So, like, it's not as insane as, like, running two, like, separate companies. Like, I can imagine, like, running 2 Jones Road. Hell no. Like, that doesn't sound okay.

[Jason]

I mean. Yeah, makes sense. It's probably still not easy. I was thinking, like, it just doubles the probability that you wake up one day and just have a certain problem, you know, you might get out of.

[Matt]

Like, the Surface area for. Is high.

[Jason]

Yeah. Just makes it so much higher. That's what I was thinking about, you.

[Matt]

Know, like, it's like lots of surface area for luck and then also. Crap. Yeah, that's, that's. But I'm like, here's the thing too. I think I have like nine or ten angel investments as well. I just got a lot of crap, dude. Like, I'm old, guys. Like, I don't know if. Can you look at. Do you see my face? Like, can you see the hair in my face? It's white. Like, it's. I'm going gray and white.

[Connor]

You don't look a day over 35. That's.

[Matt]

I'm very.

[Connor]

You're efficient. You're efficient for compliments. I could tell.

[Matt]

I'm not. But no, I just been at it a long time. So, like, I've got a lot of. And I think, Cody, I've texted with you about this. I'm very, very disciplined on time management. And I'm good at saying no and I'm extra good at ghosting people.

[Connor]

Yeah.

[Matt]

So, like, you know, I defend my calendar.

[Jason]

Well, tell me if you think this is right or not. You almost, I don't know if you're naturally like this. You almost have to be like that if you're gonna do two where, one, I feel like you could kind of be a little bit more like me and like, be more in the weeds and get away with it and never learn that skill. Two, you just, you would never survive.

[Matt]

No. And I, I, I do this thing where like every quarter, I kind of have a current obsession of the day where I spend a lot of time in the weeds and like a part of the business. So I, I could have sort of like zoom in, zoom out, and I, I parachute in, like, and it's usually quarterly where, like, my focus will shift. So I go in super deep in the weeds in something, but, like, I can't be super deep in the weeds on everything that's just not scalable. Like, not in, in this seat, not in, Even in like the CMO seat. It's like, that's also not scalable. Right. Like, you need to build team and, you know, get people to actually do work. Like you're working. As soon as you're in the C suite, you, you sort of have no choice but to work through people. Right. If you, if you don't learn how to do that, you probably shouldn't be in the C suite. Like, you're likely over titled.

[Connor]

Right.

[Matt]

In my view. Yeah.

[Jason]

No, I, I I agree with that. And, like, sometimes I'll be working, whether it's like a weekend or like, you know, President's Day and everybody's off and I'm working. I'm like, there's kind of no point in me working. Like, I can't do anything by myself at this point. I don't even, like, know what I'm doing. You know, I can barely go.

[Matt]

I think the funny part is, like, it's a great day when you start to realize that you don't even have access to do things. Like, I just can't log into certain. And it drives me nuts. You know, I got to, like, ask the IT guy or it's like, I need my media buyer. I was like, hey, can you give me permission to. Can I edit some things in meta? Which, like, meta and my team does not like if I do right, you know, but, yeah, it's a. It's a good day, man. That's a great thing.

[Connor]

I actually, I. I love that. Yeah. Realizing that either you don't have access or you really don't understand how something works is almost refreshing. You're like, oh, my God. I. It's so nice to understand I don't have to deal with, like, these sets of complexities and that, you know, some. Some e comm ops manager is actually managing the whole thing. I've been getting more and more of that as we've scaled, and it's. It's a good feeling.

[Matt]

Like, dude, like, the best example of this, because we're talking marketing, is I don't know how the names of our ads come about in meta. So, like, I couldn't actually create an ad when I could, I could click the buttons, but, like, it isn't going to flow into anything because the naming. I don't know where the names come from. It's all these letters and dots and dashes and all this. I'm like, how does this work? So, like, all I can do is genuinely, like, if I like something, I can, like, duplicate it. And that is the experience.

[Jason]

Like, meta is so different than it was six months ago. Like, even making an ad that, like, that's my biggest fear is like, I don't even know how to operate around Ads Manager anymore.

[Matt]

No. And this is like, it's not a. It's also a. There's just so many people that are. Your goal as a leader is also to be, like, the dumbest person in the room. I. I joke about that, but it's totally true. Like, when you're. I don't want to be doing that because if I have to, it's like I've either screwed up on hiring. Right. Or, or I'm just being meddlesome, you know, like that's, that's like it's one of those two outcomes. Um, so, yeah, I think it's a, it's a good thing that you don't know how to do things at some point.

[Jason]

It's good. Good one, good takeaway. All right, let's transition. So, main topic today we got a few, but we're going to talk about Meta. Sean, who needs no introduction in his infamy, had a, had a, had a pretty bold, spicy tweet about Meta. I won't read the whole thing, but we'll put in the show notes. Really was asking, is Meta incremental anymore? Let me pull it up, figure out how much of it we really should read. But it's been a hard year, I think last year. Would everybody agree? Last year was a pretty tough year for Meta for most brands.

[Matt]

The first six months. First five. Yeah.

[Jason]

Easily first 12 for me. I'm just kidding. Yeah. I mean we had that weird wonkiness that like. Matt, I feel like you and I talked to everybody during that in like February and March got back to normal but never, never really regained. And I, I don't know, I just feel like. And a lot of people are saying is there's just something weird going on. And you know, we've, we've talked about this a lot where it's just. So Sean's saying it's not incremental. I do think it is incremental. I mean it's, that's a very nuanced thing. I think it is. I think, you know, we've talked about it with Apple and like there's a huge difference between total incremental and like as incremental on new customers as you want. And I just see that being the biggest challenge is Meta. Especially again, like big disclaimer, we're not most brands.

[Matt]

We're.

[Jason]

We're nine figure brands up here. But at scale, Meta just seems pretty terrible at reaching new customers unless you're giving it the proper inputs. But it's just so much more difficult than it used to be.

[Matt]

There's. I mean there's definitely a lot of nuance. Right. There's like, it's category dependent. That which is a TAM question, which I think even zoomed in is like a total in market question. Right. So how many people are in market at any given moment in time? Which is then a seasonal thing. But like, I think a broad, the broad statement of like, meta seems to struggle with incremental reach is true for most brands of like, reasonable scale. So like, and, and I actually would go so far as like, in my experience, it has little to do with revenue and it has more to do with like, how many customers have you acquired as a business over time.

[Connor]

Right.

[Matt]

So like when you start getting into the millions of customers like we are, it's just hard to find those people, period. And you know, and then like depending on the category. Right. Like for us, yeah, we struggle. We've kind of been struggling for the last, I want to say the last couple years with Meta, with getting like, true. Like, how do we find new audience? Like, Meta just loves to go after like, who it knows will make us happy. And it's a lot of work. It's both a lot of work. And then I find even the way that we view or sorry, how do we measure like all this activity that we're going to do with the platform to try to go push outside of our core customer, you know, like, are we, if we're going to go into creative diversity, it's like, how should I be measuring these new angles and these like new pockets of customers that I'm trying to go after? Should I measure them against my best performing, you know, the tried and true, like, this is the, the rock of the business. Now I'm going to go push to like these other people. Should I expect them to perform similarly out of the gate? How long should I wait until I expect them to perform? Like, there's so much here. It's, I, I, I think I saw that. You guys want to talk about this? I'm like, I feel like Meta incrementality is going to be the third rail of the year. It's like nobody's going to want to like, so Sean just started the year off by kicking it. It's like, why not? But I could definitely see this being like the topic just because it, it commands so much share of wallet for all of us. Right. Like, it's going to be the thing that we talk about.

[Connor]

Yeah, I, I think the one thing that I'll call out is like to make this distinction for, for, for everyone listening. Incremental and incremental and profitable are two different things, for sure.

[Jason]

Yeah.

[Connor]

So like just to hit that quickly, like, does meta provide a lift on your business? And I think it's really hard to say that it doesn't and also agree you hit a lot. You Hit a lot of the caveats, Matt, but like that, that will have to be like an ongoing statement here because, like, clearly very big businesses have been built and are being built today with Meta as their only ad channel. Can you drive Lyft with Meta for your business? Yes. Is it easier or harder depending on the scale of your business, how long you've been around, what category are you in, what consumers are interested in right now? All those are caveats. It is totally possible to be incremental. I think that's one over time. And the two things that I would point to are one, Meta is the only ad platform that has an ad setting that you can optimize for incremental outcomes. They are clearly trying to do that. The other one is like, they're the only ad reps that really encourage you to do like incremental readouts. They're actually like totally splitting users and trying to. And they want to measure that because they want to take ad dollars from Google, who, like, I think is far less incremental than Meta is on average. So I think all those signs point to like, it very clearly being incremental. I do think it's changed over the last 18 months and I think more recent platform developments are probably less incremental. I'd also feel comfortable making that statement. And when I say that, I mean like advantage shopping, the, the reduced ability to target and exclude people. All those things point to me or for me point towards Meta wanting to be able to attribute higher sales to their ads, whether or not they're incremental. And it's almost like two different things that are happening within the platform and collectively. And then with like a kind of a spotty year in terms of Meta consistency, I think it leads to like, some troublesome signs as to like, how impactful can it be long term on average. So that's why. How do you guys feel about that, that distinction?

[Matt]

I guess. I mean, such a, this is like, it's such a great topic because there's so many layers and so many like, vectors that you can come at this. So like, I believe that like over time Meta has a vested interest in making sure that like their product works for people like us, right? So I think that, that like, they, there's one view which is like, man, they just always break. And there's another which is like, I think they're just trying to make the product better over time, which sometimes means they have to break it. So like, clearly over the last 12 to 18 months there's been like some Pretty fundamental changes where they've broken some stuff. You know, February of last year being like moment in time. Like I would say like most people are like, what did you do? Right? Like most spenders were like, what did you do? I, I think you're right, Connor. I think that it's, it's like the signs aren't great right now. I would say the thing I would add to this conversation is that my view of Meta is, is that they've, they've, they've actually got an internal con like set of conflicting interests, right? So they have like what is good for users of the platform, both like organic whatever, but like actual people who use their products and then what is good for advertisers of the platform. And the thing I'm always trying to tell my team is, you know, regardless of the state of the ad platform, what we should be looking at is how do you more closely align our efforts with Meta's desire to create great user experience with people who use the apps and the services. So like we should be looking at like how do we earn our place in somebody's feed and be relevant? And like that's sort of like our center of truth in that like if you orient there over time you'll likely win more than you lose, even when the ad platform itself seems to be puking. And I think that like for those of us, like if you spend a lot of money in platform, there are people who can scale to pretty serious size with Meta. I would say to that though that like they are either really large markets or, or they have exceptionally long time horizons that they look at things over like say like an athletic greens or they're just like you guys, which are just like very good at the machine, like managing the machine. I actually would say like for most people, like the broad amount of brands and categories out there, you're not going to be able to scale very big with Meta. Like I would say that that's the exception is like single channel, massive scale, Meta exception. Starting out like early days, you know, first like single digit, seven figures, even low eight figures. Like you can probably do a lot with just Meta even today. Like even as hard as it gets sometimes. Like what Sean is talking about, we're talking about like you still do a lot out of the gate. Like I see it all the time. Yeah, I think there's just so much nuance here, you know.

[Connor]

Totally.

[Matt]

That's the, that's the hard part with all of this. Like when you're in like for a show like this One. Or on Twitter or X, whatever the hell we're calling. I think we're supposed to call it X now. I don't want to get in trouble. It's really difficult to have these conversations. It's actually, this is actually a pretty good format to do it in because like you can actually go through some of the nuance.

[Connor]

Right.

[Matt]

As opposed to like just saying it's not incremental. I don't know that that's actually true for most people reading that.

[Connor]

Totally.

[Matt]

You know, it does beg the question though, like, what's going to happen to Meta's share of wallet with large spenders if they can't fit? So I guess that's two questions. Like one, do we think they fix it? Do we think they care to fix it? Right. Like are they putting efforts. I know, Cody, you've got some thoughts there. And then two, what happens to large spenders and share of spend with Meta? Over time?

[Connor]

I got more.

[Matt]

But like that's.

[Jason]

Yeah, yeah, yeah.

[Connor]

So I think those are the right questions too because if we want to cut through some of the caveats and like the nuances and it's like if you're a nine figure brand, does it feel more likely that Meta is less incremental given the platform changes that they've made? And that does kind of feel like. Yes.

[Matt]

Yeah, yeah. I even think like mid, mid eight figures, dude, like most of the ones I talk to definitely feel that way.

[Connor]

Right.

[Matt]

Like it's. Yeah, they're, they're. I've got some pretty savvy. I got a couple guys I know right now they're like that like 30, 40, 50 million and growing pretty quickly. And a lot of their growth is being attributed to going off Meta for reach. Right, right. And like really framing up like what is Meta's. What is the purpose of Meta as an ad platform for most brands in 2025? And I think that that's really important. It's like you have to. This is the thing with channels. It's like we. You at scale, you talk a lot about incremental and lift.

[Jason]

Right.

[Matt]

But I think at its, at its core, if we're talking marketing, it's when we're talking about reaching human beings. So like every channel has. Can have a purpose depending on the brand, depending on the category. And it like the purpose of a channel might be different from one to the other, you know, like how we treat Meta with Lomi has always been very different from how we treat it with Pela.

[Connor]

Guys.

[Matt]

Yes.

[Connor]

I really want to Hit that point. But I want to, I want to backtrack quickly. Your second question was what happens to share of wallet? Obviously, if larger brands are having diminishing incremental results on Meta, they'll spend less there and then do. I think Meta cares about solving that 100%. And I think they've proven that over and over. I think they will say, oh, hey, these, our advertisers do not like what we're doing currently and they'll adjust and they'll try to win those ad dollars back. They seem to have always done that. I think that they will. I think that probably plays out over the next, you know, nine to 18 months or something. I don't think it happens quickly.

[Matt]

Yeah, I mean, look, there's like 1.7, $1.8 trillion worth of incentive to figure.

[Connor]

It out totally, give or take, you.

[Matt]

Know, depending on the day. Yeah, I think they will, I think that. I actually believe they will figure out how to sort of like rebalance the algo from like this. I think what is, what people are referring to is effectively like just circling the bottom of the funnel right now and they'll rebalance and they'll figure out how to give us tools to go in and reach.

[Jason]

It's been really cool to see prescient this year just emerged as one of the leading, you know, trusting solutions for brands to measure their media mix. You know, now more than ever, you know, triangulation, having no source of truth, but really it's best practice to have multiple methods to be able to figure out, you know, what is performing. And one of the things that we love in our toolbox is prescient, but it's been really cool to see a lot of brands onboarding with them and having a lot of success. Onboarding is super quick. It's, it's the quickest I've ever seen from an. Mmm. It's been great for our upper funnel channels. Things like TV and YouTube has really given us confidence and it's very hard to validate and test tv. So they have great integrations. We use Tatari for all our TV buying and so it's the best way that we're able to understand how our upper funnel channels are working. We're not on Amazon, but if you're on Amazon, you can get really cool halo sales impacts of Amazon as well as retail channels. So it's awesome. You can forecast revenue and acquisition costs across all your channels, optimize your media mix to improve your profitability. They've always got new channels coming which is. Which is really cool. It's really played a really big role in us scaling and having the confidence to. To increase our spend in things like TV, both both linear and streaming, and YouTube as well. We wouldn't be able to do it without them. So there's a reason why Prescient is trusted by Jones Road Beauty, Hexclad, Holo, Socks, Coterie and over 100 more. And so if you want to be like one of us, like Jones Road, like, like Connor from hexcloud, check out Preant, which I highly recommend. You should go to preshenai.com operators to book a demo and see for yourself.

[Matt]

I was just in Whistler, which is in Canada, if you guys didn't know the.

[Jason]

The 51st state.

[Matt]

I hear the 51st state coming in hot. It was. I was in Whistler and you know, Yanni from Meta, he was there and our rep, Hector was there. And I, I, like, I genuinely think these guys care and I genuinely think that, like, they will like that there, there's a lot of invested interest and I think like, when I talk to people at Meta, it's like, well, you guys do have tools to go reach other people. You know, it's like. And I, I sort of. And I do wonder how much of this is just. Are we so myopically focused on like ocpm, like conversion optimized campaigns versus like the other tools in the chest, you know, and like, how do you use them effectively? And I know Connor, I think you guys do a ton with this and I know some other brands that like, very effectively use the other objectives.

[Connor]

Yeah, yeah. So, well, let's jump into that because. Because our testing very much led to Sean's tweet, so I could give an immense amount of background here.

[Jason]

I got two recent tests as well with Meta, so I know you guys test.

[Matt]

This is where I'm like, man, I want.

[Connor]

Great.

[Jason]

I saw. Yeah. In Vegas with the Phone up the House app open in Vegas.

[Connor]

Yeah, yeah. So. So, so here, I'll tell the. I'll tell the whole story.

[Jason]

Before we say what, can I just kind of say kind of some thoughts on what you guys said?

[Matt]

Yeah, please.

[Jason]

So, yeah, like, I think Matt's right to frame it. It's just like circling the bottom of barrel. It's just very hard to find and reach new people. And it happens over and over. I very much do think. I think we had our Meta reps actually came in person today, so we had a pretty good meeting with them. But I think it's One of those things where in the beginning I will raise something and I feel like I'm like a little bit talking on deaf ears or like, I'll probably get in trouble for saying this, but where it's kind of like, oh, this is not a problem. It's only you. And then I'll just share it more and more and more. And I don't know if it's just like what reps are allowed to share or not, but. Or it's like product teams, but they'll be like, yeah, we're starting to hear this more and more. And I do think they're starting to hear this feedback more and more that brands are just struggling to reach new audiences. And I think it's not impossible. I will. We'll get into all of the things that we can do either on Meta or off Meta, because it's like at a certain point, we can't just about it all day up here. Like, we've got a. There's a lot that we can do.

[Matt]

Yeah, we have businesses to run. We have to do things right. You know, dude, on that point, like, I, and this just, maybe this is just like the, the Canadian in me, but I feel for the people who work at Medic. Like, I think they, like, they're like the windshield of the company. Like, you know, they catch all the bugs. I, it's like being in a public company is kind of shitty, you know, like, there's a lot of rules about, like, what you're allowed to disclose and when you're allowed to disclose it. So, like, I suspect, you know, at least my friends at public companies are like, yeah, it's, it's very difficult to communicate publicly outside of a, like out of the walls of being at a company like Meta and say things publicly. Right. So I sort of like, man, I wish they could just tell us more. At the same time, I, I trying to be sympathetic that, like, they probably can't in some cases, you know, Like, I don't think any Meta employee is allowed to get on X and be like, yeah, dude, we really broke at this date. Like, yeah, I mean, you want to talk about how to flush billions of dollars down the toilet, like, that would be it.

[Jason]

I, I think they care. Our. I love our Meta reps. They're great. We're in disruptors. Like, they definitely care above any other reps that I've worked with. And I think they're really good and they, they truthfully care. But yeah, I think there's times where they're just like, they'll even share their frustrations and it's like, hey, you know, I wish, wish I had better news for you. You know, they, they might not have the answers or visibility, but it's, it's clear that they do care.

[Cody]

Yeah.

[Jason]

But yeah, where were we going? So Connor, you were going to share us kind of some of your tests that have led to this, huh?

[Connor]

Yeah, yeah. I was going to lay out our experience with Meta last couple months because I think it highly influenced like the spark of the discussion have mentioned some of us on the pod. We go into November and we launch two really key incrementality tests because we wanted clear data going into the week of BFCM so we could put like our next dollar wherever it was most efficient. We tested YouTube and Facebook. We expected those to be our biggest channels. And we got a really poor readout going into BFCM week from Meta and that's why we were like, we ended up spending. We spent as much money as we could other places. And I talked about this on, on X as well. We spent a lot on app Lovin. YouTube Shorts has been working for us. Snapchat was working for us at the time. Like that. Basically those data points led to us allocating budget completely differently. We come out of bfc, I'm like, hey, what are we going to do now? Because like we are not going to hit our growth goals going into 2025 if we're having trouble driving incremental and profitable results from Meta. So we launched a, like a super simple test with us with the thesis that hey, yeah, maybe we were just like circling the drain. Reported rows within the platform wasn't even that necessarily. It was down year over year, but not horrifically. It was really just how we were measuring like the incremental impact was way different. So clearly we were serving ads, we were getting people to click and engage with them. But what our data was telling us was that they were going to convert regardless. So we come out of that period and we say, hey, we think we're just kind of circling the drain. So we tested just like 40. Oh. The last thing that I'll say is during BFCM week, I thought this was really suspicious. One of our best campaigns from like a click perspective was a view content optimized campaign. I'm like, that's weird. Something's not right if we're not optimizing for purchases and driving some of our best results. So the test we ran through December was just allocating a really large percentage of our budget. 30. I think we ended it at 35% of our budget. Going to view content optimized. Saw a significantly higher incremental ROAs in that cell. So three cell tests, you get a holdout, be at one business as usual. All conversion optimized, which we've done basically for years, aside from like some reach campaigns at certain times. And then this new test which was 30, 40% going to view content optimize. We saw a large lift there. And then our last test, we leaned into that even further. We put it closer to 50%. We launched some new content.

[Jason]

50% total budget.

[Connor]

Yeah.

[Matt]

In platform meta budget. Right, 50% of your meta budget.

[Jason]

Wow.

[Connor]

Yeah.

[Jason]

What's, what's like north beam percent of new visits is that much better on that?

[Connor]

Yeah, way better. And oh God, yeah, clicks. Clicks are much cheaper. It's view content optimized and we land them on landing pages. So like we're optimizing for like a browsing user. Right. Someone's coming through. There's sometimes hitting a collections page or hitting a pdp. Like. So it's, it's not reach optimized. It's not. We're not just looking for video views. We're looking for someone who has shown some interest. But yeah, we pushed like 40% plus we did some things different on the content side. We kind of optimized content towards where we were getting the best engagement. And then that was like, that was a significantly better readout than we got, at least in November. Now a lot of changes there. We have different content, we have a different percent of our budget going to a different optimization. It's a different time of year. You could also argue, hey, it might be easier to drive incremental results in January because there's less intent than November and December. So we're talking through all of these. But largely like that's, that's where we've been going. Which points to this idea that like we, we need to just be doing a better job of like moving people into market and closing those people with theoretically conversion optimized campaigns.

[Matt]

This, this comes back to the point of like you guys have had, you've acquired millions of customers now largely in wallet, but like now in new categories, your brand, like if you're in your target market, like people have seen your ads.

[Connor]

Right? Right.

[Matt]

So like there's some element of what does a brand do to, to evolve now? Like, you know, how many impressions per year are you trying to, or how per month or whatever are you trying to be in front of people? And then like, what is the type of content that you guys actually need to be putting out and where is like that's fascinating to think of it that way. This is where I like and I do. I don't think it's just a like nine figure. Like you know, you must have like, you must be at the size for this stuff to work. Like we, we've actually, I've always been a fan of like just going for video view like with top of funnel. It's like if you make great content, like we're pretty good on video. We always have been. Just get people to watch the like if I can get somebody to watch like two minutes of a video, I treat that as just as great as a click. And, and like I actually like. I mean Meadow doesn't want people to leave platform. Well, let's just lay that out there. They really don't want people clicking off of their platform to come buy from us. They want them to stay an app like that is better for them. Um, so I, I like, I think it's very cool that you guys ran this. Did you use house for all this? Is that how you did the. Okay, that's very cool. Like I think there's a lot of lessons in there. I mean like the more you could share there, I think it would be very helpful for people in the community because yeah, I mean it's, it's sort of proving that. But do you, Connor, can I ask you like, do you think that this is the point of having these other objectives is to like actually push further up and then bring people in market? Like is that kind of, is that how this has all been designed anyway? Like we're just, most of us are just not looking.

[Jason]

That, that's kind of, that's kind of what I'm thinking a little bit. Like purchase objective is, you know, if you think of marketing funnel like purchase objective is very bottom funnel. Most DTC brands are just purchase and it's like, it's almost like you know, like crazy to suggest that you should run at least like a year ago. I feel like even like when I started talking about it. Matt, you've been talking about it for years but like running some non purchase stuff, people are like that doesn't work. That's a terrible idea. And now there's more and more and more people talking about it.

[Matt]

The statement that doesn't work is like you only can make that statement in the context of time. Like it doesn't work right now.

[Connor]

Yeah, like that.

[Matt]

But that's not the point, you know, like we're, we're. It depends like if you're creating category or you're trying to educate or. Yeah. Or like, or you're, you're like, you don't have a natural seasonality to your product. So like you're, you're sort of always trying to build up demand. You know, like, to me it's, that's like something that goes through my head a lot is like, how do I just continuously try to build demand both from a category and a brand perspective? And that, that's like a snowball that I kind of want to keep rolling all the time. And then Meta's purpose for us is like, it's just to snipe the people that are then sending signals that I'm just not smart enough to understand that they're now in market to purchase at this moment. So like, and then it's just a like media mix. And what percentage of your spend should be going into these like, longer term initiatives? Like, I believe that like all marketing should convert people. Otherwise it's just an art project like that. I just like, I believe that fundamentally. But that doesn't mean that all marketing should convert people. Like right now.

[Connor]

Totally.

[Matt]

And I don't understand why. Can I just say, like, I don't get why this is so controversial. Like, I swear to God, sometimes marketers aren't human beings. Like, what purchases in your life do you like, do you make all of your purchases just the day that you see it? Lo me, I don't. And like, I'm pretty good for the economy. Like my wife and I great consumers. And I still don't like, I still have to, I still think about. Takes lots of touch points. Most of my purchase decisions are made because somebody in my network is telling me to buy it. Or like, hey, I have one like, or almost all of them. I feel like almost all of my purchases. Now I might be aware of something, but it's like I'm waiting for some proof point to buy.

[Connor]

Right, right.

[Matt]

So like, since when do people, why are we expecting people to behave anything other than people do as market?

[Connor]

Yeah. No, to me, I had the thought over the weekend as people were having this conversation that because also people are like allergic to brand marketing and I kind of am too. Right. Like, that is a little like, oh, is the, the objectives brand. I'm like, all right, you are just trying to take my money. Brand marketing being rebranded as performance marketing over a long time horizon. Yeah. Boom.

[Matt]

You know, it all is like, it all is, you know, you should not be Doing anything that you don't believe is like, moving people closer to the objective, which is buy my right.

[Jason]

But this is the thing, like ddc, dtc marketers don't know, like, brand marketing is very measurable. What, what a big brand is going to do is they're going to connect a brand campaign to a business objective and they're going to run lift studies, which, not on purchase, but they're going to run consideration and desired lift studies. And they're going to say, did this strategy that we did over this quarter or six months move this market closer down funnel and when we survey them, are they more likely to consider us? And like, that's very measurable.

[Matt]

You know, it's funny, the thing I tell my team fairly regularly is like, don't ever turn your nose up at large incumbent brands and say that. Like, they don't know what they're doing. It's like, no, no, no. Like, they're very, very smart. Like, we're not smarter than them. We might just be faster and in some cases we're like, faster and dumber. So, like, we're willing to try that. They might not be, you know, but like, large brands are large for a reason. And yes, you could argue like, oh, it's because they've been around for 80 years. It's like, well, you know, there's also some very large brands that have only been around 10 or 20 or 25 or 30 years. They're very smart. And like, a lot of them aren't running the same playbooks as us. So, like, I don't think it's fair to say that, like, brand marketing is a waste of time. I just think great marketing is great marketing. Like, and I think that I also, I will say this. Like, I think marketers are so close to the problem set that we've, we are often not thinking like consumers. We're thinking like marketers, you know, and like, we have, like, things that we're measured against.

[Jason]

We're not even thinking like marketers. So sometimes we're thinking like data analysts sometimes.

[Matt]

Right? It's like we're thinking marketers have gotten way too close to the CFO's office, you know, and I, I do think there's an argument like, Connor, I'm with you. When I hear brand, I almost get like, I feel like I throw up in my mouth a little bit. Like that. Just that word over time in this space has just been, I don't know, it's like, it's a dirty word. But I have become a Fan of like what it, like just making great marketing. And you know, I, I, I tend to believe that like you know it when you see it. So I'm one of those people that like, if I, if I know that this is like, this is a great ad, like this is just a great video. You've seen enough of them, you just know it. I like running that shit top of funnel. Like I really do. I like. And then I can see it. Like people are watching it and they're engaging with it. You know, it's, it might not be converting them right now, not as well as like a buy my now ad, but it doesn't mean it doesn't have value. Like we just, it's difficult, it's more difficult to measure but it doesn't mean it's bad marketing. You know, it's only bad marketing if you spent all your money on it. Like that's totally, that's just bad business. But I, I, I sort of like, I love this topic because I think in the, in D2C specifically we don't talk about marketing, we talk about advertising. And I think that like, I actually think that as things get abstracted and taken away from us in these tools that like we're all going to just start having to talk about marketing more.

[Connor]

Right.

[Matt]

Like all those other topics are now, you see it like we're now talking about like psychology and we're talking about like how to measure brand over time, you know, like this stuff two years ago wasn't even a conversation. It was like, fuck it, just pump money into Meta. It'll give you some back.

[Connor]

Totally.

[Jason]

So we switched CX softwares right before Black Friday. Normally wouldn't be the best decision, but we were looking at Rich Panel and it was just so much better than what we were using. Our contract was up and honestly it was, I'm so happy we did. It was the first time ever that we made it through Black Friday and Holiday period with no ticket backlog. And I really owe that to Rich Panel. First of all, it's cheaper, it's way less. We cut our cost compared to what we were paying before by 50%. It's the first AI CX platform I've seen that's really built with AI in mind and we're not even fully maximizing what we can do with AI yet. So I can't wait to see how much more efficient we can be. But it's really the first one I've seen that's built in this new era of commerce and AI tech. It's you know, already being used by over 2,000 brands like us, like Ridge as well. One thing that's been really cool, we were able to leverage a lot of their automations and routing so our average response time went way down when we switched them. Our efficiency with AI went way up. We also just implemented their like their self serve help desk reduced our tickets by 30% without affecting anything. We're able to take care of 60% of those interactions without actually having to route them to a person. So obviously there's financial components to that that have been really helpful. The team is great. I see our team going back and forth with the rich panel team all the time in Slack. They all they want feedback, they want feature requests. You're just not going to get that from some of the old legacy players. So it's going to be cheaper. You're going to have better use of AI that everyone's trying to catch up on. The UX is way better. The tagging is better. It has the best analytics suite of any of the tools I've used. So we're super happy. So if your help desk costs are too high, if you're not thrilled with your outdated software that is know you feel like is robbing you, I highly recommend you switch to Rich panel. You could reduce cost, reduce ticket volume by 30% and honestly that's pretty conservative. Highly recommend you get a demo and see for yourself. Go to richpanel.com to check it out.

[Connor]

To hit one of your your earlier points you asked you know these more upper funnel conversions that you could optimize for. Have they been there the whole time and we've just been missing it? I mean I think we're kind of in agreement. You guys can push back. It didn't feel like you needed them previously.

[Matt]

Yes.

[Connor]

At least our tests recently proved that we actually do need it. That the way that the platform's working currently convert purchase optimized campaigns are not bringing new people into market and that's where.

[Matt]

How much do you think that that's the platform has changed and how much do you think it's my our brand has just matured to a point where.

[Jason]

I was going to say that it's. Somebody asked me the other day. It's. It's like is meta harder? It's hard to know we're $160 million brand now. If we were $160 million brand five years ago, like maybe we could have just road purchase all day and that's like pre iOS. I have no idea. I Do think it's harder because I do think Matt, as you're saying, some of these small eight figure brands, which are still not small brands but they're kind of struggling with these things and I don't think that was as challenging, you know, several, several years ago.

[Connor]

Yeah, totally. I mean like even, even, I mean we're going back a number of years now but like you used to have a 28 day click optimization, you only get seven now. It was like okay, when you're optimizing for purchase like you have, you have 25% of the window that you previously had. So it's like clearly it's going to move towards people who are making a quicker decision. Are those people already qualified? Is that a warmer audience? Like and then I go back to, you know, I do think some of like the ASC stuff, the lack of targeting, all that stuff like just from a platform perspective it feels like it's naturally moving. Bottom of funnel is us trying to acquire our 6 millionth in one wallet customer harder and a part of the problem, no doubt.

[Matt]

Yeah, yeah, yeah, I know David tweeted a thing today too around like creative and look, there's no question Connor that like some of this is just your, like it's your unique set of variables. Right? Or Cody or even me. Like we've kind of in both of our brands we've always had to think a little longer term with convincing people to buy. Like we like when we create a peely case it's like why the would I buy a compostable phone case? Like what is the point of that? So like we had to educate the market and like yeah, I think we're, we're in the many millions of customers now. So like every incremental customer requires just seems to be harder than the last one because like the obvious people are customers. They come back and they buy and it's great. Like with Lomi it's like what is it? And you know we've had to do a lot of work around like education and so I think some of it is like I'm watching and I'm like man, is, is just is meta's changes as of like taking away targeting, are they just kind of bringing it all back to this like core marketing principles now and like that we actually have to start. We just stopped looking at Meta the way that we used to like that I, that I've been thinking about that a lot. I've actually been thinking about the content thing to David's point, like a lot.

[Jason]

Oh it's a new playbook. I think, yes, I can speak for ourselves. I want to share like where we are at. We're a similar place as Connor, but I think there's a new playbook and I think it's so easy when you have success. I can speak for us to get complacent with the old playbook. And I think we're at. We have a different playbook even from two years ago. Like obviously pre and post iOS, like very different playbook with exclusions and different bottom middle funnel campaigns and interest targeting was different then, but. But now I even think it's such a different playbook two years ago. So yeah, I think brands have to reinvent. I think David's point was like the brands that are doing well have really reinvented that playbook and are doing a great job.

[Matt]

Like one of my big theories sort of kicked off like maybe six months ago. In June of last year, we started to notice this pattern that our best ads all started out as organic content that we created. So like they weren't pieces of content that we purpose built for an ad. Like, we just made it because, like, we think this is entertaining or we think this is education. Like, this is, this is a good, good piece of content. And the whole point was like, let's just throw it up on Instagram and see what happens. And then inevitably like they go viral in some way and we turn them into ads. And then like we've got some ads that like I have spent millions of dollars on since June last year, like individual ads which you don't see very often, right? Like, I know, Connor, you've talked about this. Like, you guys, the volume of ads you pump out is like, because it's very difficult to get an ad that you can spend more than a hundred thousand dollars on, right? So it's like, don't ever spend a lot of money on a single ad because like, it's really difficult to get like the liquidity you need on a piece of content. It's like one of my theories is just that the, the paid algorithm and the organic algorithm are moving closer and closer together in the signals that they look at for like, what is a good, what is a good piece of content? Not just like, what is a good ad. And I think, Cody, that's like kind of what David's hitting on, right, is the brands that are doing well have this like playbook where they're freaking content machines. They're not ad machines, they're content machines. You know, like, they're pattern Matching to what are people expecting to see in their feed and their experience with the platform?

[Jason]

Totally, totally agree with that. Yeah, I do think those things are converging a lot more with the, the tik tok ification of everything they do.

[Matt]

Like, one of the things I'm doing now as a, like I'm a marketing first CEO is like, I watch Adam Moeris, the CEO of Instagram. Anytime he posts something about like what they're changing on Instagram, I'm like, I'm going to pay attention. Like, this is the boss, you know? And like he's telling us very point blank, like, literally point by point, like, this is what we care about, you know, like, and he's going so far as to say, like, if you're going to go and make a video for Instagram, like, here's what, here's how you should do it now. Like, these are the things. So I'm just telling my team, I'm like, maybe listen, like, let's start listening to him and let's like align our ad interests with the organic interests of the platform. And like the last six months, like Pela case up up until May of last year, we were down year over year by like 10%. And the last six months of the year we were up year over year, 67%.

[Jason]

Wow.

[Matt]

And that was just a shift in like us stop, stop trying to be media buyers and like, let's just go make better content variety. Actually, like we didn't even key. We're not smart enough to think about like the diversity thing. Like David's whole thing around were my team was just like, we're just going to make that we want to watch.

[Connor]

Right.

[Matt]

Like it was that, that was the big strategy. I'm like, okay, worked.

[Jason]

Totally. That's awesome.

[Connor]

You know, Adam, if you guys are interested, Adam Messeri was on the Colin and Samir podcast last year. So good. Great episode. Yeah. I sent like, I think every marketer.

[Matt]

Should just watch Colin and Samir. I like, if you're gonna forget, don't listen to this show, don't listen to the operators, just go watch Colin, Colin and Samir. It's you're be a better marketer if you understand because I think like Connor and Cody, you're good at this too. Like, I think the thing I've always admired about Ridge is like, you guys seem very close to like just culture and like consumer culture or like your customer and that you guys always seem to be ahead of like where things are going. I think even like Jones Road for sure has done this. And I look at like, like a Colin and Samir. It's like they're just like, that's your read, man. You know, like these people are setting the tone of the Internet, all these creators. So like it's as brands, it's probably not a bad idea that we start paying attention.

[Connor]

Totally. We've got one of our guys on the performance creative team has like 600,000 TikTok followers. A guy on the partnership team has a quarter million YouTube subs. I mean like we have people that are like, yeah, some of them, the, the partnership guy listens to Colin and Smear too. Like they are, they are creators themselves or they're thinking deeply about being a creator on the Internet. Which is what you're arguing is like marketers today are. Are. Dan McCormick said this when he came on. He thinks of Create is like a media company and that's like, yes, every.

[Matt]

Brand should think of themselves like a media company.

[Connor]

Yeah.

[Jason]

It's probably a great time with the Tik Tok potential band to like scoop up like a creative strategist as like a tick tocker. There's probably a lot of people that are, you know, trying to figure out what they're doing. I think that's a great.

[Matt]

Oh yeah. Well, do you know, like there's so many creators too that like don't earn a great living as a creator, but they, they like, they make great content, you know, like give them a job to be a creator. Like it's a great for brands. Like there is a lot of great talent in the world that does not have, like, they just don't have the opportunity to turn it into income. Like they either can't, they don't know how or, or they're in a niche or whatever that just like is really poorly monetizable. Like that's.

[Connor]

Or they want health insurance. Like.

[Matt]

Yeah. Or stability, man.

[Connor]

Like. Yeah. Oh yeah.

[Matt]

Again, Connor, humans. That's a good point. Like we have behaviors and needs and.

[Connor]

Like you're just thinking about how they monetize.

[Matt]

Yeah, yeah, yeah. Like we're, you know, not the computers that we are. What do you guys. How are you looking about? Not how are you thinking about like non, non meta spend in this world? So like if we make the assumption, which I'm sure you, Connor, you guys and Cody, you have to think like we have to plan for the, the, the case where like meta does not fix this. So like they don't give us the tools. So like we're gotta, we gotta put our dollar somewhere. How are you guys thinking of that right now?

[Connor]

So that, that's what you were like hinting at this earlier and I wanted to come back to it because I think it's a great question. If meta is no longer the best at moving people in market and you have to use like view content optimization or video views or whatever, I'd argue meta is all of a sudden just not the best place to grow top of funnel awareness. I think there are much better ways.

[Matt]

So.

[Jason]

Absolutely that is the case now.

[Connor]

Yeah, yeah, yeah. And you guys will have better takes.

[Jason]

I still think meta is the best channel that majority of your spend should be on. It's just not the best place for top of funnel.

[Matt]

Yes.

[Connor]

And if that's the case and if we're also agreeing that meta cannot be as top of funnel as it once was, Meta should contract as a percentage of budget, maybe not go to zero, maybe sell the lion's share, but not like, I mean we had years where we spent some of our best years. We spent 75 of our budget on meta and it's like that's really no longer an option. So our goal this year, knowing we need to move up funnel, we're going to spend more on partnerships. We launched TV in October, we're going to try to scale that this year we'll get on streaming. I, I wrote about this in the operators newsletter so I'll give that a quick plug. But we're going to like brute force our way to top of funnel awareness and try to get some of that back. Then we'll just be across like yeah, con channel diversification.

[Matt]

I have so many questions for you. Are you, when you look at like a tv, is that a wallet thing, is that a brand thing or is that like a luggage? Like how are you guys viewing that?

[Connor]

We're currently my main goal is I, I think our ring business and our travel business is much smaller. I think we can be more meta dependent there for longer. I could be wrong there, but it's not my, it's not my number one priority for channel. Diverse diversification of of luggage for edc. We have to. So it is a combination of, of brand and we're thinking about, hey, we want to be introducing people to the wallet. They're not going to purchase on a one day click or seven day click basis. Like we want to build this awareness over time. And then another way that I liked it described, I heard it described to me recently was like instead of being product aware, which is what we are on meta, like were Trying to move people into being aware of the wallet product. We used to be more like problem aware. Moving people into like hey, what is wrong with your current wallet solution? And then maybe how are we that solution for you? So it's a slightly different type of content and that's at least how we're going to take this initial pass. Next couple months we're going to take that direction.

[Matt]

Cody, when you guys went on tv how like did you go out with a specific pro? Same thing. Like was it very product led or was it more like Jones Row Beauty? This is Bobby Brown's new thing. Like how do you.

[Jason]

It was more specific product. We, we just did Miracle Bomb at first but it was, it was you know, obviously you get a 15, 30 second spot. So it was about Miracle Bomb but it was much more branded intentionally where it was obviously it was all Bobby. Some of the stuff was like a origin story of the product, stuff like that. So like there was no call to action. It's not a direct response thing. So there's, there's definitely, you know, a lot of the, a lot of the focus. Even though we are only showing one product is still related to you know, the brand. Like we and we just shot. The cool thing about TV is you don't have to shoot creative that often. That's like one of the big things. So we just did our second shoot in November a year later where we just shot it for our other hero products.

[Matt]

Wow. Yeah, we still run, I still run the same like iterations of the same 15s and 30s that on Lomi we spend t. Like we. We're. That's probably takes up like in a year TV takes the lion's share of our budget and it's very seasonal. Like we lean hard into Q4 when like mother's Day it's still like the same videos. Like I, I love that it's like we're just going to iterate on the thing that we know works. It's like a 30 second video. It's like did you know you have this problem? Check out this cool thing that you can buy to solve it. Like it's just some variation of that. What I guess Connor, for you guys like how much of your spend do you think goes to meta? Well in total all objectives in.

[Connor]

In 2025. Yeah, I would love for it to work better and be at like 55%.

[Matt]

Hope.

[Cody]

It'S.

[Connor]

It's less now. Right. We're at like 30, 35% right now. Yeah. So I was going to ask you guys about tv. I want to talk budgets too. So we should jam on this. But we're currently at 30, 35. If we can get Meta to work, I'd like for it to be at 55%. That's what if, if I were to just. Yeah, I'm not hoping. I'm like, I'm projecting out into the future. We do what we need to do. I think Medic can land at 55 and if it's incremental, that's probably. I'd feel really good about the health of that business. Because the flip side is if we want to hit our growth goals and spend the money that I think it will be required to do that, it will be hard to do it without meta at 50% plus, do I think I can get 40% of my budget on TV? I mean, maybe I don't. It sounds hard. This sounds like way different than anything we've ever done.

[Matt]

Yeah, yeah, it, it's. I think even, even with us like for Lomi, I, I still don't think we get more than 50%. Like we. So like for Lomi, we've always been about 2/3 YouTube TV and a third meta. Yeah, like that seems to be like, it's like that combo, right? Leaning into like longer like YouTube is always was always like longer form. It's like two to three minute content consumption and like really optimized towards watch time. And both YouTube and television for us was always about driving search, like just straight up brand search. And that's across like D2C and Amazon. And then more recently it's also. And I think this year in the back half it will become about Lyft in Costco. So like how many people are coming into a Costco roadshow talking to us that have actually heard about us before and like trying to get some read of like, because if we're going to spend our money on television and YouTube in those key moments, like we should be able to see in person if that's actually having an impact.

[Connor]

Totally.

[Matt]

The funny thing is like I've tried and this I actually like, I don't have like this is not like crazy data backed up, but running like reach or video view, like other type of like objectives on Meta in certain geographies. So like if we were going to go into Costco Roadshow in Orange county, right, like certain parts of Orange county, like what we would do is we would try to like carpet bomb the region the 10 days leading up to the show on Meta with these like reach and frequency video views and Then in, in person, in store, our sales team would be like, have you ever heard of this before? And like not a whole lot. It was actually kind of surprising to us. I'm like, man, I've like literally I hammered every person in that city. You know, like if, if you're living in like Del Mar, like you got a Lomi ad if you were on Instagram. And the number of people that went in the store that didn't actually know who we were was shocking to me. So yeah, I want to try it. I want to try it with YouTube. Like I want to try something else where like the mo. The mode of the person on the platform is like I am here to watch. I'm not just like scrolling. It's not. It's a different, it's a different platform. Right. Like YouTube is entertainment. So like I really think that that's the. That for us that's going to be a like a focus this year is like focusing on watch content, watch platform. How does that impact in person?

[Connor]

That makes total sense. I've always been concerned, I mean my, my reservations around going like further up funnel with meta view optimized or landing page optimized is like historically that is all meta would give you. It's like okay, you want views, I'll just give you views. And like I think it was really hard to measure the impact. But I'd also be really surprised if four years ago it really was essential. Like if it was beneficial. YouTube's different. 5 non skippable seconds like those people are engaged. You'll get solid watch times like that totally pencils for me. So I hope it works.

[Matt]

Yeah.

[Connor]

One thing we talk about our marketing operators all the time is measurement. How am I as the CMO of Ridge logging in and understanding what our performance was yesterday and last week and last month compared to different time periods. Our go to solution for that is North Beam, a multi touch attribution tool that we rely on every single day. We really like it for two reasons. One, it is a standard form of measurement across all channels. We know deterministically that if someone clicks through, we're tracking in North Beam that that user is measured in the exact same way between Meta and Snap and TikTok and YouTube partnerships if we're clicking through from there or TV if we're clicking through from there. So we get this foundational layer that we know is measured in the exact same way over long periods of time. So I have full confidence that we know that we are comparing things accurately and honestly. The Second thing I like about Northbeam is its data management tools. We tag incessantly. I talk about naming conventions all the time and Northbeam is where we benefit greatly from that. Every day I can log in and divide my spend and sort it across different dimensions. So I know exactly how much we're spending across categories, across different demos, across different offers or asset types. So it's our go to tool. If you want to hear more about North Beam, make sure to visit northbeam I IO and make sure to tell them that the marketing operator sent you.

[Jason]

So let me, I want to, you know, I can chat tv like overall media mix, kind of a playbook. But let me just share like some of our recent meta tests as well. So we just ran two, I guess we have three recent meta tests. So same thing. So about, we started feeling like this whole like bottom of the barrel thing probably like a year and a half ago. We weren't even 100 million yet. And the thing was we were like just meta. I think we were like 80% spend on Meta and most of it was purchase optimized. I was just like, this is working. We're just going to keep doing the same thing that's working and kind of like don't look up. And then one day we looked up and we're like, hey, this is no longer working. We've scaled as hard as we can with this.

[Matt]

I remember that, I remember those text.

[Jason]

Messages a year and a half ago and we weren't ready for TV yet. So we were probably like 75 million at the time. We just didn't have the bandwidth to do tv. So we were like, hey, let's just do meta, upper funnel and reach. And it did help. I will say it definitely did help. It definitely helped. Just to get some new audiences, we ran it with some house tests. We were also, we were on YouTube. It just wasn't a huge amount. But we definitely started scaling up YouTube. But so for us the strategy was for good or bad. Last year it was mostly just channel diversification. So we launched, you know, TV a little bit over a year ago and that crushed for us. That's now 20% of mix started with linear for almost a year. So we're probably like 15% linear, 5% CTV, both doing really well. YouTube is probably 15 on average. You know, that goes between 10 and 15, but that's, that's a pretty decent size. Meta right now is 55 and that's probably like the lowest it's been in a while. It's just struggling and like I mean, we paused TikTok. Honestly, it wasn't even worth it. You know, apple oven small Pinterest is like 3K day. So that's, that's majority of our mix. But so last year I think we, we did a really good job of obviously building creative for these channels, doing TV shoots, you know, using a lot of that stuff on YouTube, measuring it, because that's obviously the hard thing. So prescient for MMM has been really helpful for tv. Everything we run with houses has been really helpful and I really think that's a lot of our success last year is just reaching these audiences. I just think we did it at the. And it worked at the expense of Meta. We took our eye off of Meta and I think it struggled. You know, we only as a bootstrap team, we only have so much bandwidth and so, you know, I don't know if it was the right call or not, but for us it's like we can't go and just find a new tv. There's not like a new channel like that. And we're going to try some stuff. So we're on a gentio now. We're doing a bunch of sponsored influencer content, you know, on Instagram as like top of funnel stuff, reaching new audiences. Because I think that stuff you can kind of like buy your way into certain audiences where Meta, it is a little bit harder to buy your way in. But I really think for us the biggest thing is going to be, you know, not more. Last year we did a lot of more. It's just, how do we do better? How do we get Meta working better? So that's really it, which is, you know, a lot of, lot of different.

[Matt]

Strategies is like you went super deep in Meta, then you went broad, now you're going back deep into like depth, into the things that you've gone and discovered. Right? It's like, it's like rivers of traffic, you know, and then how do they work together? So like whether you're using pressing for MMM or House for specific tests, I do. I don't know how much, how much do you guys like when you look at a television or a YouTube, like Connor, what's coming up for me is how much of Ridge's customer is going to be on television. You know, like Cody's for sure, like lonely. Like my customer is over 40. TV, linear TV is a wonderful place to go prospecting for us.

[Connor]

I think there's, I think there's a lot of people we, we crush with the older demo. I mean we Talk about our core Persona being Ed, the everyday dad, which is like so they're there. I mean I've said this before also but our linear TV strategy for a long time was like just as much Yellowstone inventory as we could get. Like that just always crushed on Showtime. I, I just talked with, with our agency today like Motor Trends Crushes. One of our biggest shows was Ice Road Truckers, History Channel, American Heroes, all that, all that stuff just.

[Jason]

Dude, I feel like Mythbusters reruns would crush for you.

[Connor]

Yeah, yeah, totally. I mean and that's like there's a lot of parallels with what works for YouTubers too. I mean we do better with like history or science channels. Like those skew older, those skew more affluent. Not quite like I'm watching, I'm watching the history channel at 10pm on a Thursday old. But like, but it, but it is a, it is a more mature demo. So I think they're there. You could also argue in this whole nother can of worms, another very incremental thing that we could do is just unlock a different customer. It's like how, how do we actually crack the like 23 year old who I don't think we do that well with right now. So there's, there's a lot of ways, thousand ways to skin a cat.

[Matt]

Yeah, I, I ask because like you know, when I think, when I think of channels, whether we're opening up something new or we're going deep into it, it's, it does come down to like who. What's our thesis on who we're actually trying to reach in this channel. So like that's one vector. I come at things and I come at it from like a, also a trust thing. And I think I said this to Cody when we were first chatting tv. It's like I just think that if you're going after an older customer, television just a high trust channel. So you have to like do less work to convince those people to buy. You know, just by like you being there is just a higher trust place. And like we see this even in our post purchase survey data. Like our TV customers move twice as fast as our social customers. Like in terms of decision to buy literally half the time. And that's always been the case. Like doesn't matter if it's like a Q4 or we're running it in like April or May or June. They're just moving faster. And I have. And it's the same damn ads. Like we're not like it's one product, you know, and it just has always been that way. YouTube would be like second fastest and then meta would be. Instagram would be like the slowest by quite a long shot. So it just. How, you know, my advice to people is with any of these channels, like is I got a guy right now, I know he's opening up television. I'm like, you just really have to have a thesis on like who is the customer you're trying to reach and then don't have a preference on like which channels and which placements because that'll surprise you. Like if we, we go everything we thought that was going to be true with Lomi on television. None of it was true. Like everywhere we thought we would crush, I'm like, nope, it's like tennis, you know, like give me the US Open smacked. Right? You know, not home and garden television for some reason.

[Connor]

Yeah, Shanta. Something like that all the time. You know, you don't choose your customer like your just your customer chooses you. Like that's a really. And then it's just like, yeah, wherever that person is, like that's where you should be advertising.

[Matt]

What if you're, if you're talking to a smaller brand, how, what would you advise? How would you advise them? Like if you're talking to a $20 million a year brand that's wanting to play in like non meta, like they want to go open up a top of funnel, what would you guys tell them? Like, what's the advice?

[Jason]

I go, I go, connor, I'm curious what you would think I would go Influencer because it's the most, it's the most scalable channel at every level. Right. Like tv. You have to be a certain size to do. You got to spend, you don't have to, but you're going to spend 30, 50k on creative and then you got to spend 150k for a pilot before you even get any data back. Influencer. You could start spending five boxes out a month and just get people to post all the way up to, you know, spending a million dollars sponsoring creators on YouTube and all over. And I just think you can scale that and ride that and just get it in front of people. You also have the most arbitrage in there because you're sending cogs, which is hopefully much cheaper to you than the value that the creator is getting and posting. So that would be my, my vote would be influencer.

[Matt]

Maybe you're like your go to. Like I need, I want top of funnel off. Meta creator.

[Jason]

Yeah. Especially at earlier stages.

[Matt]

Connor, would you agree or Would you advise something else?

[Connor]

What I. How I used to answer this question is like one, I usually say, if you're looking to get off Meta, you could probably take meta further. That's what I used to say for a long time, which is like, very true.

[Matt]

Yes.

[Connor]

Do I think that today? I'm not sure. And then, and then the next thing would be like, if you've really fully juiced Meta, then you must be great at content. You got a good offer, like, you, you know, you know, all of that. And then I would just say there's a lot of attention on channels that you're not on. So I'd say, try TikTok, try. If you're good at short form, vertical video, look at TikTok, look at Snapchat, look at YouTube shorts, things like that, like, just build redundancy. What works on meta can work other places. Look at Apple and something like that. Yeah. It depends on the brand. If you need to get off of paid social, then, yeah, I'd go partnerships before anything.

[Matt]

I don't think it's off. It's just like, what would you add in? Like, what would you add to create leverage for paid social? Like, to me, all these channels are just like, they're just creating leverage for each other. Right. It's like.

[Connor]

Right.

[Matt]

You know, and, and whether we like it or not, the users of each of these platforms, there's a lot of overlap. Somebody who's on YouTube is also on Meta, who's also like on television or TikTok. Like a person's media. Like a media profile of a person. Like, we consume and interact with a lot of media in a day. So it's like you have no choice but to think of these platforms in, in terms of, like, platform leverage, you know, like, we saw this like Lomi just on Meta Dog turn TV on Meta rips.

[Connor]

Right?

[Matt]

Yeah.

[Jason]

I mean, bigger sizes. Like, same thing Matt, we talked about last year when we did that same thing. Launched on tv. Meta. Meta just took off.

[Connor]

Yeah.

[Jason]

Higher percentage of new visits. Crazy. That's why I would go influencer from the beginning. Even if you're only spending 10k a day on Meta, send out 50 boxes a week. If you're spending 100 case, send out 130, 500 boxes a week, you know?

[Matt]

Yeah.

[Jason]

Like, I would scale it. I just think it's. There's some value in having some reach, upper funnel, non OCPM thing in there.

[Matt]

Yeah. I mean, with Pela last year, we started to scale up, seeding, gifting, like into the thousands of gifts a month. And like, there's no question that that like, that just created more surface area for a meta to work. And we just saw like efficiency just start to climb. The more that we scaled that up and the more tuning we did around it too. Like, let's just reach into these like very deliberate pockets of creators and this year we're just going to do more and more of it. It's like, where else can we go explore audiences but like looking at it from the influencer creator first, you know, like right now I'm like obsessed with travel content creators and then like hiking people, you know, like, just like people that have like intrinsic value. Alignment.

[Connor]

Totally. We're also. Yeah, yeah. Product seating is another one of the large focuses for us this quarter. We're doing women wallet users. We'd love to acquire more of those. And then UK customers. So going international, it's kind of funny.

[Jason]

Because we're, we're almost like approaching at different ends where like, you guys are kind of getting to TV a little bit more now. You're getting, you're getting to seating more. We're getting to YouTube sponsor content. We're getting to just like overall influencer sponsor sponsor content. Um, so we're kind of just like have the same problems, but we're kind of just attacking it from different directions.

[Connor]

What percentage of your budget this year do you think will go to paid influencers?

[Jason]

It's so early. It's so hard to. It's so hard to. To tell. We're going to spend 50k a month for 3 months and just evaluate.

[Matt]

How are you going to evaluate that? I'm curious.

[Jason]

So hard. I was at first I was feeling like really good about it, which is codes and kind of comparing clicks and codes. And then we had some codes that leaked that we just realized. I didn't think we were going to have it because we just have GIF with purchases. So it's not a discount and it's only above 85 bucks. So like I didn't think that was going to be as attractive as an offer. So those leaked. So that makes it a lot more challenging. There's post purchase, there's clicks. But. But from what it seems like so far, that's only a very small percentage of the value. And I don't think I'll try to assign the same dollar amount, like precision as we do with, you know, paid social.

[Connor]

Right. Yeah, I think codes are just inherently flawed. We're using post purchase survey and clicks.

[Matt]

Yeah, post purchase survey is weirdly, it's the thing I'm starting to trust more. Right. I know, I know. It's, it's the, it's the like for some reason with all the data that we all have and all the tools that we all have, I, in some way I do feel like I like it's less accurate than it's ever been before. And that's largely to do with just like the ad platforms themselves that are taking away targeting and they're taking away so many things that we used to have.

[Connor]

Right.

[Matt]

So it's like, it's hard to really narrow in. But I do trust, like if you ask the, ask the right question the right way, like, I do trust what I see.

[Connor]

Yeah, I like it.

[Matt]

I'm an old school, like gut feel kind of guy. I'm way less like data science sciency about this.

[Connor]

It is, it is great for gut feel. Like, I mean even just the idea, like, hey, we launched TV and now there's people telling us they discovered us on tv. Like, okay, cool, that's great. That is honestly fantastic validation. Are you gonna say something, Cody?

[Jason]

No, I'm just gonna say tv, it's, it's one of the only ways, like that's why we went with prescient is because it's the. You know, I think MMS really helped there. Like, holdouts are hard, but really for the first year it was just post purchase was like the only thing we looked at for TV. It's, it's incredibly valuable for TV.

[Connor]

We did it for Apple too in Q4. I mean, that was like, that was probably the data point that made me most confident. We. You see all these clicks, you see all these conversions, you see a low percent new visits. I'm like, oh my God, this is just retargeting and maybe it's not making a difference. But then we see 12 to 15% of people say that they discovered us on a mobile app. It's like, okay, yeah, there's something there.

[Matt]

Yeah. You know, Cody, the. With, with larger influencer sponsorship, we did have some success, like putting the actual person in post purchase. Like, oh, I heard it from this person. But then like, that doesn't really scale because you're not going to have like a list of like 250 influencers, but like for the first five, 10, whatever, it's like I'd actually put the name.

[Jason]

Okay, so we're going like, we're doing like the conditional logic where it's like, where do you see us? Influencer or YouTube creator? And then it's which one? But Then they're like writing it in and there's like still like so many duplicates. But yeah, that's a good idea. I've seen.

[Matt]

I mean writing is fine now too. Like you could have AI like just.

[Jason]

I've also seen people say they'll like. I don't know if. If no can do this, but like you can actually put in like an image of the video. So it's like I saw you on YouTube. Which one? And you could put in like the YouTube thumbnail.

[Matt]

Oh, that's kind of like.

[Jason]

That would be a cool one to do.

[Matt]

Yeah. Are you doing like really big influencers or.

[Jason]

No, not. No, majority of them. Yeah, something like that. The majority of it will be, you know, smaller, probably between 3 and 5k per video. We'll try to get in each of them twice and then we'll take probably 25% of the budget and go somebody who's like a 15k per video.

[Matt]

Probably just like what kind of audience sizes and whatever. Do you have any guidelines there or you like. You know what, it doesn't matter.

[Jason]

We're going based on cpm, so kind of like is average views. So it's probably anything from, you know, 30, 40,000 views a video to, you know, several hundred thousand of them.

[Matt]

Yeah, I'm trying to spend like I want to do one like decent size creator every month on Pela. Probably on Lomi, I think we'll do the same, but like that's. We gotta wait. I got gen 3 of the product coming out in May. So like right now I'm basically doing nothing on Lomi, and I haven't been for like nine months because just waiting for this next hardware. Don't ever do hardware, guys. It sucks. But on Pela, like we also had some success last year with like taking some bigger swings on creators. Like in May of last year we did this like a case collection with this bee farmer and she's got like 14 million followers. And like crazy. I love the Internet, right?

[Connor]

Yeah.

[Matt]

And like crazy engagement, crazy great investment. Like she was a rock star, you know, like. And I think that's it depend. I guess again, it's always nuanced. But like with Pila, we can just. We can design anything. We have no inventory. So like when we see a creator that's like, hey, you got. You should make something with us. It's like you can design whatever the hell you want and like you can give it to us next week and we're good to go. Right? So like there's an advantage there. But, like, then the. The product and the content really fits the creator. So, like, we've been having more and more as we move up the creator sizes. I'm like, oh, like, I think we can actually take some big swings here, you know? So, like, I want to spend more there.

[Jason]

I think for a lot of brands, it's challenging. Like, like, you asked us because you don't want to put all your eggs in one basket if we've only got 50k to spend. Right. You could spend that on 1, 2 creators. And, like, it's not a great test. I think for you guys, it makes a lot of sense because. Because a, you're tying in the product to it and it's an entire campaign. And I would imagine, you know, a, you guys do your own manufacturing, so you don't have a giant commitment up front, and you could probably get a good royalty deal. So that. That just, like, makes so much sense.

[Matt]

Yeah, the zero commitment up front really helps, like, of, like, inventory the. I got one. I'll let you guys know how it goes in a week. We've got one dropping on. On February 6th, and I saw the video today, and I'm like, holy, this guy is really good.

[Jason]

He's got a.

[Matt]

He's got a lot of reach. Um, all the girls in my office are, like, swooning over this dude. Like, his product. He's like, he's an actual designer too, like an artist. And like, his product is like, it's pretty rad. But yeah, I think. I think that's like, the. The thing I'm trying to figure out is, like, does it only work if you can get super aligned, like, the product and the creator? Like, especially bigger ones. Like, it really needs to make sense, you know, I guess why people don't, like, I don't know. Connor, you've actually. You guys have done so much here. What's your view on this? Like, can you make it work?

[Connor]

Like, I think it used to be much easier to get it to work. Like, for a long time we were like, super spray or Prey, like, high volume. Partnership team was like the biggest by head count. It was like a small SDR team, basically just doing outreach, negotiating deal, sending product. We flipped, like, our focus last year was like, exactly what you're saying. How do we create better alignment with our product and the content? And then how do you do that at scale? And I think we drive really great results off fewer integrations, essentially. And the best example of that is our sweepstakes, where we're like, oh, hey, if we can get the cars in the video. It performs twice as good. So last sweepstakes we got the cars, both cars, in like 25 videos. We spent a ton of time shipping those around. We flew some people in. Like, we have every incentive to just make those super impactful. Now we're trying to figure out how do we do that in like outside of the sweepstakes. The, the other example I'll give, best creator we've ever sponsored with Smarter Every Day Science Channel. He was trying to make two bullets collide and then film it with like a, a super high frame rate camera or whatever. And the integration, he ends up shooting the wallet from both sides and it's the only time he gets the bullets to collide. So like the climax of the video is also the ad integration did like over a half a million dollars in sales. The video got 20 million views. It went nuts. So we're not going to be able to recreate that like predictably. But how do we, how do we get more in that? In that.

[Matt]

But I guess. But can you, like, like if you look at the dollar volume that you guys spend on straight up ads, like, I feel like there's a way to build more predictability into something like that. Or like you actually can just take so many more shots on these like really creative people and just say like, yeah, look, here's some examples that have worked for us. Like, you guys, knock knock your do whatever. It's the Casey Neistat thing. It's like, here's a bunch of money. Go do whatever the you want. Like you're the creator.

[Connor]

Yeah, we'll see. I mean I, I think it will be difficult to like do creatively and in this really integrated way. But that's what like the team is tasked with. And half of that is like, how do we just continue have great relationships with these creators so that they feel bought in or when they have an idea for a video, they, they're thinking about us in ways that we can get integrated. So we will see that is, that is a big part of the goal this year for partnerships. It's twofold. We're going to go back to the spray and pray mentality to brute force our way to top of funnel. And then the internal team's really focusing on deep integrations. That's thoughtful and impactful.

[Matt]

Yeah, that we're identical. Like on Pela right now, it's identical. It's like, which. Who are the creators that we want to have really deep, meaningful partnerships with? Like, so we do designs together. Like, we're just crafting stories and. And then it's like, then there's this other team. That's just insane. Volume. It's like, how do I give thousands of phone cases away every month?

[Connor]

Totally.

[Jason]

All right, let me. Let me wrap it with the test of the week, if that's okay. Yeah, and then we'll. And then we'll wrap it. So mine is similar. I just want to talk about the Meta stuff that we've been testing. It's very similar to Connor's, actually. We ran three. We ran a quiz completion test actually back in November, and it was actually so, you know, we run most of our ads through a quiz funnel. And so we set up a custom event where if people completed the quiz and I think I forgot. I think it was. Anne gave their email. I don't remember if they had to. We were optimizing for that. We ran that for a few weeks. That was actually our most efficient incrementality test that we've ran the entire time. Wasn't a huge spend, it was like a few thousand a day, but most efficient. It was prior to Black Friday as well. So we just kept it running. We actually paused our reach. It was a lot more efficient than our Reach stuff. We've ran three holdouts on Reach. It was always incremental to Connor's point, not always profitable. I thought there was still like a big halo that it was like, hey, if we're going to spend $100,000 a day on this channel, like, we can spend, you know, 2K a day on Reach. I didn't. I didn't need, like more precision than that. I. I knew there was a lift and then we ran a few just conversion optimized holdouts was really our first one on Meta ever, actually. I just, like, never really doubted it before because Meta was always such a big part of our business. And like, when we launched a region like eu, we just went with Meta there and like, everything did well. So this was higher spend level. So this is kind of like what we were spending, let's call it equivalent to like 60, 65% of our budget. And our MMM was showing. We should probably pull back. So we ran at what we found very incremental, not profitable at that spend. So like 47% lift. So in the regions where we were running Meta, we were getting 47% more new customers than where we're not. So, like crazy incremental, like Meta, our business kind of lives and dies by Meta, you know, a little bit at that road. But not profitable at the overall cost per incremental. Now the important thing to remember is you don't just have one average roas, you have, you know, diminishing marginal returns. So the next thing we did is we just did a scale back test and just did another, another, you know, two cell meta test and just pulled 15, 20% off of that number. Probably improved by 20%. And so now we're at break even on meta, you know, which is, is fine. We want to be profitable on first purchase, but, you know, obviously there's value in that, so we can stomach that. And then probably a lot of that spend is better than break even. And then what, what Nick, Nick, our rep helped us with this is like looking at that, like marginal incremental ros between the two tests, just comparing the spend and then the revenue and like, it was pretty ugly. And like that spend is never going to be profitable. That extra like 15% was just like, you know, we're a $90 AOV. It was like a $200 cost per incremental of that spend. Obviously it averages out way better than that, but I think just that extra tranche of it was just like so ugly. So we obviously pulled back. We're at about 55% of meta for the month. And then, so what we're going to do is same thing as Rich did, we're just going to take that extra bit of spend and reallocate it. We know CTV does Well, we know YouTube does well. Uh, and then we're gonna take a, a good bit of it and just put it into Quiz Complete. So totally. We're probably gonna go. I don't know what we're gonna do, but maybe like 15% of our overall meta spend, like we'll go pretty big on it.

[Connor]

Wow.

[Matt]

And we'll just take the objective is Quiz Complete.

[Jason]

Yeah, it's like a custom conversion. But like, yes, of, of people that, you know, take one of our quizzes.

[Connor]

Dude. And Quiz complete is like not that much different than VUE content. Optimized. You're optimized for a interested person. They're completing the quiz. They're getting to a product page. It makes total sense.

[Matt]

They're investing a little bit. Like they're, you know, for sure.

[Jason]

And we're hopefully getting their email as well.

[Matt]

Yeah.

[Connor]

Yeah.

[Matt]

Cody, is there a day in the future where you think you're not, you're. You'll. It'll no longer be reasonable for you to try to be profitable on first order?

[Jason]

It's a great question. I don't know if our LTV is good enough to, you know. Well, we can run models and stuff. But to say. But. But probably.

[Connor]

I think when you have enough stores.

[Matt]

That'S what I'm wondering what size is the brand and the store count and like just all the variables where it's like, you know what, like it's not going to make sense for us to be profitable in D2C on first customer just because.

[Connor]

Right.

[Matt]

The business has changed.

[Jason]

That's right. Probably. And we'll probably have to get there. Fortunately we have, you know, just growing cohorts of, you know, repeat revenue that hopefully we can get our cash flow and contribution margin in the immediate from them.

[Matt]

Yeah, very cool. Great problem to have, man. I like it.

[Jason]

All right. That was a fun one. Anything else you guys want to want to do before we head out?

[Connor]

No, dude. Matt, thanks for coming on, man. Super fun.

[Matt]

I like this nerdy. We don't do this nerdy on our show.

[Connor]

Yeah, you guys all do the fluffy.

[Matt]

Like leadership stuff running companies, man. Yeah, no, this is good. I appreciate the time, guys. It's fun.

[Jason]

Hope you enjoyed it. That was a fun one. Thanks so much, Matt for coming on and joining us. Want to thank our sponsors Motion, Prescient Rich panel and Northbeam. As always, if you enjoyed this, please share it. Subscribe on YouTube. Give us a like and leave any comments that you have for the operators hotline.