The Details Of Managing Cost Caps Day To Day transcript

how do you actually go about managing cost caps bid caps Target row any manual bids in Facebook ads from day-to-day as great as it sounds to just set a Target and have metago and hit it every time we all know it doesn't always work that way as much as I am a believer in all of those tools it just doesn't work that way all the time not even I think that so I'm going to tell you today exactly how I go about day-to-day management of cost cap bidc cap TRS targets including how often I make changes How I build targets all that stuff let's get to it everything starts with a 28 day click goal row ass okay that's where I start everything and the reason I do that is that's the broadest window that meta ads will give me and I think captures the vast majority of the value that meta ads drive that's why I use 28 click that means you have to go set a custom column you could do that in the in the drop downs in your meta ads dashboard 4 28 day click there is no um pre built column that allows you to see 28 day click performance uh without setting a custom column so you have to set a custom column to do that but you can put 28 day click revenue and roas in your dashboard and that should be the place that you start okay so that's what I'm managing towards um I assume that 28 day click Rass and Facebook ads 28 day click revenue and Facebook ads in the dashboard is basically right I don't use a third party attribution tool for that um that I think that number is basically right most people you know people who are nervous that that is going to over report or U over report Revenue you know I I think they have these ideas that like Facebook is trying to steal money from you or whatever um the incrementality tests that I've seen show that usually even 28 day click revenue is Under reporting the full value of your spend in terms of the incremental value it's producing for your business so it's a safe bet I think to look at that it's easy doesn't require any thirdparty tools and probably gets at least the majority of the value even if you don't um isolate 28 day click revenue for just first time purchases which is something that's now available also in the Facebook ads dashboard so go to your column set go to compare attribution Windows click 28 day click revenue on and while you're at it click one day click on and I'll tell you why in a little bit okay um but that is something that you should go and do right away so that you just have that in your dashboard all the time and that is what I'm using to set a Target um for my business okay so that's the starting place for all for all management of ads whether you're using manual bids or not and basically all I'm saying here is you need a Target you need a Target that you're managing to and that starts with um some kind of Target in my view in the dashboard and the Target that I use the revenue window that I use is 28 day click Revenue okay so start there okay um now how do you build that Target you build it off of your unit economics and I'm going to show you right now on screen if you're not wa if you're if you're listening to this uh episode you're not watching it it's okay I'm gonna be able to talk you through it but if you're watching it you'll see that I've put up on screen a unit economics calculator that I use and this is one of the places something I haven't really explained much before in much of my content but if you if you've subscribed to my email list in the past you probably know um or you've probably seen this tool it's in my for free essential e-commerce resources you go to alf.com right now sign up for my email list I'll send you this for free you just copy duplicate a version do it for yourself okay um and it gives you a few targets including your break even row ass um uh at 28 day click based on your unit economics that's the way I'm building my targets okay so um so I start with break even I add all of my unit economic information everything that goes into getting a product um from a manufacturer to a customer all the variable costs associated with that including shipping costs all those things and then I compare that to the aov see how much margin I have and there's some formulas built in here that allow you to see what a break even 208 day click row ass is now whether you actually Target Break Even or above that or below that or whatever is a separate question from this episode that I do not have time to get into here relative to this episode of my podcast but uh but you you can start with that Target it spits it out and here's the thing that I think is really helpful here okay what's really helpful is if you look you'll see uh that there is um a delayed purchase multiplier as part of this okay and the delayed purchase multiplier what that is is a calculation of the gap between one day click or 7day click Revenue you can set it wherever you want and 28 day click Revenue okay so the idea is um if I get uh if I if I if I've entered in my unit economics and I have now a 28 day click Revenue Target I can can't actually manage ads to a 28 day click Target I can't tell Facebook to optimize for that number I can only tell to optimize for one day click sday click or I can add in views or engaged views okay and so this is the fundamental challenge of managing as day to-day and you'll notice I haven't said anything yet about cost Caps or bid Caps or Target RS or anything like that it's because those are all Downstream from here okay first we have to get our targets right and we have to know what targets we're trying to hit and so what I do is um typically uh because I can't because I can't optimize for 28 day click Revenue I'm trying to project out what Revenue I need on one or sday click uh on a one or 7day click basis and then and then assume that that Revenue will produce additional value beyond that in that 28 day click time window okay because there's some multiplication and this this makes sense when you think about customer behaviors right plenty of people are going to click today wait three days and buy well if you're targeting sday click Revenue in three days that Revenue will show up but if you're optimizing for one day click Revenue in your basic like automatic default dashboard that Facebook ads give you gives you that Revenue won't show up okay that Revenue won't show up uh because you've only uh told Facebook to optimize for one day click as the target okay and so what it will show you in a default window when you optimize for one day click is only that Revenue now I'm also taking out all view conversions here I think engaged view is probably a useful conversion window not a huge deal to me U but it's reasonable for me to leave that in there I've played with it a little bit it's just doesn't seem super additive and does muddy the waters a little so I don't use that um but take all your view attribution out otherwise if you want to have engage View and then that's fine with me um but basically uh click click-based targets I think are um highly incremental uh in most of the testing that I've seen they're highly incremental which means they're they're actually producing the value they say they produce as like new customers in in your business okay and therefore are pretty reliable um and so I use all click-based Targets and then like like said what I'm doing is I'm building a multiplier for what kind of Revenue I need to hit on day one or day seven depending on what I'm optimizing for to get me to day 28 and that's what I call the delayed purchase multiplier so here's some simple math to think about it right if you look on the screen right now I've got it set up as one day click and 208 day click you could really do this either way um you could change 1 DC to 7 DC if you wanted to it doesn't really matter that much um just make those whatever but uh in fact you could even add a third uh row into each of those you have one 7 128 DC all in there okay um and what I do is I have this delayed purchase multiplier here so you can see like I have in this $100 average order value um and 65 points of margin okay just about uh almost exactly um and so the first P first purchase break even here is a 1.54 but that is a 28 day click number because I'm assuming that my ad is driving more value than what is showing in the one or sday click window okay and that means that I don't actually want to Target a 1.54 on one day click or s-day click if I'm doing Target row ass or in this case a $64.80 CAC okay if I'm doing lowest cost which would be cost cap or bid cap uh all right so um so I don't want to do that what instead I want to do is think about what number do I need on one or seven days that will ladder to a 1.54 and the simple way to do this is to actually look at your historicals in your accounts ideally with an ad that has been turned off for more than 30 days there's some details of this that are a little confusing but because meta ads reports revenue on the day of the purchase not the day of the click um you you probably if if you if you are and it's on a 28 day maximum window you want an ad that's sort of been closed that hasn't been running for 28 days and you want to find as much spend as you can it's been turned off for that long usually some kind of campaign if it's a sale campaign it might not be a great indicator but if you have some Evergreen ads that have been turned off at some point for more than 28 days within a six to six month to one year time window nothing major has changed in your business over that time uh and you may have turned off ads or campaigns for any number of reasons okay um go look and see what on average again you can set up your compare attribution uh tabs here go look on on and see what on average is the relationship between one day click 7-Day click and 28 day click in there and you can build that ladder and that percentage multiple is what you would need to hit so for example in the sheet that I'm showing you here there's a 20% delayed purchase multiplier is what I have and what that means is if I was getting a uh uh a one to one on one day click in this uh sheet right um then I would assume 20% additional value over 28 days is is what would come from that okay so the simple way to do this math is do 28 day click divided by one day click or 28 day click divided by seven day click and just take the percentage right subtract the one there and take the percentage okay so if uh in this case it would be 28 day click over one day click would give me 1. two okay um and so that would be a 20% window so 1 point2 take out the one and now you've got 02 which is 20% okay so um so if you have that then you know like in this case what it should is with a 20% delated purchase multiplier the one day click Ras Target that I need is a 1.29 or the one day click CAC Target that I need assuming the same row is $77.77 and now I have the basis for my cost cap and of course or my bid cap um and I'm not going to get into it here which which one you should use cost caps versus bidc caps I've put out a bunch of content and why I prefer bidc caps you go look that up just look up and Fa bidc caps and YouTube you'll find a bunch of it if you're not measuring your ads at this point with a pixel from Billy you're doing it wrong Billy is an incredible tool that you can use for a One-Stop shop replacement for basically the entirety of Google tag manager um but the place where I've use them the most is ASM my pixel for meta ads uh especially relative to the Shopify native integration Billy is just incredibly smooth incredibly affordable and tracks your ads tracks the events on your website with uh incredible quality and I know that because event match quality uh scores tell me that in meta ads and I've done the tests to do this I've run uh Billy against other third-party pixel tools I've run Billy against shopify's native meta ads integration and consistently I see two things the event match quality score in meta ads is better so that's the objective measure I've also run Billy against other tools uh side by side same ads two different campaigns and Billy outperforms them very consistently nearly all of my clients use Billy I love the tool I think it is extremely helpful and you will like it too they've also added cross Channel attribution just like it's a throwin on this tool which is crazy I don't even use that very much because I just don't use a lot of third party attrib tools but if you're using an attribution tool you might be able to save some software cost switching to Billy like it's really really something go to billy. billy. you go check it out for yourself today the first month only costs you a dollar so you should test it uh billy. a to get best the best pixel tracking you possibly can for your meta ad store get the best data to your uh to your ads and therefore the best performance you can get of course you should be subscribing to my channel by the way um if you like this kind of in the weeds media buying content you're going to like a lot more of the stuff I put out I try to go into the weeds here um every so often and really get detailed so you're going to like it so go subscribe right now if you're doing that okay so um the delayed purchase multiplier though you can change and it will reflect that so now I just changed it from 20% to 40% and now all of a sudden my one day click row Target is a 1.1 okay not a 1.29 it's a 1.1 um and my one day CAC Target is $90.72 now my 28 day click Target did not change okay it's just my one day click Target and the payoff of this is really simple okay the payoff is I can't wait 28 days to see if my ads worked I need to know sooner than that whether or not my ads are performing especially because spend varies massively from day-to-day and if you've run manual bids before uh right any and manual bids I just mean again cost any cost controlled um media buying what you know is that your weekend spend especially tends to be much higher than your weekday spend and that can make everything look bad if you think about this right um if you need a 1.1 to make money uh or if you need a let's just say you need a 1.1 today to produce a 1.5 on 208 take click if that's your target well that means the more successful you are today the more your Blended metrics are going to look worse today okay because you're going to be scaling at a 1.1 so imagine yesterday you spent 10 grand and today you're spending a 100 and you're spending both of them at a 1.1 okay if that's what happens then you're blending up at a 1.1 if you're spending at a 1.1 all day long you're actually probably G to lose a whole bunch of money today because almost nobody I don't I mean I can't imagine almost any business has maybe a super software business of some kind is making money at 1.1 so you're losing money all day today but you're doing that not because you're going to make money on LTV but because you're going to make money at some point in the future uh within the next 28 days on first purchase okay and that becomes uh the way you think about it so or break even or or however however your target is set okay again you set the target kind of wherever is best for your business um but the thing is you would still want to spend that money because it's it's not like a long cash conversion cycle or anything like that in fact the majority of that is going to come in the first seven to 14 days but you want to take the opportunity to spend while there is availability for you and so you want to you want to see that spend go way up I've had this happen with clients recently where their weekends have gone crazy and I've been like gosh should I be shutting it down looks it makes today's am which is or what some people call new customer Rass right new customer Revenue divided by total ad spent it makes today's numb look terrible it Blends down our average in a really bad way and yet it's probably the right call to keep that spend going and the reason it's the right call is we know or I know because I've done exactly the work I told you before for what my one day click 1.1 uh you know this a hypothetical number but what that is going to blend out to it's going to project out to at a 1.5 because and I know what my unit economics are and I know where I make money and so that's where a sheet like this is really useful and that the sheet here just does the math like I said AJF gr. comom sign up for my email list there this will get sent to you all right um okay so that is the starting point because you're going to bid one day click and sday click in your ads that's the way I do it and I'll just tell you also that my one that usually my standard account setup is one day click bid cap plus 7day click tros and I take the same same ads bids for each okay I have another video uh called the major thing your media buying strategy has wrong again you should go check that out um that video will explain to you why I run both of those side by sides if you like this go check out that video the major thing um your media buying strategy has wrong I'll see if I can get it linked in the show notes uh for us uh in the description here uh so that you can just click it okay so that's the basic basic setup that I'm running all the time which means I'm running some one day click some to 7-Day click and I have to see both of these by the way you should be warned if you are doing what I just said and running bidc caps and Tass in the same account you probably should know that sometimes the Rel that delayed purchase multiplier relationship that I talked about before sometimes those things actually are different at the for TR ads versus one day click or for 7-Day click versus one day click if you think about it optimizing for 7-Day click means you are by definition telling meta to Target longer consideration cycle customers which means perhaps the delayed purchase multiplier will be different than somebody optimized for one day click but you get those Targets in both you get and you see how that's going to go and you and you build from there okay so um so that's what you do but and now that is the way you set your manual bids to begin with right you you use unit economics you figure out the relationship between 17 and 28 day click you set up your campaigns you now have a Target and let's say you know you're solidly profitable at a 1.7 okay well call it a two make make make numbers easy now you've got a solidly profitable at a two row ass or a $100 cas we'll just call it okay that sounds great so you're like okay great I'm gonna use the unit economics calculator I'm G to figure out what that ladders to so that my two row s maybe it means I have to Target a 1.6 on s-day click or maybe a maybe for my $100 CAC I got to Target a one point uh $150 CAC on one day click whatever you you do all the things I just told you you set that up and the problem is things go wrong okay uh as much as I would love manual bids to work perfectly all the time uh they can go wrong in a whole bunch of ways okay sometimes there I'll just name a few ways that I see this go wrong sometimes sometimes um there is there you're asking manual bids to solve an impossible problem like there is inherent volatility and variation in your brand I actually did a video about this a long time ago but there's one brand that was using um cost caps for uh Dynamic product ads but they were changing out the products all the time it was an apparel brand where you know it was like jeans and shirts and sweaters and whatever and all of them had different prices and different releases had different products and different prices and you kind of look at all that stuff together and it's like well of of course the cost cap isn't going to be like super stable all the time it's because you're constantly changing the product set which means there's inherent volatility in your brand and so nothing could be stable it's it's actually an impossible problem that you're trying to get it to solve there is no past data in this constantly changing product set that's going to predict the future accurately um you're just going to you know now you can you can sort of manually manipulate this and I'll talk about that a little bit more and I think it's still I would still use cost caps and and Target roas or in my case bid caps and target roest for that but at the same time I would expect a bunch of volatility okay so what do you do when that volatility is there okay um another thing that happens a lot is there are big changes relative to Big moments or sale moments okay um you think about it right what meta ads is doing with manual bids is taking historical conversion information and using that to forecast future conversion information but what happens on your future is not like your past this is another thing I've talked about in past episodes okay um go look at one of my I think my first episode with Cody pler from from Jones Road we talked about this okay the problem here is that uh if you think about it if today my conversion rate is 2% and tomorrow it's going to be 4% not because of an ad being better or something like that but just because I'm GNA run a sale or launch a new product or or it's Black Friday or something like that okay there's no way meta can predict that that's actually fundamentally unpredictable from past data and so um so your meta so your caps May respond really differently and actually the place where this is really a problem it might mean you run a little profitable on the first day you just kind of let your caps run and they they will figure out eventually right the more purchases you get at the new conversion rate the faster it's going to learn but um this really becomes more of a problem especially in the back end of a sale because the reverse happens right you go from a 4% conversion rate back to a two 2% conversion rate now every click is worth half as much as it was before and suddenly met but meta spending like it did after it figured out quote unquote that you'd run a sale so how do you deal with that okay and how long does it take for meta to relearn that and how does it reproject conversions like these are questions that I don't know all the answers to but it's a reality of doing this the more moment to moment you are the more this gets challenging and this is where media buying and staying close to things um does require at least today a human element that is real okay uh there is no just sit back and let it rip all the time kind of strategy for this except for those rare lucky supplement Brands out there where you know you just don't run sales ever and you just are all you're doing is just trying to optimize subscription funnels like those probably require a lot less manual manipulation of this sort of thing um or just uh or manual watching of it okay sometimes something just seems off this is another thing I've seen happen where for whatever reason an account just runs high had one one brand I was coaching for a while where like we would run um cost caps uh when I don't remember if it was cost Caps or Target roas targets or what but they just basically constantly the ads constantly performed about 30% worse or 40% worse or something like that I don't remember what the number was exactly than what you set the target at okay now they did that consistently is the thing so um so there's a clear solution to that um but but they did do that and so that created a problem for this brand so how do you manage that if if the brand if the brand is constantly value that's different than what you're saying okay well um you have to figure out something to do there and I recognize that you can't just sit there and burn money all the time all right so having said all of that I want to also throw one other thing in which is that while I am totally fine with the idea that there that these tools are not perfect they are probabilistic forecasting tools and the inputs change all the time and uh and the outputs can can VAR all the time um first of all I think they are way better than the alternative like not even close relative to auto bidding they're just like way way way better okay but um secondly the reason I actually don't talk about those things very much and the reason I usually speak with so much confidence about manual bids is simple which is that that's actually most times not the problem most times the problem is you or me and our like inpatient um brains that do not understand probabilistic forecasting and can't deal with small sample siiz noise and all the things that get in the way of these things working well so I want you to consider the possibility before one of those things is is the issue I want you to consider the possibility that in fact they are not doing anything wrong and the problem is with you okay I want you to consider that I want you to consider the possibility that the problem is is is is wrong is is not with the the tool but with you okay you've set something up somewhere there's an optimization problem or something like that that should be your default position and then after that you can go and think about some other adjustments okay so what do I do when things are going wrong um or when when that's when something is changing or something like that um the simple thing to recognize is that um first of all if it is the case that you're that like I the example I gave earlier where there's say a consistent 30% gap between the Target that you set with your cap um and the actual outcome that's actually not a very hard problem to solve and the tool is still really really useful here all you do is just adjust your targets by 30% right so if you think you need a one uh Target Ross a one day click and it's a and you actually um are performing 30% worse than that then just adjust your target up to 1.3 until it shows you otherwise okay watch it carefully and see that you don't choke off your spend or whatever but like that should be a simple way to handle this is that you just you just adjust your Target and keep it there I have found in particular that Target Ros uh bidding tends to you it tends to need to be a little higher than your actual Target I've actually always kind of wondered if that's because meta is forecasting out that you'll get some very large orders even a small number of them that are going to throw off the averages and so um when it press forecast the aov uh in in the midst of the forecast maybe that's the reason why it does that but um that is a pretty common thing that I see where you probably need to keep your target realass targets a little bit extra High um you know who knows uh how that goes for your particular account but it's something to watch out for okay so if that is the case that's a simple thing to do and that's actually not very hard um that's not very hard you just go and do that okay otherwise um the way that I manage this from dayto day when there's this kind of volatility um again if it's consistent it's not so hard okay um but if there's these changes on the time the first question I ask myself is which side am I willing to miss on okay and this is a this is a consideration for me for the client some clients want to be reflexively aggressive okay again think about a subscription client that's going to make its money on LTV you may push out let's say they have plenty of cash you may push out the realization of their LTV from you know or the realization of their the point that they want to hit from you know 30 days to 60 days or 60 days to 90 days and that's like a little bit of a problem it can it can be created cash conversion cycle challenge depending on what volume you're doing this at but realistically most brands have 30 days of extra cash lying around they're not running it so hot that 30 days longer to realize their cash and then make a bunch of money on that customer like they're gonna make probably less money on that customer than they were before but it's actually still better for them to be a little more aggressive there than it is to pull back um and to spend less money because the customer is still so valuable to them that they'd rather Miss on the side of spending too much not too little in that case I'm going to build my targets from a day-to-day um to be a little extra aggressive and to be a little faster about making changes uh that that allow me to keep my spend going okay now on the other hand consider a brand that's at $5 million in Revenue it's a really tough stage of scaling every dollar really really matters the cash is really challenging all those things like for that brand especially if they're not trying to turn it into a hundred million dollar company next year okay right they don't have huge goals I'm gonna I'm gonna instead revert back to the side of airing on the side of caution so I'm going to set my targets all a little bit more conservative and do that this is a conversation with me as a as an agency person and the client to say like what what are you trying to do what's your cash like how you trying to like what's more important to you to spend more to spend less whatever okay and so that becomes like the first question I want to answer is which side am I willing to miss on and this is where again as much as I would love to think the tool work perfectly all the time the truth of the matter is especially if your agency side you're just not going to look a brand owner in the face I talked about this with Taylor holiday recently you're just not going to look at Brand over in the face and say like I don't know the tool should work never make a change like I even if the changes you make are just reflect the human bias towards action in a way that's not good um even if they're actually making things worse I understand why that happens and why people are frustrated and if you have some operator who's just a total robot brain who wants you to rely on the probabilistic forcast and they get mad when you touch it then fine but like most operators are not like that right most people are concerned about their cash all the time and they have a clear Instinct the most under optimized part of your business is your supply chain I know that is the the case because uh I have talked to so many e-commerce businesses and so many operators who just have done so little work talking to lots of Manufacturers really shopping price really working on terms all those things and the thing is it's time consuming sometimes even tedious work looking for new manufacturers that is why you should go work with my friends at move supply chain move supply chain is an offshoot of more Staffing the staffing agency you've heard me talk about a lot of times um they came from a background they're based in the Philippines and came from a background of being philippines-based employees in a US e-commerce business on the supply chain side of the business and they know their stuff I am working on starting a brand right now they're building my supply chain in the first week of of working together they had found 60 manufacturers reached out to over 50 of them uh and we've now narrowed it down to like our last three okay uh they're really awesome and also because they're Philippines based they're really affordable you can pay for incredible Talent there like the smartest supply chain people I've been around um and at the same time uh they can work on your business without it costing you an arm and a leg especially if you're earlier stage is the kind of thing that can really open up Margin for your business I just guarantee you if you haven't done this kind of work before in your business there is massive value to be created just imagine how much easier your business would be to run if you your unit economics look better imagine how much easier it would be to do all the things I'm talking about in this episode if your unit economics looked better you could spend more on ads make more money if you had faster turnaround times uh shorter lead times U shorter cash conversion Cycles like all those things can all happen by just hammering your supply chain you should look into if they are fit for you they will tell you on a um exploration call so go reach out to move supply chain go to mve supply chain.com tell them I sent you and get talking about find out if there are places in your supply chain including not just your product but your packaging maybe even your 3pl things like that um in your supply chain where you can get better go to mov Supply chain.com and get started today like most people have some sense of all the time they want to say like oh we can't have too many days like that that was too bad or oh that was really good um or oh we can't have too many days like that um uh in terms of keeping the spend low we want to make sure to keep our foot on the gas it's really important for us to deploy the dollars okay and there's all kinds of reasons people would come to those conclusions but typically people have an instinct so that's the first thing I would do is know what that instinct is think about it and build your plan according to that okay the second thing I would do all the time is to have a simple spot check for your ads at a given time to make sure things are basically right and that spot check that I use okay is last click Revenue um now all of this stuff well there's really two spot checks okay last click revenue is the shortest one and simplest one and I really love using last click Revenue what I mean by that is to actually take Revenue that is reported down to the level of UTM where the entire attribution window is they click from your ad to make a purchase that's it on that for on that one visit okay now last click Revenue drastically undercounts the full value of your spend but if you track it over a very long period of time the other thing you will notice about it and this is one of things you have to do track it at a weekly level and maybe at a monthly level the other thing you will notice with last C revenue is that it is remarkably consistently correlated to the roas and even new custo and am right again am acquisition um marketing efficiency ratio so new customer Revenue divided by total spend okay so basically the total value of the that your ads are producing across all your channels together it's just amazing how highly correlated last click revenue is and how consistently it moves with those 28 day click Revenue metrics which is what I report on and with am metrics right so you're basically going back and forth between a a very narrow window of performance but a narrow window that doesn't tell you the whole truth but the truth it tells you is it never lies about right that's what last click revenue is last click Revenue doesn't tell you the whole truth in fact doesn't come close to telling you the whole truth it drastically undercounts the total value your spend but the great thing about it is it never lies it it it manage it shows you exactly what happened at that level okay um and so you have to have your UTM set up well in your meta ads account I'm going to show you in the description for this episode my UTM string is there and there I'll put a screenshot um on the screen right now sort of where you see the UR URL parameter input in meta ads if you don't know how to do this okay um and you just copy that string put it in there and you'll get Dynamic and you'll get Dynamic UTM so that meta is sending the information with your ad to back to your website and then even if you're Google analytic ga4 uh setup is messed up which it shouldn't be if you've installed Billy if you've listened to me and used Billy for G4 tracking like you should have a perfectly functioning G4 and like with a click of a button extremely easy um or if you have um you don't even have to use Billy though it can or you don't have to use G4 you can do this I have a Shopify report that I just have saved and I check this and I'll just spot check my ad performance at a day-to-day level and see if my last click revenue is way off my historical so here's what I mean if typically I get a uh let's call it a 08 last click revenue on my ads okay so um I spend a dollar today I get 80 cents back on a last click basis okay and that's what my historical ads have been if I see that in the ad account as a historical number that's correlated with about the performance level that I want then no matter what my scaling is like today no matter what my 28 day click revenue is today no matter what my am is today if I'm somewhere near a08 last click row ass if I'm you know let's say within 0.1 of that okay so that's like what 15% on either side then I know that my ads are probably not way off my Target and no matter what my dashboard says at a given time I can just use that to quickly spot check and say okay my targets are fine everything's okay just wait it out wait for reporting to finish Etc um and and I should be okay okay um you track that week over week month over a month and you have that on hand to have a comparison number it can go really far for helping you just not get lost here because again in the mid in the midst of a world of all of these tools and reports and attribution tools and incrementality tools and all those things um like it's just a really solid simple number that tends to correlate with that and maybe at some point your media mix becomes so complicated that no longer applies I don't mostly run brands that are that big where that's really a challenge but basically sub 50 million like it seems to me that's a really good way to do it so just make sure you're tracking your utss have that all the time and then as I alluded to a second ago also track back to your am um by the way you can have a Shopify report that is built and pre-saved in your Shopify reports where you can set up campaign level last click data and that's what I do okay I don't have time to show you how to do that here you can go figure out how to do that in Shopify reports so at the level of UTM campaign name in Shopify you can go set that data up have it for the day I I refer to it regularly okay so build and save that report track it over time do that and then um and then of course check your am over a longer period of time as well so monitor this as you go and again this is not going to work very well on the situation I mentioned earlier where you're at 10K one day and 100K the next day and spend and you know that's an extreme example right most brands aren't going 10x their spend day over day but when you see those things if you track your AMR weekly and monthly um and you have a a simple enough media mix you should basically know what happens um that should lad to a contribution margin Target that you have something like that it's sort of a simple standin for understanding that you're about at the level you want so I have a client recently where you know we changed around our bidding we did a bunch of stuff and after a couple months we realized our AMS are tighter than they used to be why is that and now we're like rhif some things and re-evaluating some things because we're just watching that metric pretty closely but in larger swats we're looking at in larger time Windows because then you normalize This One S and 20 take click thing right if I'm not going to get revenue from a click today until 27 days from now potentially and the truth is I might not even get it till 50 days from now and you can't even see it in any Facebook window if I'm not going to get that Revenue then then what I probably need to do at some point um is uh is just make sure I or I can't see in a dashboard so what I probably should do is just make sure my bank account looks right my total performance looks right my return you know my my new customer Revenue um is where I want it to be and that's why as I've said before like I you know I never I basically almost never look at the Shopify home screen I'm never looking at just Revenue I'm looking at new customer revenue and returning customer Revenue evaluating them separately seeing them separately because I want my ad spend primarily to drive new customers and so that does that if you do that all the time manage according to those one seven one in sday Click targets laded up to a 28 day click Target make adjustments Rel to as data comes in to see what those if those targets need to change maybe your supply chain changes maybe your aov comes in at a really different spot than you expected which is a particularly big deal if you're bidding for CAC um with you know because now the performance is going to be relative to the aov if you do that and you spot check dayto day with last click data and am data you generally can use those things like you know uh a sailor and with a compass or whatever right I don't know I don't know what sailors use I assume they're using incompasses they probably have GPS and much more sophisticated tools than that but you get the idea right you use that all the time to sort of measure what's going on maybe I'll use my uncle as an example who actually is the kind of sailor who can navigate according to the Stars right he gets out his seant and he uses that he looks at the different stars and he knows where they are and he can measure he stays on course okay that's the example um that's the example that I would that I would use my uncle is the real deal it's pretty sweet to be able to do that um so anyway so that's the idea you use those tools like that and you manage dayto day that way and then you try not to make too many adjustments if you can help it um if if if you're basically close then you you should hopefully get these things to a place um where they're good I'm recording this episode in December Black Friday just happened I've got holiday Brands where it's still really volatile day today the swings are really wild because they're so seasonal you know I'm really on top of things then but we're gonna get to January 5th for some of these Brands they're not going to run a sale for three weeks something like that at some point I want to have my targets basically set to where I don't really have to adjust them anymore um and I use these tools to help me with that both in the vol times and the less volatile times measure like I said according to the total contribution of your ads and your ads pend and against your unit economics in the business and you'll be in good shape don't forget to sign up for my email list on my website hf.com to get that unit economics calculator sheet that I flashed on screen here a little bit ago I use it all the time we use it constantly With Our Brands I think it'll help you and don't forget to follow up with my friends at move supply chain don't forget to follow up with my friends at Billy both of I mentioned earlier and the links for them are in the show notes you can follow up with everything I'm doing at AJF growth.com uh and set up for my email list there like I said even if you don't want the unit calculator I won't spam you I don't send that much email so there you go uh also reach out to me on X andrewj Ferris uh or and tag me publicly if this episode was helpful to you or not just uh let's have some public conversation about it I think it' be useful for other people to get involved as well uh what else can you do email me podcast ajg.com and if you really like this episode the actual number one way you can thank me is to send it to a friend uh that would be great and to subscribe to my channel wherever you're are watching or listening I try to put out content that's as helpful as possible I love hearing from you when it has been helpful to you I hear it all the time and I really appreciate it uh because I really do care that it makes your business better so thanks so much for watching for listening talk to you next time [Music]