Connor (1:47)

So for sure.

Aaron Orndorff (1:48)

So. All right, Aaron. Wink, wink. So we got the marketing operators mug. Connor, you're slowly adding more things to your background. I say we have another bookshelf.

Connor (1:58)

I see we have a second bookshelf, second chair.

Aaron Orndorff (2:01)

I see some things on the. It looks like Amazon's been there. So I like, I like the slow add of things. Like, it's getting more and more lively in the background. So we're. We're leveling up both of our. Of our setups. Cody, I don't know if you have any. If you have any personal space level ups that you need to talk about today.

Cody (2:17)

No, I need to talk about. About Connor's hoodie that I. I'm impressed. That's. Did you buy that or they sent it?

Aaron Orndorff (2:24)

Yeah, no, I bought it.

Cody (2:26)

Those are sick. I actually think that's cool, dude.

Connor (2:29)

The only problem is I. You know, the checkout's just so fast and seamless. I hadn't realized that I clicked the wrong size. So this is a. This is an extra small. So I got.

Aaron Orndorff (2:38)

I got, like, very little. I got very little arm.

Cody (2:43)

Arm. That one checkout got you. Yeah, 100%. I just. I just want to say again, like, in case anybody is listening, we mentioned it last time. Nobody sent me merch. If you send merch and we like it, we will wear it on the pod, clearly.

Connor (2:56)

Yeah, absolutely.

Aaron Orndorff (2:57)

Got my tubi media hat on to be. Makes a great hat. We love to be great partner of Hexclad. So case in point. Case in point. I also have the. The Shopify sweatshirt, and it's also very awesome. Although, where do you. I know where to buy them because I also bought it, but I don't even know, like, where do you buy Shopify's physical product merch? It's not a Shopify dot com.

Connor (3:19)

Yeah, it's some. It's like Shopify supply or something, but then they do it in drop. So, like, I. I don't think this.

Aaron Orndorff (3:24)

Hoodie is for sale anymore. Oh. Oh, here it is. Shopify supply. Okay. Oh, all right. This is a sick website, dude.

Connor (3:32)

It's insane.

Cody (3:32)

Yeah, their.

Connor (3:33)

Their last drop was, like, really, really kind of crazy.

Aaron Orndorff (3:37)

Dang. This is cool. Like, they got the whole, like. What do you call that? The parallax? Is that what that is where you're, like, scrolling and I don't know. They got some good stuff right now. They got some T shirts. They got some crew necks.

Cody (3:49)

Like, I think Sean like the sweater. They had some cool sweaters, too.

Connor (3:53)

He got the sweater.

Aaron Orndorff (3:54)

Yeah, the At. At Harley. Cody, you heard Cody, you heard you. You heard Cody right away. Like, we'd love to get some.

Connor (4:02)

Just this shameless ask for. For gifts.

Cody (4:04)

Oh, I am exactly so shameless about it. No, no problem. Begging for free merch.

Aaron Orndorff (4:10)

So I think, Connor, you wearing the. The Shopify sweatshirt right now means one of two things. It either means the The Ridge sale is off to a banging start, or it means you're trying to will some. Some more juice into it. So which. Which end of the spectrum are you. Are you right now?

Connor (4:24)

We're. We're happy with the sale so far. Cautiously happy. Like you guys will. The. You guys will appreciate this. Listeners will appreciate this, but we launched our sale five days early. I. I've brought this up before. Last year we launched on the 12th. This year we launched on the 6th. So there's a really interesting question around. Like, well, what do you even compare?

Aaron Orndorff (4:46)

You know, we.

Connor (4:46)

We gave ourselves a whole additional weekend. We launched it later in the week. We launched on a Thursday instead of a Tuesday. We give ourselves a whole extra weekend. So what we ended up looking at was basically the. The 7th, 8th, 9th was Friday, Saturday, Sunday. We comped that to the 14th, 15th, 16th last year, something like that. We comped a much later week, basically a full week later. And we grew slightly. We did it more efficiently, which I feel really good about. The fact that we are that much earlier in November and we are slightly growing is awesome. And then if you look at the unfair comp where we say, hey, we're on sale now. We weren't on sale last year. We're like absolutely ripping year over year. So. So it feels good.

Aaron Orndorff (5:21)

That's great. Yeah, we're, we're seeing something similar with our newness this year. Like, I'm really happy we decided like our, our whole launch strategy was launched the new roasting set at the end of October. We wanted to have that product have its moment, then launch the rest of the Thanksgiving products on the 7th. And like our, our year over year growth rates have really bumped up ever since we launched that early sale. It's not like they're. They're pretty niche products. Like, it's the roasting pans and like some niche cutting boards and like carving and tuning forks. But that's been. Yeah, it's been a good, a good like, addition to this year without like, like, do you guys have your whole entire sale right now? Because like, ours is obviously okay. Full sales rolled out so very. So still pretty different. But yeah, I think this is something we'll continue to do is like, let people get their Thanksgiving products as early as they. As they want so they can just like feel good about that. Cody, what about you guys? How are the. How are the holiday kits looking?

Cody (6:18)

They're good.

Connor (6:18)

They're.

Cody (6:18)

They're good. October was like, great. We actually sold out of our October kit on the day of holiday so couldn't have timed it better, maybe one day earlier if I'm, if I'm being picky, but I'll take it and then. Yeah, it's good. Through the first five days we're up like 32% on the collection compared to last year. So, you know, good. But we're definitely in like a waiting period. So we're below, you know, expectations overall, but haven't, haven't launched sale yet. So it's our first sale. I think we forecasted it pretty conservatively, so hoping it's a, hoping it's a good ride.

Connor (6:52)

Do you guys have a, do you guys have a pulse on how other people are feeling about Black Friday so far? I know it's really early and we mostly want to focus on like week of Cyber5, but I keep seeing comments on Twitter specifically that like things look soft year over year.

Cody (7:07)

I feel like they're. Yeah, that, that's what I've seen. And, and I do think they are like, I do think they are from data I've seen even when, like, even when your reps, you know, from different channels start a conversation with like economic data of like not forecasting really growth for the, the sector and stuff. Like you know that's, that's a sign, you know, they almost, they probably are normally trying to upsell things and, and try to, you know, build optimism to get you to spend more. So when they start with that like it's definitely a telling sign. I think there's some, I always feel like there's some like self serving bias where like usually people on Twitter are either very positive or very negative. And then in like group chats and slacks it's usually like very negative. But I'm definitely seeing that more seeing in some chats with, with nine figure brands a lot of early softness, softness compared to, to prior year.

Connor (7:54)

But look, government's back open. Stimulus checks are rolling out.

Aaron Orndorff (8:00)

Is this going to be the perfect timing for every E Commerce brand in the universe or in the US at least? Can you imagine if like November 15, like everyone gets a $2,000 check, like every E. Comm brand in the US is going to absolutely pump.

Connor (8:14)

Yeah, yeah, yeah, we'll see what happens. Scott Besson's been like back and forth on what exactly is happening. But yeah, government back open, seamless checks may be getting printed and then you know, the McRib is back, which is, which is correlated with strong economic gains.

Aaron Orndorff (8:27)

McRibs back.

Connor (8:28)

The McRib is back.

Aaron Orndorff (8:30)

Since when?

Connor (8:31)

Like the 11th yesterday.

Aaron Orndorff (8:33)

Oh my God. I just Missed it. I had a fat McDonald's breakfast last week and I got my first ski day and stopped at McDonald's on the way out to the. To the resort. And man, if I would have known the McRib was there, I would have crushed a McRib at 11am Hilarious. Wow. All right, that's good to know. Cool. Well, let's get into it. We got some fun stuff today. Before we do that, I want to thank the sponsors. Motion, Prussian, AI Rich panel after Style and House.

Cody (8:59)

Hey, Connor, I don't know if you know this, but there's a lot of talk about creative diversity right now on all platforms. We've been talking about it a lot. Andromeda, I don't know if you heard about that. It's apparently a. A Greek legend, a Greek myth, but I believe it is something that Meta has done that. Obviously. Obviously. I'm kidding. But everybody's talking about creative diversity. Everybody's talking about Andromeda and how the game has changed. We are all focused on it. I think there's not a DTC operator who does not know it at this point and how important it is. And being able to test, measure, do creative diversity, get a high volume of diverse assets is really the name of the game. And I'm super excited because Motion has just rolled out AI tagging, which helps to simplify as our volumes go and diversity is going up, we have more different types of styles. I know you're a big name and convention guy. I know that you think they're the heart and soul of DDC brand. But another casualty of the AI era, Motion now has AI tagging, which simplifies all of your reporting. Automatically tag stuff just makes it easier to splice data. I know you were just saying, actually you sent it to your team. I sent it to my team. What are your thoughts on AI tagging so far?

Connor (10:01)

Yeah, no, totally. And Motion's premier sponsor, we're supposed to say nice things, but legitimately, as soon as I got the video from them, because we got early access, sent it right to my team. I'm like, this is. This is the way to go. It makes the comparative analytics just so much simpler. I was just looking at it this morning. Bucketing between ugc, Lifestyle photo with text, product photo with text, all these different breakdowns that we used to have to labor over to tag and automate and then. And then break down the reports by those dimensions. It's all kind of working out of the box. So you got it totally right. We were talking about creative diversity all the time. Producing that I think is a big challenge for brands right now. Analyzing that just as big of an issue. And AI's motions AI tagging system is a great solution for it. So if you want to check it out, go to motion app.com and let them know that the marketing operator sent you.

Aaron Orndorff (10:53)

All right, let's get into it. So we are talking about like intraday pacing today. I think the episode prior we talked about how we go about setting our daily pace. Now we're going a little bit more granular and talking about the intraday pace. I, it's pretty easy with revenue, right? Like Amazon and Shopify have pretty, you know, especially Shopify, but even Amazon has pretty solid hour over hour pacing. And like you can tell like how close you're going to get to your total daily target for the day just by following those hour over hour trends. So like, I don't know if you guys have anything different that you're doing when it comes to the, the revenue pacing, but we're, it's very simple. We're just like keeping keeping tabs on how we're trending hour over hour and trying to understand like, hey, based on our current pace and based on any like, like how we expect this to kind of like tail off towards the end of the day. Like we think we'll come in plus or minus this against our, our total revenue target for the day. Like and then we're also using that and we'll get into like the, the hourly ad spend pacing. We're then also using that to kind of calculate like hey, how are we seeing like any massive efficiency bumps or drops in any specific hour? Same with cac. But are you guys doing. I think we should spend most of the time on the ad spend. But like Connor, maybe you can start off like with the revenue. Are you doing anything other than what I just talked about in terms like the hourly tracking?

Connor (12:11)

No, that's exactly. Yeah, it's, it's actually, I mean from like a Google Sheets formula perspective, it's the exact same as we do on a daily basis. But instead we're just doing it for the, the, and we'll, we'll start the hourly pacing on Wednesday. I think we've like, we also started pulling that up. I think one year we even started earlier and that was like more work. The, the juice was not worth the squeeze if we were starting like Sunday before Black Friday or whatever. So we start a couple days early. It ends up being like 96 hours of hourly pacing and then we, we're looking at the accrual, right? So you can understand, hey, 6:00am Morning of black Friday, we were up or down year over year on a revenue basis. And then depending on when Your emails or SMS's are landing or how ads are performing or what your channel strategy is like, you can see differences. Like you could be down 6am and up 7am so then we're looking at it on an accrual basis where you'd say so far from midnight through 10:00am, you know, PST in this case we are up 5% year over year. We're spending 2% more, something like that. So those are really the only two ways that we're looking at it.

Aaron Orndorff (13:14)

That is cool. Okay, so you're actually, you are. So we're not, we don't have like a spreadsheet. We're looking at, we're just kind of like, like gut checking it, pulse checking it, but you're actually pulling it into a sheet and you're looking hour, like year over year by the hour.

Connor (13:28)

Yeah, year over year by the hour. And then, and then we're adding up all those hours up until that point to say ye, this, this far through the day versus this far through the day last year. This is where we sit with revenue and spend. And then what? We're doing that across all of our different markets as well.

Aaron Orndorff (13:44)

That is awesome. I frickin love that. We might have to do a working session with the rigid hexcloud team to see how you're building that out because that's pretty dialed. I love that. Cody, what about you? Are you, are you doing anything like that or what's your kind of like pulse check on the hourly revenue pace?

Cody (14:00)

We have a dashboard that updates pretty much, you know, instantaneously. So we used to do it where we would have like a spreadsheet before that and like every hour we'd put in, you know, our pacing. So we're not really looking at like hourly pacing. Like this is how much we spent this hour and this is our revenue this hour. It's more of like, you know, here's how we're pacing for the day and then we'll, we'll compare that to comps. But honestly, going back a second, like how do you guys set your budgets to begin with? Because what we do, we have our forecast, we have our, you know, our spend, our mer mer for each day. But obviously it is a guess. Especially like you don't know how it's going to perform espe. Especially if you, you change something right like, this is our first ever sale. Connor mentioned earlier, like, they moved their sale earlier. Like, you can't, if you used to launch on Black Friday, now you're launching a week earlier. Like, your, your first day is not going to be equivalent to the first day, but also your Black Friday is not going to be. So hopefully that's taken into account for your forecast. What we do is we'll, we'll take that. We'll look at historical. As we forecast, we'll look at, you know, subjective changes based on what we think will happen. And then depending on how we're pacing for that month and how we'll, we'll, we'll take a bet on how aggressive we want to be. So we'll say, hey, like for holiday, this past, you know, time, the, the launch before it did great, we crushed it. We thought we were doing a lot of the right things. We, we felt good about this collection launch. So we're like, all right, we're, we're going to err on the side of being aggressive, you know, based on our MER targets, based on our revenue targets. Like, let's spend at least this much and like, let's get our daily budgets on all channels loaded in there to hit that. And we'd rather start high, go high, which are some pretty big bets, you know, because they're going to be million plus dollar days. And then we'll just look at pacing in this dashboard every few hours. Really every. Honestly, it's actually probably refreshing. Every five minutes for us is what we're doing. But. And then we'll just make a call. But I think I'd rather overspend, hit it hard from the beginning and then pull back. But how do you guys think about that or look at it?

Aaron Orndorff (15:56)

Yeah, so, so let's, that's a good transition. We should go into the, into the ad spend stuff because I think that's where this is where like the horror stories can happen. This is where you can get like, you know, halfway through the day and you're like, wow, we just burnt like we're 75 through our budget or, or the opposite. Like we're, we're three quarters of the way through the day and we've only spent 30 of our budget. And we're also like, definitely going to come in under our revenue target like that. So, so we are. A few things we're doing. So first off, we use North Beam. I think everyone here uses Northview. I'm pretty sure Northview updates every 15 minutes. Like, we are getting very granular budget pacing on all of our core channels that directly integrate with North Beam, which is like, I don't know, 70 of our budget maybe or something around there. So like, we are updating that very regularly to say, hey, like and, and really looking at meta as the core channel and saying like, hey, if we're going to spend, you know, especially on, on like our Cyber five days, we're going to spend seven figures on meta alone and like mid seven figures as a whole. Like, we're really using meta as the leading indicator to say, like, hey, if are we pacing well with meta, like, and it's, it's kind of a gut check, right? You're like, all right, we're halfway through the day. Like, are we 40 to 50% of the way through our budget? Like, that would seem to make sense. And then comparing that to revenue, it's like, all right, maybe if revenue is really pumping in those last few hours. And we're also spending up on meta, like, that's, that's fine. And just making sure we're not like blowing through budget, but our revenue is not trending in the same way. So we're doing those like, you know, looking very granularly at North Beam and updating that regularly. The other thing we're doing is we're moving our, we're like increasing the frequency of our data poles with our data warehouse and just like data partner Sara. So like usually they're pulling, they're like refreshing that data like a few times a day. We will, during this period of time, like basically from when we launch on Friday, start doing hourly polls. So we'll also have that data getting pulled directly into our data warehouse, which that's even better because that's going to have all of our revenue data, that's going to have all of our CAC data. That's going to be probably the best spot for us to understand like, how are we pacing throughout the day right now and being able to update it regularly? So that's like the biggest north themes are already like, you can update it every 15 minutes. But that's the big change we're making is like having our data warehouse just pull those updates quicker so we can see how we're pacing more granularly with all of our key metrics. So those are like the, the big changes and how we're going about it. What about, what about you guys?

Connor (18:27)

So I'm, I'm on Cody's question around, how are you setting budgets? Because I do think this is an interesting one. I've talked about this before. It really depends on the type of brand.

Aaron Orndorff (18:37)

Right.

Connor (18:38)

Like, let me ask you guys this. We just need ballpark numbers. How much high. Do you guys know how much higher MER will be on Black Friday versus the month?

Aaron Orndorff (18:47)

Oh, God, not a ton. Not like, not like 2x.

Connor (18:52)

So that means you're, you're scaling, you're scaling budget significantly on the day of Black Friday.

Cody (18:57)

Depends how we spend into it.

Connor (18:58)

Yeah, exactly. So that, that's, that's my kind of thing. So, you know, airing on deciding as a brand, do you want to err on the side of caution or on the side of being aggressive? It kind of depends on your MER targets. Like if you're already, if you're already baking in aggressive projections, which Ridge has done, and I've said a number of times, I think there, there are absolutely times in the past where we've overspent on Black Friday and I wish I could get some of that money back and have just taken a higher MER and more, more efficiency. We are going to err on the side of caution, most likely this year, be more conservative, and then we'll scale up throughout the day. But if I'm a brand that typically is at a 6x MER on Friday, and I actually think that I can, I can blow revenue projections out of the water, then I could totally imagine being more aggressive. But that's really depending on your, your starting point from an M perspective, I think can dictate how aggressive or how conservative you want to be because it's extremely easy. To your point, Connor, if you're too aggressive early on, you'll just never make that back through the rest of the day and you'll have misspent, you know, a couple hundred thousand dollars.

Aaron Orndorff (19:58)

Yeah. Yep. Yeah, definitely. And like, that's where, like, revisiting one of the things we talked about in the previous episode like that, that Roas left KPI, like, that's one of the things we're really leaning into, to be more confident in spending up on that day because we have, yes, Black Friday is our biggest revenue day, but we also need that spend to work for us throughout the rest of the year. And like, we know that that, that spend on that day matures really well throughout the last 35 days of the year. So we're going to, we're going to spend up here. We could, we could spend half of what we spend. I don't know how much revenue we would miss and like, make our MER look juicy, but we're probably also going to hurt ourselves In. In trying to hit our December revenue, too. So it's like, what's. What's that balance? So, yeah, it's. It's tricky, though. It's. It's like, it's. It's a very imperfect science. You know, you're just taking the best, most educated guess you possibly can.

Cody (20:46)

Yeah. I mean, you're taking a bet either way. Right. And I think what's important is like, like Connor mentioned, like, knowing where. Where you want to bet for that moment in time for your brand. Like, sometimes we'll be more aggressive and I'll tell my team, like, let's go, let's. Like, I'd rather miss on the side of being more aggressive, you know, if we have to. And then other times it's like, hey, like, let's really focus on efficiency here. Like, we're not after growth. We're after max profitability. Like, let's be a little conservative and it changes. It's not like we're always a brand that's going aggressive or vice versa. So, like, depends on how your month or your quarter is pacing. Depends on how your growth is pacing. Depends on, like, inventory as well. You know, if you're out of inventory, like, definitely you should. You should probably, you know, take all the margin you can get. But I think, I think con, like you said, like, it is so, so imperfect. Like, it's a bet we're making. We're making guesses and we're making, like, probabilistic bets. So I think empowering your team to say, like, hey, like, it's okay if you miss. Like, we don't have to get it perfect, but, like, we're aligned that we're going to take those bet and we're going to go this direction, either more aggressive or less aggressive. But I find it is easier to spend, especially knowing those Roas lift metrics. I'd rather hit it hard early at the gate knowing you get a longer lag there. Right. You. You a. You maximize any potential upside. Right. Of. Of, hey, we're not holding oursel back by spending too little. And then you can just spend less later if you're not as efficient and hopefully you do get a row lift. So it kind of compounds versus, you know, spending what, what I think a mistake we've made in the past is spending a little bit less, having more demand, trying to catch up. Now you're trying to, like, change budgets. It's much harder to increase them. You're Connor, you talk about a lot of getting that weighted down mer where you're not really spending super incrementally now. You're, you're pacing for the second half of the day is so, so much higher in spend and it's probably not the most efficient spend or your back half when your ros lift is, is lower. So that's my preference, is to start strong.

Aaron Orndorff (22:42)

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Connor (24:39)

One thing I'M excited about and I'd love your guys's take on. We're going to nail this down tomorrow, but we should be able to do a, we're going to do a scale up test week of the for Cyber five. So we'll do it. We're not going to do it for our main EDC business because that would be like too disruptive. So it's either going to be EDC in Canada or it's going to be rings in the US Which I think are both like good enough sizes that will get enough signal. And I'm hoping that we could basically leave this period and say yeah, how incremental were those dollars through this week and particularly on Black Friday. We scaled last year on Black Friday we scaled up 70% day over day in terms of spend. I think it could be very possible that a more optimal scenario for us is to scale up 40% day over day and then, and then it's actually we're just going to take a much higher mer and those last few dollars spent are actually not nearly as profitable as. As they could be. So that's the plan. What do you guys think? Any, any feedback or have you guys done anything similar in the past?

Cody (25:36)

Just some, some questions. So this is meta or this is everywhere?

Connor (25:39)

Oh yeah, good question. For the sake of simplicity we would just do meta and for EDC Canada and rings us it's like that's 70, 75% of the budget.

Aaron Orndorff (25:47)

We did this exact thing last year because to, to your like going back to what we just talked about about the, the spend maturing while we were trying to also validate like hey, is this been still incremental like right now like in this moment and, and later on and it, it really was like we really, we saw in oh my God like some of the best cost per incremental orders we've seen. So like we're not doing it this year because we have a few other tests, like more macro tests. I think I talked about like our YouTube and CTV scale up tests that we are running and we're doing observation windows through like we're actually ending the test tomorrow and then doing the observation window through the next two weeks. But we, we had the same thought last year because we're always trying to like hey, could we spend a million less on Black Friday and still hit our revenue targets? And I think the answer was no like based on the cost per incremental we saw, which was like some of the like the top we've ever seen. Like it's like that spend is actually very incremental during, during those actual peak moments. So I think it, I think it makes total sense they are doing that. I think it's like really, really actionable for all of your sale periods. Like, do we spend up during periods? We answered yes, we should spend up pretty aggressively during sale periods.

Connor (26:55)

Do you know what time period did you do it for last year?

Aaron Orndorff (26:58)

Yeah, let me, I'm trying to, let me load up House real quick and, and pull it up. When are you run running yours?

Connor (27:05)

Like, so we have, we have tests running up until the week of Black Friday. So we'll get those readouts and then that will help us like set budgets for that week a little bit more scientifically. And then this test that I'm talking about now is like literally just the, the Cyber five days.

Aaron Orndorff (27:21)

Yep. So we did our. So we didn't do it in meta because we were like, that's a little, it's a little bit risky. So we did it in YouTube and TikTok and we ran both of them from the 27th through the 10th. So the 27th of November through the 10th of December. And like, yeah, I'm just looking at our cost for incremental orders, like in that, that performance chart and these two tests, like by far have the best cpia, like by orders of magnitude. Yeah, it was very interesting.

Connor (27:52)

Yeah. And honestly, I would love to get that readout that our scaled up sell actually is more profitable than the scaled down sell. But I am super excited about just getting any sort of clarity there. We've been doing this for so long and we've basically aired on the side of aggression for a really long time that generating that profit, in my opinion could be going either way for us.

Aaron Orndorff (28:11)

Yeah. Yeah. I guess the other thing you would have to do is more of like a period over period, like, hey, we just scaled up by x percent day over day. Are we seeing our first orders scale up like linear to that or is it, is, is it not linear to that? And because you, you don't need a, like, I think House is the best way to validate these things. But if you don't, if you're an eight figure brand, you're like, we don't have House yet. We're on three channels. Like, you can do these things just like period over period and just understanding like, all right, spend 1 up 40 from the previous period that like first orders also go up 40 or to go up 20% and like, that's kind of uncovering the same thing that you're uncovering with House is like are we seeing diminishing returns on that spend? But now the tricky part is like did you, did you measure it for long enough? Did you let that ad spend mature for long enough? And it depends on like you know, if you're hex glad you got to do that for a longer period of time. If you're right, you know, selling a $60 AOV product like you should probably see that almost instantaneous like in a period over period manner.

Connor (29:09)

So, so that was going to be my second point. So what do, what do we care most at Ridge going into to this Cyber5 period? 1 Ideally we're running this 2 segment holdout to do a scaled up test. We can get the incremental roas on the additional spend. But then the second one is more what you're talking about which is, which is very, you're looking at things at a very granular level. You're not doing necessarily, you're not necessarily doing holdouts.

Aaron Orndorff (29:33)

Right.

Connor (29:33)

So the other thing is we do and I'm sure you guys are in a, a similar bucket. Like we'll meet every two hours with the paid media team and at times of the day we'll use our hourly pace and we'll say hey, we're pacing 5% above target and we're pacing at spend at our spend target. So let's spend 10% more. Now if we spend 10% more it's extremely important that two hours from now or four hours from now we're making sure that we are now beating our projections by more than 5% y because to all, all the points that we're making it's, it's very easy to be like you just blend down your results. You're not actually driving incremental revenue in that period. And that's what you're talking about period over period. I'll be, we'll be doing it on an hourly or like bi hourly basis. And that's, that's really where the focus is going to be to make sure that we are driving as much value as possible.

Aaron Orndorff (30:19)

Yeah, yeah. That's why I like having those like contribution margin flow charts because I think it makes like to your point it's like hey we're, we're at spend forecast for let's say 10% or 20% above Rev and like having a map where you have like revenue on one axis and efficiency on the other axis on the other axis and in the middle you have like contribution dollars. And of course you need to apply some like General assumptions about like costs and then like, all right, let's say it's 30% non marketing spend costs and we're subtracting out the ad spend. I think that's where those decisions become a lot easier when you can be confident in saying, hey, we're actually better to do 15 million in revenue at a 6x MER than we are to do 18 million in revenue at a 4.8x MERCK. Like from a net like bottom line contribution margin dollars. And I think that's like, that's the math you're always doing is like, dang, should we, should we push more aggressively here and be less efficient but do more revenue or hold on, let's do less revenue, be more efficient and like that's the most branch probably. I mean blanket statement but like that's what we optimize for is not, is not profit percent. It's, it's total net dollars. Like we'd rather drop a few percentage points if we can totally, if we can grow our net dollars where this gets even.

Cody (31:34)

Like I 100% agree. Like I'm, I have a whiteboard. I wish I could show it, but I literally have a triangle of like our hierarchy of stuff because like contribution margin, AM revenue, but also inventory. Right. So I, I don't know how much this is applying to you guys. If you have anything limited edition, but you also have cash flow consideration. So it's like you're actually going beyond profitability and contribution margin. It's actually like, you know, cash flow and balance sheet. So it's like, all right, well am I actually willing to take a lower return on this? Because I want to move through this inventory that is limited edition that is just literally going to be stuck on my balance sheet sheet if I'm not able to move it.

Aaron Orndorff (32:08)

Yeah.

Cody (32:08)

And like we'll go as far as setting different, you know, like our, our media buying approach changes. I want to talk about like bid caps here. I'm curious if you guys do any of it so I can share our strategy and how we, how we go about it. But we'll set like different big cap targets based on what our demand plan team is telling us about, you know, inventory. And we'll, we'll definitely take a different target on, you know, a different campaign for different, one of our different collections.

Connor (32:33)

If that makes total sense.

Cody (32:35)

So I think that's like a higher level thing.

Connor (32:37)

Yeah. So I'd love to talk a little bit more about what your ad account looks like. So you're saying more or less campaigns by product. So you might have a certain kit that's limited edition and you will set different bid caps. The what you're willing to pay for each order of this limited edition kit, depending on what inventory is.

Cody (32:53)

Yeah, I'm pro consolidation as much as possible. So we still have like Black Friday holiday stuff sprinkled through our main campaigns. We have one big ASC that has like all of our holiday stuff in it. But then we also have, I would say, honestly, the highest spend campaign lately is our bid cap campaign. And we'll have multiple ad sets in there, and those will have different targets there.

Aaron Orndorff (33:15)

Got it.

Cody (33:16)

And so that's where we'll split them up a little bit more just based on either how we need to set a different target based on like a AOV or, you know, just a back into a ROAS or based on inventory. And so that's like our main lever to control that.

Connor (33:28)

That makes total sense.

Aaron Orndorff (33:29)

We're not, I mean, we're just like lowest cost. We don't really have any. We should talk about merchandising maybe a little in a little bit because we are definitely, like doing a lot of like, merchandising updates throughout the sale, but we don't have that. That like, seasonal product quite the way that you do, Cody, where it's like if we don't sell through these, it's like we're not going to sell them again for the next year, so. Oh.

Connor (33:50)

Because, you know, just to say this explicitly, Cody, what you're saying is you'll have, you'll pay more for a customer buying your limited edition kit so you can move through it so you don't get stuck with it. But if you guys are selling the standard miracle bomb that you're happy to hold that inventory and you're setting that bid cap much lower.

Cody (34:06)

Exactly. Yeah. Yeah, exactly. Because we pretty much, we want to be out of it. So, you know, profitability is very important. But, you know, if your target is a 1.5 on something and then you're like, hey, we got 50,000 extra of these. Well, all right, maybe I'll, I'll. I'll sacrifice a little bit, you know, because, because, because there are cash flow considerations there as well. It's. It's. I can't imagine. We're, we're really fortunate.

Aaron Orndorff (34:30)

We're.

Cody (34:30)

We're very profitable and we have like, really strong balance sheet. And I still, like, when we buy these things, you know, for like these limited edition things, it's still super stressful and I lose sleep over it. And like we're in a really fortunate cash flow position. I can't imagine like, I'm sure for some brands it's like, you know, they're, they're making really, you know, they're making purchases that they have to like they have to move their inventory or they're going to be. I just can't imagine how stressful that would be.

Aaron Orndorff (34:55)

Imagine being like last crumb, like, like last crumbie and a perishable item. Super seasonal. They do like all the, you know, the seasonal Christmas and Thanksgiving cookies, which are fantastic by the way. Like I almost every year buy one to, to bring home with to my family. But like that's got to be such a hard job. And it's like, what do you do if you have 5,000 leftover of these Thanksgiving cookie packs? Totally.

Connor (35:19)

And I'm sure, I mean, I feel like those types of brands end up typically under ordering inventory, ensuring they'll sell through, ensuring that they, that they're not getting stuck with a bunch of, you know, out of season inventory. But because of that, they're like massively capped on their ability to grow. Just because it's like really hard to like find the optimal scenario where it's like, hey, we're buying enough so that we can scale aggressively but not too much that we don't get stuck with any of this. It's like an impossible line to walk.

Aaron Orndorff (35:47)

Yeah, it is. Yeah. Demand planning is like so hard.

Cody (35:50)

Yeah, totally.

Connor (35:51)

And that's why a brand like Ridge would be super aggressive is because we're going to have these gunmetal wallets forever. So it's like, yeah, we could be, we could be hyper aggressive.

Aaron Orndorff (35:59)

Yep, yep, same here. It's like, oh, if we, if we ordered 120% growth in eyes, but we only hit 90 or 100, it's like, okay, we're bummed because we want to hit our target, but like we'll sell through that inventory in the next quarter. It's not part of, not going to spoil.

Cody (36:14)

When our holiday collection didn't do great last year, part of the feedback was like it does didn't feel holiday enough. So we did like the best creative we've ever done, like very custom packaging, like everything. The only negative of that is that you can't reuse that in the summer.

Aaron Orndorff (36:28)

You know, you can't use it.

Cody (36:29)

I mean you could bring, do a bring back and stuff and like keep it live for a little bit longer into January. But yeah, otherwise it's, it's pretty much just a write off. Past a certain part.

Connor (36:38)

Is this the kit that you guys launched last week?

Aaron Orndorff (36:40)

Yeah, yeah I was actually gonna say that it it's like it's very holiday looking without like the junior like in the in the red box makes it very holiday. But you didn't veer to like putting like Christmas wreaths on it. Like I thought it was like a good balance of keep of making it feel holiday but it's still like 100 branded like with Jones Road which I thought was was cool.

Cody (37:04)

Yeah tried to hit our version but even like the miracle bombs are coming in different stuff. They're coming in like clear packaging with silver. So you know I think feels like and sell it year round but like that's what it feels like.

Aaron Orndorff (37:17)

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Cody (39:07)

You know, listen, enough demand planning. Let's talk media buying again on. On big caps. I'm a fan. I, I at least love it in theory. I think, like, have your guys meta reps pitch you like the ABS strategy, which is like the bid cap strategy, where you have, like, we. We've been, we've done it for years. We. It wasn't working for a while, but so it's essentially used to be like inflated budget strategy or inflated bid. And it was ibs. And I was like, guys, you need to change that name. So I think it's ABS now. I don't know what. I think it's like accelerated bid strategy. So it's, it's essentially a really high budget and it's not new like this. Been around for a while. It's a really high budget bid cap campaign. You can set where it's like, I think we set it like a million a day, maybe even higher if, like, we think we're going to spend something close to that. And then you set your bid at, you know, obviously what you're willing to pay. And what that does is it removes the pacing mechanism. So if there's like a lot of demand early in the morning on Blackfire or something like that, normally you're. You'd be held out of a bunch of the auctions because you have to keep that budget that you have throughout the day. This one, because your budget's so high there's no pacing mechanism. And so you can kind of go after any potential person that, you know, the system thinks you can convert at that level. Um, and then if you really want, because, like, if you don't, if you're worried about overspending because it, it does happen, you can set an ad set max limit that like, you shouldn't spend just as an insurance. So we've, we've done this and I think it's supposed to be more for a, a peak period, which I love because, like, I remember on one Black Friday, like two years ago, like, I think we spent like almost a million. But, like, I'm not, I'm not comfortable enough to go, like, all right, lowest cost, million dollars. Let's just set it and forget it. Like, I don't, I don't have the balls for that. So I really like this to capture more of the potential upside, be aggressive, but hopefully you're not spending if, if it, you know, performance isn't there. So I'm, I'm a fan. It works for us.

Connor (41:03)

Do you guys launch. Do you guys run that strategy throughout November or is it something that you'll kind of focus on just for these, the highest volume periods like Cyber5?

Cody (41:14)

No, we actually run it like pretty much Evergreen. Now I, I know it's not intended to be that way. It just works for whatever reason. It's our highest spend campaign and it's our most efficient. I don't know, maybe it's, you know, some of the mechanism. So I know it's not the intended, but it works for us. I'm not like dogmatic about big caps. Most of our, you know, most of our campaigns are on, are on, you know, low cost. But it works for us and I like it. But there's, there's some things you got to look out for. Like when conversion rates fluctuate, like I did this one year when we were first getting to big caps, you know, your conversion rate will go way down. Like Tuesday, right? Or even Monday. Tuesday. Well, like Meta doesn't know that it's going to go down and so it's going to bid based on what your previous few day conversion rate was. And so you'll like, you can overspend very significantly and like come in way above your target cpa. And so what we'll do is we just have to like get ahead of that and like aggressively bring bids down when we know conversion rate is going to drop, but then vice versa. Like if the last few days you had a 3% conversion rate and now you're going to have a 7% conversion rate because it's like day one of the sale which is will actually like overcorrect and actually like bid significantly higher for like a day or two.

Connor (42:20)

Yeah, that's interesting. You know Google has, and this is a good tip for cyber 5 week because I just think it's best practice to put in place. But Google has seasonal bid adjustments. You can actually tell the Google Ads platform, hey, we expect to see we want to bid 40% higher on the day of Black Friday to do exactly.

Aaron Orndorff (42:35)

What you're describing, Cody.

Connor (42:36)

We know conversion rate's going to go up, let's adjust our bids ahead of time. But you can actually like schedule it out in Google.

Cody (42:42)

Question about like so, so Connor, I think you have a note in here about like different channels, right? I'm curious like how you guys think about budget increases across various channels because some of them are, are super programmatic machine learning based where like you can just set a bid and it's like, hey, I'll set budget really high. And you could probably get a, I think you guys were saying like a 70% day over day increase or something like that of spend. And then some of them, right, are much more traditional. You know, you can't do that for an out of home, you can't really do that for tv. Like how do you guys, how does your media mix evolve? Like based, based on that? And are you spending as you increase budgets going into peak? Is it, is it concentrated in a few channels?

Aaron Orndorff (43:21)

Ours is. And then we also, the way that we, we have our media, we break out our media mix by period in the last 60 days of the year. So like we'll have a different mix when we launch on Friday than we have for the first 14 days of the month. Right. Like, well, we'll heavy up in meta, we'll heavy up in search. We'll heavy up in our and our more middle bottom of funnel last click channels. And then yes, we're not, we're not doing like if we, if we're gonna go from, you know, if we're gonna add $300,000 of spend or whatever from Thursday to Friday because that's when our sale launches. It's not like a linear, hey, let's just take the increase in spend and multiply it by the total mix and put that everywhere. It's, it's, we're doing a little bit more manual manipulation at that point in the year. It's like, all right, we might move meta up, you know, more percentage points and Google at more percentage points than we move up streaming tv, which is like both us just manually manipulating it and because our media mix is changing for the most part though, like, like our vendors, they know like any vendor that's doing the media buying for us, that's not internal. So like ctv, which like we have a managed service for that linear TV out of homes, its own separate thing that's like we're not looking at it the way that we look at all these other channels. They, they know our daily budgets. Like they've seen them, they're in hand. They've had them for a few weeks at this point. So they, they're very buttoned up on. Hey, on the 14th, like we're moving our CTV budgets from X to Y. And then we're just checking in at the end of the day to make sure that there weren't any discrepancies there. So like we've just gotten ahead of it enough where they know how we're going to pay us. And then if we have any changes because like you said Connor, we'll meet with our media buying team like daily or every other day and kind of just run through like how do our benchmark, like our click based benchmarks look or how do our clickbait metrics look against benchmark as well as year over year. And then we might do some manual, some more manual manipulation. Manipulation and then we'll just like adjust the spreadsheet that every vendor has and they'll see that. So like we just have all of our daily budgets in a single sheet and share that with internal and external partners and like we've found pretty good just like pacing success because of that.

Connor (45:31)

Yeah, we're, we're very similar. The, the non programmatic channels like a linear or an out of home or something are naturally in this period as we scale going to become a smaller percentage of budget. Like if we have, if we're able to spend. We've actually seen a ton of success recently on linear DB and let's say it's 6 or 7% of total budget right now. There's just no way we can commit to maintaining that percentage of budget while we scale budgets 400% or whatever. Right. So it's like it naturally we are increasing budgets but as a percentage of total it's actually going to be probably half of what we were at in October. And that's just like, I mean even from like a payment perspective we have, we have net 30 payments on a, with a handful of networks on linear tv but like the idea of prepaying for hundreds of thousands of dollars of spend in a given week just doesn't make sense. So it's like yes, that sort of channels naturally at a disadvantage versus everything else. So we err on the side of these like to adjust channels like influencer, linear. Yeah, out of home I'd, I'd put in all of those buckets. Then what we'll be looking at week of Cyber5. I mentioned the house test that we'll have going on our two biggest channels. That'll be, we expect that to be YouTube and Meta. So we'll get those readouts going into the week and adjust budgets accordingly. That's the most scientific adjustment we're going to do. And then it's exactly what Conor described where we'll be looking on an MTA basis. Where are we relative to benchmarks and then yeah, depending on what we're seeing kind of reallocating from there on a, you know, maybe daily basis or so.

Aaron Orndorff (47:00)

How, how do you think about it, Cody?

Cody (47:02)

Yeah, definitely Similar.

Connor (47:04)

Right.

Cody (47:04)

Like, let's say we wanted. I'm just making up a number, Meta to be, you know, 60 of our mix for November. Like, we're probably 80% for black for like the Black Friday sale period. You know, I do think we have some more channels now. Like, I think Applovin, if it performs that can scale, you know, if you have performance there. Again, I don't know the cap and incrementality, but, like, at least that is more similar to like the, the modeling behind it. YouTube can. I don't, I don't. I don't know. I don't find YouTube can scale like as rapidly. It's like somewhere in between like a meta and a tv, I feel like.

Connor (47:36)

Are you talking specifically like day over day? Because I would agree with that a lot.

Cody (47:41)

Yeah, yeah, like, like, like you. You can scale it and you can definitely increase it more than you can a tv, of course. But Right, but like, you know, you. We can go from spending 50k a day on Meta to 750k.

Connor (47:52)

Totally.

Cody (47:53)

And you can. YouTube, you could probably go from 10k a day to 30k a day maybe. And that's like, that feels like a big one. So usually when we change YouTube, it's like twice a week and it's like, let's set it and hold it. Something like a TikTok. I don't know if you guys are spending like, we're spending so little there that even if we triple budget on TikTok, it's still like pretty meaningless in the grand scheme of things. So that's why meta is just like by far the biggest lever here. And then, yeah, everything else is like podcast TV influencer, you know, linear. It's just. Yeah, completely agree with you. We will think about increasing them, like, as much as we can, especially for, like continuing to keep funnel full and stuff like that. So Meta doesn't become like 90, but yeah, you just don't have the same liquidity in it we had.

Connor (48:37)

I mean, last year we struggled with meta a lot and I've talked about this quite a bit and we're luckily seeing much better success so far into the period. But yeah, I mean, meta was like, I think it got down last week, week of Cyber5 to like, I think 50% of our total budget, 40% of our total budget. Which is just to say that that shows how much we had to scale. It was like Snapchat, AppLovin and YouTube we spent a ton of money on. And they scaled, they scaled pretty decent. Last year we ended up hitting all the results that we needed to. It was just kind of ugly along the way. But yeah, there's just no. Linear TV was never a part of that discussion. We were never like, let's double the linear TV budget to make it for, you know, a poor performing.

Cody (49:17)

You could do the Shopify and just like, buy the sphere that day. Totally.

Aaron Orndorff (49:23)

There we go. Yeah, I'm looking at our, like, daily pace right now, like, when we go from Wednesday to Thursday. So, like, from the day before Thanksgiving into Thanksgiving, like, we're tripling Meta budgets, but we are only increasing other channels by like Applovin, for example. Like, we're definitely scaling it, but it's only going up by like, not even 2x. It's like 1.85x. So, like, definitely not a. Not a proportionate amount of scale. And then like, you can. We also have like, the. The percent mix by channel too, which is kind of interesting because you can see meta goes from like, you know, 40 to 50 leading into this period. And then it's like cranked up to 60. And then like, applovin also is a larger percent because we see a lot of, like, last click there. And then you'll see some of the other channels that are more like demand gen going down a percent and not scaling as aggressively.

Cody (50:15)

So I remember, like, right around Christmas time, when most people should probably normal people were like, off taking that, taking their time, chilling with family. I was like, looking through our P and L, our budget for next year, and I was like, how are we going to save money? And one of the things I did is I leaned on a lot of our partners. And I remember slacking a meet from Rich Panel and I was like, what can you do? How can you help us? We had just switched to Rich Panel a few months before, went really well. And I, I told him jokingly, by the way, I want to throw it out there jokingly, that if he could help cut about 500k from our customer service costs, I'd get a Rich Panel tattoo. Well, we did that. You've probably seen a tweet. He did some AI thing of me with a neck. Neck tattoo. I'm not gonna do it. Sorry, Amit, but I will talk about how much I love Rich Panel, how much Amit has helped us. So we had 18 support agents before. It was a lot. And it just was not scalable. We had so many people. We had this, like, old legacy software that was slow, it was broken, it was expensive, and it just took too many people to operate. So we not only made the switch, but Amit and his team really helped us. Now we have eight people and we have a much better CSAT score. Our numbers are way better, our response times are way quicker. We're leveraging a lot of autom, a lot of AI, but again, it has not hurt customer experience. We track and I get a weekly report of our csat, of all of our stuff, of our nps and it's going up because we're actually able to get back to people, give people better answers. The automation learns from our best agents. So it's just continually is getting better. We switched to Rich Panel about two weeks before Black Friday. Might be a crazy thing to do, but it was super easy. We came out of Black Friday for the first time in three years with no ticket backlog. The software and support has blown us away. I highly recommend you switch. If you do it and they save you a lot of money, you should probably get a tattoo. But it's not something my wife would let me get away with. But yeah, if you're running an E commerce brand, I highly recommend you switch to Rich panel. You'll be able to leverage their software, save money on software costs, which is great, while saving a significant amount of money on personal costs. So if you want to go into Q4 with a leaner, smarter support setup and come out of there without this crazy tech backlog, just make your team happier. Go to richpanel.com demo, tell them Cody from our credit operator sent you and tell me you're ready to get a tattoo.

Connor (52:10)

So you have a, you have a channel spend forecast for Applovin for Black Friday right now?

Aaron Orndorff (52:15)

Yeah.

Connor (52:16)

Do you guys have that? Cody? We don't have that.

Cody (52:19)

Yeah, yeah, yeah, we do. I, I think the percentage is like we kind of just do it on the fly like we do. We have a daily total spend based on our forecast and then a daily split. But like when I set the media mix for a month, like I'm just putting just to keep it easier. Like, hey, meta is going to be fixed 60% for the month and then we just kind of like manually adjust and work around that to know like, hey, we're okay with less right now because we know it's going to be higher. I don't have it like in the cells as a different. If that makes sense. But, but we'll talk about it like a weekly standup. We'll be like, hey, what channels do we want to push on? What do we want to pull on right now?

Connor (52:54)

Totally, totally. Yeah, we do. Okay, so we have, we have monthly, obviously monthly total spend forecast. We have a monthly channel forecast as well. You could theoretically make that a daily forecast, but we don't have that like documented anywhere. And then we typically do it on a weekly basis. The Friday before, we'll set channel budgets for the following week. And then during the week of Cyber5, we'll be talking about it every single day and like resetting the forecast. Hey, you know, Applovin looks really good. So we're gonna scale into that Wednesday more than we will a, you know, X or something.

Aaron Orndorff (53:27)

Yeah. And this is just your starting point. Like we'll, then we'll have that meeting and be like, wow, AppLovin's 40% higher clickbase ROAS than we thought. Like, hey, we had 20k plan there for the day and like throughout the week, but should we actually crank that to 30k? And then you're. It's all zero sum game. Because we're still making sure we're. We're spending two budget for the most part. So it's like, all right, like, does meta look worse than we expected? Great, that's an easy swap. Let's, let's put 10k into app love and take 10k out of meta and like, have this kind of dynamic, this dynamic, like workflow and process going on that just keeps going until you, you're done with the season.

Connor (54:01)

Let me ask another quick question. Do you guys have. What do you think is a reasonable margin of error? If you tell your team, I'm going to spend $200,000 tomorrow and it comes in at 208, are you like, yeah, that's kind of par for the course.

Aaron Orndorff (54:13)

Yeah. Oh, God, yeah, Totally.

Connor (54:15)

Okay, then what is the margin? What's a comfortable margin of error? What if they tell you tomorrow that they spent 230 instead of 200 near 15 above above target.

Aaron Orndorff (54:23)

I'm not that worried about that, honestly. Like, we're gonna spend mid eight figures in the whole period here. So like if, if we start to get, if we start to creep into, like, hey, we just misspend by 50k and say, all right, like, let's, let's have a chat about what's going here. Like 20k, you can kind of make that up in a, in a day or 2, but like 50k plus you start getting close to it. Like we had a channel last year that overspent by 200k on one day. I was like, ah, like we had a chat with that vendor. Yeah, yeah, like that guy. We're like, guys, this Just can't happen.

Connor (54:52)

It's gotta be so hard to be such a big brand.

Aaron Orndorff (54:55)

That was like. I'm like, what's going on here?

Cody (54:57)

Like, what was that? Like, 2% of your mix for the day?

Aaron Orndorff (54:59)

That was. I'm trying to remember what day that happened on. It was a pretty big percent. It was pretty big percent.

Connor (55:05)

What about you, Cody?

Cody (55:07)

To me, it's all. It's all relative to. It's. It's. It's all variable. So it's all about, you know, performance. And so it's just like, hey, did we hit our contribution margin targets? Did we hit our.

Connor (55:18)

If. If you hit your revenue target. Yeah. And then you're. What margin of error will you have around spend? So it's like if you overspent, you missed your. It's directly coming out of your contribution target.

Aaron Orndorff (55:29)

Got it.

Cody (55:30)

So, like, assuming that's. See, I think in my mind, I'm assuming that the revenue target is not fixed and like all of our spend is incremental. Maybe it's like a wish list. So I'm like, hey, you know, if we're trying to spend 200 to make a million and we spent 250 to make 1.1, like, that's. That's good. You know what I mean? So it's. It's kind of like that.

Connor (55:48)

No, I'm talking about literally, like, like inarguably missing your contribution and profit target because channels overspend. It doesn't feel reasonable to be. Like, we said 200k and I wanted to be 200k on the dot. Like these. The channels are hard. We just had better spend slightly this week. Yeah, totally. So I'm just, I'm curious. Your guys's take, like, at what point are you like, hey, team, you. We got to be more dialed in than this.

Cody (56:12)

I'd say 20% if I had to say. Like, I've seen that before and have given like TV teams feedback.

Connor (56:16)

Cool.

Cody (56:17)

Of, like, of linear and. Because then. Because you are bidding on linear and. Right. They have to get accepted depending on the market.

Connor (56:23)

Yeah, linear is a tricky one.

Cody (56:24)

But I think there's times where I'm like, guys, I think I. I think we're overspending. And like, I'm not happy with the. The delta there. And then I think that's another one. As we were talking with meta budgets and setting them is just like, all right, let's all be aligned. Going into it, if we are going to miss, based on overall softness we're seeing, I would prefer for us to Miss under right now.

Aaron Orndorff (56:45)

Yeah, for sure.

Cody (56:45)

So it's also the direction too. It's actually not the amount, but it's also direction.

Aaron Orndorff (56:49)

Yep. Yeah, we had this over the weekend where we overspent on meta one day by like 30k. And like we had a monster revenue weekend. So it was like, okay, that's like. And the in platform stuff look great. So like, all right, not a huge deal. But the first question, especially for the channels we're managing, is what was the account set to? Like, was it set to 30k over? Right, because that's something. That's a. That's a human mistake. Was it set to the budget and meta just overspent and like, that's exactly what happened. I think it's a flexible, like code stuff like that overspent over the weekend and it was like, okay, like, that was not your fault at all. So that's the first question is like, oh, we overspent 550k. But like it was still set to the budget. So like that's out of our control. And that's when we'll go to the meta reps and say, depending on the performance, right? Like, hey, we think we should. We owe. We owe some credit here. Some like money back or whatever it is because you guys overspent in our account.

Cody (57:38)

And it's also like, hey, we. We overspent. We came in less efficient than we wanted, but we chatted about it throughout the day and we made a conscious decision that like, we wanted to see if performance would pick up or like we were okay to keep budgets high, you know, because we have, you know, row s lift. Like, that's how I look at. But yeah, I had an infl. Our influencer agency asked me like a week ago, like, hey, we're look for the month. It looks like we're going to come in like 3k above budget. Like, is that okay? And I'm like, yeah, like, that's inconsequential. Like, totally.

Connor (58:09)

It really comes down to the, the. The paid media stuff for me, where I think, I think for me it's like if we are hitting our revenue target but spend is coming in over 10, that's the max margin of error. I have that if we're coming in 15 over and because also this is under the assumption. We've been talking every single day, multiple times a day. Like the. The example is we spent. We spent like 180 the other day. The plan was we're gonna spend 180. We came in exactly at our revenue Target, we ended up spending just under 190. So we were at. That's 5%. Yeah, that's. That's fine. And, and it was exactly what you guys were describing early. The, like, flexible budgets on Meta just, like, spent a little bit more than we were otherwise, anticipating that totally within the margin of error. Otherwise, it's, It's. You get to the point where people just aren't adding up all the campaign budgets that they've set and they're not operating as dialed in as they need to be.

Cody (59:01)

But what time period?

Connor (59:02)

Because.

Cody (59:02)

Because with the flexible budget, stuff like meta can go. I don't know if it's 25% or 50%. Like, you might have a day where you're like, seemingly underspending or. Or over. Because meta is just kind of like, hey, we. We don't think it's the best time to spend for you right now. Maybe they're right. Maybe they're wrong. Are you saying, like, you'd rather override that and you'd rather, like, make sure you. You hit your budget targets for that day? There's a difference between, like, your team just not setting the right starting budgets and wanting to spend 100K and they just, like, didn't calculate it or setting 100K and then met as like, actually, I'm gonna spend 80 today and I'm gonna save 20% for the next two days.

Connor (59:36)

Yeah, totally. Yeah. Look, I guess, I guess it can. It can kind of shift throughout the week, and it depends on where the overspend came from. If we have our entire meta budget on flexible. If we have our entire meta account across all categories on flexible budgets, that we could. Theoretically, the entire meta campaign could overspend 20%. If that's 60% of the budget, then we're talking about that could explain 12% of an overspend. So it's still, it's still. You still get pretty close to my margin of error. I think there's very few scenarios where, because of flexible budgets or because some sort of platform setting, everything is set correctly, but the platform overspends by over 10% is actually, like, extremely uncommon, I think.

Aaron Orndorff (60:16)

What's the worst you've had?

Connor (60:17)

Oh, dude, we've got some horror stories of like. I remember once we had a pixel issue we were doing something on. This was years ago on Google where we had big budgets, target CPAs. Kind of like what Cody was describing earlier, where we were spending only a fraction of our total budget. Every single day we changed a pixel on the site. So Google quickly started thinking that like add to carts were purchases or something. So CPA drops and then we just start maxing out the budgets and then Google will happily spend another 20% of our budget or whatever. So that was, that was really bad. One year.

Aaron Orndorff (60:53)

That's tough.

Cody (60:54)

Yeah, I think like that's, that's one right. Talking about big caps. If like our, for some reason we're doing the ABS strategy and like we're spending way more and we're not finding performance, like yes, that's not my media buyer's fault. Like Meta is, you know, Meta's overspending and making a bet that it's not panning out. But we do have to be on it. If we know our budgets are that high, we have to know the probability of it and then like we have to catch it. So it's more about like what are the actions we take and did we do it?

Connor (61:22)

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Cody (62:50)

I'm curious, how do you, how do you guys approach scaling your like mid funnel campaigns? Like Connor, I don't know if this is still true, but I remember a few months back you're like, hey, we found best performance 40% of our meta account on, you know, view content. Do you try to keep any proportion like that you found? Do you scale up those kind of.

Aaron Orndorff (63:08)

Yeah.

Cody (63:08)

Relative to each other or not?

Connor (63:10)

Well, one of the, one of the reasons, one of the like telltale signs that meta really wasn't working for us the way that we wanted it to was last November our one of our highest ROAS campaigns on an MTA basis was a view content optimized campaign. I'm like, okay, yeah, something, something super weird here. So that's how we kind of got down that rabbit hole this year of like, how do we set that as a percentage of budget? Because we found those campaigns to be very incremental. So we have a. Right now on Today, 10% of our Meta budget will be going to view content optimized campaigns. That's roughly the target we're going to hold ourselves to. We've tested at different percentages of total mix and that's actually a little bit under our target just because we think we can get a lot more juice out of the purchase optimized stuff and then it'll become a smaller percentage. Hopefully it becomes a smaller percentage the week of Cyber5 just because everything else should be working much better.

Aaron Orndorff (64:01)

Yeah, we're not. I mean, we're definitely scaling it down, Cody. And that's honestly following the holdout test we ran. Cause we ran a really big holdout test and we, you know, you do reads throughout the test and then you do a read at the end after the observation window. And like we just saw a massive drop in the CPIA when obviously as we did the observation window through our, through a sale period. So like we use that, that trend to say, okay, we're gonna, we're gonna have the percent of our meta budget in view content be higher in view content leading into the sale and then bring it down during the sale and then bring it back up when we're out of sale. So we're always moving it up and down based on if we're in an evergreen period or a sale period.

Cody (64:39)

Yeah, it's kind of similar to like the TV stuff. Like, I don't think it's going to scale as much. We're not going to like triple our view content, but we, we try to be mindful of it and try to just like keep the overall reach, you know, positive and grow in the right direction. So even as we're scaling budgets more incrementally going like throughout November, we're just trying to keep an eye on what percentage of our account is going to kind of, you know, mid funnel versus purchase.

Aaron Orndorff (65:01)

So what's. I want to, I want to bring it kind of full circle. So Connor, how are you like tactically getting your, your pace updated? Like is that a North Beam thing? Do you have a separate way of like every x minutes or every X hours? You're, you're pulling in your spend per hour per channel so you can understand like, hey, we're, we're looking good against pace. We're under, we're over like what is that? That I know we talked about the revenue. You're pulling that into a sheet by hour. What's that like tactically look like tactically and technically, I guess for your ad spend.

Connor (65:33)

Yeah. So same process. We, you know, we talk about this all the time, but on a daily basis at Ridge, we, we are managing the business in many ways off of MER Amer with our like centralized data warehouse. That's the source of truth. Then we're looking at Northview to look at like really bottoms up at a user level, who's clicking through what are CPCs, what are people converting at, what are rows relative to of benchmarks. What that becomes during the Cyber 5 week is all hourly revenue and all hourly spend is going into a spreadsheet. So we're calculating hourly mers and then that accrual me throughout the day and that just tells us like the general health of the business. In the same way that MER yesterday or month to date is really important. We were looking at hourly and you know, to today to the, the past hour. Then when it comes to like figuring out what's working, what's not, we're using North Beam for that. So we use. I am a huge. We're moving away from Supermetrics ultimately. But like I've been at Ridge for almost nine years and I so much of our business is built on like super metrics automations and it's really good. You can plug in 90% of the accounts that you need and you're getting really quick hourly updates from the API. You're pasting in whatever Amazon revenue that you need. Because Supermetrics doesn't connect to Amazon or he doesn't on an hourly basis. And it's like we're putting that, we're putting together that reporting that way.

Aaron Orndorff (66:54)

Got it. Cody, how about you? What, what's your like methodology for checking in on, on pace on ad spend?

Cody (67:01)

So our. We, we have a data warehouse. We don't use super metrics but for daily stuff we, we have our forecast in, in a Google sheet and our data warehouse pipes that in because we used to use funnel and it kind of broke it. We have a dashboard that we use that, that updates, you know, automatically. They're not a sponsor. It's north. We do north beam for intraday but for our like blended mermaid pacing we use something else. But they're not a sponsor so I'm not going to give them any free love.

Aaron Orndorff (67:27)

Wow.

Connor (67:29)

Principled.

Aaron Orndorff (67:30)

Tough principal principle.

Cody (67:32)

I'll give free love for merch, but it's about, it's funny.

Connor (67:37)

Let me ask one more question. I know we're wrapping up here in a second. What do you guys do personally this, this time? So you got Thanksgiving, you're hanging out with the family Friday. Does the non marketing team have the day off? Are they working? Like, what is that? Cody, I'll start with you. What is, what does that look like for you?

Cody (67:54)

Yeah, I have two, I have two questions. Yeah, I'm curious if you guys do blackout dates. We do. I never reject PTO throughout the year. Like, I've never done it. I literally just rejected three this morning and like felt like an asshole about it. But I'm like, this is, this is also the period where you know, where you know if you're in growth, if you're in creative. So it really depends on the position. Like if my product development team wants to take off, like they have nothing to do this period of time. They work hard throughout the year. Like do it if you're on CX and you're on the growth or you're on the growth team, like, you know, you're, you know our copywriter has a few days off. Right. Because like if we have to make a pivot there's somebody else that can write copy. But if you're like, if you're a media buyer, like you're not taking off.

Aaron Orndorff (68:34)

Yeah.

Cody (68:34)

So we, we have, we have blackout dates. Obviously people are with family and with travel. But like the growth team even at Evergreen during a weekend is like, you know, we, we are in slack looking at budgets. It's just the nature of the job. So it just depends on the function and the role. But we really have. We have blackout dates. We really try to limit the PTO right before the sale and during it. And then really, once December hits, it's like, it's much more liberal. That being said, I think what we'll do is probably, like, once we get into, like, that weekend, do, like a daily standup. Um, so I'm curious what you guys do, how you approach, because we've always done just async, but I think it might be more efficient to just do like a daily standup once, like, Friday starts or something like that. Just with grow team.

Aaron Orndorff (69:14)

Yeah, we'll do a daily standup. We. We start that next Monday, actually, with myself, our director of paid media, London, and then two folks from our finance department to talk about how we're pacing. And then we'll do, like, we don't have these scheduled yet every other day or every day. Media buyer syncs to, like, adjust budgets on the actual, like, Thursday through Sunday period. I tell the team, I'm like, you shouldn't be working. Like, you don't need to. Nor should you be working full days. Like, you need do the work you need to do to execute on the moment that we're in right now. If that takes you an hour, great. If that takes you three hours, great. So it's like, obviously everyone in paid is going to be spending, you know, 30 minutes here and there, adjusting budgets throughout the day, having some conversations. Same with, like, the retention team. They're going to be like, scheduling campaigns, making sure everything goes out. But, like, if you're in CRO or like, influencer or, like, affiliate, like, you don't really need to be doing much. Like, most of your works led into that. It's like, great. Like, go take that. That period off, be with your family, get. Get refreshed and recharged. And, like, I'm not working. Like, I'm more so checking in throughout the day. I'm probably working, you know, two to three hours a day during that. That weekend and sometimes less, sometimes more, depending on how good or poorly things are going. And then, you know, a lot of group chats going on with, you know, me and London and Jason and our. And our paid social media buyer during that weekend as well.

Connor (70:34)

Yeah, I think it's good. That was the point that I was gonna make is like, it is a weird time again. We do, like, Thursday. We'll meet a couple times. That's really just with the paid media team for the first meeting of the day. We'll have retention. We'll make sure we're all on board there, but they don't have a lot of like hourly adjustments to be making. But then you end of this, you enter this weird period of time where it's extremely high volume. I end up like, you know, I am the worst. And I'm refreshing revenue like every 15 minutes or whatever, right. And then I'm like, All right, we're 15 minutes in. If we, for, if we like extrapolate that out for another 45 minutes, we'll grow 10 this hour. Like just way more granular than I need to be. But there's, but there's frankly not at times not all that much other work to be getting done. So like last year I was like, I was getting workouts in during the day, like in between paid media syncs and then just trying to, just trying to make the, the work as impactful as possible.

Cody (71:29)

I could just envision you trying to like, stay loose. You're like warming up and like loose between your crud stand ups.

Connor (71:35)

Yeah, yeah, yeah, yeah. That's basically it. Do you guys, do you guys end up having dreams about, about marketing? During Q4, I just had my, I had my first one the other day that I was having a. I used to.

Aaron Orndorff (71:47)

At Homestead. When I was at Homestead, it was pretty bad. Like, I would dream about work, wake up, go to work, go to bad dream about, like, I don't know. I. I figured out along the way how to avoid doing that. So not really. Not anymore.

Connor (71:59)

Last year was one of my favorite dreams. I had a dream I was in a spreadsheet.

Cody (72:03)

It was very like, it was, it was very surreal.

Aaron Orndorff (72:07)

Yeah.

Connor (72:07)

I was physic. I was like, the physical space around me was a spreadsheet. I was like in the cells.

Cody (72:13)

That's when you wake up. That's when you wake up and you go book a vacation and you're just like, I just, I'm. I need a vacation. I got to get out of this.

Connor (72:21)

Last year was really taxing. Yeah, that dream is, is the, the best example. Case in point.

Cody (72:27)

My wife's birthday is this December 2nd, so it's. I think that's is Cyber Monday. Yeah. So it's like we're going, we're going on a vacation literally on the third or fourth.

Aaron Orndorff (72:37)

Nice.

Connor (72:37)

Nice.

Cody (72:38)

Much, much needed.

Aaron Orndorff (72:40)

That's awesome. Dream of in a spreadsheet. That's great. Well, cool. Should we wrap there?

Connor (72:45)

Yeah, we should wrap. And for those still listening an hour in, we wish you a profitable, scalable Cyber5 weekend.

Aaron Orndorff (72:53)

All right, that's a wrap on episode 87 of the Marketing Operators podcast had a great in depth episode today on how we think about intraday pacing on revenue ad spend inefficiency KPIs as we're in our peak moments to make sure that we are pacing towards targets both on the revenue and the ad spend side of things. Thank you to our sponsors Motion Prescient Rich panel after sell in house. If you're enjoying the show, make sure to like subscribe, comment and share with your marketing friends. Thanks.