How Pact Acquires 50K New Customers per Month (with no creative strategist or media buyer) transcript

Apparel brands are super hard to scale. So, how does this brand manage to acquire 50,000 new customers per month while also having a smaller team? You don't actually have a creative strategist on staff. That's right. But instead you have a That is wild. >> [laughter] >> We have 500 SKUs, but I'd say the biggest game changer that we've had from an operations standpoint is Meet Kaylin Parker, Pact's Chief Digital Officer.

Founded in 2009, Pact is an elevated basics brand where everything is GOTS certified organic cotton and fair trade. And I hate to say it, but sustainability is not an easy value prop to market on Meta because there is no immediate and tangible impact to the customer, especially on a first-time purchase. And it can be hard to demonstrate your commitment to sustainability in the brief moment that someone sees your ad, which makes it super hard to scale on Meta.

But Pact has a really unique strategy that allows them to acquire tens of thousands of new customers every single month using the platform. So, let's first break down their approach to media buying, and then we're going to dive into their creative strategy and operations, including a massive creative unlock that actually allows them to maintain the scale. So, Pact's media buying is divided into two core buckets, their business as usual campaigns as well as their dynamic product ads, aka catalog ads.

We have 500 SKUs. We obviously can't do an individual ad for every SKU that we have. We rely on dynamic ads to kind of fill in the gaps. And they also use Marpipe, which allows them to inject creative templates onto those catalog ads. For both their catalog campaign and their business as usual campaign, ad sets represent one product category, and they treat each product collection like an individual business with custom creative strategy and execution, including collection-specific product sets.

And across both campaigns, they're using Meta's value-based bidding, aka ROAS bidding, to help scale and protect their margins. So, for those of you that aren't familiar with this, when you're setting up your campaigns, you have two options. Number one, you can maximize the volume of conversions, or number two, you can maximize the value of those conversions. And volume, as you might guess, means the actual number of conversions, which means you want as many purchases as possible. 10 conversions will always be better than seven conversions.

However, with value, you're telling Meta to focus on getting the type of purchases or conversions that's going to give you the best return on ad spend. Essentially, you're telling Meta to go after the customer that's likely to spend more or have a higher AOV. So, in this case, maybe seven conversions actually could be better than 10. For example, you'd rather have seven customers that spend $100 each as opposed to 10 customers that are only spending 25.

Maximizing revenue as well as margin through a ROAS-based bidding technique is so important for us. It allows us to treat each of our ad sets like an individual business. So, they set a specific ROAS goal, so Meta doesn't end up just spending on a single product or category. Exactly. And this value-based bidding essentially allows to protect that margin. And the reason why this works so well for Pact is because one of their most popular products is underwear, which only costs $15.

But they also have sets [music] that go up to 150. And this value-based bidding essentially allows Meta to not dump all of the budget or spend into underwear because that's probably going to be most likely where they're going to get the highest number of conversions. Meta does that complex math, adjusting the bid based on the product value and margin. It's a simple way to optimize performance without micromanaging bids, which is really important to Pact specifically since they have such a small team.

And another factor that allows Pact to scale with this lean team structure is because of the company-wide adoption of AI. I mean, haven't we all been? However, their biggest one is actually directly tied to the media buying process. I'd say the biggest game changer that we've had from an operations standpoint is building out a custom agent to upload all of our paid assets. I could upload 100 ads within 10 minutes just by clicking a button.

That's crazy. It's amazing. It has been life-changing. But in the past, whether it was myself uploading ads manually to the account, it would take days. In November, we probably had over 300 ads for holiday within the account. And so, just getting those uploaded literally with a click of a button, it was just it was so empowering. It gave us time to think about strategy. It gave us time to do other things that are helping move the business.

Pact's custom-built agent first looks at a Google Sheet that standardizes the naming convention across all ads. It looks at things such as format, time length, whether or not it's a partnership ad, etc. And inside that sheet is a link to the Google Drive where the assets are located. It is then uploaded to their business as usual campaign by using the campaign ID number in Ads Manager. It saves so much time, and honestly, it allowed us to not have to backfill this role.

AI has also had a huge impact on their overall creative operations process. So, let's take a look at that now. We have a very small and nimble team. And so, we have a creative content manager. So, she essentially >> [music] >> manages our content briefs, creating them, finding creators to work with, whether that's individual agencies or individual creators, kind of keeping that roster of people going. About 50% of Pact's ad spend actually goes to partnership ads, which is being managed by this role.

[music] And they found the most success by working with smaller creators or micro influencers as opposed to the bigger influencers or even celebrities. And they have a massive secret weapon. You don't actually have a creative strategist on [music] staff. No. But instead you have a creator. That's right. She's a Pact employee, and she creates content all day long for us. And [music] having her on the team is so integral into us being agile and our speed to market that we can I can ask her when I get online in the morning say, "Hey, do you think that you could create some of these ads for me?

I will have them in the account by 3:00 p.m." So, so that alone is just it drives our business. You know, to not have to wait a week or even a few days, she just got it. You know, she had that kind of endless curiosity. She also uses Motion to be like, "Well, why am I not the top [music] ad here?" She wants to be the number one, two, three, and four ads. So, Pact is really winning in a few places when it comes to creative velocity, aka how quickly they can get great creative actually into the ad account.

It's quite a bit quicker for them to actually make that creative with their internal creator who also does the editing. And it's quick for them to actually upload that content with [music] this AI agent uploader. Now, when zooming out on their entire creative operations process, AI has also really helped them to speed up their briefing process. And they also use Motion to generate new ideas for brainstorming and analyzing their content to find new insight, especially with their new AI tagging features.

Now, let's dive into their actual creative. And fun fact, every single one of Pact's top-performing creatives over the last year was a piece of creator content or user-generated content. Three of them were partnership ads. Four of those were made from external agencies. The other six were internal with four of those actually being made by their internal content creator, Paige. And all but one of their videos is over 30 seconds long.

Most of them tend to hover around the 20-second range. So, when I'm analyzing a brand's top-performing creative, I always really like to break down their storytelling structures so that I can see if there are patterns that are being replicated across the whole set, or if there's anything that we can double down on or even replicate across different SKUs. And one of Pact's top-performing formats are these short montage-style videos, similar to what a creator might post on TikTok.

I actually see some creators call these low-effort videos, but they actually do a really good job at puncturing the top of funnel by being able to communicate more vibes as opposed to value prop marketing. And Paige's top-performing content, the internal content creator, was actually a piece of listicle-style content. This was also the top performer for the brand as a whole. And something that stands out to me, too, is just how great the clothing actually looks, yet it looks comfortable and also really approachable.

The art direction and setting in these are also all really clean, but again, it's not feeling too luxurious or high-end. They can see themselves in it. It's not pretentious. It's just it's it's just feeling better about yourself. And I think that like also just comfort is [music] a really big piece of Pact. And so, feeling comfortable, but also just looking put together, which is key. And their second top-performing ad last year was from one of the top UGC creators in the game, Kelly Jensen.

The question, "Why is it important that your undies are organic?" is actually hitting the customer at the exact right point in the awareness journey. They might have heard that organic underwear was the best, but they're not really sure why. And this video really helps guide them through that without being clinical or preachy. This also hits at the core of Pact's overall messaging strategy. It's not just a clothing brand, it's also health and wellness, which opens them up to being able to use more of those strategies more commonly used by supplement brands.

[music] What we really want is people to feel like getting dressed in the morning is just another form of self-care. Of, you know, we take our vitamins and we drink our juice. >> Yeah. And really, I think like over time, it's been >> [music] >> it's been really great to see the organic food movement take on such like a popularity. And people understanding that now, and I think that now we're looking at clothing, and we're looking at how things touch our skin.

And essentially, [music] things that we put on our skin are just as important as things that we consume. And so, I think just teaching that is key, especially without shame or judgment, and it's knowing that like Pact is doing the [music] right thing. It's like it's an actual business that is doing what we say we're doing. The thing that impresses me the most about Pact is how they are able to grow and scale on their own terms despite being in a super competitive market, while also maintaining a relatively affordable price point for consumers.

The things that really allow them to do this in this new era of Meta ads really is that value-based bidding, so they can protect their margins, and their commitment to creator content, so much so that they have that internal content creator page. I'm a huge fan. And also that team-wide commitment to adopting AI in the way that, candidly, actually has a big business impact and isn't as much of a distraction, because I have seen that a lot, and I think Pact is a really, really great example of a brand that's doing it right.

And that wraps up our final episode of Ad Spend. It has been such a joy to be able to jam with so many different marketing leaders and founders, and really seeing the tangible ways that they are using Meta ads to scale in today's world. Be sure to watch the other episodes in the series, and let Meta know if you want them to bring it back. I'll see you guys next week. Bye.