How This 9-Figure Beauty Brand Measures Its Marketing Spend (With Cherene Aubert From Ilia Beauty) transcript

Shireen Abear is not only one of my favorite people in e-commerce, actually one of my favorite people like in the world. I just love Shireen. She also has one of the most impressive resumes in e-commerce. Shireen was the director of growth strategy at Common Thread Collective. She was the vice president of growth and data at Bobby, a 9 figureure monster formula business, incredible business. And now she's the senior vice president of e-commerce and digital at Ilia Beauty.

A like multi-9 figure postacquisition monster of a beauty brand international omni channel crazy. She's seen this industry from so many perspectives. Let's get into it with Shireen Aar. She's the goat. Let's talk to her. All right, Shireen. How are we doing? I'm doing well. I'm doing well after that intro. I mean, you really gassed me up. I'm ready to be here. I'm hyped. I'm almost for sure going to re-record it like after I after I did it because I feel like I could do better.

But you're right to guess up because you you have a crazy resume compared to everybody else I talked to. Like you what was your title at CTC? Head of growth. It was the director of growth strategy. Director of growth strategy. That's right. And so like you basically are working with at those in those days a whole bunch of like more pure play DTOC businesses probably like let's see when you were there like most of them would have been like low eight figures.

Do you think that's right? Yeah I think low eight figures. We had some higher we had like a few higher eight figures. Yeah. some bigger legacy brands, but it was like such a diverse mix of businesses that I think that's probably, you know, Taylor Holiday loves to talk about how much of a launching pad CTC is, and it truly is because the access to data and information and categories, business sizes is like unmatched. Yeah, it's crazy.

Um, yeah. And then Okay. And then you went to Bobby uh and when you were there, you led growth there. I led growth and oversaw their data team. Yep. Great. And that was a business. Had they reached nine figures when you were there still? Yeah, they we in two years reached nine figures and launched in all target doors that carried baby formula and the majority of the business uh was and probably still is DTOC. Amazing business.

Yeah. Yeah. And so you got to see like a super fast uh rapid fire. I remember just talking to you about the fundamental problem being like you you what were you saying? You were like you had to be the head of Sloth, right? Because you were selling too much product and uh so you had to slow it down, right? And then and now you're at Ilia where you guys are like I mean nine figure doesn't even feel like the way to say it.

You're like an omni channel postacquisition international beauty monster, you know? That's what it's like. It's just like a whole different stage of business. Oh, it's Yeah, totally. It's like it it's interesting because if I look back on the sometimes in your life you look back on the thread of your career and it's it totally is like each one kind of played into the other and I picked up where I left off in the last place.

So it's been yeah pretty cool to look at the story unfold. What does the SVP of e-commerce and digital do at a place like Ilia? That is a good question. I mean I don't know. You talk Yeah. go wherever the wind takes me. No, I'm just kidding. I oversee our DTOC business, our Amazon business, our global advertising. Um, and I'm beholden to I don't directly oversee our um retail.com business because our sales teams oversee our retailer businesses, but there's like a very close partnership between, you know, my team that drives media and sellth through and retail.com performance and then the actual retail teams.

So that that's kind of um what we're driving from a sales and marketing standpoint. And then under the underbelly is like we're overseeing you know the data team BI and some of the uh digital stuff that makes the business um function. You are in charge of the performance marketing spend. Y uh you're in charge of are you in charge of the deployment of non-performance marketing dollars? Yep. So all the advert Yeah. All advertising.

Yeah, that's a really big job. Okay, it sounds fun. Let me So, let me ask you. So, there's a few things that are happening in a business that size that are not happening in other businesses is my guess. And one of them is that you guys are probably thinking differently about um about performance versus brand marketing than some other people um and and some of how that works. And then also thinking about measurement really differently.

Uh which one of those is more interesting to talk to because you guys are super omni channel even.com right you have D TOC and you have you know the classic players like Amazon but then you also have like yeah like you said retail.com right ult.com or whatever Sephora.com like uh what's what's more interesting to talk about first do you think the measurement component of it or or the sort of brand versus performance component of it?

What do you what do you have the hottest take on Shireen? What can you just like light people up with? Oh gosh. I mean I think the me they funnel into each other but I guess take is in the order in which we did it as a business is we didn't have the measurement in place we had a bunch of theories and hypotheses as many do when they're you know building uh building things that haven't been built before and so we kind of made this decision when I joined to lean more you know I was like saw this clearly at Bobby how much brand drives growth you can't just drive growth by doing running the same growth playbook.

So the first step was like let's change our playbook. Let's try some different things and we're just going to observe whether or not sales go up like very primitively and then we kind of layered in the measurement to be able to actually run these incrementality tests and justify the lift across channel. Um, and it's that I think that measurement piece is not controversial, but it's like such an ongoing activity that the more tests you run, you get fewer answers, but you get more questions.

So, it's just like a a tree of questions that just keep unfolding. Um, but yeah, I mean, I I think the brand versus growth piece could be interesting to talk about. Well, I'm I'm actually extremely fascinated by the very first thing you said there, which is that when you when you you didn't actually measure incrementality with like tools, you were just watching if revenue went up. Uh, and that's very interesting to me.

So, like can you talk through how you did that? Because that answer is basically what I tell my clients for a lot of things right now. Um, it is essentially like the bank account's the only attribution system that never lies. So like like how how did you actually do that? Was it just like okay over the next three months we're going to deploy 20% more dollars and we're going to see what happens across our channels or like was it that simple or was it was there more to it than that?

Yeah, it was a little bit um it was there's there's layers, right? So you come into a business or you're a part of a business and you're doing the same thing over and over again. you're running, you know, meta bottom offunnel conversion ads and they're all the same and you you got the not cheap V2 and you got the sticky note V4 and you got the competitor comparison V3, right? And you're kind of like doing this thing and you're like reading what's on Twitter and you're looking at, you know, what everyone else is doing and you're looking at your competitors and that works until it doesn't.

And so I think as a as a business that's growing you like that's a totally natural progression is like let's copy the templates let's run the playbook and we're like oh that there's a point for every business where the playbook doesn't work and you have to actually think about a little bit deeper about your strategy. You have to think about your product mix and how much are these products actually growing your customer value and do people recognize your brand or do they recognize your products and how do you get them to like understand and buy into your brand instead of just buying into a product and how do you penetrate the market more and how do you measure that your awareness is growing so that you can actually like play in the market and so all of those things are like a part of the trajectory but not You don't have access to all of those things all at once, right?

It kind of starts with a theory or a hypothesis just like any testing process uh does. And so I think when I joined I was like, hey, we got to run a different playbook book. We have to like build equity into who we are as a brand and we um are kind of so concentrated in this like growth marketing growth media um world that we need to start exploring like what happens if we move a little bit upper funnel. What happens if we start telling our brand story?

What what happens if we uh start running um media on CTV and we are not looking for uh an immediate you know lastclick direct response goal and we did a lot of things in addition to changing our media strategy and kind of like going more upperfunnel with our media strategy. We looked at our offer strategy kind of moved away from discounting. We moved more into like more premium offer strategy. we elevated our email and SMS.

So, we kind of like did this like overhaul on like how we position ourselves as a brand and get a little bit more like refined. And then naturally, we also had great innovation, but you start to see your CAC goes down, you start to see your revenue goes up, your your traffic increases, and your conversion rate increases. And all of these things kind of give you an indication that oh maybe people really do care about like brands that have brands.

And that's the that's the challenging thing for I think new brands today when you're starting up. You have to not only run the growth playbook, but you have to think about how you're building a brand and the cost to compete in ad platforms is getting so much more expensive. The barrier to entry is so much higher. Um, yeah. And then you validate all of that with tools and measurement and testing and and that's what we're doing.

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Yeah, super performance marketing focused. Um, brand marketing budgets were, you know, probably not as big as they needed to be for business of this size. And that was like one of the first business cases that I made. I was like, "Hey, I'm the traditionally the growth person. I'm here to Yeah. business, but like in order for me to drive the DTOC business, I'm going to need the total business to grow. And I can't just play with, you know, the performance marketing.

Like I can't that performance marketing is not enough to grow the business. So, we need to actually invest in brand marketing. We need like real top offunnel marketing dollars to put into the business." And that was something that, you know, we as a business were able to align on and invest in and like we saw the results from it because it's just so hard to justify marketing efforts that don't generate an immediate return when you're small and clawing for profit.

Um, but I'm just curious, I mean, you you've seen businesses at every stage at this point and how they're deploying these things. It's interesting too the way you're describing this Ilia which it sounds like had much more of a performance marketing background. Uh so it's not like you came in and they were like all right start deploying all the bajillions of dollars on brand marketing. It's like well you had to fight for that money it sounds like.

So as you think through this now do you think that do you think that brands ought to be thinking about that earlier than they are? And if so I'm curious what stage you know like I you may not even have a thought about this but yeah. No, I do. I think about it a lot and and that's where I like think fondly on those preios 14 days and I'm sure Andrew, you and I both knew people that were like these, you know, 22year-old guys that were driving Lamborghinis off of some like in just corny drug.

Do you think that was real? Do you think they were actually doing that or were they lying then like the same way they're lying now? I mean, they were probably loaning a Lamborghini. Yeah. Right. Yeah. But off a drop ship business and off of like the worst ads you've ever seen, right? Like that was a blip in in Are we just are we just idiots for not doing that? Yes. Yes. Like I mean should we have just quit CTC at the same time and and like just gone and started drop shipping like and started like a print on demand sock business, dude.

Yeah. I mean, I think we're talking about the same business now. And yes, we should have done that because that that was that was free money for a little while. And then and then and then it and then it died and then I think the person got sued, I think, is what I don't remember for sure, but Yeah. Yeah. The the powers that be were like, "Too many people are making too much money. We got to put a stop to this." Yeah.

Right. Yeah. But it was it was like a blip in time and we we I think we all kind of thought like the the gold rush lasts forever. Yeah. And it doesn't. And um I think about businesses today and I'm like, well, okay, if you put that those same tactics in play today, I have not heard of maybe there's like a couple of brands and they're they're like, you know, driven by growth experts and there's a few that that make it that way.

I don't know, maybe there are more. I just haven't seen them that kind of make it beyond that like, you know, get out of that 1 to 10 million and go beyond like within the last five years. I mean, man, I I'm going the total other way on this. I It's so funny. I like one of my core this is like this is like my my thing now is is like there's just I feel like I can't you throw a rock in any direction, you hit somebody running an eight figureure business now.

That's what I think. It just feels like it feels like there's so many more of them than there were before. It's a weird thing. Everybody has a sense that you have when I talk to them. I just had fan fan bion and I it'll release at time it hasn't released at the time we're recording and I know you listen to every one of my podcasts like start to stop. So uh so that's why you haven't heard yet if you're wondering because it just isn't released yet.

Um but the um the the but fan Fan was on and he's like I've looked at 300 businesses in the last year and like 50% of them are dead on arrival and like you know like you know 25% of them like have a chance and then 25% of you know 10 or 20% of them are good and it's like so I you know I that's a more informed perspective than mine and I think there's just a lot of people are saying the things that you're saying which is that it's so hard right now even before you talk about tariffs which is like a whole other conversation but everybody was already saying this, but I I just I'm just amazed at how many businesses like are big compared to what it used to be like.

Uh, and but start now or did they start? Yeah, I don't know. That's where I'm like ones that I feel like there was a there was a cut off point. You know, I think of like I feel like Sean Frank from Ridge has talked about this like the when they started their business when they were able to have their ascent was very important in the kind of growth trajectory and the story of where they're at now. But um that's what I'm curious about is like were there any in the last you know two to three years that started up and are there probably are.

That's where I'm like I don't hear that many stories about them. The ones that I know of have started have been kind of like around a little bit. Yeah. Um Yeah. Well, that may part of it is actually that aside from the moment, you like you just maybe need to expect anything to take longer than what the like story that the crazy stories are, right? Like almost by definition, a story of super success that you hear on Twitter or LinkedIn or whatever, the fact that it became a story that got picked up in an algorithm almost by definition means it's an extraordinary outcome.

And that like essentially what most people ought to be thinking about and I I do I do actually think this is important in the in the total conversation that like people need to recognize that if you get your business to five million in the first year and a half or something like that, you did great. You know, even if it's at 10% profit and you're not turning over a whole bunch and you don't have a lot of cash, like you did awesome.

You did awesome at 5 million in a year and a half, two years, whatever. And if you can get it to 10 after three years or you know it's just like getting it to 50 in two three years is is rare by definition you know like and that's the reason you hear the story about it and so you know some people are like oh everything is so hard and so difficult and I kind of sometimes want to go like are you sure or do you just have like did you just think it was going to be so easy and it's like it turns out to not be yeah I don't know there's some kind of thing and maybe it was always like that right and we were we're so colored by that blip in time where the soft guys were making getting Lamborghinis that were like, "Oh, everybody gets a Lamborghini.

You get a Lamborghini and you get a Lamborghini." And you're right, the success stories do make it seem a lot easier, you know, than it is. But I I think about like, you know, okay, if you're a brand today, if you're just starting now or if you're if you started a year ago and you're like, why can't I scale? And kind of going back to your question of like when is too soon to invest in brand marketing. I I think it's all dependent on like how much money do you have, right?

Like do you have an invest in injection of capital to deploy against growth or brand marketing? And if you do, which is not everybody, almost nobody now. That's that's the thing that's for sure not happening. Like people are just not, you know, unless they got Yeah. Unless you're like a food and bev company with a plan to get to mass retail really fast or something like that, you know, like But yeah, that's true. Yeah, that's true.

And so it's like, okay, if you're bootstrapped and you're just, and I've talked to some of these brands, too, like these smaller ones, and they're just playing the like Meta and Google game, and it's really hard because they're not able to drive profitable acquisition because they're not getting traffic outside or acquisition outside of Google and Meta. But I think the one exception is and this is like not new news is like uh Tik Tok has been an amazing growth channel for small brands and just like can you figure out the algorithm?

Can you create content? Tik Tok has done an amazing job of automating and scaling content creation and influencer and affiliates. I've learned more about their affiliate program than I have. I went to like their beauty summit a month ago and it's insane what they're doing. there. I didn't even know this existed. They have this Slack uh channel they call Lark. It's like Tik Tok's uh Slack system. They actually for some brands, they create uh channels and they just throw influencers in there and the brands will create these like tiered almost like MLM style sales incentives for like hundreds of influencers at once.

And you've heard about the these tactics. I feel like some of the DTOC drop ship bros kind of figured this out on their own, but like you know the fact that Tik Tok is facilitating this for brands and they have this like Tik Tok shop open collaboration where affiliates can like sample and you know you you uh they pay for the sample until they create a piece of content for you. So, they've really found a way to like scale and automate.

And that's where I'm like, that's the one exception to this where it's like if brands can figure out social content and to create like really good native social content and scale out their affiliate program on Tik Tok shop, that's the exception. It's sort of an interesting It's an interesting thought. Like it's almost like that is what brand what quote unquote brand marketing is for early stage DSC bootstrapped companies.

Like it's just that like so it's still influencer driven whether it's Tik Tok or anywhere else, right? It's still influencer driven and it's still probably not going to get you a direct return in terms of like necessarily the organic post or you know the old days of pay for post and you get you know sales right away. Like it's it's still performance driven though in that you turn that content either like Tik Tok shop or or like an you know an affiliate strategy where it's like truly like you know direct returns through the affiliate or you're taking that content and putting in your ad account or maybe m multiple of those at the same time.

It's like that there's still much more manualness to it than there is even with the things that you just described with TikTok. Like there's there's it's harder to measure. It's going to be more inconsistent. you're going to lose some money at with working with different people and you're going to make some money working with other people. But what it does is it begins to get you in the hands and mouths and content uh you know feeds of of influencers which still people are influencers still rule marketing in some ways you know like it's just so I wonder if that's I wonder if that's the right answer.

It's like essentially brands ought to be thinking from an early age, how do I get my product or from an early stage, how do I get my product associated with uh the people who my customer is influenced by and and if I can do that in a way that generates even a break even return or something like that, that's a win. I'm going to do that as much scale as I possibly can. It reminds me a little bit of like hearing about what uh Jack Rubin and Pretty and Fig did. you know, they worked with Kinship and it was like, you know, they did massive amounts of seeding just in the UK for a long time and it was just like thousands and thousands and thousands of packages going out even before it sort of made obvious financial sense and then turn all that into content in the ad account and so a lot of it didn't work in the ad account just launch all of it and they're finding a way to make that but like you know now four years into the journey or whatever they are they've probably had 15,000 posts or something like that you know like I I don't know I have I made that number up I've had Jack on the podcast a few times so people are going to think I'm saying something specific.

I'm not like, but I I know it's something like that effect where it's just been so many thousands of posts with a product and so many influencers hands over so much time that eventually that kind of builds up and then your performance marketing comes kind of behind and alongside that as a way to amplify that. Like uh yeah, I'm I'm working on a brand right now that I'm going to launch someday. I've talked about a few times here.

I haven't told people what it is, but like uh it makes me think about that. Like I wonder I wonder if that's the thing I would tell myself from an early age. How many of packages could I send out? How many how many packages could I afford to send out? And what kind of system could I could I build to afford to send them out so I can get that that kind of stuff happening from as early of a stage as possible? And that's sort of the equivalent in the early stage of a business of like brand marketing.

It's still not quite the same because you're still going to measure it on some kind of performance level. You have to have some kind of return on it. But yeah, that's that I don't know. It's interesting. I I like the way you just approached that question. If I can be 100% honest with you, there is only one newsletter that I read regularly and that is the newsletter for my friends at Workspace 6. Workspace 6 uh is uh I read their newsletter because I just love what they are doing in the e-commerce community.

It's Workspace 6 is not just a newsletter, of course, it is primarily a community for seven, eight, and nine figure e-commerce operators and executives. And it's really hard to not get a ton of value from a membership like that uh if you just engage at all in that community. Uh Workspace 6 functions primarily on Slack and so you can interact in real time really quickly with uh hundreds of other e-commerce operators in your space.

So as you're working through questions like should I get this piece of software? Should I hire this agency? Um what are you doing about tariffs? those kinds of things. You have immediate access to a community of people working for the same problems who are at your same business stage, a little above it, a little beyond it, who can really help you with it and who are engaged in the community as well. It's just a really great thing.

It's only $1 for your first month, $99 a month after that, and there is no annual commitment. It's just a monthly commitment. Um, again, just really hard to figure out how you're not going to get more than whatever the thousand dollars of value that it would cost over the course of the year if you um hold on to that membership because there's so many things like this that come up where you just need help and support from other people.

And wonderfully, I am not allowed in the community and neither is any software provider because they keep it only to e-commerce ex uh brand executives and operators so that people can speak freely and honestly about that. My own clients are in workspace 6 like a few of them are in there. Um, when I asked Sam uh from Workspace 6 if I could get in there and check it out before starting to do ad reads, he said no because your clients are in there and they need a set space to talk about your business and I think that's fantastic.

So, go to workspace 6.io. Workspace 6.io. Check it out today. See if it's a place for you. Highly recommend getting involved there and seeing how you can make your business better by connecting with other e-commerce executives and operators in Workspace 6. Yeah. And it's it's not too dissimilar from a mature brand expanding internationally. their employ they're doing the same thing like you know we're entering new markets and we're doing the same thing we're product seeding we're getting our we're getting influencers to talk about our product that people in the market already know and trust we're putting spend behind it we're seeing what works but it is really like very similar to what new brands have to do today um and I think the other like brand marketing lever that I would say young brands should work on is partnerships.

Another one that's like so painful, manually labor intensive. All of them are like unique and different and everyone wants to, you know, and it's hard to find brands that are brand aligned and but you're essentially what you're doing is you're getting exposure, free exposure to a totally other brand's captive audience and you're potentially doubling your, you know, audience with maybe product swap or whatever else it is like coupon codes or, you know, it it's just like small ways to get in front of new audiences without having to pay advertising dollars for it, which I think Yeah.

No, no. Yeah, it it makes makes sense. You're right. They're so painful and so manual. Um but but and but and and there's going to be some sort of brand shine that happens if you if you're with another brand to some degree. It's like, oh, if we're associated with this brand, it's, you know, it says something about who your brand is. You even if they're not bigger than you necessarily. It's just like if this brand is for the same people and they're non-competitive, then we want to be there with them.

Um like let's talk about as you've added brand marketing. How do you guys measure that? Uh do are you guys just like measuring impressions? You doing surveys doing brand lift stuff? You checking brand search? Like when you guys actually go do like more sort of legitimate brand marketing like that? Like is there some kind of is does your performance marketer data driven brain do something with that data or you just just yolo it at some celebrities and see what happens?

Yeah, that was one of the things like that really sold me on brand marketing was my time at Bobby being the growth person and going into that period of oh we're not advertising but we had a goal where we're like okay the White House just mentioned all of our competitors but they didn't mention us and we are able to track share of voice for all of our competitors and their share of voice is higher than ours. So, I was like, here's our goal team.

Like, I'm not on the brand marketing team. We have had uh the business has an amazing chief brand officer. Um, but I was like, let's actually quantify this and put some numbers behind it and set out to achieve a share of voice that was on par with being mentioned by the White House. And so, that's kind of how we approached like some of our brand campaigns. And then we were able to measure the conversation, the lift. Um, and in that in Bobby, that's where I uh ran like a a market study, like a consumer insights, market segmentation study, and that's where we were able to get a better understanding of like, you know, let's take a dipstick in time of like where our brand awareness is.

Let's understand the market segments, who is our customer and who isn't. And that's where you start actually doing like once you start doing market segmentation, you can get a little crisper on how to take more market share um and how to really more meaningfully compete as a leader in the market. And I brought some of those things to Ilia. So when I joined, I was like, let's do like a light audience insights and segmentation study.

Let's put in a brand tracking tool. So, we have a tool we work with um called Tracksuit, and it's like a monthly survey that actually surveys people in the beauty industry and tells us where we're at in terms of awareness versus our competitors. And then with that awareness metric, we can also see like consideration and like how many people are considering us, like what's our differentiation score? And then we're able to kind of piece together like, okay, well, this brand is twice as big as we are and they have that much awareness.

So if we want to be twice as big as we are, then we need to actually drive a similar level of awareness. And it's not always one for one because you need to drive awareness with a market segment that is actually prone to buy. And so like that's kind of the ball game now. And it is measurable. It's very slow to measure and you can't actually attribute each marketing activity to driving awareness. Um but essentially what we do is we do a series of you know activations.

We have go to market plans for new launches and we kind of put some frameworks around our marketing and then we just measure the lift in brand awareness over time and we're like okay we're growing our awareness is growing. we're doing the right thing. And then we layer incrementality testing over that. And we're actually able to see like at least from a media standpoint and an advertising standpoint, what is driving instore sales?

Like what what are we doing that's actually driving like omni channel sales in the period that we're running the media? I have a theory that uh that basically the more you channel expand also the more you have to do that. It sounds like your Bobby experience actually works against that theory some. Um, but that like part of the deal is part of the I think part of the reason performance marketing works is that uh is that the goal of a Facebook ad of a the magic of a conversion optimized Facebook ad is the ability to get from ad to the place to purchase with no steps in between just like quickly and it's like click and buy in this one place.

And if that's like sort of the only place for the person to shop um then it it makes perfect sense. Or even if it's app plus Amazon or something, it's like it just sort of makes a lot of sense. And whereas if you are running like brand marketing messages and your only place for a customer to shop is your DTOC site, then they really have to go out of their way to go to go to D to your DC site and make the purchase, right?

They they have to then they have to think and do that. And again, maybe if you had Amazon in, there's like a categorical search element or something like that where you might come up and they might have seen you. But if you are actually in mass retail, then you now are at a place where it's like, oh, I'm walking through Ulta or whatever. And I and now like the presence of the package the packaging you know is a like a reminder back uh to the customer about uh this ad that they have seen somewhere.

And now this mix of sort of like awareness and consideration can actually get met by the ability to actually capture the demand with a bump you know back from the sort of distribution channel. And and so I sort of think like part of the reason that brand marketing as people think of it doesn't work that great for.com business is just because they're not available enough places to buy and that that sort of the two the two of those the expansion of the demand capture with the expansion of the sort of funnel stage approach are really handinand and that you really shouldn't do one without the other.

It's just like when DTOC brands go into retail for the first time. to go to mass retail and their performance marketing like stops working as well or something like that and they're like they're confused about how to measure it or their sell through is not as good as they wanted and it's like wait how do we support retail sell through it like oh we have to do things that don't necessarily create a onetoone purchase on my on my website in the same way and you have to start thinking really differently precisely because the demand capture is is different you know yeah I feel like the that's a really good you know way to look at it like the stage in which this type of measurement this brand measurement is relevant is probably um more relevant for omni channel businesses.

I think Bobby is the exception because they were defining a category which was like online baby formulas never existed and I think the market was kind of smaller like when you compare beauty to infant formula it's a lot smaller market and so they were really competing for share of market in a meaningful way and they're like okay now we actually need to understand the customer which ones are going to stop going into store and buying online.

Um yeah it's it's super interesting and I think the other the other thing that I would say in is building brand relevant even for a DTOC brand I think it is because I this is not sc I'm going to say something not scientific at all but for many brands that I get served ads for I've already been to their site and it was the source wasn't through Instagram and I start seeing their Instagram ads after I've been to their site through a referral or through some other means of discovery through some research that I've been doing.

And so I think that's where it's like, okay, are you com are you competing in the auction against other brands and how well are you competing? And it's kind of very similar to the example you gave of walking down the aisle. Like when I'm scrolling down the aisle of my phone and I see a brand that I've already heard about somewhere else or I've heard I've seen something or I've seen my friend talk about it or I saw an activation that they did, I'm like, "Oh, I already know this brand.

So maybe I'm more likely to purchase now that I see their Facebook ad or their Instagram ad or same thing as like walking down the aisle and you've already seen something. So now you're more prone to buy. That's where I'm like I hear a lot of brands like talking about and we we did this too. I think before we had measurement, we were looking at our Facebook rolling reach and we're like our our new accounts reached was not going up and that's where we're like okay we just have a hypothesis like let's move upper funnel in some of these campaign types and see if we can reach more accounts and I think it's like that is the game now is like how are you reaching more people without just running a meta conversion campaign like there has to be some other way.

Yeah, this is where a lot of people are turning to YouTube now, I think, is like it's it's almost like the calculation for a lot of brands is the the next best place to spend your next dollar for a very long time is a meta conversion campaign and like maybe a categorical search campaign or something like that on Google depending on how competitive you could be there or shopping campaign or whatever. Uh but that's kind of like you said that sort of first stage, but then there's the second stage which is like okay now now where's the next place to spend spend my dollar?

And um one instinct is to go towards a reach campaign on meta, a clicks campaign on meta, video views campaign on meta, whatever. Um but what I think a lot of people are doing is that is going like oh actually the next place after meta conversion campaigns is YouTube conversion campaigns basically which is harder to measure uh sometimes a slower return sometimes a little bit more of an omni channel effect. You got to use incrementality testing.

The inplatform the dashboard is going to be wildly wildly off. clickbased measurement is not going to work at all. 50% of YouTube's watched on a TV. You literally can't click it. Like so you you get into this weird thing there, but um but that that's where people go and it's just sort of stages out from there is like is just how do you keep doing that? And as it turns out, what ends up happening is that your return on that money doesn't just get pushed lower and lower and lower and lower as you'd expect, but actually it sort of has a secondary impact of increasing your awareness stages out and you sort of slowly build that baseline awareness so that in fact all of your campaigns perform a little better than they would have if you would have just done one of them at a time alone, you know.

Um, so that that's my sense of how it tends to work for brands as they grow that sort of like the awareness creates more awareness. There's a little more word of mouth out there. There's maybe maybe you've invested in influencer, whatever. And suddenly like your your ad spend as a percentage of your total revenue isn't necessarily going up that much as you grow. Like your CAC is essentially holding fairly constant or something, you know, but it's just like it all becomes less measurable. it all becomes harder to see and you have to use different tools and you have to think about like sometimes it takes three months instead of three days for that purchase to come through and but you sort of give it enough timeline and that's the way it ends up building for people.

That's my sense of things at least is that like for those larger businesses. Now, frankly, I mostly deal with like earlier eight figureure businesses. But that's my sense that they sort of build the ability to spend money in that way over time. And each stage requires you to go another step away from closer me uh measurability uh some measurability but get you know a little longer of a timeline consideration timeline all those kinds of things until you're Ilia and you're multi-9 figure whatever international and you're trying to figure out okay now how do we layer more and more and more and more and keep growing and think smarter about reaching people at each stage and if I get you into the awareness stage today well then nine months later might be when or three months later maybe you go to consideration and six months after that maybe you're like really considering buying at some point, right?

But if you keep doing that over time, that nine month time cycle will will eventually hit and you'll end up having more customers and and and it works. But it's just, you know, in the earlier stages, you can't afford to wait that long and, you know, it's harder to measure, like I said. And so that yeah, that's my sense of like how sort of series of actions tends to work. It's interesting that you say it's your sense because like in a way you can actually see it in different businesses like you know we we all know the the smaller businesses are probably spending like at minimum 25% of their sales on ads probably closer to 50% of sales on ads and then you see these like larger businesses that are like spending 10% of their sales on ads and you're like how does that happen?

They're not scaling their paid media at the same rate of sales, but it's exactly what you're saying is they're building over time. They're building a distributed strategy. They're growing their awareness. They're bringing in customers from through other ways. And so, like, yeah, I think your sense is validated just by that, just by looking at the P&L of businesses of different sizes. Yeah. And I mean, in the early days of DDC, right, like part of the deal here was that it was like the the the promise was that the middleman would be gone.

We would cut out the the nasty retailer who's who is the source of all of your markedup products, you know, stupid Target out there just taking all your money. U but of course, as we all know, there was there's always going to be a middleman and Target got replaced with Zuck and uh and and so now Zuck takes all your money. But for your business, you've just all you've done is reintroduced I mean, I don't know if you guys are in Target, but like you just reintroduced Ulta or Sephora as the middleman.

And so that becomes the margin hit instead of the Facebook ad. So So maybe your CAC as a percentage of revenue comes down, right, to 10%. But of course, your actual product margin by the time the retailer takes their cut and I don't know if you guys do like a 50-50 profit split or something like that depending on what your retail margins are and all that, but like that's essentially the same thing as paying the money to Zuck for performance marketing.

Uh where you're just like somebody's going to take half of that margin and it's going to be Zuck or it's going to be a retailer, but they're going to do the job of getting it in front of people. And Sephora's done an amazing job building an amazing business where it's huge and in every mall and is in every, you know, whatever. And so they're going to be there. And so when somebody wanders themselves off into Sephora, they play the Zuck role.

They're the product discovery kind of thing. And there's people in there who are trained with your product, you know, whatever. So u anyway, it's just uh that I think is I'm assuming is part of the way that happens, right? is like, yes, technically your your marketing as a percentage of ad spend goes down on the P&L as you get way bigger, but you're still doing the same thing, which is paying a large amount of your profit to somebody to get your product in front of people.

You know, that's so true. And now China's telling brands that they're the middleman and yeah, straight to the supplier or the factor. I think in fact, President Trump is telling them that China is the middleman, right? Or is it? Yeah. Yeah, that's true. It's all life is just a series of middlemen that you through. It's a good point. Everybody's coming for your profit. Everybody's coming for it. You just got to protect it.

Hold on to it. Greedy hands everywhere. Yeah. So true. True. And again like I think the that just that becomes so much more complicated when you are in retail and there's a point at which like you know you're if you're a DOC first brand and you expand into retail there's this like inherent brand awareness that comes from being in the retailer and then and then um and then there's like a clear moment of realization where it's like oh the retailer is your customer. you have to drive your own sales through.

Oh, nice. Yeah. Yeah. And like you're on the hook and the retailer's fighting with Amazon and they're all going to lose because Amazon is just coming to eat everybody. And so you're it's really interesting like the dynamic between brands and retailers. Um how delicate it is, you know, how much brands are maybe don't realize when they expand into retail how much on the hook they are for their own sell through. And if you expand your distribution faster than you're able to expand your brand, then you're just trading sales between channels and one channel is going to eat the other.

And so I, you know, you hear about this all the time. That's such a good heruristic for thinking about that problem. That's so smart. Yeah. It's like the DTOC, you know, channel owners like, "Oh, my DTOC channel sucks because we expanded into retail and it's cannibalizing." Like, "Dang, retailer, it's your fault." Well, it's like no, actually the brand's responsible for growing its awareness f as fast as it's growing its distribution.

And if you think that you can just get sales by expanding distribution, you're gravely mistaken. And you have to put the money into the markets or you have to put the money into the market to grow, you know, your business no matter what, whether it's DTOC or in retail. Yeah, that's that's a very smart way of thinking about the cannibalization problem. I really like that a lot. I've never heard anybody frame it that way.

Yeah, I think that's really really clever that essentially it will be cannibalistic not because retail is cannibalistic but because you have not spent enough money basically no one knows who you are like of the 10 people you know like if the if the market is you know however billions of dollars and like less than 1% knows who you are and like of course those people are going to go if you if you're now suddenly available in a more accessible channel like why wouldn't they go there so now it's your job to like find more people and that's the challenge which is again why that awareness type of marketing is so important as you grow and have distribution.

H I really like that a lot. Um what do we miss anything today Shireen? What else do we need to talk about? Do we want to talk about AI tariffs? The new pope. What do you think? Oh yeah. I thought it was Pope Trump. Did you see that? Uh yeah, that's a good point. Yes. talk about all of them at one time. Oh yeah. Pope Trump AI tariffs and pope all at once. Good point. Yeah. Yeah. Yeah. That's funny. Um Yeah. The uh the Do you have any uh maybe we should just do like Do you have any other like just smoking hot marketing takes right now?

That is just like this is the thing that you want to come after everybody for and this is Yeah. Do you have anything like that right now? Can we just hit the rapid fire ones before we wrap up? I mean, this is not like this is not a hot take, but it's more of a like existential realization that like, you know, this period we're at an inflection point with AI right now where it's the new gold rush. There was like the Facebook ads gold rush.

If you missed it, me and Andrew missed it. We could have had loaned a Lamborghini for six months, but we missed it. But the AI gold rush is happening now. And if you think about it, it's like all of these uh periods of innovation are very cyclical. A lot of people lose jobs. It's really sad. And then society changes. Like when the tractor came out, the guy that had his like little horse that was doing whatever you know he was doing.

I don't know farming that well. I shouldn't have chose a farming analogy, but like when the tractor came out, like that was a massive innovation that upset a lot of farmers. And now we're in but the tractor like completely changed farming. And so now we're in this period. And what what I think about a lot is businesses established businesses always have to watch their back when it comes to competing in the market. But now you have a new generation of brands that are going to come out with, you know, a fraction of the employees and they're moving five times faster because they're using all these tools and they're embedded.

They're building their business around these tools. And that's like the big thing that I'm really like excited about. And it's probably going to be very devastating for the brands that can't catch up fast enough. But it's going to be a massive opportunity for that next generation of brands who can move faster, be more profitable, be more efficient, like take share from the slower moving giants. And like it just really excites me.

Um, but I think for those brands, they still have the same challenges we just talked about. Like, you can't just put however many dollars into the Facebook ads machine and expect, you know, profitability. Um, so how do you continue to build your brand through some of these like growth hacky brand uh building ways that we were talk about talking about and like build your business around AI and just like scoop up so much market share like it's going to be amazing.

That's the new Lambo pathway. It sounds like is what you're saying. That's the new Lambo pathway. Come on, we still have a chance, Andrew. Yeah, I think I'm too old. I think I think I I've had that experience a little with the AI thing of just like this is like I used to wonder like when you get older in your career and you just sort of stop being able to relate to what is happening in the newest and best ways. Like how does that happen?

And I yeah, I think it's just it might be happening for me is all I'm saying. And I think I there might be it's just like an incredible opportunity out there with AI right now that I'm sleeping. We're pretty AI forward. We're like trying to use AI in every way we can to make our processes better and all those things. And it sounds like you guys are too, but it's a it's a big it's a big shift to turn, right? Like at at Ilia, you guys have to figure that out in some challenging ways.

But yeah, it just it feels still like like you said, like there's somebody out there, Jacob Posal and others who are just like they're just going to build brands that launch 10,000 ads every single day in the ad account and one of them's going to hit and they're just and they're just going to press a button and it's going to just launch ads. It's just like they don't, you know what I mean? It's just going to be the endless machine and the they're going to use that to sell a product that's like a a kids coloring book where all of the pictures were made with AI, you know, and so like that didn't cost them any money and it's going to be printed on demand so they don't have to store any inventory.

And yeah, there's some, you know, something like that is going to be like, yeah, the Lambo pathway. And I'm just too old. I just I just am not going to do it. The print on demand Lambo pathway still exists. You heard it here first. on the Andrew Ferris podcast. If you don't have a Lambo yet, we just gave you the pathway. It's Yeah, it's because you're sleeping on the opportunity. It's your own fault or you're too old.

Uh, okay. Anything else? Any blistering hot? It's just anything super spicy right now. Sometimes you have something like that that makes it way to X, but I don't feel like you you've said anything like that for a little while. Maybe you're getting soft. I'm getting I'm getting I'm getting too old, too. I'm too tired. This is That was my hottest take. Lambo halfway. You know how old are your kids? They're one just turned seven and four.

Okay. Well, yeah, you're out of the most tired parenting stage. You don't have an excuse to be too tired, I don't think. I don't know. I'm just working like a dog over here. Okay. All right. Okay. To do my job for me. They're not really. Yeah. Yeah. Yeah. All right. Um Shireen, if people would like to follow up with content of yours, uh where do they do it? They can find me on Twitter. Okay. Uh probably roasting people, making memes, or tweeting useless uh information.

A great follow on Twitter. You got to do it right now. Yeah. Yeah. If you want to if you want to just see me um drop some some memes, go to Twitter. If you want to actually see me drop some professional information, go to LinkedIn. Uhhuh. Um Okay, great. So, so tw uh Twitter asks for the memes. Uh and LinkedIn for the information. Both of those links in the notes. Shireen, thanks for taking the time as always. Thanks, Andrew.

I hope you love that episode as much as I did. I love talking to Shireen. It's just uh always fun and always at some point goes into some giggles. You should follow Shireen. She's a really great follow everywhere you can and just stay up with what she's doing. Really brilliant person. You sub subscribe to where uh to my show wherever you're watching or listening as well as to my newsletter. Uh go to ajfgrowth.com, drop your email address in the uh pop-up bar, popup or the footer for that.

Get my newsletter. You're going to like that. You'll also get my four free essential e-commerce resources there, which is good for you. And don't forget to follow up with my amazing sponsors. I've got uh I've got uh Workspace 6 in this episode. Workspace 6.io. Amazing community for seven, eight, and nine figure e-commerce brands. I actually have Sam Mandlesson from Workspace 6 coming soon to talk about that 8 figureure portfolio of businesses he's built profitably.

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I've got Will from IQR. I've got uh just a whole bunch of good stuff. You're going to love it. Build Alessandro talking about the sale of natural bod. That's going to be a great episode. Um subscribe wherever you're watching this thing. I'll see you next time. [Music]