#649: How to look at ROAS with Mitsu Kikuchi and Rocco Baldasarre of Shirofune

Summary

Podcast Summary: The Agile Brand with Greg Kihlström®

Episode #649: How to Look at ROAS with Mitsu Kikuchi and Rocco Baldasarre of Shirofune
Release Date: March 12, 2025

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Introduction

In Episode #649 of The Agile Brand with Greg Kihlström®, host Greg Kihlström engages with Mitsu Kikuchi, CEO of Shirofune, and Rocco Baldasarre, Head of Business Development for Shirofune in the USA. The discussion centers around Return on Ad Spend (ROAS), specifically contrasting short-term ROAS with Lifetime ROAS, and explores how automation and first-party data strategies can drive long-term business growth.

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Guest Introductions

• Mitsu Kikuchi, Founder and CEO of Shirofune, shares her background in digital advertising and her approach to creating algorithms that mimic human decision-making without relying on traditional AI or machine learning.

• Rocco Baldasarre, with 16 years in digital marketing, explains his role in simplifying campaign management to deliver substantial results for both agencies and clients.

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Short-Term vs. Lifetime ROAS

Greg initiates the conversation by questioning the industry's heavy reliance on short-term ROAS metrics. He asks whether focusing solely on immediate returns might cause advertisers to overlook the long-term value of customer relationships.

Rocco Baldasarre strongly advocates for a shift towards Lifetime ROAS:

“Brands have got to have that same mentality [as Amazon]. They need to understand that acquiring a customer at let's say $60 might be unprofitable today. But how many times that the customer buys from you? Let’s assume by 10 times now that's $600 versus the $60 you spent to acquire that customer.”
(05:31)

He emphasizes that lifetime ROAS provides a more holistic view of marketing performance, enabling sustainable company growth by focusing on customer retention and repeated purchases.

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Defining Lifetime ROAS

When asked to define Lifetime ROAS, Rocco provides a clear example:

“Campaign A is getting you a ROAS of 200%. Campaign B, 250%. ... Historically those customers, Campaign A over the course of 12 months, that 200% becomes, let’s say, 800%. And the 250% of Campaign B might become a 600%... if you optimize for lifetime ROAS, you're optimizing for the 800, enjoying the 200% markup compared to the 600 Campaign B.”
(07:15)

This illustrates how initial metrics can shift significantly when considering the long-term value of customers.

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Efficiency Gains Through Automation

Greg addresses the common hesitation among advertisers regarding the complexity and effort required to manage and measure Lifetime ROAS. Rocco responds with an analogy to highlight Shirofune's automation capabilities:

“Why do you use a dishwasher? Why don’t you wash dishes by hand? It’s much simpler... Instead of washing dishes, you can watch some TV with your wife. Same thing with Lifetime Roas and Shirofune. We do the work for you so you can spend the time strategizing, making new creatives, talking more to the client.”
(10:45)

Rocco underscores that Shirofune not only automates the cumbersome aspects of campaign management but also drives company growth by enabling advertisers to focus on strategic initiatives.

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Impact of Third-Party Cookies and Shift to First-Party Data

The discussion shifts to the evolving landscape of data privacy, particularly the decline of third-party cookies and the increasing importance of first-party data.

Rocco Baldasarre explains:

“First party cookies have always performed better than third party cookies... we believe that it is simply forcing advertisers to do something more efficient to begin with rather than forcing them to do something less efficient.”
(13:12)

He advocates for leveraging first-party data to create more accurate audiences, enhance tracking capabilities, and ultimately achieve more efficient advertising outcomes.

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Beyond Lifetime ROAS: The Role of AI and Human Intelligence

As the conversation progresses, Greg inquires about other benefits Shirofune offers beyond Lifetime ROAS. Rocco clarifies Shirofune's unique positioning:

“We are not an AI company because we created Shirofune 15 years ago when AI wasn’t a thing... we call what we do human technology or human intelligence... it's as if Rocco or Mitsu or George would be literally sitting down and spending countless hours to analyze that data and take that decision.”
(15:32)

Mitsu Kikuchi adds:

“AI can do a lot, especially for analyzing the data... we can ask AI what happened or what this data is... This is going to be the next big thing for marketers.”
(14:43)

Shirofune blends advanced data analysis with human expertise, ensuring that automation enhances rather than replaces human decision-making.

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Staying Agile in Marketing Roles

In the final segment, Greg asks Mitsu and Rocco how they maintain agility in their respective roles.

Rocco Baldasarre shares his approach:

“Always speak to people. You can learn things from everybody... I checked in, logged in, read all the documentation. Now I know how to do it.”
(17:06)

Mitsu Kikuchi emphasizes continuous improvement:

“I'm always improving our algorithm to be better... don't miss any small signal. Even if it's so small... stick to the tiny real things.”
(17:46)

Their strategies highlight the importance of ongoing learning and attention to detail in adapting to the rapidly changing marketing landscape.

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Conclusion

The episode wraps up with Greg thanking Mitsu Kikuchi and Rocco Baldasarre for their insights. Listeners are encouraged to explore Shirofune further through the show notes.

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Key Takeaways:

• Shift Focus to Lifetime ROAS: Moving beyond short-term metrics to assess the long-term value of customers can lead to more sustainable business growth.

• Automation Enhances Efficiency: Platforms like Shirofune automate complex processes, allowing marketers to focus on strategic initiatives rather than manual tasks.

• Embrace First-Party Data: With the decline of third-party cookies, leveraging first-party data becomes crucial for effective targeting and tracking.

• Blend AI with Human Intelligence: Combining automated data analysis with human expertise ensures more nuanced and effective decision-making.

• Maintain Agility Through Continuous Learning: Staying updated and being adaptable are essential for thriving in the dynamic field of digital marketing.

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About Shirofune:

Shirofune is a leading digital advertising marketing automation platform dedicated to optimizing campaigns with long-term growth in mind. By reducing ad management time by 50% and enhancing ad performance, Shirofune empowers brands to achieve sustainable success.

For more information, visit Shirofune's website.

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This summary captures the essence of Episode #649, providing a comprehensive overview for listeners and those interested in advanced advertising metrics and strategies.

Transcript

[Domo Representative]

We all know data is valuable. We use it to tell a story to make informed decisions for our businesses. But turning data into actionable insights can be a challenge. It's time to unlock the true potential of your business data with Domo's AI and Data Products platform. Domo lets you channel AI and data into innovative uses that deliver a measurable impact. Ask your data Anything at any time. Anyone on your team can use Domo to easily prepare, analyze, visualize, automate and distribute data, all amplified by AI. Domo goes beyond productivity. It's designed to transform your processes, helping you make smarter and faster decisions and drive real growth. All powered by Domo's trust, flexibility and years of expertise in data and AI innovation. Data is hard. Domo is easy. Make smarter decisions and propel your business forward with Domo. Learn more today@AI that's AI.domo.com the Agile.

[Mitsu Kikuchi]

Brand.

[Greg Kilstrom]

Welcome to season seven of the Agile Brand where we discuss the trends and topics marketing leaders need to know. Stay curious, stay agile and join the top enterprise brands and Martech platforms as we explore marketing technology, AI, E commerce and whatever's next for the Omnichannel customer experience. Together we'll discover what it takes to create an agile brand built for today and tomorrow and built for customers, employees and continued business growth. I'm your host Greg Kilstrom, advising Fortune 1000 brands on martech, AI and marketing operations. The Agile Brand Podcast is brought to you by Tech Systems, an industry leader in full stack technology services, talent services and real world application. For more information go to teksystems.com to make sure you always get the latest episodes, please hit subscribe on the app you listen to podcasts on and leave us a rating so others can find us as well. And now onto the show.

[Podcast Host]

We are here at ITEL Palm Springs and seeing and hearing the latest and greatest in e commerce and retail in digital advertising. Are we chasing the wrong metrics? While short term roas might look impressive, are we missing the bigger picture? Whether those customers actually return? What happens when we shift our focus to lifetime roas instead? Today I'm joined by Mitsu Kikuchi, CEO of Shirafune and Rocco Baldessari, Head of Business Development for ShiraFune in the USA. Shirafune is a leading digital advertising marketing automation platform that has transformed how advertisers optimize campaigns with long term growth in mind. They help brands reduce ad management time by 50% while unlocking greater ad performance beyond just short term wins. Mito and Rocco, welcome to the show yeah.

[Mitsu Kikuchi]

Thank you for, you know, introductions and, you know, inviting us.

[Podcast Host]

Yeah, absolutely. Yeah. Good to, good to see you here in Palm Springs. Before we get started, why don't you each tell a little bit about your background and your role at Shirafune.

[Mitsu Kikuchi]

Yeah. Thank you. I am founder and CEO of Shorofune. Mitsuki Kuchi and I began my career at the largest digital advertising agency. And we, you know, replicated what actual human do every single day. And our platform is like really human. So we can, you know, save time for the tasks that a human needs to do and that our algorithm is not like AI or machine learning thing. So we can do the things like human and we can save the time that tasks that AI cannot replace.

[Rocco Baldessare]

Thank you so much for having me here. I am Rocco Baldassare and I'm the head of business development at Shirofuna. My career has encompassed 16 years in digital marketing, working with any size of clients you can think of, from small to large clients, small to large agencies. And I joined Shirofune because I truly believe in what we are doing here to really simplify the work while bringing bigger results for both agencies and clients. And I'm very excited to share some more with you today.

[Podcast Host]

Yeah, great, great. So, and Mitu, I know you shared a little bit about this in your intro, but can you tell us a little bit more about what Shirafune does and how it compares to some of those other platforms?

[Mitsu Kikuchi]

Yeah, thank you. So the biggest difference between Shirafune and other platforms is how to create the algorithm. So like I said, our algorithm is really like what actual human do. So I did a lot of coding to replicate what a human experts do every single day. And we don't use any AI or machine learning.

[Podcast Host]

So let's talk a little bit about, you know, in the intro I talked a little bit about the idea of short term versus lifetime roas or return on ad spend. Roas and cost per acquisition are kind of the gold standard in paid media. But do you think that advertisers over rely on these, you know, short term metrics?

[Rocco Baldessare]

Oh, they absolutely do. Every time we look into clients using return on adspend, we are essentially seeing them constricting themselves with performance. And why do I say that? I say that because most businesses nowadays, they rely on people buying products over and over again from their brands. So just think about Amazon. Now if Amazon were to tell us that they were judging the performance of their advertising based on a customer buying once a product, you would think they're crazy because Each one of us buys from Amazon over and over again. So brands have got to have that same mentality. They need to understand that acquiring a customer at let's say $60 might be unprofitable today. But how many times that the customer buys from you? Let's assume that by 10 times now that's $600 versus the $60 you spent to acquire that customer. And of course you need to implement strategies to retain those customers. But the whole concept is what is the value of that one purchase over time for the business? When you understand that now you're moving toward a much more holistic approach to marketing. Your budget is going to be used toward a lifetime goal and you're actually going to be able to grow your company. We are actually seeing companies not growing, especially because the focus of the instant gratification metric, which usually limits them over the course of the years to competitors that are actually using those kind of approaches.

[Podcast Host]

So the term then lifetime roas, what is that like? I'm familiar with customer lifetime value and things like that. How would you define lifetime roas?

[Rocco Baldessare]

The best way to define lifetime roas is to give you an example. Let's assume you have two campaigns running. Campaign A and campaign B. Campaign A is getting you a ROAS of 200%. Campaign B, 250%. Marketing managers, next time they need to allocate budget, they're going to put more money on campaign B because it gives them 50% more ROAS. However, let's take a step back and let's see how historically those customers, the customers of both campaigns have done. It's not uncommon to find out the campaign A over the course of 12 months, that 200% becomes, let's say 800%. And the 250% of Campaign B might become a 600%. So now 800 versus 600 Campaign A, which was doing worse in month one, does 200% better. So if you optimize for lifetime ROAS, you're optimizing for the 800, enjoying the 200% markup compared to the 600 Campaign B.

[Domo Representative]

We all know data is valuable. We use it to tell a story, to make informed decisions for our businesses. But turning data into actionable insights can be a challenge. It's time to unlock the true potential of your business data with Domo's AI and data products platform. Domo lets you channel AI and data into innovative uses that deliver a measurable impact. Ask your data. Anything at any time. Anyone on your team can use Domo to easily prepare, analyze visualize, automate and distribute data, all amplified by AI. Domo goes beyond productivity. It's designed to transform your processes, helping you make smarter and faster decisions and drive real growth. All powered by Domo's trust, flexibility and years of expertise in data and AI innovation. Data is hard. Domo is easy. Make smarter decisions and propel your business forward with Domo. Learn more [e-mail] that's AI.domo.com Want to learn more and join the discussion About Marketing and AI? Attend the premier conference dedicated to marketing and AI. That's Meicon, the Marketing Artificial Intelligence Conference from October 14 through 16 in Cleveland, Ohio. MEACON brings together the brightest minds and leading voices in AI. Don't miss this opportunity to connect with a dynamic community of experts, visionaries and enthusiasts. The Agile brand is proud to be the lead media sponsor of this important event. Register today@MarketingAI Institute.com that's MarketingAI Institute.com and use the code AGILE150 for $150 off your registration fee. I can't wait to see you there.

[Podcast Host]

So you know a lot of advertisers are struggling with managing ad campaigns and all this. I think there's a lot of reasons why they focus on short term goals and metrics, but one of those could also be just it takes a lot of effort to manage things over time and the effort to put into measuring something like lifetime roas seems, or at least feels like it would be too much. What are some of the biggest efficiency gains that advertisers see when they switch to an automation driven campaign management?

[Rocco Baldessare]

Let me go to the beginning of your question where you told me they prefer to do short term roas because it's complicated to do the long term approach. Do you own a dishwasher?

[Domo Representative]

I do.

[Podcast Host]

Yeah.

[Rocco Baldessare]

Let me tell you. Why do you use a dishwasher? Why don't you wash dishes by hand? It's much simpler. Right? Right. Same thing with advertising. The fact that something is difficult is because a company like ours is successful. We make it easy for you. In addition to that, we save you money. Because it's not only about increasing the profitability, the time that is needed to perform all the optimization that we do. You don't need to do that anymore. So we free up time from you. So now instead of washing dishes, you can watch some TV with your wife. Same thing with Lifetime Roas and Shirofune. We do the work for you so you can spend the time strategizing, making new creatives, talking more to the client. Now with that example made, it's easy to understand what the benefits are. The benefits are first of all, time savings into getting all of that process automated. And Shirofune does much more than lifetime roas. Lifetime ROAS is a little piece of what we do for clients. But in addition to that, you're going to be able to grow the company because if you are in E commerce and your focus is still on short term roas, chances are they're losing a lot of money. Because in many industries the cost to acquire a customer has become higher than actually the profit on the first sale. So there is really no other way. And many companies right now, for example, they bid on first, they bid on getting a customer. Why don't you bid on acquired first time customer and how do you acquire a first time customer but having the data and using the data to figure out who is a first time customer. So it's all about survival for the business and growth of the business. So it's not why should they do that? It's why don't they do that?

[Podcast Host]

Yeah, yeah, got it. So I want to talk a little bit about, you know, there's been a lot of talk about third party cookies and their impact on or third party cookies going away or it's a little up in the air. I think exactly what's going to happen necessarily, but there's certainly a move to first party data in general. How are, you know, how does this impact, you know, what you're seeing from advertisers and how they should think about measurements and things?

[Rocco Baldessare]

It basically goes down to first party data has been around for years, but only a few companies have adopted it. Because coming back to our dishwasher, why do I need to do that? Right. Why you need to do that is because we are now in 2025 and people are getting scared that third party cookies are not going to be a thing. I know that Google postponed the whole issue for a year, but it comes down to you need to equip yourself to perform at your best. And first party cookies have always performed better than third party cookies. So the question always is, why haven't you used them before? First party data allows you to create audiences, it allows you to track better, it allows you to do a lot of things. So we believe that it is simply forcing advertisers to do something more efficient to begin with rather than forcing them to do something less efficient, which is not the case at all. I hope that answers your question.

[Podcast Host]

Yeah, yeah, no, absolutely. So I guess you Know, we've talked a lot about the lifetime roas and that component of it. Certainly Shirafune does a lot more than that. As you were saying, you know, as we're wrapping up here a little bit, what's something that listeners should check out in addition to what we've talked about, about Shirafune that could benefit them?

[Rocco Baldessare]

I'm going to leave that question to Mitsu to talk a little bit about the AI, because we are seeing a lot of AI happening in the market. So, Mitsu, maybe since you are the genius behind all of that, you might be the best person to answer that.

[Mitsu Kikuchi]

Yeah, definitely. AI can do bigger things, and I think AI can do a lot, but especially for analyzing the data, which is the coming, you know, sound, the part of what AI can do, because the amount of data is really increasing and we can see all the data at the same time, but AI can correct all the data and analyze instantly. So we can just ask AI what happened or what this data is, saying that. So we can just ask and ask and answer and ask again, so. So we can get a whole picture of what's going on. This is going to be the next big thing for marketers, I think, and me too.

[Rocco Baldessare]

Something that I think is important for the listeners to know is that I don't want your listeners think that we are an AI company because we created Shirofune 15 years ago when AI wasn't a thing. We essentially hard coded our whole platform. We, me too, are following the platform. Give credit where credit is due. Right?

[Podcast Host]

Exactly.

[Rocco Baldessare]

I didn't call it a line of that code, but the reason why I'm mentioning it, Greg, is because we believe that AI is good, but people are better. And as a result of that, we call what we do human technology or human intelligence. Why do we call it human intelligence? Because what we automate is automated, as if a person would be doing that. So essentially, whenever you apply lifetime roas, whenever you apply our recommendations, whenever we do budget and bid modification for clients, it's as if Rocco or Mitsu or George would be literally sitting down and spending countless hours to analyze that data and take that decision. And that's, to me at least, is a key element. Because a lot of AI companies out there nowadays, but not a single human company that uses technology to improve performance.

[Podcast Host]

Yeah, yeah, that's refreshing to hear. So, yeah, I like that. Well, before we wrap up, I mean, Mitsu and Rocco, thanks so much for joining. One last question for both of you before we wrap up. I'd like to ask everybody. What do you do to stay agile in your role and how do you find a way to do it consistently?

[Rocco Baldessare]

Always speak to people. You can learn things from everybody. And I always believe I don't know everything that allows me to learn something new that I didn't know the day before and sharpen up my skill set. An example I can give you I got an email the other day from Amazon offering me a $500 coupon to run ads, video ads on on their streaming platforms. I didn't care about that, but I actually checked in, logged in, read all the documentation. Now I know how to do it. That's one more thing I learned. So that's my advice to your audience and Mitsu. You probably have a better advice than mine.

[Mitsu Kikuchi]

So I'm always improving our algorithm to be better. So the important thing is don't miss any small signal. Even it's so small. And if we found something like, you know, we feel it's not different from what I thought, we have to stick it to be better. So that's my advice to stick to the tiny real things. When you want to do something bigger, we need to stick to this real thing.

[Domo Representative]

Yeah.

[Podcast Host]

Love it. Love it. Well, again I'd like to thank Mitsu Kikuchi and Rocco Baldessare from Shirafune for joining the show. You can learn more about Mitsu, Rocco and Shirafune by following the links in the show notes.

[Greg Kilstrom]

Thanks again for listening to the Agile Brand brought to you by Tech Systems. If you enjoyed the show, please take a minute to subscribe and leave us a rating so that others can find the show as well. You can access more episodes of the show@theagile brand.com that's theagile brand.com and contact me if you're interested in consulting or advisory services or are looking for a speaker for your next event, go to www.gregkillstrom.com that's G R E G K I H L S T r o m.com the Agile brand is produced by Missing Link, a Latina owned, strategy driven, creatively fueled production co op. From ideation to creation, they craft human connections through intelligent, engaging and informative content. Until next time, stay curious and stay agile.

[Rocco Baldessare]

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