E051: Why Meta Purchase Conversion Isn’t Enough - Rethinking Ad Optimization for Incremental Growth

Summary

Marketing Operators - Episode E051: Why Meta Purchase Conversion Isn’t Enough - Rethinking Ad Optimization for Incremental Growth

Release Date: March 18, 2025

In this insightful episode of Marketing Operators, hosts Connor Rolain, Connor MacDonald, and Cody Plofker tackle a pressing issue in the digital marketing landscape: the limitations of relying solely on Meta's (formerly Facebook) purchase conversion optimization for advertising strategies. They explore alternative approaches to ad optimization aimed at driving incremental growth, sharing personal experiences, strategic insights, and practical recommendations.

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1. Introduction to the Challenge

The episode kicks off with the hosts discussing organizational changes and new hires, setting the stage for a deeper dive into marketing strategies. Cody introduces the primary focus:

"Ultimately what we're supposed to do as marketers is drive incremental returns. It feels as if over time Meta has developed the platform in a way that it can very easily become less incremental."
— Cody Plofker [10:28]

2. The Diminishing Returns of Meta Purchase Optimization

Cody and Connor express concerns about Meta's evolving algorithms and their impact on incremental growth:

"Incrementality is not the same as acquisition. It depends on every brand and Meta can still be very incremental, just not as efficiently at reaching new prospects."
— Connor MacDonald [11:34]

They discuss how Meta has shifted focus towards targeting audiences further down the funnel, making it challenging for brands to use Meta as an effective top-of-funnel (ToFu) channel for acquiring new customers.

3. Exploring Alternative Optimization Strategies

To counteract these challenges, the hosts share their experiences with diversifying optimization objectives beyond purchase conversions. Cody highlights a pivotal moment:

"We could tell things were not penciling out from the top line perspective... optimizing for view content like that's performing best was a sign we needed to do something significantly different."
— Cody Plofker [11:34]

Connor adds further depth to this strategy:

"View content optimization focuses on driving browsing visitors rather than direct purchases, which aligns better with our goal of reaching new prospects."
— Connor MacDonald [13:13]

4. Implementing and Measuring Incremental Strategies

The conversation delves into the methodologies for testing and measuring the effectiveness of different campaign optimizations. Sean shares his brand's analytical approach:

"We're running view content optimized campaigns, but the cost per incremental order is just not a number that we would be comfortable with."
— Sean Frank [24:53]

Cody reveals compelling data from their experiments:

"In our top of funnel optimized campaigns, we saw a 5x incrementality factor from what Meta was reporting."
— Cody Plofker [27:37]

They emphasize the importance of using sophisticated tools like House and Prescient to accurately measure incremental returns and inform budget allocations.

5. Case Studies and Real-World Applications

Cody discusses specific case studies demonstrating the effectiveness of diversified optimization:

"In December, we started testing how much budget to allocate to top of funnel, and found this new 'Traditional Flash' campaign was driving 60% of our revenue, proving to be highly incremental."
— Cody Plofker [53:24]

Additionally, Sean references a House case study with Javi Coffee, highlighting the superior incrementality of video ads over image ads:

"They ran video ads as upper funnel and image ads as direct response, finding that the video ads had a significantly higher incrementality factor."
— Sean Frank [45:19]

6. Strategic Recommendations and Best Practices

The hosts offer actionable recommendations for marketers seeking to enhance their ad optimization strategies:

• Diversify Optimization Objectives:
  Move beyond purchase conversions by incorporating objectives like 'view content' to target broader audiences.

  "Identify contributions from each campaign type and prioritize those that drive true incremental and profitable performance."
  — Cody Plofker [47:19]

• Implement Rigorous Testing:
  Utilize holdout tests and incrementality tools to accurately measure the impact of different ad strategies.

• Allocate Budgets Strategically:
  Based on incremental performance data, adjust budget allocations to favor high-impact tactics and reduce spend on underperforming campaigns.

• Invest in Creative Diversity:
  Develop a range of creatives tailored to different funnel stages to effectively engage and convert new prospects.

Cody underscores the importance of continual testing and adaptation:

"Identifying contributions from each campaign type and prioritizing those that drive true incremental and profitable performance."
— Cody Plofker [47:19]

7. Conclusions and Takeaways

The episode concludes with a consensus on the necessity of evolving ad optimization strategies in response to changing platform dynamics. The key takeaways include:

• Understanding Incrementality vs. Acquisition:
  Recognize that driving incremental returns is distinct from merely acquiring customers, requiring nuanced strategies.

• Leveraging Advanced Measurement Tools:
  Employ tools like House and Prescient to gain accurate insights into ad performance and inform strategic decisions.

• Balancing Creativity with Data-Driven Decisions:
  Combine creative innovation with rigorous data analysis to optimize ad campaigns for both performance and incremental growth.

"If you're struggling to reach new people on Meta at a $10 million roll run, you probably have bigger problems... It's about giving things a much bigger effort and not just relying on other channels."
— Connor MacDonald [68:48]

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This episode serves as a valuable resource for marketers navigating the complexities of digital advertising on platforms like Meta. By advocating for diversified optimization objectives, robust testing methodologies, and strategic budget allocations, Marketing Operators provides actionable insights to drive sustained, incremental growth in an ever-evolving marketing landscape.

Transcript

[Cody]

Cody, what's the mer. Impact of a second child?

[Connor]

What do you mean?

[Cody]

Now that you've had a. You've had a couple weeks to measure, is it good for performance, bad for performance, not good?

[Connor]

Don't do it. Don't do it. If you care about your. Your health, your sleep, your sanity, your m. No, I'm just kidding. But it's a. It's a lot more challenging. Got. Got our hands full and.

[Sean]

And what, one month, two months after the. The CEO role. So you're just. You're just stacking them on top of each other now.

[Connor]

Just, Just. Just added on.

[Sean]

I love it.

[Connor]

Hasn't been a. Yeah, hasn't been a. A smooth. I mean, hasn't been a smooth ride to start the year. Lot lots going on.

[Sean]

That's exciting though.

[Cody]

Go.

[Connor]

Sometimes. Yeah, definitely.

[Sean]

One challenge after another. All right, well, I'm out in Minnesota right now visiting my brother and, and his wife and my fiance, Connor is out in LA right now, I think on some. Some work. Ridge duty. Yeah. Are you out doing some. Some ridge things in la?

[Cody]

Uh, it's a bit of business and pleasure. I. We've got a VP of marketing starting this week, so we're going to onboard in person, which is super exciting. I'll be at the office in Santa Monica. Our CEO Sean Frank's birthday is today, so I had dinner with him last night, you know, currying favor with the boss. And. And then my brother's running a marathon this weekend, so I'm checking a lot of boxes in just a couple days here.

[Sean]

Wow, Amazing. You said. You said office in Santa Monica. What's the. What's that set up like? Is that. Do you have a little Ridge HQ in Santa Monica?

[Cody]

Yeah, yeah, yeah. And we got it. We moved in just before the Pandemic started. When we were like, we're all going to work in person. We had people commuting in. We were doing that for about three months and then Pandemic started and everybody went remote. So right now we've kept the office. It's been nice for, you know, if we're doing like executive off sites, if we're doing onboarding in person. We've got. The original founders are still here in Santa Monica, so they work out of the office quite a bit. So you've got maybe 10 to 12 people on any given day working out of there, but relatively small percentage of the workforce, but helpful for all the stuff I gotta do with the VP this week.

[Sean]

Oh, very cool. And. And I didn't know you, so I knew you were hiring for the vp. I didn't know you made the hire so. Well, first off, congrats. That's very exciting. I'm sure that's a big, a big weight off your chest and load off your plate of work. What's the. Yeah, what, what details can you share on that? Like where'd you find them? You know, what kind of, what kind of responsibilities and, and things are you, are you dishing onto their plate?

[Cody]

Yeah. So they were referred from some like mutual friend of the brand. They'd been in consulting. They worked at Wayfair for a while. So like this woman's just extremely tactical. What we were looking for is, is two things. One, I would like someone to better own what I would describe as like our, our owned marketing channel, CX retention partnerships and organic social. As we bring more things to market, as we're introducing the products where we can have like longer, more natural LTVs. Like what are the channels that are dealing with customers on the front lines or just our community or our warmest prospects? People like that. And how do we tell like a more cohesive, thoughtful strategy on a day to day basis? And that just level of coordination I think requires you know, someone directing those teams. So that's one key piece and I think there's a lot of exciting ways for that to go. That, that quickly becomes like way more nuanced retention strategies. And we have a lot of opportunity there. And then the second one is, and I talk about this quite a bit, we're obviously launching so many more products this year. I think we have like a hundred and I, I think this was last year we had like 120 go to market items. I think we got more this year. So she's going to run all the go to market strategy.

[Sean]

That's insane.

[Cody]

Putting together that. Oh my God.

[Sean]

Over, over 120 go to market items. Holy crap.

[Cody]

And some of those are, some of those are much bigger than others obviously. But like yeah, I mean February was crazy. We had like the last couple weeks we've been doing like three or four go to market item reviews between like new promos, new products. We were launching a loyalty program this week that's on there. So just all sorts of stuff. And uh, I've been spending a lot of time and energy like with those marketing summaries, making sure we're briefing creative the way that they need, making sure that our channel strategies are thoughtful and kind of like leveling up in the way that we need or laddering up in the way that we need. I'd like for her to own all of that. So own channels go to market are kind of the two big things. And having come from Wayfair, I think she's incredibly tactically strong marketer. Wayfair launches thousands of SKUs every year. They have millions of SKUs on their site. So someone who's just like operationally savvy and like doing everything that we need, I think will huge benefit to the business. And that's what we'll get going on this week.

[Sean]

Exciting. As far as like org chart goes, do are they sitting in between you and all of like the channel leads on retention. Organic social community. Nice. Okay, so that's exciting. So you just took like four, four or five direct reports off of your plate and now you're going through this, this new hire, this woman from Wayfair.

[Cody]

Exactly.

[Sean]

Very cool.

[Cody]

Very cool. And so I'm excited about that. So like my plan is that'll be a. Not only will it save me time, like a significant amount of time, but I think all of those channels will benefit from deeper involvement from a VP level leader. Like, I just think there's a lot of meat on the bone when it comes to retention or partnerships or all of that. So like, I think with one person I can save time and then those channels can actually like uplevel quite a bit. So I'll have the VP of marketing, I'll have the creative director reporting into me and then we've still got kind of like the paid media and growth team. So it's like E Comm. Tech, performance, creative, things like that will still roll up into me. But that's kind of how I'm seeing the different silos of the marketing team.

[Sean]

Got it. Yeah, that's interesting. Yeah, I think friend. Friend of the operators. Network Sherene. I might be butchering her last name. Shereen Auber. She was one of the first. Like I looked at her role and I was like explaining some of the problems I was having and I'm like, how do you possibly manage all these functions of the business and still like have, you know, you know, giving your input or your direction in like a useful way. And her answer was so, so, so simple. And it's really struck with me. It's just this like concept of like adding layers of insulation. Like you have four direct reports and. And it's too much like you add someone in between you and those people and like you can still get your input into those channels strategically, but now it's going through someone else and it's up to that person to get more, a little bit more in the weeds. You know, you get more in the weeds, you get closer to the people owning those channels. And I thought a just a really simple but, but useful concept to think about when you're like when you kind of hit that tipping point on like wow, I have like seven, eight direct reports. This is way too many. Like I'm probably not giving any of these channels enough attention. Bang. Add in that layer of insulation and cut it down which is basically what you've done with, with this new hire.

[Cody]

100% and and so you guys can imagine we don't need to get too far into to the ridge org chart but the creative director just came on in August. So like before that it was like almost a completely flat marketing organization. I had all of the our senior designer, our photographer, like our creative project manager rolling up into me all the retention channels or the own channels that I mentioned and then all the growth team. So yeah, over the last six months there's been a big focus on senior experience leaders. I think I have the clearest view on what success will look like than I've ever had. So that's just helped with hiring and I think will will hopefully lead to, you know, some successful team building.

[Sean]

Very cool.

[Connor]

That's awesome. Happy for you. Happy to hear, excited to hear how it works out.

[Cody]

Yeah, thanks guys.

[Sean]

Yeah, sweet. Well, we got a fun one today. Before we get into it, I want to thank our sponsors. Motion Rich Panel Prescient after cell in house.

[Cody]

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[Sean]

All right, let's get into it. So there's been a lot of chatter amongst us, you know, in our group chat, but also just across all of the DTC ecom community about, you know what, what's the state of Meta right now? There's a lot of chatter about, you know, at some point at the end of Q3, early Q4, you know, meta adjusted its algorithm to really start going after people that were ready to convert in market. And there's just a lot of chatter about unlocking Meta as a top of funnel channel again. Now I think when you're at, you know, nine figures and, and probably even under that, like Meta's always going to transform, at least in some regard to targeting people that are ready to convert middle bottom of funnel. But you know, I think most of our brands were also built on Meta being a top of funnel channel. And I know hexclad really relied on Meta and still does for a very long time, but over time it just become more and more middle bottom of funnel. So I guess like question for you guys, like why are we even talk about, why are we even talking about like diversifying away from the, from the per the Meta purchase convers, which is what a lot of this chatter has, has been about in the last, you know, call it three, four, five, six months. Connor, you want to, you want to answer that one first?

[Cody]

Yeah. So I think this, I think this relates back to a conversation Cody and I had with Matt, Cody and I had with Matt a couple months ago was ultimately what we're supposed to do as marketers is drive incremental returns. And it feels as if over time Meta has developed the platform in a way that it can very easily become less incremental. And what I mean by that is, you know, if you think about advantage shopping, the removal of exclusions, the optimism or, sorry, the, the attribution window going from 28 day click to 7 day click, advertisers only optimizing for click based outcomes. It just ends up, you were asking Meta to go further and further down Funnel to attribute sales to itself and that can very quickly become less incremental. So when we talk about driving top of funnel awareness, I think what we're all looking for is better incremental results. You guys can correct me if I'm wrong, that's how I think about it at the very least. And it feels like we have to be more creative in aligning what Meta is doing with our ultimate objective. And that comes down to like different forms of optimization. How do you guys feel about that as a summary?

[Connor]

Agreed. And I think there's probably more to it, so I'll add some more. But I think the one part that we've discussed this ad nauseam is like incremental on is not the Same as acquisition. And I, I mean it's going to depend on every brand. I think it's very incremental or at least Meta can still be very incremental and it can so but it maybe isn't as incremental as new customers as you want. And then in addition to that, I also think it can be incremental on new customers, but not great at reaching new prospects. Right? Not great at reaching like serving net new impressions. But maybe when people have gotten impressions on and haven't purchased but have gotten impressions on other channels, Meta is very good at kind of sniping them off and being incremental. So I think there's kind of different levels to it. We still do see it being very incremental, just not great at reaching new people and not nearly as efficient as we would like it to be, even though it does drive a significant part of our business. So I think that's it. I think there's a bunch going on. All of the ASC of everything makes it really challenging. I think exclusions just don't work the same post iOS like you're just going to have 30, 40% leakage no matter how hard you try. And I also think that this whole like optimizing for like third party data is also a pretty terrible decision that I'm not understanding why they do it. And I think that that is making things even, even less incremental. So yeah, I think there's a lot going on and I also think just like the whole broad everything, like it just seems like it's, it's so hard to get out of this little like vicious cycle of just going after the same people. And obviously creative diversity is the key, but it's so much easier said than done.

[Cody]

Kiddo. Just one, one point of clarification, if you could explain one more time what you guys are seeing that it is incremental, but not necessarily with new prospects. So are you guys seeing it drive returning customer revenue?

[Connor]

Yeah, that's like one of our tests. But yeah, it does. And no matter how hard we try to exclude changing all of the exclusions, it's, there's still like 30, 40% leakage. So like 30% of our spend is actually going to repeat customers and it is incremental on them, but it's not, you know, that's not our main goal with Meta is to, is to drive, you know, repeat revenue. So we really, you know, need new customers to grow our business and need to find ways to reach, reach new people. And Meta is just getting Much harder to reach new people. And obviously there are ways of reaching new people but those also we want to make sure they're profitable as well. That's kind of like the catch 22. It's not. Yeah, that's the thing. It's not incrementality is not that hard. I think most channels that we've tested have been incremental with house outside of like Google brand search. But it doesn't mean that they are all good places to put our dollars. It's are they incremental and efficient enough at the KPIs we need and on new customers. So you need this like perfect storm of all of them and most. Yeah, it's. It's a challenge finding that at times.

[Cody]

You know I will say I feel like we need to define a term needs to be defined here and I don't think we do it necessarily in this moment but jumping through the hoops of, of incremental and profitable explaining that seems totally redundant. Maybe room for a new acronym. Maybe you just smash up some words, find a new term. Great branding opportunity for someone like a House.

[Sean]

What, what does house call it now? I think it's like cpia right? It's like Cost per Inc or cpio. It's like Cost per incremental order and.

[Cody]

And like yeah IROS and cpio. But even that it's like we incremental and efficient is the point. We, we could, we could take it as a next step from here but obviously like I think, I think there aren't all that many brands thinking about it to that level and we can't just be saying all those words forever. Great opportunity. Get a little more efficient. Create some.

[Sean]

Drop your ideas in the YouTube comments here so we can get some, some new vernacular. Rolling Cody, that's interesting to hear. Your like your, the data you're seeing on your meta spend like 30, 40% driving repeat orders at least based on our north theme data. For us it's still 95% plus first time orders. Now granted I'm sure some of that is like hey this person bought on Amazon or maybe they bought in Costco and they've been shopping around our site and now they've converted. We know that there's absolutely some of that going on but for the most part based on our MTA data we're seeing mainly meta driving first time order revenue and all of our orders being first time orders for the most part. But I think that's like the tricky part in our data overload ecosystem we operate in now Is like, it's hard to suss out what that really means because what we found is that oftentimes we'll see high net new visit rate, we'll see high percentage of first time orders. But when we run the, the incrementality holdout test, it is incremental. We're seeing incremental orders, but the cost per incremental order we're getting is just not a number that we would be comfortable with. So it's like, what is the, what is the role here? Like, what that's telling me is that we are actually showing ads to a lot of people at some point where we just did not need to show them ads anymore. Like they were already going to convert. But we spent in, you know, we're showing them more ads. We're trying to find that sweet spot here. So like for us, that's what, that's what we're looking at. We're looking at like rolling reach, which has gone down for us, like down to the single digit percentage where the amount of people are actually reaching for the first time on purchase conversion campaigns is like some months less than 10 of our total reach. We're looking at net new visit rate, first time order rate, one day, click ROAS in like trying to paint this and then layering that on top of what our holdout testing data is showing us to be like, okay, we're actually overspending here on purchase conversion campaigns. And if you layer these data sources on top of one another, you can clearly see that. But like it's really hard to see if you're only looking like, if you were only looking at an mta, at least with our data, it'd be really hard to understand that because of, because like I said, the net new visit rate's high, the first time order rate is high. So you wouldn't really. It'd be hard to find that point of diminishing return. Like, what are the, what are the data points that you guys are seeing? Like, I think, Connor, you've been doing a lot of this. It sounds like in, in your meta account, like, but what were the data points that you were like, hey, we gotta diversify away from purchase conversion here because it's just not. We're hitting a ceiling on acquisition.

[Cody]

Yeah. So I will say our journey over the last couple months was interesting. It really started in Q4 where we started seeing issues with meta and I talked about this on the podcast. So for the, for the loyal listeners, it might not be all that new, but we saw Facebook underperform dramatically on a Click basis during Q4 where we were just not driving the clicks, not seeing the conversions that we needed, we could tell things were not penciling out from top line perspective, etc. Etc, etc. And what was odd to us at the time was one of our best performing campaigns was just optimizing for view content, which we've done kind of on and off for years for many reasons like imperfect attribution, there only being a seven day click. Like I, I can totally understand why it is not advantageous to have your entire ad account optimizing for purchase events. Um, it is also on the flip side odd to say hey, as soon as we optimize for view content like that's performing best like we. Those were like the, the, the signs to me that were pointing towards like us needing to do something significantly different in our med account. So that period in November really kicked off a lot of testing. So over the last couple months we've been, we've been experimenting with large percentage of our meta ad account going towards different forms of optimization. And when I say different, we're actually only optimizing for view content. And the reason I like view content a lot is we drop people on landing pages. We're optimizing for a PDP view. So you're basically optimizing for a browsing visitor, which I would love to have more of those out in the world. And if we can do that at a lower cost per click, a higher ctr, a lower cpm, we can, we can serve more impressions then I think that's good for the business. So we basically experimented with how much of our budget is going towards this content view content optimized campaigns. And then our source of truth almost solely is just house in that because as soon as you start optimizing away from purchases, everything else just looks bad. One day click rose looks bad in an mta rose doesn't look good within meta. It is incredibly hard to understand, at least from my experience, how much value you're creating. That's why I've always been so skeptical about it for other brands is it's really easy to be like we need to spend 10% of our budget on reach optimized campaigns. And I think it's really easy to just give your money away to meta and not drive any sort of impact. So we have been rigorously measuring with holdouts. Do you understand that incremental impact and what we found is it's some of the most incremental stuff that we could do that we're getting our most incremental and profitable performance in certain instances from these view optimized campaigns. So that's where we've landed over the last couple months. And to wrap this up, I think it comes from a number of things. One, I think it's the scale of our brand that we are just, we are large enough and old enough where we have to be doing things that are a little more out of the box than someone who's doing 10 million a year or something like that. And then two, I think it is a, it is a byproduct of Meta Ads Manager development. Like, I just think we have to be. Some combination of those two leads us to this being a more optimal setup for our account.

[Connor]

Yeah. You think if you were at your size five years ago, would you, you think you would have had to do it? It's hard to know. It's impossible to know.

[Cody]

But do you think, because you're not even saying if we were five years ago we were doing 30 million a year. If we were in today's environment, do we have to.

[Connor]

I was saying, I mean, maybe you can answer that. I was thinking the other way. If you, the revenue that you're at now, but in 2021 or 2020, do.

[Cody]

We have to do that?

[Sean]

Yeah.

[Connor]

Would you have had to run View Content then?

[Cody]

Yeah, yeah, yeah, you're right. Impossible to say. I'd say probably not. Like again, that's pre. That's pre. All these things that we've talked about that have made it harder for Meta to optimize for incremental purchases, to take credit for conversions that are happening. So yeah, we probably don't have to do it five years ago and sorry, the last thing I'll say is like I talk to other brands, really big brands that can run their entire account at purchase optimized events. Like some people can really do it. Brands 10 times the size of Ridge are doing that.

[Connor]

Do they have something where they're getting like a disproportionately higher percent, like, or just traffic from other sources that maybe would be feeding Meta, you know, some signal, like do they have giant influencer programs or giant TV budgets or something like that, or big retail distribution, anything like that?

[Cody]

They're obviously the, the brand that I'm thinking of that is like, yeah, like six or seven times bigger than Ridge has a very diversified marketing mix. I'm sure Meta is still the largest. It's the lion's share of their budget for them. I actually think it's more a Matter of tam. It's just like a way bigger category and it's a way more like in market category. There's just naturally people shopping there. When I'm talking about it's kind of like what you talked about earlier Cody but like we need to be driving net new interest in minimalist wallets. Like that just doesn't happen otherwise. If I'm selling rugs for instance, like I just spent so much money at ruggable. Ruggable is not the example that I'm thinking of but like I had to redecorate my house, I had to get rugs. That's happening to millions of people a year. You are naturally going in market and beginning to shop. And I think purchase optimized can work better for a category like that than someone who actually needs to be driving that net new interest. If you're running an E comm brand, you know the game of maximizing AOV and that's exactly what After Sell does. Over 35,000 E commerce brands including all of us at marketing operators trust after sale to power their upsells and increase their AOV by 30% on average. Their upselling suite works from checkout all the way to the thank you page. Here's a few things that help after sales stand out. One, you've got one Click post purchase upsells which we talked about on episode 40 with Shane and 33 with Zack stuck. It's a great way to drive revenue without adding friction or expecting the customer to re enter payment. Two is you get checkout upsells which we use heavily at Ridge and they have the ability to monetize your thank you page with their free rocked thanks formerly known as network offers some real numbers from after sale users up to 35% increase in conversions and over a 16 average conversion rate. If you're not optimizing your upsells with after sale you're leaving easy money on the table. Book your free demo today and get after sale for 60 days free. Go to aftercell.com operators to claim the offer.

[Sean]

Do you know if this if this brand you're referencing, do you know if they're seeing like so you're saying this brand's like 5 to 6x times the top line revenue scale of Ridge. Do you know if they're and maybe not but are they like seeing really are they still like reaching new people? Like are they still seeing high rolling reach percentages and like are they doing holdout tests at like testing scaled spend thresholds and being like wow like this is still a really, a really acceptable cost per incremental order. Like do you know if they're doing that or, or yeah. What does that look like?

[Cody]

Yeah, totally. It's funny, I don't have all that many details. I don't know about Rolling Reach, what I will say about Rolling Reach. And just for all the listeners, it's something that naturally declines over time. Right. So if I'm selling something that has an incredibly high average order value that someone might only be in market for, you know, once or twice a year or something, if that they've. I'm sure they've hit every person in America multiple times and they're not too worried about like the saturation of that. They just need to remain top of mind for when you're ready to make that big purchase. So I don't think Rolling Reach is quite right for everybody or at least not at all times. And then the second one was they definitely do geo lift studies and they definitely see incremental lifts on all their channels. They're, they're a very tactically smart brand. So yeah, I think, I think depending on category and size, all these caveats, et cetera, et cetera, more than possible for someone to be driving increments of results even with all purchase optimized. But at least for us we haven't found that to be the case as of late. Yeah.

[Sean]

Did you, going back to the first data point you had that made you like go and try to scale this view content tactic. You said you, you rolled out view content during Q4 and it was your highest performing campaign. So was it your highest performing on like an MTA based return on ad spend? Oh wow. Okay.

[Cody]

Basically. And that's what it was like. I mean maybe not the highest but like incredibly well performing to the point that it was a, it was like oh something weird is going on here. Like if, if, if the best MTA results we can do is optimizing for not purchase something, something strange is happening in the account currently. So that's what really started us down the rabbit hole. What I also say is Cody, I mean you've been saying for a couple months now that your guys quiz funnel optimization is one of your most incremental.

[Connor]

It was. And then just how the years go. And we tested again. Spend, increase, test, shit the bed. Not very good. So we'll see. Nick was saying that he's seen some weird stuff with like three cell tests. He told us today. So we'll probably run a 2 cell with it again and, and just See we, we had nowhere near the spend that you guys had on it. But yeah, that was, that was super disappointing. So you know, scientific method gotta just, just repeat and just test again and see if what seems to hold up because I was pumped about that as well and that was our most efficient. But it was, it was so good. I was very skeptical of that one. Maybe it wasn't enough data during Q4. So we'll, we will certainly test that again. What are you guys going to do from here? What besides just adopting that? Are you going to roll out any other tests? You're going to test like non. Have you, Are you going to test any non purchase on other channels? Are you going to test any other events on Meta? Like where, what, where are you going from here?

[Cody]

Yeah, good question. The other interesting test that we've run so we've been doing this, these top funnel optimizations and measuring that and one thing I'll just call out there is here I have it written down. On our top of funnel optimized campaigns we basically saw like a 5x incrementality factor from what Meta was reporting. How does that strike you guys? That's, that's, I think that's an extremely high multiple. It, it doesn't. What I'm not saying is we're not getting like a 4x incremental rows. It's not like oh Meta's reporting a 1x and we're getting a 5x like we are, we are basically like unit economic profitable which I'm super comfortable with particularly in this case. I think we're introducing new people to the brand. We're serving a lot of really affordable CPMs. The 5x to me stands out as just like oh yeah, there's a lot of conversions happening that meta just doesn't understand how to attribute to itself for all those reasons. There's lots of people making purchases online but because Facebook can't attribute those purchases to meta in a seven day click window, we're just not serving ads to those people. So that was one. So we, we, we understood that moving forward we're just going to go ahead. Connor.

[Sean]

I was gonna say by the way to answer your question that on that like I don't. So first off you're saying the cost per incremental order you're seeing is 5x the CPA that you're seeing in platform on that campaign. Right? That's what you mean by the incrementality or the.

[Cody]

Yeah, yeah, the rose is 5x.

[Sean]

Yeah, I don't see, I don't even know how to react to that because like we're actually in the middle of our first non purchase conversion holdout test right now and like we have to run it for a really long time because of our consideration window. So I'm hoping it like I'm, I'm, I'm, I was looking at the data today and like the ROAS is super, super low. So I'm hoping we have a massive incrementality factor on that.

[Connor]

Oh, don't even look at it. What, what event are you optimizing for?

[Sean]

We're, we're doing view content as well.

[Connor]

Okay. Yeah. I mean we're, when we run reach campaigns we're probably at like a 0.1 ROAS in platform.

[Sean]

Yeah.

[Connor]

On our quiz we're probably a 0.25. Like it's just campy how you look at it and measure it.

[Sean]

Yeah.

[Connor]

Especially for. How long are you guys running it for?

[Sean]

We're running it for like two months.

[Connor]

Okay. Yeah. Honestly the, the thing and, and Meta has shared some data. I've, I've even seen it. Like this stuff does best with like six months. Like this is like full funnel marketing for sure that I don't think we can measure as like performance market like you can with the holdout, but I think like the longer you can run it and be patient. So when we originally did our reach campaigns, we ran a two week reach test and we found it was actually like slightly incremental but like not profitable. And so we're like, all right, but there's something here. Where do we go from here? And we ran I think a six week test with maybe like a six week look back or something like that and we were like pretty happy with it. It was pretty good. And then we ran a, I think we were a 12 week after that. You know, we're like, hey, we think it's pretty good. We, you know, the results look pretty good. We're going to run it Evergreen. There's no harm in just putting a 5% holdout on it or 10% holdout and you know, seeing how it goes. Yeah, that's the thing. Like we ran a YouTube reach test and I think we did like a three week test and, and I realized it was just so stupid in hindsight. Like if, if, if we are going to run this, this style of thing where we're trying to find new people who are not in market. Like we just have to give it long enough, so.

[Cody]

Right.

[Connor]

Yeah. Especially for your consideration and.

[Sean]

Totally.

[Connor]

And where you are at your Maturation curve and how much you guys are spending. Yeah, yeah, that's.

[Sean]

And that's, that's the thing. That was our strategy. Like we very, we were very intentional about launching it. Right after this, the big game sale ended and then we're running it. We're running the test basically right up until Mother's Day sale launches and then we're having the post, you know, the observation window run through Mother's Day. So we were like, all right, let's give it a solid six weeks to run, build the funnel. Let's let a funnel clearing event happen because we think that's the best shot of getting the best read possible. So like we were very intentional about that. What, what I'm very bullish on right now is the, is the upper funnel metrics are looking good now. I was expecting, you know, it's a view content optimized, right? So it's literally optimizing for someone to go and like visit a landing page. It's like, of course outbound click through rate is going to look great. CPC look good. CPMs are looking good. Just because it's a less competitive auction. I think what I'm most bullish on as the soft metric is our add to cart. Our cost for add to cart looks really, really, really good on these, on these new content campaigns so far compared to like some of our best purchase conversion campaigns. Did you guys see a similar trend when you were, when you've been launching these?

[Cody]

I don't know. Cost per add to cart. Off the top of my head, it makes sense. We're driving traffic so much more affordably. We know that they're browsing. We're optimizing view content. Like it's not that hard for cost per add to cart to be much cheaper. Right. I was going to ask. I think that's a great. One thing that we were battling with was like what metrics? Because we're measuring, you know, there's probably three top of funnel campaigns. There's multiple ad sets that we like have now validated at this point are driving an impact, but we only know that it's driving an impact as a group. How do you actually, what metrics are you actually using to optimize between ads or ad sets in order to try to like manage it? At some point you want to make decisions as to what, what ads or ad sets are coming on or off. Cost per add to cart is a really good one. Is there anything else that you guys would be looking at to make those optimizations?

[Sean]

We haven't even thought about like that that for us the, the creative was going to be the follow up test. It's like okay if, if you content proves to be incremental and at a, at a clip that we at a you know a cost per incremental order that we think is is profitable or it's not but like we think that if you give it a long enough time that that that audience would clear then we were going to roll into okay now let's do like a hi fi creative holdout versus direct response for like we're going to do like a creative test right now. We basically just have some of our top performing scaled ads in in each cell and we're just keeping the the playing field level by doing that. I don't know. That's a good question because you'd have to optimize that creator for some sort of soft metric if it's never going to turn into a one day click roas or one day or third even if it's like a 30 day click you're never really see that data show up. So that's a. I don't know. That's a good question.

[Connor]

Yeah, I talked to probably a year ago talked to you know one of those other big brands that everybody knows and they're running I think like 25% of their meta spend on on Reach which was wild but it was what their mmm was showing them and they were like yeah, we don't really optimize it. We just kind of, we put ads in there that we like and you know totally just, just, just let them go. So that's kind of how we did it. I mean occasionally I think I will like it depends I guess what your objective is like and, and meaning like the you know, the objective that you're talking about. Like if you're going for Reach, you know I'd probably look at CPMs and if something has much higher CPM if you're going for you know, quiz completions or V contents like you should probably be optimizing towards that thing but I don't, I. It's so different so I don't know if there's really like a great rhyme or reason. So we haven't done much optimizing at all.

[Cody]

Yeah, so you bring up Creative in top of funnel in this brand just saying they run creative that they like and I think that's a perfectly good strategy. We also focused on like it's all video content. It's largely like either problem and solution content so you can think about like us trying to introduce a problem that consumers have. We're talking about bulky wallets or RFID blocking, something like that. That's been exclusively the focus. We're not running any static ads in top of funnel because again, just kind of like making subjective decisions here, but didn't feel like the right way to introduce someone to the brand if that's what we're trying to do.

[Connor]

Yeah, no, I think that makes a lot of sense. That's similar to how we've thought about. We've gone a little bit more educational with our stuff, but it's like definitely non promo.

[Sean]

If you want to hit next level growth, you need to move away from correlation based measurement and move towards causality. There is no better way to test your channels, your levels of diminishing return, certain tactics within a channel than using a geo based incrementality testing tool. And that's exactly what House is. That is exactly why all three of us use House. House is a self serve experimentation platform that allows you to configure regional test and control experiments to measure incrementality and identify points of diminishing returns. House is really the, it's the most controlled, the most scientifically sound way to do any sort of marketing testing and experimentation. These things are very, very hard to set up on your own. It's rigorous. If you have one little variable messed up all of a sudden your data is not trustworthy. That's why House is such a VAL partner. All you need to do is go into your ad ad accounts and add exclusion or exclusion list, run the data or run the test. And not only do they set up the test for you, but they also help you interpret all the results. So they're handling experimentation, design and experiment analysis and also even going as far as helping you make sense of what to do based on that data. And we at Hexclad have gotten some insane insights this year from all of our household out tests. So our core strategy this year has been doing channel level holdouts to really see which channels are driving the best and most efficient cost per incremental order. So we've tested YouTube, Meta, Google, PMax, TikTok. We're now testing AppLovin. We are getting a sense of which channels are driving the most incrementally efficient first time orders right now. And the amount of insights that come from that information is insane. It helps us inform where we develop creative. It helps us inform where we scale up budgets in certain channels and bring certain budgets down. Plus we are now able to use our incrementality results and actually plug it right into Prescient. So not only are we getting causal data, that is actual data that we can trust to make decisions off of, but now the media mix models and the probabilistic data from Prescient is even more accurate because they're using actual data to inform their models and the readouts that they're giving us. House is an essential addition to your measurement stack. Go to House IO forward slash operators, that is spelled H A U S IO operators. To start your incrementality practice today.

[Cody]

One.

[Connor]

Of the tests that I think about that you've mentioned, I don't even know if it worked well for you, but just like you tested a lot of variables with the House test at once and you just added like more videos and like exclusions and stuff, like what you think is the right way. I'm curious how that went for you because we're launching a similar test, almost like a creative diversity test, but it's also going to be an optimization test because we'll shut stuff off pretty quickly in creative tests on the creative that we think is good, that like meta and platform looks good, but MTA does not look good. And I'm just like, maybe the credit is maybe we're reaching new audience and maybe they're not purchasing in a one day window, but like maybe over a longer period of time they are. You know that, that new ad, that influencer ad with good ADA metrics and good meta performance is actually doing a pretty good job. And it's kind of the same concept that we're talking about with like this is why you need upper funnel things to reach new people. Even though, you know, the attribution doesn't look great. But I'm, I'm even thinking about it within a purchase sell within a purchase campaign. So have you, have you run anything like that where you've like done different creatives or different optimization in one?

[Cody]

Yeah, so yeah, I didn't really finish like our journey, but in December we start or November we really identify the problem. December we start testing like percent of budget going to top of funnel. We get what I thought was kind of like a unclear readout in early January. So we end up running the test again and that ends up looking really good. This, this new cell that we have that is a combination of like I want to say 35% of the budget or so was going to top of funnel. This proved to be very incremental. Now the tricky thing with that was I would describe there being Three things going on within the account. We have true top of funnel optimizations with. Then we have our purchase optimized campaigns. And there's two types. There's like our core evergreen products highlighting gunmetal, carbon fiber black, the standard stuff we've been selling for a decade plus. And then we had a number of new launches. We launched Alaska Twilight, we had a collab with Peanuts that went live. Those are all purchase optimized on a one day click basis. They were like more or less the same, maybe slightly stronger performance on some of the newness. We knew that as a whole those three different types of content were performing much better. So what our next test was was we actually broke out top of Funnel separately to get the, the IROS readout on that. We also broke out newness separately and got the IROs on that. And what we found was, and I think I texted you guys about this, obviously Top of Funnel performed well, but the newness within purchase optimize was incredibly incremental. Like far and away, you can imagine, I want to say on a click basis it was 10, 20% better than our other stuff. It was, this was actually like a crazy readout. But we got like a 4x incremental ROAS which is like way higher than we run the, the blended business. So obviously that's pulling a lot of weight in terms of driving performance and revenue. And what that implies basically is that our purchase optimized core campaigns were not driving nearly as much incremental performance as we needed. So what we're at now is we are focusing on newness and purchase optimized campaigns and then video content and top of funnel optimized campaigns and then really trying to reduce and hedge against underperforming ads in that like evergreen bucket. So that's kind of where we've explored now. We were, we. So that's, that's exactly, that's essentially what happened. We're testing a bunch of stuff. We have snapshots in time where we identify we're moving in the right direction and we've broken those apart, measured them separately and now we're kind of like reassembling them in a way that we think makes sense. And we'll probably end up, we're just gonna consistently test over the next couple months to like try to find the right balance.

[Connor]

Do you regret testing multiple variables at once or would you have done that again? Like, because, because sometimes when you do that, like I've done that with landing pages, just made a new one, you're like, all right, Great. It worked. But like, why, like, where do we go from here?

[Cody]

Yeah, no, I don't regret it at all. I mean we were so far from where we needed to be in November and December that it was like it. I would much rather, and this is maybe like it's not like perfect from like a scientific perspective, but I think we could get to what really matters is driving better outcomes, not perfect clarity as to how we drove those better outcomes. And I think we could more quickly get there with more aggressive testing. And then we ran the risk of needing to do what we ended up doing, which was backtracking and like splitting out. Well, what were the big changes? How do we piece those out and like test our way into it and. But ultimately I think identifying those earlier, running that and then like kind of doing a postmortem essentially to some degree just meant that we were getting better performance for longer. Now the risk was we're changing a bunch of stuff, it's not changing for the better. So then we have no clarity and we didn't get better performance. That would have been a pretty shitty place to be, but we luckily avoided that.

[Sean]

Connor, how.

[Connor]

What do you think of, of my test of like different creative and just like not really optimizing off of like of a Click within a purchase1.

[Cody]

Sorry. Your test would be purchase optimized on the content that's getting the strong ADA metrics.

[Connor]

Kind of like for us maybe it's this like local maximum thing where like newness is very hard for us to scale like that. We, we, we are trying for creative diversity but the same thing continues just to work in our account and we'll have some stuff that looks good in meta, looks good in ada, but like northing one day click just does not look very good. So theoretically, you know, maybe it's just not. It's. Maybe it, maybe that's actually a good thing. Right. Nothing against when they click that it's actually reaching people who maybe aren't buying right now. But it's the same theory as like a reach campaign. Right. But they'll just totally buy later. So that's our plan is like we'll take that creative and so we're really changing two variables in that cell. One of it is the creative because they do go hand in hand in the real world. One of them is a creative that we're going to put in there. We're just not going to shut it off or we're not going to shut it off based on a, you know, click attribution even Though it's in a purchase one and, and number so just that creative. More diversity. And then number two, just really not optimizing it the same way. Optimizing it, you know, not really based on these click based metrics.

[Cody]

Totally. I think it's a good test. I'm thinking about what you will is it. It's just a two cell holdout. So you'll understand because this is what we talk about all the time. You could do it, I think you could do it two ways. You do two cell holdout and say, hey, we just want to know the iroas of this type of content. And then you'll get that, but you won't know exactly what everything else did in your account at that time. So you'll just have to kind of gut read of like, hey, this is good or bad. Or you could measure the other half of the account and say what is this doing? And that would, that would be two, two cell tests so that you have a good understanding of basically BAU versus this new type of content.

[Connor]

Yeah, we're trying to figure out how to do it, but I do want to compare it against bau, um, because that's what we're looking for. It's like what's the best way to do it? Not necessarily like is this incremental at all? But yeah, that's, that's our plan because I, I just, like I said, we're, we're just having a hard time with that. So I do, I do think like upper final reach, it all makes sense and you know, at our sizes, all, all worth testing it. But I think I'm excited about this test as well.

[Cody]

And you know, honestly, this is me like venting a little bit. But like ultimately it's just like an endless rabbit hole to go down because then the next question is like, okay, you've measured theoretically your BAU creative, this new cool type of creative. Okay, let's say like the new creative is better. You, you can't spend 100 of your dollars on it. Then the next question is like, well, what percentage do you want going to each? Like how do you allocate between those? And you could just go down that rabbit hole forever. So that's tricky.

[Connor]

Yeah. Did you guys see. I forgot we talked about it. There was a, a case study that House did with I think it was Javi coffee and they ran. Have you guys seen this one?

[Cody]

The video creative.

[Connor]

Yeah. So they ran all in purchase optimized two cells. One of them was video ads that they deemed were upper Funnels. So kind of think like standard UGC video ads. Asc, same exact settings, same exact exclusions. The other cell was again, same setup, but image ads, only much more direct response offers. And what they found was they were both incremental. And don't quote me on it how says the case study published. But the video one were so much more incremental and they were so much like the incrementality factor was so much higher. Even though they had the same exact media buying setup for both of them.

[Cody]

Yeah. So then it's like, so then what do they do? I mean, I guess in that case maybe, maybe you can justify spending all on video or something like that. Maybe is the next test. But then is that true outside and inside of promo periods, things like that. There's just like all these caveats as businesses change over time. What, what. Where I think it ends up being for us is we get clarity during snapshots of time. And then there's ultimately always going to be kind of subjective decisions to make that you're just going to have to feel comfortable with and continue to like make sure that MER and CACs are like penciling out the way that you intend. Because we've given ourselves a, we got a readout a while back and we, we even had suspicions of it earlier that like video content does drive better incremental performance. So we just hold ourselves to a certain percentage of our ad spend within a given category going to videos. I don't want 75% of my budget going to static ads, even if those do have the best MTA results. That just doesn't feel good to me. That is not scientific. We have now validated that and gotten to justifying that percentage for through like, scientific methods. But I can't tell you exactly that we allocated the right percentage yesterday. So we end up just getting into this weird thing where you're kind of gut feeling it at the end. A little bit of a no.

[Connor]

But you could say, hey, we need a different. A different, you know, you know, Roas, we need a different like north lean row us for video versus a static. And maybe that's where I'm hoping we get to. It's like, hey, we know that we can accept 20% less on these videos with these whitelisted influencers because we're, we're, you know, driving top of funnel with it, theoretically.

[Cody]

That's a great point. That's a great point. We, we are going to test whitelisting ads too. That, that is one where we've tested that many times over the years and have never been able to drive like comparable performance that we have from, from other purchase optimized campaigns. But maybe one of those things that is actually much more incremental.

[Connor]

Yeah, we'll, we'll find out. I'll let you know. Are you guys going to test any view content or similar on other channels now? Like are you going to go and test this on, on like a YouTube or a Pinterest or anything? Or Snap?

[Cody]

We've been testing a lot of like CPM optimized YouTube shorts campaigns. That's been working well for us. We're also, we're also introducing the top of funnel strategy or the top of funnel optimizations into our different categories. So we've proven it out with EDC like a really like a relatively large percentage of the budget. We've introduced it in smaller pieces to rings and travel.

[Connor]

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[Sean]

Are you doing more, Are you taking more of your new products now and thinking about them as acquisition products whereas before you might not have done that based on the newness incrementality readout or are you already treating a lot of these new products as acquisition focused products?

[Cody]

The categories rings and travel have always been acquisition products. We know that we'll need to grow those like via their own funnels and budgets and creative and things. Yeah. So this is kind of interesting. Within the EDC business, we're launching new colors and designs and things like that. And I was actually worried last year two things that one, we would launch new things and they would perform really well within Meta. But I was actually concerned that they weren't incremental. I was like, look, we're sending millions of or emails to millions of people, text to a million people. We've got it on the homepage. Like there's so much awareness being driven that I was worried. Us launching it within Meta was actually just kind of like soaking up intent that we were generating elsewhere. And because of that I was worried we were spending too much time developing creative content for that newness that like I'm like, oh yeah, we are spending too much time on static ads and new video content. Let's focus on the core evergreen stuff because the newness is going to take care of itself via email, sms, et cetera. That was my concern last year, coming into this year and one of the reasons we wanted to test it separately to say like yeah, hey, is this actually doing what we expected? And it turns out it was like the opposite of what I believe that now we're like, oh, actually we should try to. We can pick our spots a little bit better. I mentioned the 120 go to market items. We can't possibly build out an acquisition strategy for each and Every one of those. But the ones that we think are going to be hit will have bought bigger and inventory. We should spend more time developing like a more comprehensive go to market strategy because we now feel that's the best way to drive new, new interest in the brand.

[Connor]

Yeah.

[Sean]

So, so was the newness that you were promoting in this test was this like it was within everyday carry. So it was wallet.

[Connor]

Right.

[Sean]

And then was it like just like a new colorway or a new design pattern or like what is that what it was?

[Cody]

This is a new, this was a new pattern called traditional flash. It was a tattoo wallet. If you guys saw it, I think I, I think I sent you guys the landing page. But yeah, it's like a, like, yeah.

[Sean]

I think I remember that.

[Cody]

Yeah, like flash tattoos. It's like there's a butterfly on it and like a wolf and things like that. It's just like a cool looking design and it's two wallets, two key cases. We spent about $80,000 on that campaign and then we measured the, the iros of that just of it was maybe two or three campaigns.

[Sean]

And was, was that just, just that product? Right. So you had isolated and then how'd you have that test set up? So it was like one cell getting exposed to those ads and then the, and then was the other cell business as usual or was it, was it like did you also have a cell that was not getting exposed to any Facebook ads?

[Cody]

It. This was. Okay, good question. This cell was just a two cell holdout. So whatever. 60% of the country was able to see these Traditional flash ads. 40% of the country was not. We looked at the lift there, but.

[Sean]

40 was still getting business as usual.

[Cody]

Still getting business as usual.

[Sean]

Right. Got it. So it was against the baseline. Got it.

[Cody]

Yes. Against the baseline. They were still getting the, the BAU ads. Yeah. And that was again because we'd already proven out, we, we felt good about the mix that we had for Facebook as a channel. And then during this period we were testing top of funnel and then the purchase optimized newness separately getting a read on those. And what we found was extremely incremental purchase optimized tattoo wallet campaigns in IROs that we're incredibly comfortable with in top of funnel, therefore. And I'm like extrapolating a little bit that our purchase optimized evergreen campaigns are not as incremental as we expected. And that's what's led us to like just changing budget allocation between those things a little more and it's going to change how we're preparing for new launches.

[Sean]

Got it, got it.

[Cody]

That makes sense. Let me. This is another interesting data point that we got. So you guys, I guess don't deal with like too many new colorways and things, but of the purchases that are attributable to our tattoo wallet designs, how much of the revenue do you guys think came from the tattoo wallets question?

[Sean]

I'm gonna say, I'm gonna say 50% of.

[Connor]

I'll say 60.

[Cody]

Yeah, it was 60%. So you guys are, you guys were pretty, pretty in the realm. I wasn't sure exactly what to expect. But it is interesting to see, hey, we can actually promote newness and we sell a lot of other stuff. We're selling a lot of just gunmetal and black wallets. We're bringing in people and interest with cool designs. They're buying something that's a little more standard. What's also interesting about that is in this period we can look at the incremental roas. So the incremental revenue driven by these campaigns was significantly more than all the revenue we did in these tattoo designs. So I actually think if 60% on a click basis, we're like getting super into the weeds here. But on a click basis, 60% of the revenue went to the designs that we were promoting. I actually think if you look at the total incremental impact, it's probably like 30% or something. Like it actually becomes a really small percentage and that there are many more people who are just like they, you know, they, they, whether they're clicking the ad or not, they're seeing it on Instagram, they're coming to the site, the vast majority of people are buying other things. And that will also change the way that we approach budgets moving forward as well. Like what we tend to do at times is we'll weight all of the spend against the revenue of that product. We'll say, oh, hey, we spent $10 here, we did $20 in revenue. That's like, you know, is that a 2 to 1 return? When in reality that $10 in spend actually probably drove, in this case, $50 in revenue. It's just, it's just coming from many different products.

[Connor]

And how are you guys track? You guys track like MER by category usually, right?

[Cody]

Of course. Yeah, yeah, yeah.

[Connor]

So it kind of throws. Throws a wrench in that a little bit or hopefully makes it even better, I guess, than what you thought.

[Cody]

Yeah, exactly. So MER by category can actually look really good or top line revenue can look really strong within that category. Because promoting the Tattoo design is driving so much more than just tattoo design revenue. So anyway, we've been like piecing away a bunch of really interesting stuff on Meta over the last couple months. It's, it's changed our go to market strategy quite a bit the way that we are preparing content and doing budgets and yeah, the plan is just to continue to refine that over time.

[Connor]

Do you see different like incrementality factor? Like I wonder if. Because like for us, some, some products that are, you know, new we'll try to run ads for but like we won't really scale them because the MTA doesn't look great and we haven't ran a whole lot on new. But I wonder if it's just like a great way to get people back to site or to site and you know, do that. So like do you see a different incrementality factor on a, on those or not? It was, I mean, look pretty good in platform.

[Cody]

Those look pretty good in platform, but then they look extreme. I mean in this case it looked extremely good in terms of incrementality. So I, I do think so you could argue that even at like we wouldn't do this because I think this is a big assumption. But you could make the argument, hey, we could take half the roas on, on our next new launch, our next new tattoo design or whatever. We're actually comfortable with half the rows because we know the incrementality factors 5x or whatever. Like there is a lot of room for performance to deteriorate before it gets anywhere near unprofitable. So you could think we'd probably scale a lot. But that is, that's probably the next test. But in, in your case, Cody, maybe it would be worth testing the new products that are just more interesting, right? Like they're getting clicks or getting awareness. It's more memorable to some degree. Like maybe that's just selling more miracle bumps hopefully.

[Connor]

Yeah. And how are you measuring what they buy? Like what, what the other products people are buying with that is.

[Cody]

So I had the North Beam team export all of the. They were actually for me able to export all of the line items attributable to order IDs from the MTA on a 7 day click basis because I don't know how else you would get that. You could maybe get it from Google Analytics. It'd be a total pain in the ass. But they were, they were able to export that all for me.

[Sean]

Could you add like a, I was gonna ask the same thing. Could you add like a, like a UTM filter. Like hey, show me all revenue, all orders that have this like campaign UTM attached to it and then also have like a, a product column and it would. And then you could see the, the distribution that way. Obviously that would only be on last click.

[Cody]

But in, in Ga. Yeah, in Ga.

[Sean]

Or even like right in Shopify you.

[Cody]

Could do it in ga. You could do it in Shopify you would just have. There'd be fewer orders. I don't know what the difference would be, but I think it would be at least you're probably getting twice as many attributable orders from the North Beam data.

[Sean]

Right, right. And. And we've done that with the like that's what we did with the LFR events where we'll actually go in platform and say hey, of all. You know of 300 orders attributed to this campaign promoting knives, how. What's the split here? Which gets us more than what we would see in the MTA because we're optimizing for 7 day click for most of the time. Cool. Yeah, I was curious about that.

[Cody]

Yeah.

[Connor]

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[Sean]

Connor, you said something earlier about, about you know that the, with the strategies and the tactics in the ad account for a 10 million dollar brand versus 100 million dollar brand. Very different. Cody, do you think, do you think a brand doing 10 to 20 million dollars in top line revenue per year should be playing around with like non purchase conversion objectives and if yes or no, and if yes, like what do you think the, the method is to measure that knowing that they probably aren't having like an MMM tool or, or a household out type tool?

[Connor]

No, I don't. I think it's important to remember that everything that three of us say is not financial advice and no, nobody should listen to us. But no, I think, I think obviously disclaimer that we weren't running this from the beginning. We weren't running this when we were you know, 10, 10 million dollar brand. So it's, it's just the necessary strategy for the stage in the game and meta's current, you know, position. But I, I don't think it's nearly as big of a problem for you know, for, for a smaller brand probably until you get, I mean for us I think it was probably 50 to 75 million is when we started to feel it maybe a little bit larger. Yeah, maybe around 75 million run run rate I would say first like do you, do you have an incrementality problem? Like is there a hypoth? Like are you just testing it? And if Somebody's just wanting to do it because that's what they should be doing. You know, they feel like they should be doing or are they seeing some signs in their business and it'll depend on tam. Like Connor was saying, like you might be able to not, you know, need this until $200 million if you're in a huge TAM. I think some of it depends on what your other traffic sources are, you know and hopefully you have something else. I think that's where I would say is hopefully you have another traffic source that's not meta purchase optimized. And you know I think for, for $10 million rounds like influencer would probably be the best one. I think that is the best, most scalable channel because you can send three boxes out a month or you can send 3,000. Right. It's not like TV where you have to be spending, you know, a certain amount to really be able to do it properly. But no, I would say you better have like a really damn good reason to do it. And I, I would recommend not. And you know most of your budget should probably be on meta. I mean most people are kind of have their budget there and if a business is good that is probably doing pretty well. It's. And there are ways to I think validate like when we launched Tick Tock for example or even YouTube before we, you know, we're on board house. Like we looked at post purchase survey and you know, hopefully you're small enough where you, you know, you can see as if you're as your budgets scale up and you start spending $5,000 a day on a channel, you should see more people saying hey I found you on this channel. It's not perfect but you should be able to see it and you should see it in your mer and your, you know, your contribution margin of if, if things are working out properly as well.

[Cody]

Yeah and it's a good answer. Two things, two things that I hear in that and I'd be curious if you agree Cody. One is bringing up channels is a great point that like before. Yeah, yeah you're probably better off testing a YouTube or partnerships before non purchase optimized events on meta. I would agree with that. And then also If I'm a 10 or $20 million brand and I'm at all worried about incremental impact, you probably have a content problem like we're also talking about. You bring up the Javi example from Houzz or like we're finding with, with problem solution videos in top of funnel technically but like even still, it's just like how do you best articulate and introduce how, how do you articulate a problem and solution if that's relevant to your brand? And how are you introducing people to the brand and what is the content format that's best to do that? Those are the two things that I'd probably be thinking about first.

[Sean]

Yeah, like purchase conversion and like building awareness are not, they're not exclusive for one another. Like I think people hear like purchase conversion. They're like, well, how am I going to build brand awareness? It's like to your point, run a really good brand product, whatever, explainer video in a purchase conversion campaign and you're simultaneously building awareness but you're, you're doing it within an audience that you know, Facebook thinks is also going to turn into a buyer at some point. And like, I think, I think the $10 million, I think the rolling. I think Cody, your example of the just like following the post purchase trend and being like small enough to be able to see like the, the cause and effect, there is a really good way to look at it. And also, you know, the rolling reach exercise, Connor, that you outlined however long ago in the, in the operators episode, like as long as you're still reaching a bunch of net new people in meta, there's probably, and the performance is good. There's probably no reason for you to, to go move away from that. If that starts to go down, then yeah, maybe you go and you invest a new creative or influencer brand partnerships. But I think if those two things look good, there's no reason to.

[Connor]

Yeah, if you're, if you're struggling to reach new people on meta@10 million. And again, that's a, that's a pretty big business. So like that's great. But you probably have bigger problems if you're not reaching new people. You know, purchase, optimize that 10 million. Like it's either TAM product, you know, messaging, you've got creators on the account like that. Yeah. And, and by the way, I, at our size, I think we have a content problem. I, I think that we could potentially not need these things or need less of them if we had the creative to better reach new audiences as well. I think some of it was forced on us by our own wrongdoing. Right. And that's how I'm trying to almost think about new audiences on meta as channels. And I think it's really easy to think about it and be like, okay, we're going to go create this funnel for TV or for YouTube, but for and, and for Meta, it's kind of like, hey, like, we need to do the same thing. Like, we're gonna. If we would put 50 grand into testing agentio or test influencers, like, we need to put 50 grand into, like, creative for this new, you know, Persona and build landers and build funnels and like, be really strategic and give it a much bigger effort. And like, think about that as a new channel. And I think that's at least like the framework that I'm trying to kind of take into this year and, and push things forward. This year is like giving things a much bigger effort and not just going other channels or not just going other optimizations. And it's not to say they're not important. It was just what we did last year and that was what we focused on. And I thought, I think we got pretty good at measuring some of them and finding things that went. I mean, TV is now 20% of our budget, but I think we neglected Meta. And so some of it is you might not need to do as much of this stuff or do it as early if you are pushing audiences with. With creative, which we're not doing a good enough job of currently.

[Sean]

All right, that's a wrap on this episode of the Marketing Operators podcast. We hope you enjoyed that one on all things Meta, non purchase conversion events and the the thoughts and strategies and tactics around that. Thank you to our sponsors, Motion Rich panel, Prescient after Style and House. And as always, if you're enjoying the show, make sure to like, like subscribe and share with some of your marketer buddies.