Opening The Books: Beardbrand transcript

hello and welcome to the Ander Ferris podcast an episode of the show that I am so excited about I've been pumping it up for a while but today on the show I've got my second ever opening the books episode and this time it is with beardbrand beard brand is a brand that you may have known and seen they've been around the e-commerce space for a while led by founder Eric ban Holtz Eric is uh an incredibly transparent guy with with his business in general and he's got his own podcast e-commerce conversations that you should listen to Eric and I got talking recently about his business because beard brand was built on the back of organic content in a way that almost no other e-commerce brand that I'm aware of had really ever done they were they were pathbreaking in this uh respect they they built a huge YouTube following and really got made their business pretty large on the back of of organic uh YouTube content without spending any money on ads in fact Eric would tell you meta ads has always been a weak spot for for them as long as they've been in e-commerce they hadn't been able to make meta ads work for them so we got on a call and I basically started to coach them through their approach to meta ads now uh that is the basis for an opening the books episode A Live recorded coaching call that's what this concept is where some founder very graciously transparently shares what's happening in their actual business their actual ad account so instead of just hearing me give general principles we get specific about what I would do if I was running there ad account and that's what this episode is it's with me Eric and Mike Lawson the head of Eric's meta ads program at this point uh so uh if you've not if you're not familiar with this concept and on the interferes podcast this is my second one of these ever the link is in the show notes for my first one with nazarin Jafari from uh from mixed by nazarin where nazarin did the same thing you will if you uh have heard that episode you will like this one if you not heard that episode you will like it and the same idea is there a real live recorded coaching call with actual transparency to what's going on in the business in this case with beard brand one other thing about this episode that is really cool about a month after we recorded the beginning of it with all three of us with me Eric and Mike on the call Mike and I followed up and did basically another hour where we walked through okay some good things have happened what would we do next to get there and so in the middle of this episode you'll see it's going to go over to a month later and you you'll know when we'll tell you when of course that update happens in the episode but uh but that's coming too so we actually get some followup on some of the changes they've made and some of the growth that happened after they started to implement some of this stuff which is awesome and there's you know more room from there to to keep growing so uh look out for that one last thing in this episode there are a whole bunch of documents referenced and uh and episodes referenced and all kinds of stuff like that and so there are million links just like with my uh mixed by nazarin episode uh of opening the books with this one the way to get access to all of those things completely for free is to go to my website and sign up for my email list and you'll get them all and the way to do that is to go to AJF grow.com beardbrand hf.com beardbrand that has all of the links that I reference on this episode and they will get emailed to you in an easy format so you can just get all of it totally free and I'm not going to spam your email address afterwards so make sure to sign up for that all right that's enough of the intro it's me it's Eric banol it's Mike Lawson working on beard brand giving you visuals into all of it as we go let's dive in all right gentlemen how you guys doing good I'm excited Wy man I'm glad you've got that way I've been I've actually been geeked on this for a little while I was telling Mike actually that I have a very good friend with the same name so I've been like looking forward to this conversation because it feels like a conversation with a friend Eric let's start with you tell people who you are I think probably a lot of people know you but uh tell people who you are and uh the beginning stages of beard brand and how long you've been around and all that kind of stuff give people context on your business is what I'm saying I'll try to keep it yeah I'll try to keep it pretty brief uh I'm Eric bolds founder beard brand beard Brand's been around uh we're going on our 12th year now we're entirely bootstrap company self-funded I've got a couple business partners and uh when we tend to make money we try to put it back in the business and build more of a u I hate using the term lifestyle business but uh a business that I enjoy the journey on is the gold beard brand beard Brand's a Men's Grooming company we sell products obviously for your beard but we've gone beyond the beard so uh if you're a dude I've got products for you stuff for your ha hair for your body of course for your beard uh under your armpits yeah it's been a fun ride it's fun ride we kind of like to do things our own way so from a marketing perspective we've we've historically leaned on our organic channels we have a YouTube channel with a couple million subscribers a smaller Channel with 200,000 subscribers and then uh of course we're on Tik Tok Twitter and Instagram Facebook and all those kind of have like a a few hundred thousand followers as well our newsletter is Best in Class incredible writing incredible education inspiration and show you shows how to do email without simply resulting to sales promotions and discounts so Mike's done a wonderful job creating a brand voice and creating interesting content on both our blog and our newsletter over the years so it's uh it's been a fun ride and and I tend to share the stuff over on e-commerce conversations which is uh my podcast and Andrew's been on there it's been a great episode as well so I hopefully that wasn't too long that's a little bit longer than I normally do no that this the Genesis of this conversation is that we got deep on meta ads last time I was on your podcast and I was like hey why don't we just come on and talk about your specific account and talk about what we would do and that so I think we'll spend a lot of the time there and I think that's probably the place where I could be the most helpful anyway I mean you you guys Eric are the first brand that I can think of in D Toc that really was serious about like organic customer acquisition through really cool content and so when I think of like great blog great newslet letter great um organic content like you guys are the first brain that comes to mind for me um you know I remember hearing about when you got to a million Subs on YouTube and just be like my goodness that's like just monstrous so U Mike I I know you've been a big part of that can you Mike tell people your title and how long you've been at beard brand for uh senior copywriter and it'll be four years in October cool so you've been a huge part of that journey and now you're running the meta ads account too yeah yes I just keep I'm like Kirby I just keep swallowing more and more uh things that's really funny I was trying to think about if everybody would know a Kirby reference but then I thought like probably everybody listening to this is like a millennial so yeah probably probably so yeah a few a few of the younger ones you probably won't get it but yeah that's awesome um okay so let's let's like talk about let's start with some sort of big picture context for kind of some of the problems that we want to work through and try and solve today um so say to the business a little bit like what's going on lately where have you been and on the meta ad side like I know you know you guys are unique and that meta ads has not been the core driver of customer customer acquisition for this business unlike so many d2c Brands and so do you want to talk about kind of where things are out now and what your hopes are for sort of meta as a channel and and what you're trying to get out of it yeah I feel like you know historically beard Brand's always done the things that are traditionally viewed as difficult well like we we've been pretty good about organic content um you know driving awareness through that building relationships with remarkable people and influencers and stuff like that we've never really done the the easy things well which is U meta ads we we've kind of dipped our toe in it and had some success but always kind of had the the challenge of of making sure that it was profitable as a bootstrap company like the the cash actually you know positively moving into the the the business is is quite crucial like it's not sustain able for us to acquire a customer and expect for them to you know like pay off in 12 months or 18 months or something like that so I like to see you know ideally a first first time profitable customer acquisition uh at worst maybe three months to to to break even on it but um yeah so those things have have historically been hard if you've listened to my podcast you know like this has been a really tough year for us we're down uh 40% year-over-year our strategy last year is to double down on organic content and uh that didn't go well for us like uh our views on YouTube have been struggling uh as well uh we lost a major retailer in Target and uh so like it's just been like uh a series of I want to call them calamities but it feels like calamities when you're running the business you know when in 2023 I almost feel like the reality on the wall is that you have to grow grow through paid like it or not uh for us in the space at this point so that's kind of moved to the top in terms of our customer acquisition strategy has been through um paid ads specifically meta like so what I want to do is really Master meta and and take that as far as we go so we're we're not doing Google ads at all right now uh or Tik Tok or SnapChat or anything like that it's I really want to stay focused and M one channel and then once we get that mastered then look at ways that we can bring on other channels um but I I don't want to muddy the water with you know like multiple attribution and different channels taking credit for different things I just want to know what Facebook is doing or meta is doing and then kind of grow from there I think that's incredibly wise and there's a lot of people who like they kind of start that probably speaks to your experience in your Commerce like they they there's a lot of people who start freaking out when something when things go wrong and they don't and they like just start chasing a million Solutions in a million directions but instead I think what you're doing is like saying um okay we probably have to get good in this channel it's just part of the reality of things you said whether you like it or not by the way but it sounds like you don't like it no if it was up to me we wouldn't we wouldn't do PID ads yeah yeah yeah um why why is that what what's your uh what's your instinct against that for not a right answer I don't like I don't like Mark Zuckerberg you know it's like I don't like giving him money is it's like the stupidest reason ever but yeah um and especially like when you're losing on ads then you really feel like you're you're giving Zuckerberg a bunch of money so it's like if it's one thing where he's helping generate a bunch of money for Beard brand okay cool that's a good tradeoff but when we're losing money and it's all going to Zuck just don't like that yeah okay no that's totally reasonable um so yeah okay and can we so you also mentioned one other thing here that just like for context because I think this this has a big impact on the way that I would sort of suggest we approach strategy for anybody but like let's talk about goals as well do you have like a a you said you know you hate the term lifestyle business but you want a business that in in some ways fits your lifestyle um that's my sense of what you're saying what like can you talk a little bit more about like what's your hopes are and goals are for for Beard I think I've heard you say in the past that you don't necessarily set like a revenue Target each year or something so and I don't know if that's still true but um but can you talk about sort of how you're thinking about where you want the business to get to and and what you're hoping for with it yeah um we we don't do Revenue targets uh we try to like kind of our culture or and I don't know if I communicate it well to Mike so he might be able to correct me or not but the the culture is like try to to do the best that we can do and work within you know our own talents and abilities uh and not kind of put external stresses on ourselves so intrinsically motivated to do the best that we can uh and then my job as a leader is to help make sure that the team is pointed in the right direction and working on the right things uh which you know sometimes I get wrong or or I distract the team but um can confirm on the distraction part not but but in terms of and fortunately like Mike's been here long enough that he he has the confidence to you know be like hey let's focus on this we're not there yet you know stuff like that new are hires tend to have to really struggle with that when they hear a lot of idea dump coming from me and you know want to be like Kirby and do it all but the reality is like all my ideas can't be executed so um I do you know I'm I'm biased I love my team I think I got the greatest team they a joy to work with um I want to build a business that I enjoy doing if if I sold B beard brand I don't know what I do I try to create another beard brand so it's like if I'm just going to create the same thing I already have why would I sell it um so for me like I want to build like a a legacy brand a brand that can be around for decades and I think to be around for decades you kind of have to have like a longer term approach and you have to be you know um I think a term people use like anti- fragile or you know like you know not overleveraged basically so you know uh for me that's very conservative uh cash management um and being able to to scale up or down depending on the needs of the business and and maybe we don't grow too fast because of the risk that would be included with that and um maybe sometimes we have to make some some pretty challenging Cuts uh as well when the business is not doing that well but fortunately I I feel like you know the worst is behind us so what I'd like to see the business do in the short term is probably grow another you know ideally maybe like 10 to 20% claw back some of that market share that we lost and then it will take a little bit of ease out of the business where we don't have to do things like sell the office and you know like really make unpleasant Cuts so yeah like that that's super super helpful in terms of setting that context I think like one of the questions like I'm always trying to ask uh is what is not only sort of people ask me all the time things like you know should you or what what's a good Rass Target what's a good CAC Target what's a good CPC what's a good and it's like well the an is dependent on so many things but what I hear so far just from talking to you about this is like okay um on a cash basis we don't want to be pushing out our profitability really really far and that's not only a decision based on cash management and capitalization of the business but it's also a decision based on what you want for the business which is like I want to run beard brand for the foreseeable future um I would like it to grow but I'm not asking for it to double um like a you know meaning like regular consistent growth via a channel that creates profitability for you in meta and so I look at that and say like okay the the that means that yeah like you said first purchase Break Even you could maybe push it out a little bit if you really needed to and if there was a great argument for it and you could sort of pencil that out but um but yeah that that's exactly kind of the way that I would think about it as well um in light of that do you have a clear and Mike I'm actually curious if you know the answer this question do you have a clear Rass Target today or CAC Target today that you're like managing towards yeah I mean I think as we're just getting the account going again and we're I've been Shoring things up for maybe six weeks now um anything above a one is kind of Baseline where we're aiming to be just to get things moving um two 02 is is the goal um and I think right now over the past six weeks we're kind of sitting in a 1.4 1.5 spot so we're up which feels good um but there's room to optimize for sure yeah okay awesome and then like from an average order value you know or it ranges depending on you know how products are doing but it seems like around 55 bucks is kind of what we're seeing for an aov so that would put it around like $25 to $30 is our Target customer acquisition cost okay cool um so I won't make you fill this out exactly but this is the way that I would think about this um typically for for most brands so let's call that 55 there and you know ultimately I would just be breaking this down usually to where I'd look at percentages cost of goods merchant account account fees should be pretty standard across the board some amount baked in for returns and then shipping costs and fulfillment costs um you know I don't know if you're self-fulfilling or if you've got a 3pl my guess is you got a 3pl but um but uh but you know kind of those things all together roll that up into some kind of number there and then um and then if we said um you know uh so these are not actuals by the way just just just so we're clear um these uh these would be uh this would be the beginning ways I would think about sort of how to approach Target setting is just to get us to this and this would be sort of a first order profitability set of targets so um so yeah depending of course it's going to depend on the product and all kinds of other things but um but let's say um Eric if you're if you're comfortable sharing could we roll in some final number here for like total cost of the product um we we tend to have it like around 75% okay cool great Co or so I guess it would be 25% cogs would be yeah right you know my where we realistically kind of end up yeah okay cool so we'll call it something like that right 25% we'll just roll that together and again you can see I've like gotten rid of the formulas here um but something like that as kind of the number and that that then creates like a really interesting way to approach this account relative to the conversation we've had so far and this is really really important it's in terms of lading into to the performance of The Meta account because um because now you've got questions around um how do we set targets and how do we build profitability which for me is like always the first question with one of these things to figure out kind of where spend can get to and what we want to be doing so um so if we just take that as a baseline number 75 points of margin uh you know this is not surprising to me by the way like you guys are selling consumable products um you know at 55 bucks aov is really strong in a category like that it's going to being able ble to get up to you know over 5050 bucks should help mitigate the cost of shipping anything anywhere um you know if you're down around $35 selling consumable products well then your shipping charge is going to eat up a much larger percentage of your margin um so that's awesome that your that your aov's up there um I have um I have also gone ahead already and looked through your historicals just using the Shopify cohort analysis um to try to get some sense of where your LTV is at as well and I've got you right around 60% growth in a year um and that's significant because um and and for people who are who are looking for that report right now in Shopify in your analytics you can just go and see there's a cohort report and you can look at this by order you can look at it by sales growth Etc now this number is a blended average number at 60% I bet you it's higher on some products and lower on some other ones and if we were going to spend you know ongoing month over month kind of work on this one of the things I would want to do would be to look and say like are there products that are particularly high margin are there products that are particularly High LTV and ideally both that have any meaningful market share and say like those are now your a players for like developing creative to go after right because if you've got more margin and if you've got more LTV that's the customer that you want to acquire um sometimes there's a trade-off there uh you know you'll have higher margin on one but lower LTV and so you might want have to set a Target relative to each product along those lines but that's kind of the way I would be thinking about framing these sorts of um these sorts of things and and so then like go ahead go ahead do you mind if I so this 60% like let's say my average order value is $55 so 60% of that is what like 30 $30 that would mean somebody on average spends an additional 30 bucks over the course of the year so they spend $55 on day one and they spend additional so so yeah really yeah that's right yeah yeah okay which is which is uh I would say above average in e-commerce um if not spectacular um and you know there's there all kinds of questions about how you would maybe pursue that in an ongoing way my guess is like the product lasts for a while and people are you know I don't know how much people are caring for their beard daily versus elsewhere and again depending on which product you've got a bunch of Men's Grooming stuff so I bet this ranges quite a bit and um and like I said you know if you were going to go into sort of looking at all the details here you could go into that cohort report in Shopify in the analytics Tab and you could actually go now you can actually really easily go look by first product and um and and sort this out a whole bunch of different ways so um so yeah the other thing I will I'll say we should just like flag and watch out for is it's possible because of your organic content um that you have customers who actually perform better on an LTV basis based on which marketing channel they've come in through um it's possible that like a paid acquisition customer has like not as deep of an experience with the brand and um versus somebody who's been following you on YouTube for two years you know um and so so maybe there's less loyalty there I I ultimately these are all marketing efforts in a way where um my guess is it's not too wild but again you could sort of go sort through those details for the sake of time we won't go dive into all of those things but like Mike this is one thing I would be doing if I was in your shoes right now right where you've taken over the ad account I'd just be going and playing with that cohort um builder in Shopify all right so here we go so here's your customer cohort analysis again you just kind of go to this in the analytics tab right here in Shopify you'll see it um this might be plus only but I'm not totally sure um really really useful it's funny we use lifetim le as well and this is like very similar yeah well so sh this report is coming for lifetim Le I use lifetim Le mostly as well and life Ely has some easier ways of getting at that Revenue percentage increase where I had to do a little bit of manual stuff without looking at lifetim Le um lifetime is also really cheap and it's a nice tool um but yeah there's a there's a bunch of this information that's um coming in here but you know you could look at just sort of like growth sales over that time and see you know um how that's growing and you could look at it of course on all kinds of different timelines Etc um but if we were to go and do this right you can go play with a bunch of different filters for this you could look at sales Channel marketing channel product name include subscription or not that's a really useful thing because you can see subscriber growth versus non-subscriber growth and revenue like all of those different things and I would just kind of goof around with this for an hour and just like go see if you can find any um products or anything else that are getting meaningful value where you can um can really see if that's the case um and and for me that would be driving what I would be thinking about sort of where to invest my creative time and effort right um uh to to go and do that so um that's Baseline um anything anything else we want to uh hit there uh I think you guys are probably fairly clear on that point but um but yeah quick Interruption to tell you about my friends at more Staffing if you have considered trying to add to your team in any part of your e-commerce business I'm talking about supply chain Inventory management Logistics marketing growth like customer service you should be considering that in the Philippines my friends at more Staffing are incredible they are a Filipino staffing agency that will help you recruit onboard train and they'll provide ongoing coaching to employees in the Philippines to join your e-commerce business and here's the thing you need to understand about this the goal here isn't just cheap the goal is to find incredible e-commerce Talent with deep resumés deep experience to add them to your business and then to do that yes at a lower cost than you would hire those same people in the US but it's not just about cheap like you're going to find actual professionals with serious experience who are high integrity 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if they hire an employee for you if they help you hire an employee and they don't last for a year they will help you replace that employee completely for free so go check out more Staffing atmor now.co all right let's get back to the show Mike let me just uh pause here and ask you a little bit about kind of when you took over what your approaches here anything you feel like this is the stuff that you feel really clear that you're trying to accomplish um and and terms how you want to run this um so yeah so so give me a little bit of background on sort of when you took over and what you're trying to accomplish there yeah so I guess I took over Late July um and really started getting things going on the account in August probably beginning of August what I'm working through is this uh four-phase process where phase one is basically taking ad creative and putting it into a campaign optimized for click um and it's an campaign um and I might run like 10 versions of one ad where just one thing is different on each ad and I'm basically just testing for differences in the creative and seeing which generates a better response um at that point what I'm looking for is anything that has over a 2.5% unique clickthrough rate um through or with a minimum of 400 Impressions and most of these I kill at 400 Impressions that usually gives me enough data to say this adds drawing something this one's not that's this campaign here yeah that's this phase one um phase two is taking anything that's a winner in phase one so anything that meets that unique clickthrough rate criteria um I set up in staging as a uh so it's in a campaign optimized for conversions and then I mve that into phase 2 and I test it on a broad audience uh us males ages 25 and up and I give it a budget of $25 and I let Facebook do its thing and what I'm looking for is 10 conversions at my target CAC which is 20 to 25 bucks and honestly if it if it's 30 bucks I'll let it go if it's it's 35 bucks I'll typically Let It Go to based on what those sure sure um those actual average first purchased order value is um so that's where I'm at anything that I've had that's worked in phase two I've just gradually increased that adset budget within phase two and just kind of scaled that way to that broad audience and then I've set up in phase three is testing out different audiences so that's where I'll take uh any ads that are winning and I want to have three to four at a time minimum and I'll just set those up with different ad sets targeting different audiences and I'm basically just looking can I improve performance with these ads based on putting them in a different pool of people um and then ultimately anything that works in phase two I would move into phase four which would just be scaling um and so I would take the best performing ads at the best audiences and just get them started right off the bat in an campaign at a higher budget trying to get them out of learning as quickly as possible and I have some ads that I would turn on in phase four right now but I'm waiting on a uh stock stock resupply okay kind of created a bit of a uh issue with out of stock stuff with some of this ad success early on yeah awesome yeah yeah you've got some stuff that's clearly working that phase three campaign particularly looks pretty strong um okay I um I hear that and what what I hear in that is sort of a really meticulous approach to creative testing this feels like the approach of a copywriter to me who's like thinking really carefully about messaging and wanting to understand what's working and what's not let me just I'll say actually one of the other things that sort of spurred this conversation when I was talking to Eric on his podcast recently which will link in the show notes um by the way um let me uh just J jot that down so that gets in there um I did listen to that episode by the way oh great okay well yeah so so you probably heard that I'm about to tell you I think a pretty different approach on the whole um but one thing I really one thing I told Eric is that um is that I think a copywriter is the right person in general to be running an ad account um I want somebody who is really really focused on messaging and like especially for a brand like beard brand where like you know the brand itself is so important to um what you guys are trying to accomplish and and Eric I know not only is like sort of business strategy for you but my sense is it just like a business that you feel proud of running you know it's like a brand that you want which is a really important part of the business so um so to me like having somebody who's got real feel for and control the messaging has been in it for a little while as the person as the primary person driving um this the creative approach to the account and ultimately the performance of the account is is right because you can then go work with designers and editors to get the sort of visual outcomes that you want and you know brief things and um and edit things and requests re-edits and all those kinds of things as needed um but it really I I strongly believe that the performance of meta ads begins on a creative level really really is rooted in messaging first and foremost and um finding a way to to kind of get messaging that comes across and performs really really well so um so I what I hear in your method is is um an approach to really trying to learn learn learn learn learn and go from there I think that you are probably shooting yourself in the foot by doing it that way though and I'll tell you why I think that you can actually learn a lot more a lot faster while reducing um while reducing the cost of testing by massively consolidating your campaign approach um and so so it'll actually um what what I would move to what I'd recommend moving to is essentially um an approach that is going to be targeting really really broadly pretty much across the board excluding past customers because I I want to keep those in a separate Target bucket and then um and then get you the opportunity to to actually spend as much of your time as possible briefing and iterating on Creative launching that creative into the account and then scaling what's working as quickly as possible without having to move things around and take all those learning ings and then essentially just take the learnings as they come um as you see what stuff starts really really working um so that that is what I I think that you're sort of making it harder on yourself actually than you need to to get the learnings that you want by having this like move through different phases approach um and instead would suggest what if we actually could launch the creative and if it works it scales and if it doesn't work it doesn't and then that's it then you just kind of go from there um that's that's the way that I would approach it so um now we're going to get to the point in the conversation where I'm going to tell you exactly what I think it's going to be different than what you're doing so far and you guys get to decide if you want to do it or not it's not my account I'm going to hang up when this call is over and you guys will get to think if if I'm right or if I'm wrong but um but there we go so let's jump back over really fast to the unit economics sheet um because I want to actually kind of walk through some some of that setup um to think about how we approach the the structure of these ads actually um before I do let me let me share screen again in the ad account have you guys um created or optimized or set up your Facebook and Instagram shops at all I don't know okay so I think we we we set it up maybe years ago but I don't know if it's something we're currently doing or using so I'll just pause here and say you should um I am astounded I'm astounded by how well Facebook and Instagram shops has worked for at least one of my clients where basically by clicking a button once the shop is set up as long as all your orders are processing the right way and everything is fulfilling the right way um there is some subset of Facebook and Instagram users who clearly um like shopping on Facebook and Instagram directly this I don't get it at all I I can't imagine doing that myself but um but by running ads to website and Shop um you uh I have seen at least one client like grow their acquisition basically with no effort by like 25% at the same return and so what kind of customer do they have are they primarily women or men or primar primarily women yeah for sure um primarily women but um there's actually another thing here which is that if we set um if we build our account around bid Caps or cost caps then there's really no risk to doing it as long as the account as long as the experience works because what will happen right is like Facebook and Instagram will start sending some traffic there if it doesn't work they will stop doing that um and is if you can't get it at your target CAC then you won't do that and that basic Point what I that I just said that by running caps you sort of allow yourself to test things like creative things like your Facebook shop um I think is like the key one of the key reasons to to run bidc Caps or cost caps is that it will just say like look this is the return we need if you can get that return spend my money if you cannot get that return do not spend my money and that eliminates so much risk in the equation um of of testing anything like this so okay now I will uh help your OCD and ex that out because it was actually bothering me as well but uh I have I have put my finger on that and said I I'll just say I have seen meaningful performance improvement from Brands and it shocked me I would not have believed it meaningful performance Improvement by um adding that and by the way if you ever want to add it this the once it's set up the way you would do that would just be um to create a new ad set you just click right here website and Shop you have to go make sure in the setup phase that everything works but it's it's that simple I will say I probably the biggest reason why I haven't gotten into that yet is I've been kind of like just taking this very meticulous approach to getting the ball moving and kind of working with one thing at a time and and Gathering as much data as I can on that one thing and and totally because I'm kind of also just learning this on the fly as I go so yeah yeah totally and I mean I I yeah I completely understand that I think if if the as long as the shop experience is decent you know I think uh I think uh it can be effective um and so yeah um all right so let's let's talk through the this sort of account setup a little bit more and I actually want to start on the question of attribution setting so right now you are what uh you're at what meta defaults you into which is 7-Day click or one day view attribution um Mike talk about that a little bit uh and if this gets vulnerable sorry I don't know you know I know you've been running this account for six weeks so you're you're you're brave to come on and talk through these things but there there are uh um is is there a particular reason you've chosen this attribution setting that's the attribution setting that was in there standard and totally that's just what I rolled with yep makes sense I think that's why a lot of people do it um my first and strong piece of advice this is one that is like it's kind of no-brainer to me is that unless you know for a fact that beard brand customers have a long consideration cycle and at a $55 aov I highly doubt they do um I would move I would rebuild in the future with all attribution settings at one day click and get rid of view attribution um especially for a um you know if you think about the distinction right click click attribution would be anybody who's clicked on the ad and then Buys in this case within a 7-Day window um view attribution would be anybody who views your ad in the feed and then um and then purchases within one day of that you guys are running a meaningful organic content machine which means lots of people are going to be coming to your website outside of your meta ads I I mean there's not really a great reason in my view to run view attribution in general um but especially for a brand that is going to get a bunch of views on their content um that has nothing to do with your ad account uh including view attribution is just going to give uh ads needless credit for performance and is going to make your row ass look better than it actually is at least on a view window so I would eliminate it um it you know the simple way to do that would be um I think actually you probably can't do it um once it's set up but um let's see is it at the adset level this is embarrassing um oh yeah no here we go yeah at the here it is it's at the adset level this attribution setting um it will it will default you into that and with a live adset you can't change it so you have to build a new adset that's okay I think we'll do a lot of rebuilding today anyway um I would be um just running that as one day view uh as one day click only um and I would eliminate view attribution altogether that will begin to get cleaner metrics around the target uh that we we want to set um so that moves us back to this unit economics tab um sorry let me just pause there any questions any thoughts no cool um great um so that's really important though I guess yeah one question can you change the default is that possible to go ahead and do so you don't have oh um I don't think so um but what I do is anytime I build a new adset I just do duplicate an old one so it essentially it just essentially does it for you so um yeah so um okay because then once all my settings are set my exclusions all those things it's just like duplicate rebuild um all right so um so to come back to here let's say we're assuming 25 or 75 points of margin 60% LTV um that means that uh actually this is like one of the great things about a high margin business like this is that your first purchase Break Even is at a 1.34 and you're actually making money you're adding positive contribution margin over the course of a year so break even right 0 in contribution margin um th this uh Ras Target and this CAC Target are fed directly from this unit economics sheet and by the way anybody watching this um I have a defaulted ver templated version of this that you can get just go Um and follow the links and the notes and all those kinds of things and you can use this sheet yourself as well bu put in your own numbers um but uh and the way I would do that if I was you by the way would be to to actually put in each point cost of goods Merchant fees customer all these things um so you just have Clarity to where your margin is um and so your first purchase break even here would be 1.34 your C targets would be $41 and now you go you got Z in contribution margin which I'm defining as Revenue minus ad spend minus cogs okay so Revenue minus ad spend minus cogs all the variable costs associated with selling a product to a customer um now you're at break even on first purchase um and within a year you've got 2460 coming in you could think you could sort of model out from here if you wanted to different scenarios where um where you know at certain volumes you could see exactly how much contribution margin you'd be adding to the business if you spent $100,000 out of 1.34 so you generated $134,000 in respon in return that would give you you know 2460 times however many orders that is um so there's a way of there's a way of kind of approaching modeling out how this would look over the course of the year if you want to get down to that kind of a model I've also included here just for visual these these numbers are really arbitrary but if you wanted sort of to go 20% Bel or 20% above break even um in my uh you know that would give you a row as and CA Target there as well and those are really arbitrary like I said but they're just sort of strategic decisions and visualizations for how you want to think about running things going forward um now uh so so yeah again let me pause there any questions about that from a Target setting perspective um I guess I would just obviously these numbers are are rough but our yeah our our cost of goods is probably more like 25% so it' be a couple dollars higher I don't know how oh oh okay yeah okay so right so all in it would be like something like that or something like that right I don't know anyway yeah I mean well it's at 1210 right now uh on B5 so that would go yeah that that by the way is a template number that's not that's a that's a that's not a real number um so um yeah we can as long as we have some kind of a rough estimate here I can at least give you that you guys can go back so if you change if you Chang the 22% to 25% that that would fix it um yeah okay but now I got to uh rebuild this uh here we go there cool all right so and I don't know about your shipping cost and fulfillment costs Etc but there you go yeah um okay so again you could sort of fill in your specifics there but you get the idea um same thing it spits out these numbers for you and you could think about this like the interesting thing here is like even if you take a 20% loss on first purchase you do have positive contribution margin over the course of a year which is nice so that when you're in an early testing phase you know you don't want to live that way forever you're at least still going to be generating some kind of value which is which is good um okay so now there's another detail here which is that if we move to one day click Rass um uh one day click attribute uh optimization there is still another Factor here which is that many people will click on day one and they will buy over the course of the next 28 days for their first purchase and those count right um those purchases count it makes sense people have a cons some consideration cycle here even if it's not a huge amount there will be some of it and that's what I normally refer to as delayed attribution it's it's not really delayed attribution it's like delayed purchasing right um we should probably call it a delayed purchase multiplier but I estimate that in every ad account that I look at um and that way I have some sense of if if I'm going to take credit for the entire 28 day window that meta will show me um which is how long meta will show you uh of the purchase Behavior off of a click then I actually want to set my one day click row ass Target relative to the the True full 28 day window that I'm going to exist at and so the way to check that in um in meta ads in ads manager it's a little tricky because of the way that um meta reports conversions but there's like a simple way to do it we could just like take let's just take like a I don't know a thre Monon period that's at least 28 days or longer behind us so that we don't have any kind of weird attribution stuff and we can go to compare attribution settings here and we can put in a one day click and 28 day click window and so now I've got my Revenue here split out between those two things now this is a very small spend overall so um so we should actually probably take a longer window than this let's go yeah it's like we didn't really start running ads until yeah like August yeah right okay yeah so it's not going to tell us much um and and this this is actually not going to be a full a full closed attribution window either um let's see yeah this is not going to tell us enough quite yet we need more data to figure this out exactly but what you will do as you collect more data and you're spending a lot more recently is you would want to take a closed attribution period so past the last 28 days so that ads you have run have um because Facebook reports purchases on the day of the purchase not on the day of the click and so trying to understand sort of how those two relate is a little bit tricky um but um but let's take a a closed attribution window here and right now you've generated uh on a 28 day click window $44,000 let's say 41 3213 and on a one day click window on those same adds you you're at 336 4 74 so let's just um multiply over that there you go you've got a 23% increase in that period of time um I would say as a general rule 30% is sort of like what I see in most accounts sometimes shorter sometimes longer so we can estimate it there because we have so little data that looks close to about right relative to what we saw in the account there and so I would just build that there which means and this is the kind of key payoff of this point that on a Rass basis if you get a 1.36 assuming meta's attribution is basically right and I actually think it is at this point 1.36 on one day click that will that will generate to you over the course of a 28 day click window which you have visibility to a 1.77 before any LTV comes in and so that would then mean also at a CAC basis um that we need a $40 37 CAC to generate a $316 CAC which would get us again to break even on first purchase again we could adjust these numbers to whatever strategy that you wanted if what you really really wanted was to take this 2.13 and say like okay we actually want to be 20% above break even over time um or you had mentioned a 2.2 Target before you can just kind of punch that in there and it will spit out for you this this just sort of does the math to spit out for you what the targets need to be so um so then you can just kind of go back to there um so so that's uh that's what I'm looking at so if let's let's let's say that we're going towards break even right now what we would need if this if these margins are basically right is a 1.36 um on one day click does that make sense yeah and just to like because there is so much volatility to the average order value um uh I noticed like maybe if we're promoting one product that's $20 versus another product that's $40 there's going to be a little bit of variance can you focus on like that scalability through your roas instead of that CAC or do you have either or option or how does work so one thing I would do there and this is actually another reason to to think about how you build your account is I've actually created for you a custom aov metric here so it's actually coming in a lower $44 um and if we go last 30 days let's see 45 42 I did notice that on the website's a little bit higher than that too um but you can actually get this at the campaign and adset level and that I assume that's because you're promoting different products here than what people are buying across the rest of the site or whatever um and so if that aov is coming in at 45 bucks or $44 on on a click distribution and by the way um if people don't know how to do this um you you just create a custom metric here and you can set you know um in this case aov is uh leave that clicked on is just purchase conversion value over purchases Etc I also set up a conversion rate one um and I've made and those are available to you guys I put them uh available to everybody across the business but um but the the aov at 45 bucks means that you'd have to change that CA Target relative to the aov and and basically to your point Eric I would just say I would be setting this up so that probably at the campaign level or maybe at the adset level I would approach I would have different products um going and if I know I'm promoting a product that's going to give me a $70 aov then I'm going to change my CA Target relative to the specific margins of that product and I would just go right back to um to this unit economics calculator and do that at the per product level um and just say like okay on this product if this is my LTV and this is my unit economics then then I'm going to more or less aggressive according to um to what the particular elements of that thing is and um and you could do that really across any product that you wanted to now some people might click on a product and actually buy something else so you always have to validate that the aov actually comes in um relative to what you expect but yeah that's the way I think about it U like everything like this you're addressing in real time as you go so cool um okay so now you've got some kind of a CA Target and at least gets us to break even again over time you may want to push that up to like that 2. 2 number you cited earlier Mike and you could just kind of play the same game with this sheet that I just showed you um but now that takes us into the question of account structure and some of those things so if we're going to move to a one day click and I would I would really recommend that it'll it'll give you a lot um in in point of fact here by the way um what you'll see here is if I use your default attribution you've got 12.3 Grand in 7 Day click plus one day view if you had 10 grand a one day click 11.6 Grand in 28 day click so your actual the attribution that you see here it's actually showing more Revenue than a 28 day click despite that it's only giving you seven days of clicks so uh to the point of this attribution thing if you actually go and set up those um attribution Windows here what you'll see is that Facebook on the default attribution setting you've got 7day click one day view which is what it will default you to on the on the revenue column here purchase conversion value it's showing that you generated 12.3k on these ads right um but in fact on a 28 day click only VI so if we if we if we extend the S days to 28 days and we get rid of all the view attribution you're actually generating 11.6k um and you know on a one day click basis it's it's down here now this number will get better over more time because there's this is the last 30 days so there's there's not there's a lot of delayed attribution yet to happen that that effect of somebody clicking today and buying you know in two weeks or whatever um you know this includes ads from yesterday so those people have not had a chance to buy in two weeks yet um so this number will get but it's just something to keep an eye on um I don't think this is going to like wildly change the outcome necessarily but you can see there's some difference um and you know on this Campa campaign it's a little more Stark 11.6k which this campaign has more remarketing in it and so if you have remarketing it's going to even there's going to be even more view attribution because people have already been to your website and they're already in the consideration cycle Etc so um so yeah that's something that I would I would be watching Pretty closely um and and just just make sure that you've got your attribution setting setups that you can see one day click versus 28 day click and understand the difference um so yeah um any questions there any we've relatively clear on that yeah so if you just scroll to the right a little bit you can see the U the R numbers each days right and that's the click and and it will give you that kind of at every level same thing with CAC here CPA right there Etc it even does it by your custom columns so um cool um now I know we spent a lot of like a lot of time on that but it's really important because you to have like I think one of the biggest things with meta ads that people sort of don't realize that like getting real Clarity to your targets you know even if you recognize there's going to be some noise around attribution and like you know somebody clicks on product a and buys product B and all those things having some baseline Clarity there um is like is really really helpful because now every every other decision you make can be through a framework that you feel really confident about that you're actually making money in the account because otherwise it's a really easy way to just like leak dollars out of your business in a way that's not very helpful um and ultimately the final measure of the value that you're creating is the actual new customer Revenue you're creating so if we really wanted to look at this your bank account never lies to you and this is why I'm not a triple whale guy or a North beam guy or anything like that like what I think you actually need to do is just go and and um and forget what any attribution tool says I think meta is close enough it's it's pretty close to being to being right at this point they've sort of solved the iOS 14 problems um and at this point now like what I'm going to be watching ultimately is am I are my ads actually driving new customer Revenue you just added 20 grand and spend that you didn't have before did you see some commensurate lift in your new new customer Revenue over that same time period if so they're working um you know you can reasonably say that unless you know that you had some Tik Tok go viral or whatever over that same time um that's the way that I would ultimately pulse check all of this stuff um is to make sure that to make sure that you're actually seeing it there so yeah in the early days we were using shopify's data we set up some uh reports that would filter customer traffic on U with the UTM codes that we threw meta in there and of course the numbers weren't exactly the same but they seem to be like within a comfortable barrier and then we also do postp purchase surveys with Grapevine and we've seen just a huge influx of meta uh traffic as attribution from C so I feel pretty confident yeah yeah and it's really nice like because we're only doing meta to know that you know it's not something else yeah I I like that I think yeah in my view like again like meta's I've said this a lot of times but I just think meta's attribution is really close to being accurate at this point like their modeling is really really good they say they've got very little signal loss at this point so you can basically trust it I think and and then just kind of adjust as you as you watch the effect on new customer Revenue um all right so let's talk about um account structure which is a big conversation for a lot of people um I will show I will tell you exactly what I think is the best way to build a meta ads account um what I would do is build my campaigns by product and I I might at our spend level even actually have one CBO only literally one in the entire account um with campaign budget optimization let me let me just say from the outset what's driving my opinion here my opinion what is CBO yeah campaign budget optimiz ation so that would be that meta allocates your spend between adsets instead of you setting your um your budget at the adset level so you set the budget at the campaign level instead of at the adset level meta then determines how to spend your dollars between all of its adsets that thought suggests that meta's machine learning is very very good at predicting the future it's very good at predicting what will happen next um and certainly better than my human lizard brain at at sort of sorting through all of this data and trying to understand what's next you know I've got a bunch of years in in meta ads I've done it uh for a while and like I I'm just terrible at predicting what's going to happen next I increase the budget on an ad and it performs a lot worse than I expected I decrease it and it like performs better and I turn off an ad when I take over an ad account the first thing I almost always do is I go find all the ads that past media buyers have turned off and I dropped them into a CBO and there are ads there that are still winners that somebody turned off for some reason and it may be because they had two bad days of performance it may have been because their boss was breathing down their neck it may have been because they broke up with their girlfriend um and they were just like feeling nervous you know like and machine learning never breaks up with his girlfriend right so like it's like there's there's it's just going to sort of coldly evaluate the data and predict what's going to happen next based on that and I believe that at this point Meta Meta is insanely good at this the machine learning is insanely good at this so what is driving almost everything else I'm about to tell you is that basic principle that meta is exceptionally good at predicting the future and you should use that to your advantage and it does this beautiful thing especially Mike for a guy like you coming from a copyrighting background which is like like it actually makes it so that you don't have to worry about it and you can spend all your time thinking about how to write and brief better ads and launch them and go which is probably where you are uniquely talented anyway which is good right um so um so yeah so that's kind of what's driving this so what I would be doing is I would go all of my I would get rid of your phase setup I would move all of my ads into a CBO um and I would set my ad set by product um probably probably at our level of spend right now I would have each ad set be a combination of product and probably angle um and so what I mean by that is like if you've got six ads for like what's what's one product you're advertising right now we're only advertising old money utility oil beautiful we are literally only just doing one product at a time okay that's going to make our life easy so then I definitely want to go one CBO and then the ad set differences would be like a sort of a a set of ads that are um that are that are each ad set I would separate out by angle essentially so if you've got like one creative style or one angle because because meta says that learning happens at the adset level um what you want to do is let sort of the the creative do the work of doing the targeting for you as people respond to a certain creative message um then they are um meta is going to accumulate the learning people's engagement relative to the message that you've put out there it's going to accumulate that learning at the ad set level so if you have ads that are having wildly different sort of angles right if if I mean I mean so Andrew I've got a specific so so from an ad perspective we have like different models like different faces like me yep Greg Carlos and then we have different messages like different quotes so those would let's say those are the two primary angles we're looking at would it make sense to have an adset with the same quote but three different models or would it make sense to have um the same model but three different quotes yeah so let's look at it um let's let's let's look at the creative here and and just talk about it really specifically pull this back up and sorry for interrupting you but no no I it's good you're taking it from the theoretical to the actual which is probably better um so we'll take this these phase two ads all right so here is the ad um this is this is clearly the work of a copywriter it's so good I love it um um and uh yeah man which is funny because it's it's I'm just using quotes yeah but you know what copywriters pick up on that right like it's like you can tell like you you notice that like this is like eight words that do a lot of work you know um I gu just smell it is is like the language I always say is is it's freighted there it's it's communicating a lot in a in a very few words which is like effective headline writing right so um and even shop nail smell awesome like it's just like tight and clear and um and all those so like yeah our most popular fig set is best price ever is really good I like I love this so what I would say is um I would keep um different messages is what I would separate out at the adset level um and then I would I would uh different models I think would be fine to combine in adsets the one caveat here is that like if it's like slight if the messaging is not wildly different because you could sort of Imagine um a message that was like um All About Effectiveness like a problem solution sort of oriented ad and uh in a much more sort of direct way I think like that message could be different enough here that you you actually may be appealing to a slightly different customer than this sort of uh it's almost like vibi and smell oriented and some of that um but yeah I think I think I think at the same time your budget is low enough that you want to get out of the learning phase as often as possible which means you need 50 conversions per per week so probably if the messages are reasonably close to each other and all you're doing is different models I would probably get six ads into one ad set fill up that ad set and go from there there is an old piece of meta um documentation that says you shouldn't run more than six ads in a single ad set um I don't even know if that's fully true anymore I I have but I have sort of run with that and kept things that way um and and so yeah so that's probably the way I would do it is try to get six ads into one ad set if the messages or the creative style is like wildly different then I would be willing to sort of separate that out but I want to have um no adets in in the learning phase I think the learning phase matters and you want to get out of that whenever possible and if you're not you know if you get to a $200,000 a month spend or something like that then you're not going to have this problem as much at a $44 aov you're going to pile up purchases it's one of the advantages of lower aov products on meta is that you pile up purchases faster you can imagine if you had a $500 product you just get less purchases which makes it harder to get out of learning um and so yeah go ahead Mike Andrew Could you actually pull that ad that specific ad back up sure because my my question is if I I'm always looking to test every little thing because yeah I can for example just that headline our most popular fragrance at its best price ever I would test 10 different versions of headlines and subheaders to go right there yeah um so if I if I wanted to do that and keep every other component of the ad the same would I I would just put those all into one ad set within that one CBO so actually so um if you if you right there you've got the you're sharing the post ID across uh different ads I would not do that I would instead actually kind of duplicate the ad as a separate ad unit each time and it will still pull in the comments across ads um but then you'll actually have the opportunity to add five headlines and five elements of Copy in the ad setup um and then meta will combine them all for you until it finds the Right Mix now that's going to make you a little crazy I can tell because you're going to actually not be able to isolate that variable but what I will tell you is I would actually encourage you not to try to isolate those kinds of variables what I would do if I was you is I would take bigger conceptual swings in my testing and I wouldn't worry about the details so much um at this stage of things I would try if I was you to be thinking less about testing headlines and more about testing Concepts so like for me I would be going like could I what happens if I've got that ad versus a video of Eric talking about the product um and one video would be Eric talking another video would be like what about Eric's wife talking about what she likes about the product on her husband like um what about like you know what I mean and I would I would I would try to come up with long form short form all kinds of still versus not you know product image versus face like wildly different headlines and that's what I would be thinking about as what is big tests in in Concepts what will happen if you do that is that a few of things will rise to the top something will hit right you'll have an ad that hits and then then at that point I would go and start making some tweaks to see if you can affect affect change but in the early stage like you guys should be aiming at this brand can spend $150,000 a month on on meta ads it can um and you have enough margin to do it you have enough LTV to do it so you're not mitigate you're not stopped by your unit economics and you're really content rich and so like and and you're driving it from a creative person so I would be thinking about like what is going to accomplish that and a headline change is probably not the difference that's going to take you from 20,000 over the last 30 days to 150,000 what's going to do that is like meaningfully different concepts um you know and so that's probably the way I would be thinking about your testing process um and and so because of that this account structure that I'm uh advocating for will actually allow you to to kind of get there fast um and that's where I would say like each of those Concepts that I'm referencing becomes its own adset Keep It In A CBO and by keeping it in a CBO what will happen of course is that um whichever ones are performing best will just rise to the top and your your lower performers will go to the bottom and they will not spend um and and that will then give you the data to say okay this is what's working best ultimately um so put your tests in there go ahead and put in five headlines put in five pieces of supporting copy when you go build the ad itself but uh but I wouldn't worry so much about tweaking details I would think big concept uh what do you think about that yeah that makes sense cool cool the other thing I would do if I was you is that you guys have this incredible advantage of having boatloads of organic content I would go take some of the stuff that's performed best on reals on Tik Tok and even on YouTube YouTube's tricky because it's a different aspect ratio so um it's going to be horizontal instead of vertical right although I don't know if you guys are big on shorts right now right but like that'll be vertical aspect ratio and I would start dumping that stuff in into your ad account I would grab anything that is product focused in any way and and what I mean is like anything that's showing off the product being good and I would just go like I would take two days download as much of that as I can and build 20 ad sets into a cbbo and just go fire that stuff in there because I bet you have creative that would work right now um and that would allow you to um to then just go and again like the sort of the only filter I would do to sort through all that content is is this stuff really strongly featuring the product um because the one thing with direct response advertising it's going to be really different than your organic content game is really product focused stuff doesn't play as well with Organic content all the time whereas with with direct response marketing right it's like it's got to get people involved in the product itself and so I'd be a little more willing to talk features and benefits and some of those kinds of things in in your direct response ads as opposed to um you know in your organic stuff it's not going to work as well um is my guess uh I I don't know I mean you you guys are know way more about organic content than I do but yeah yeah I mean like we found that like the organic content doesn't always sell uh that's certainly the case so it does have to be product oriented organic content that hit so that might be a little bit tougher to find um y because we we tend to produce organic content that it's more designed it to scale yeah I mean I I was looking through some of the uh real stuff that you guys have and going like you know there's one guy talking about how he's caring for his mustache and like uh and how does he style his mustache to be that way well like it starts with you know him talking about blow drying and combing and all these different things that he's doing but then he goes into okay and I use beard Brands and he references the product specifically and then he applies the product there um you know you could easily get a video edit of that that like the product like pops onto the screen and so you just sort of like floating product there so you just reference it and then at the end have add a shop now with that product and and that just like that just like tweaks it to be a little more um product oriented and that's another thing you can do is start looking at like maybe you're getting people to stop on this if you look at sort of like um we'll call it hook rate which would be like 3 second views over Impressions on videos right do people stop on the ad are they hooked if that's the case but then they don't click and they don't buy then you could think about using the intro from that ad and tacking onto the back of it like okay some more product oriented stuff and begin to get a little bit more iterative over more time um uh but in the beginning I would be thinking about net New Concepts for you and then organic content recycled um into ads and and kind of see what happens um so let's let's actually talk more about the the U media buying setup so that we can continue to to think about how we'd set ourselves up for that kind of success so you've got your attribution setting CBO at the top and let's talk about targeting um you've got a few phases here what I would probably think about is using um this structure here these ads in your phase two here right now where you've got a bunch of exclusions so you've got all your past customers your um you know from clay which is great your Instagram engagers website visitors all these things again past purchasers from the pixel looks like it's in it's in here somewhere clavio syns versions of it all those kinds of things what I would do is I would go to the one campaign and I would make every ad set the same which is the only thing I would exclude is past customers um I would roll up your website visitors and your IG engagers and your FB engagers all together um and I wouldn't worry too much and essentially what I'm saying here is I would let meta sort out whether or not it should remarket someone or go to someone fresh uh Etc um and that's at the exclusions level that's the only thing I exclude is past customers now I want to exclude past customers because I want to hold past customers to a higher Rass Target probably right a lot of those people are going to buy anyway and I don't want to pay for them if I don't have to um so it's not that you can't advertise to pass customers I would just put them at a different Target um than I would somewhere else and so um so that's that's what I would do and so now you've got one CBO ad sets with exclusions of pass customers only you're targeting broad um with uh without you know without any exclusion of remarketing and then let's talk about uh age and gender so you're going 25 plus that makes sense to me you probably just don't do very well with with people younger than 25 I totally get that so I don't mind a little bit of limitation of the audience there but let's talk about gender um now you guys will have an answer to this right away You're targeting males only um is there not any sort of like gift purchasing happening from women uh in in your guys's uh account or in your guys's business it happens it's just at a lower rate yeah and in my experience anytime we've attempted to Target women through meta we've we've paid a lot more per acquisition for it yeah yeah okay so then uh I don't mind this then um if you're going to go mail only that seems reasonable to me um you could go broad targeting and just sort of let the machine learning figure that out um and uh and it may even be able to especially if you have like a you could imagine even creating sort of a gifting angle at some point where you you generate ads that you're really aiming at you're aiming the creative at women now I wouldn't Target women only again the creative is going to do the targeting for you the creative is going to find a person and then find more people like it because this is this is where like broad targeting is helpful if you target really broadly um creative is targeting in meta at this point meta is going to build its own lookalike audience basically at the adet level to where it's going to find more people like the people who are responding to the ads in that adet and go to them so if you run an ad that really appeals to 35 to 44 year old dudes then it's probably going to keep finding at that adset level a bunch more 35 to 44 year old dudes and maybe a certain subset of them you know based on if it's a beard product versus something else or whatever um if you were let's say you cracked creative and you came up with a brilliant idea that was going to be like a I I don't know maybe it's just holiday like a wife buying for her husband or whatever um you could imagine a separate piece of creative in the same CBO where it's like really um hitting a wife buying for her husband as the Target and that creative would then be its own angle and its own adset and it would sort of repeat targeting there and so by keeping the actual targeting at the sort of adset level really broad like we've got right here you're going to let meta go sort out um who that creative appeals to and if it's not going to appeal to women it basically won't run out to women so um not not the end of the world it's fine with me if you want to kind of keep that male only and you're just saying like that's who we're going to Target that's we to go after that's fine um but it's something I would think about um in the exclusions so now one CBO at go ahead go ahead this might be a little bit of a segue and a different subject and maybe we come back to it later but you know it seems like from the comments that the ads get served to a lot of people who aren't our target audience and we have like a lot of junk you got to clean up or negativity or Y you know people complaining like um I I guess you know how do you handle that what do you recommend do you just yeah delete the comments as they come in and move on if it's overtly negative about the product I delete them my mentality about this um is that if I had a if I bought a billboard and I saw somebody's graffiti on it like this product sucks I would probably get a new billboard and that's basically the way I think about my ads um if it's just general kind of like I don't know that dude's beard is gross or whatever like I don't that's probably not terrible for engagement and I would let that go um if it yeah versus this product doesn't work um I would get rid of this product doesn't work um that's probably the way I'd think about it and that can make a meaningful Difference by the way if those negative comments pile up and and to the broader Point Eric what I would say is like all of your ads are appealing to mostly people who aren't going to do anything right like a good click-through rate is 2% that means 98 out of 100 people are going to scroll right past your ad um and then of those 2% who click a pretty good conversion rate is 2% um you know or 3% or whatever it is it is and so so you're getting a subset of a subset and this is part of the reason why people's instincts around like this will or this won't work are often wrong is like yeah you wouldn't read or you wouldn't you wouldn't read that whole piece of content you wouldn't watch that whole piece of content but I'm not appealing to you I'm appealing to the subset of people who would um and and so I don't really care about like my instinct I care more about like is the data going to go find that subset of that subset yeah price criticisms do you tend to cut those off too or is it something to help weed out people who are price like if it's too expensive yeah uh I don't mind those I think price signals value and I think it's fine with me if some people are going to call out that it's a finer product by saying that it's too expensive for them you know um I think there a subset of other people who want the price to be higher because they want better quality products and that's probably who your customer there was a really interesting thing that happened on the one ad that's really gotten a lot of mileage um it's I mean every time I look at it it has like five or six new comments and somebody had made a comment about the price being more expensive than they would want for a particular product and two or three people organically jumped in and kind of corrected him on his opinion so um there's conversations happening within the ad comments which are really interesting and I've always had the belief that a little bit of dissenting opinion is is okay because it kind of forces people to take their own opinion and if their opinion is in agreement with what you're selling they might feel a little bit more entrenched in that opinion I agree and if you're appealing to everyone you're appealing to No One probably right like it just means you're not taking a position on anything so I think yeah I think it's fine I I what I would say is probably like if you are priced higher then just think about that and terms of how you're presenting everything else you're doing and uh again this is something that should be I think will probably be intuitive to you guys in in terms of what you guys have accomplished in a brand perspective in the past like in my view that's fine go get the guy with a little bit more money who really cares about taking care of himself and and think about how the brand communicates to that dude in general you know so yeah um yeah I've actually thought about this a lot in Men's Grooming and sort of even thinking about branding and messaging around masculinity which is obv a sort of Hot Topic in today's culture and and all those things and being a beard being beard brand you guys could probably dive into some of the ways you think about who is our ideal man and what are their values around masculinity and some of those things that are that are sort of interesting and and probably in some ways we'll piss some people off but we'll also allow you guys to kind of carve out a space that's your own yeah and I think we you know creatively we we try to differ from a lot of brands in the space particularly in the beard space that very direct directly try to make that direct connection between facial hair and masculinity yeah and we try to not do that and we let we let customers decide have their decide their own definition of what masculinity is yeah yeah there's like a really cheap and stupid way this this is what I mean like you guys wouldn't do this you're too good of brand people to do this but there's like a joy like have a beard like a man you know like it's like G just so cringy and stupid and like it's like it's like the the least creative way to approach brand messaging ever you know whereas like what you guys could do probably is is think about like who is the photo of what is this saying about sort of the beard brand man and you know how he cares for himself and his beard and and why he's willing to spend a few dollars on this product that's nicer and better Etc like that's the kind of stuff that's in there and this is actually one of the things I would say back about like The Meta ads thing is like people think you can't communicate brand while doing direct response marketing you know and I just think that's wrong like you you can you can sell product and have it reinforce brand quality and talk directly about the product and have it reinforce brand quality in a way that's good for the brand that I think carves out a space for it uh it means being creative about it but again this why I like that you're in the C you're in Mike is like you're going to have I think like even the ads that we were just looking at earlier it's like a perfect example of they look good they feel they feel elevated in a solid way like I think I think it's it's a good um yeah I don't think you're G to have a problem with that okay let's talk about one last part of media buying and this is something that a lot of people have a hard time with but I I I don't even actually totally understand why and that is cost Caps or bid caps um and so at the adset level you have the opportunity to set a cost per result goal or a bid cap um the difference between those actually um cost caps will give you an average CA bid caps will give you a maximum cap CA um and so um but either way you you can put in a number that just says this is what I'm willing to pay for a customer I am a big fan of bidc caps personally because I like like the idea of saying if I know that over some certain threshold I no longer want that customer that customer goes from being a profit Center to a cost center and I don't want to give Zuck my money uh if I'm not making money right um then a bid cap makes a lot of sense to me and what we can do is we can inform that bidc cap basically um 100% based off of this we just say Okay on a one day click basis if I have to set my if you set a bid cap or cost cap it will be set according to your attribution setting so if you switch to one day click then your bid cap or your cost cap will be set according to that one- day click Target um and so this is why it's really important to understand this delayed attribution element as well um so let's drop our aov down to 44 um you know again probably some of these numbers change from there but let's just say This is Gospel right now you need a $30 uh we dropped it to 44 because that's what we were seeing in the ad account at the aov level um on one day click you would need essentially a $30 CPA um which will then turn into a $23 34 sent CPA to get you to to first purchase Break Even assuming these numbers are right again you can go back later and sort of um go from there so what I would do is probably at an earlier stage of business I would set my bid cap here a little higher than this maybe at like 35 bucks or something like that um because I want to air on the side of getting spend and getting data and start getting spend through um uh through my ad account but the beauty the great beauty of running things with bidc caps is that meta will only spend if it thinks it can hit your Target and that is awesome because it takes your decision-making about budget out of the way it also means that meta will flex your spend relative to how many people on a given time are on the platform that can do that and what I mean is on the weekends there are more daily active users on on Facebook and Instagram which means there are more auctions to win at the same price on the weekdays during the workday uh as much as people would complain about this sort of thing actually most people are working and especially in your target audience they're working they're not scrolling Facebook and in Instagram all day whereas like maybe on Saturday morning they're lounging around their house and they're just scrolling and so um and so when there's more available inventory on the weekend a bid cap will allow you to go sort of flex up your spend with that available inventory and it will Flex back down the weekday and I've seen this to the point of like 50% or we'll say 100% more volume sometimes on the weekends for some Brands you know depending on all kinds of different things and so um that is awesome because that will allow you to flex with the available volume and keep your um performance constant so um what I would be doing and this is the other thing is like uh this is the other reason you you can freely and safely go add all this organic content to your ad account if you set a bid cap and it let's say it run let's say you set it at $35 like we just said right um then you can go take all this organic content pump it into your ad account put it all in these ad sets in one CBO and now meta is set up to um optimize your spend for the best performers within the CBO because it it will allocate your spend between adets and at each ad set it will it will allocate your spend between ads so basically you're just saying to meta here here's the target go spend my money as much as possible on the ads that are going to give me the best performance at or under my Target and spend until you hit my target um and if you cannot hit my target do not spend the money and that's kind of and that's the that will allow you to then go and do the thing that we first talked about earlier Mike which is to test really aggressively right to go take your mentality around I want to know which messages are working I want to understand this um and in and and you'll know is working because it's the stuff that it will get spent on whether that's organic whether that's organic content that's being repurposed stuff you've used I would go back through your account and go find ads that were turned off at some point and go launch those into there as well um and I bet you you have winners that you don't even know are winners um and and if you set the account up to do that now the one thing to watch out for here if when you set that bidc cap is this aov question because your CPA will change relative to aov sort of imagine that you have a a $100 average order value product here a two to1 row on $100 is $50 uh in CPA a two to1 Ros on $50 is $25 in CPA right uh does that make sense and so so this is where you do have to separate out products at the adset level to make sure that you're getting consistent aovs at the adset because you're going to set your cap at the adset level um and if this gets complicated enough there's some other ways to to solve it but while you're running one product this is actually really easy you you you just set the same um Target across the board and go and spend now there's possibilities that it won't spend and there's all kinds of details and I'm happy to follow up with you at some point maybe we'll even record a 10-minute bonus episode at some point of like here's how we solved the wouldn't spend problem but I think you probably have creative that can spend at or under your target already made and ready to go you just have to go set it up for success in your in your account structure that's what I would say do that what I said just make sense that was pretty theoretical well yeah I got I got a question so basically it scales through additional or higher performing content like you don't have to adjust your budget at all you don't have to come in and be like all right I want to spend $500 a day or yeah in fact what I'd say is is there any of that involved at all no I the only the only the only way that would be involved is inventory constraints typically so like you'll have an ad hit right and suddenly you're like oh my gosh we can keep spending add or under my Target and so then you you do that and you hadn't planned for that on your inventory forecasting because it's really hard to plan for ads suddenly taking off um and so then you might have to constrain your inventory you constrain your spend based off of that but actually what I would do there first is I would actually just lower my bid cap and just take higher margin per product that I have and I would try as much as possible to sort of sell as much of my product as I could get through without getting without selling out at the highest margin possible so I just take the most contribution margin possible on each product U does that make sense and you can you can you can adjust your bid cap after something's been cre yeah yeah that's most of the adjustments I do in an ad account are not budget they're bid caps what I would say is if inventory is per permitting you should actually never hit your budget you should always have your budget higher than your bidc cap um and that's because if you hit your budget that means you actually had more room to spend um at or under your Target and uh and that's what you want right you want to maximize the volume at or under your target um and so and so uh if you hit your budget that mean if you I was say if you hit your budget two days in a row that means that you should have adjusted your budget up or your bid caps down you should either take more efficiency per purchase or you should take more volume at the same efficiency um always you should always be taking one of those two things and that that becomes the the the budget management as you're going um because yeah because as long as meta spending at and your targets are set correctly and your attributes set correctly it means you should be getting the outcome that you're trying to pursue if you have a banger ad that pops like yep what does that look like in terms of like performance like are you going to go from a $100 day to $10,000 day or something like that or I have I have a client that based on Creative spent like 253 Grand in January and spent 280 Grand in August and we could have gotten there faster um um and it was a part of it this is not the only thing that got got that kind of growth but part of it was exactly what you just said Eric a banger ad that just I mean it massively outperformed my expectations like this is not because I'm some Super Genius or anything it it worked really really well and we could have actually scaled that a lot faster but of course you cannot plan inventory for that and even if you can like the cash movement is really hard in a business to do that and so yeah so absolutely you can see sort of massive scalable growth which is why people are so um set on meta as a way to do this Mike we got to mute you when you're typing yeah you're a loud typer Mike sorry I was I was just typing that I I need to pause and grab my charger because I am about to die and I didn't need the warning at the beginning of this that this might go longer than we expect yeah ah hold tight hold tight yeah yeah cool um yeah and I think you know I mean while while Mike is doing that we can actually keep going Eric really fast I'll just say like I think um I think uh you know this is where like your you being sort of an idea machine is interesting like if you with your creative mind Eric like I think if with your powers combined with mics and your willingness to get on camera and record stuff and try stuff I think beard Brand's going to be uniquely positioned to generate um creative Concepts that sell product and to and to sort of you also have a long history of learning like seeing feedback from an algorithm about what's working or not and then creating more of it it's the same exact game on meta ads you're going to start to see stuff that's like oh if we do this to the content it effectively scales in a way that just like on your YouTube account right and so um you're going to be able to I think do that interpret the results and I bet you with you and Mike sort of combined um you're going to be able to generate that content really really fast and try a new iteration really really fast and then it becomes a game of sort of operations of you know scaling inventory and all those kinds of things but I'm I'm confident you guys will be able to accomplish that I am back great welcome back great welcome back um okay so just a one time one more time recap the way we talked about the setup here one CBO I I would launch my creative tests right into that CBO I would launch it in a new ad set because the other thing is you actually don't care about if your creative test Works what you care about is how does it work relative to other options and and in a CBO if you set the campaign budget at the Top If your new ads work then that ad set that you launch them in will just will just rise up and eat up and take over the spend um occasionally new ad sets will get very little spend for whatever reason um and so you may start your bid cap a little higher than the rest of your bid caps would be at the account level um and when you when you launch new creative you know five or 10 bucks higher or something like that just just to feed it some initial data and then move it back to down um but even that I found to be only rarely necessary I think meta can learn very very fast um what works and we'll start launching those things um to the top pretty quickly I've had definitely launched ads where like you know my CBO is going I launch a new ad set with ads in it and that new ad just shoots to the top takes over the whole spend in the account um and that's what you want to set up to do and then and then from there as you do all of that work you're going to get a bunch more data really fast and that's where you can kind of move into the sort of iterative mode of okay how do I adjust this content now how do I create new variations from there the other thing you can do is almost anytime I create a video I will um I will create the body and the sort of uh CTA portions of the video and you know if I'm going to do any validation or guarantee hey we got a 30-day moneyback guarantee anything like that body validation um and um and CTA all the same but I'll just write six hooks for it because there's just so much value to be gained out of doing that and if you go to an editor and they can edit one body portion of the ad down through the end but then they can just attach six hooks to the front it's going to make their job a lot easier as well and and for you it sort of will allow you to Target like okay what happens if I try and go like I don't know funnier or more product focused or more direct you know there's like a lot of different ways to play with almost any piece of creative and so that will allow you to test stuff from the beginning um and spin out Concepts and and you'll see stuff really rise to the top doing that um okay there's a lot more we could say creative for you I think you could get more directly product focused that's the one feedback I have from the creative in your account and really try to flex the the like direct response muscle a little bit you know go go read David Ogie and see what he's doing and I he did a lot of brand stuff too but um but uh but just you know those kinds of things or go go read some the old like um Mass sales letter uh you know copywriters those kinds of people and just sort of pick up on some of those tricks um I know you also want to be really protective of the brand at the same time so some some probably tactics that you're not going to use a beard brand that other people would be more comfortable using but U which which I think is great you guys are trying to build something you're proud of and enduring so um so yeah but um but yeah I I think those are the kinds of things that I would that I would consider but uh if you've got that account set up from there then then then I think you'll be well positioned for Success sweet uh Andrew do you have a a recommended campaign budget to start with above whatever you're actually spending so right now you spent 20 grand in the last 30 days I'd probably put it at two three grand and the more you know something like that again because I just never want to spend through it um if you're running caps that's what I would that's what I would do and again if you hit it uh scale just keep an eye on this those that one day click row as if that one day click R Us looks like it's going to ladder to relative to that economic sheet it's going to ladder to the 28 day click R Us that you want start scaling watch your new customer revenue and see what happens and then shoot me an email I have access to your accounts and I'll I'm happy to look at it with you so yeah yeah maybe once I get it set up I'll have you pop in there just yeah make sure it looks right yeah cool yeah no problem okay any questions while we wrap up I mean Mike what what do you think like comparing the two strategies between because I know we talked about this uh before the call and how you do like to to Tinker and you know yeah I mean it it seems to me like just a different way of doing the same thing essentially so two sides of the same coin if you will yeah I think you're going to be able to scale a lot faster the way that I'm suggesting it and test a lot more a lot more quickly I think that's the big big advantage to it that's my guess yeah I mean that makes sense I like that you know normally if I'm trying out an ad and I'm I'm basing whether or not I think it will work on how it does in a click campaign I'm taking out that step and basically if it's not going to work then Facebook's just not going to spend money on it is what I'm what I'm taking away so there's nothing to really lose there whereas with what I'm currently doing I am losing some money through testing for for clicks even if it's only 10 bucks a pop that still adds up if I'm testing 100 ads a month or whatever it also assumes that the click behavior of that subset of customers is going to ladder to purchase and I have seen plenty of times where like higher clicks doesn't actually equal that in the same way you know I've SE yeah I've seen that too so yeah there's no guarantee based on a 4% click rate in that phase one test that yeah it's GNA convert in a conversion campaign it's probably a decently strong signal but just when you put it into run to converters you'll get that same signal right you'll get it it'll be not as good as the click campaign signal is because click you know the people who are opt when you optimize for link clicks the thing I think people uh many people don't realize is that like when you optimize for clicks what you're actually optimizing for is a subset of users on the platform right um and so it's people who click on ads that's that's what you are optimizing for but it doesn't say anything about their purchase Behavior whereas when you optimize for purchases or for conversions you're optimizing for the subset of people who are willing to click on an ad and buy it which is kind of its own behavior um the sort of the best illustration of this is that like there's a lot of people who have tried the tactic of optimizing for ad to cart because they're like oh like if I'm not getting enough data at the purchase level if I optimize for add to cart then maybe I can get those people to add to cart I'll get more data into meta and those people will buy but what you actually end up getting is a bunch of people who add to cart and don't buy because there's some set of Maniacs in the world who go to all kinds of e-commerce websites click on e-commerce ads add things to the cart and never purchase and I like I don't I can't believe this Behavior exists but it does and so um I think and I think that's Eric Eric is that kind of maniac I could see that I just I want to see everyone's flows you know I want to see their abandoned car emails he was just telling me about it this morning it's all e-commerce professionals that's that's all who you're who you're advertising to right there just email email marketers that's who it is um yeah that's funny cool any any other questions on on this approach no sounds good I'm excited to try it all right awesome well um yeah so uh I I think your skep your kind of semis skepticism to start makes sense what I've found is that typically people will not be true believers this until they've seen it work and that's perfectly reasonable you shouldn't you shouldn't be um and and so I think it's worth a try especially in the phase you're in um uh guys Eric uh especially because you are the uh person who owns the company I super appreciate you being willing to share so much stuff with so much uh transparency with people I think it will really help them I get questions about this kind of stuff all the time about like campaign setup Etc if we can do any kind of a followup or something after you set it up and we could show people that that would be awesome so people can kind of see how this actually worked out um but hopefully um hopefully people kind of have a sense of how uh how to do it from here so I think you've you've been a great help to a bunch of e-commerce people who will definitely watch this and check it out everybody should go listen to e-commerce conversations with Eric uh his podcast as well um and then go buy some beard oil you know absolutely thanks for having us on happy to share and hopefully help everyone level up and you know create the the life they know they can have awesome Mike thanks man I appreciate it a lot yeah thank you Andrew all right see you guys hey quick Interruption from me again uh you just heard us wrapping up part one of the conversation we're now going to go forward in time about a month uh to Mike and I following up Eric couldn't join us for the follow-up call that's okay but Mike and I followed up to talk about what the account looks like after he started implementing some of the changes we talked about and what was what we would do next from there to keep forward progress happening so let's go forward a month in time to my conversation with Mike following up Mike maybe what we can do to start welcome back by the way thanks for thanks for taking more time yeah thanks thanks for taking ditched Eric we ditched the dead weight of Eric he's gone Eric Eric is in terlinga at the Chile competition right now so is that real is that what's happening yeah yeah yeah it's like the biggest chili cook off in Texas is inlingua just outside of Big Bend is he eating chili or is he cooking chili or he better be eating Joey I don't I don't know that Eric Cooks so okay got it that is so awesome um where is Terlingua that is something Terlingua is this little tiny town just outside of Big Bend National Park where's um that is like if you can picture Texas I've always pictured Texas as like a bird flying upside down and so like El Paso is the tip of the beak and then there's kind of like the head that goes down along the Rio Grand River um Big Bend is kind of like a big chunk of what I call that bird head none of this is like technical on the west side of Texas right yeah yeah it's far west Texas um it's like it's near the border um right near the Rio Grand and tringa is kind of this like famous Ghost Town slash there's like an actual ghost town in turling um West Texas desert Town that's pretty remote yep and they do a huge chil cook off every October yeah that is awesome I had no idea that's amazing um that sounds like a really fun time actually a unique event um yeah okay well anyway Eric is eating chili but Mike and I are are are building businesses over here while you're Caz evening chili and so just getting after it um so all right so um let's uh let's talk about kind of where the account is so what I'm going to share my screen um and that way we can kind of poke back around where things have gotten to um so let's actually go back to September so people can kind of see how that all ended up um and um and so Mike maybe let me just I'll I'll give you a couple observations that I see here and then you can kind of fill in from there so um you know previously there were there were these sort of multiphase approaches to the ad account we spent about 28 grand in September um 7day click one day view attribution says we returned about 30 grand but 28 day click attribution says we returned about 27 so um I'm going to take the click attribution there and say that's probably the most accurate representation uh as usual actually for people running 7 DC 1 D 1dv attribution these numbers end up being fairly close to each other um but about 27 Grand so a 0.97 row ass on the whole um you said September 28th or so you sort of implemented the structure that we talked about in our last call which was move to a single Consolidated CBO with within that a whole bunch of AD set they started to go um spending in September you can see here there's that one CBO um all bid capped all bid controlled and what happened was something like what you might expect at first if you're running the same assets which is we spent about 10 grand less last month uh 16.6 grand um but we returned about 22 Grand uh so for 1.33 Roos which means we spent s grand less for $4,000 Less in Revenue which is which is cutting off basically the dead weight in the spend which is really good so um that's a step forward we're obviously not to a point here where we've unlocked a $300,000 a month spend or anything like that um the results aren't super crazy but when you go look uh at the actual setup you've done I think a really good job here which is launched a bunch of adsets against each other um broad targeting mostly maybe limit to you know 25 plus mail that makes perfect sense to me that that you just cut off the parts of the audience that you're you're pretty confident are not going to be buying from you um so it's male and maybe maybe an age uh age cut off but otherwise broad targeting and uh and you've got some clear stuff rising to the top here in the spend uh all bid caps you can see here and these and now kind of this is where we're at so uh why don't you fill in any other gaps that uh you want to fill in Mike about sort of where things are at and what you're seeing and what you're thinking about yeah I mean I think a lot of it it makes sense you know I had to spend a bit of time I've had to really kind of over exaggerate those bid caps in the beginning and gradually walk them down I haven't been able to quite get them down as low as I would like yeah um because because it'll just cut off spend completely because it just yeah yeah yeah and even like where they're at now it's still I'm still getting a lot of bid limited or learning limited messages my you'll get you'll get bid limited forever that's meta's way of saying we would really like you to spend more money um and there's more volume Here If you bid like bid Limited is exactly what you're asking the bidc Caps to do right to limit to limit the spend it's saying the bid is limiting your spend you're going like yes great that's the point so yeah yeah and I think what I have seen is meta kind of focusing more on your big picture average CPA so I'll have some days where my CPA is like up around 90 bucks and then I'll have just some days that are really good where that CPA is around 20 to 30 bucks and it kind of just depends on the day um and then like like you said big picture it's it has cut off some of the Dead weight spend um and at least has made the account a little bit more efficient yeah yeah I mean I'll say two things about that right away and this is like the sort of hard reality is that like the truth is we're actually not all the way to the targets that we need to get to for this to scale uh at the unit economics that we discussed on the last call and so the reason that you're that you know dropping the bid further and further is um is cutting off a spend completely is because that's meta's way of telling you