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EPISODE 440 47 mins

Ex-VaynerMedia and BarkBox Exec Explains How to Scale from $1M to $10M+ → Sam Piliero



About the guests

Sam Piliero

Kunle Campbell

Sam Piliero is the founder and CEO of The Moonlighters, a media buying agency specializing in Facebook and Google ads. With a background at VaynerMedia and BarkBox, Sam brings a wealth of experience in scaling brands and optimizing media strategies. His agency focuses on providing comprehensive growth solutions tailored to each client's unique needs.



In this episode of the 2X eCommerce Podcast, host Kunle Campbell interviews Sam Piliero, founder and CEO of The Moonlighters, a media buying agency. Sam shares his journey from early entrepreneurial activities like selling lemonade to working with industry giants such as VaynerMedia and BarkBox. He discusses the evolution of his career, highlighting how his experiences shaped the formation of The Moonlighters, which focuses on comprehensive growth strategies for brands.

The conversation delves into the nuances of media buying, with Sam explaining the importance of understanding both demand generation and demand capture. He provides actionable insights on structuring an agency for optimal performance, emphasizing the role of growth directors proficient in multiple advertising platforms.

Sam also discusses the impact of YouTube and Meta ads, offering tips on creating high-quality, effective campaigns. He stresses the significance of focusing on total contribution margin rather than just ROI, advocating for a holistic approach to measuring business success.

Additionally, Sam highlights the value of authentic user-generated content (UGC) in today’s market, encouraging brands to prioritize genuine customer reviews and testimonials. This episode is packed with practical advice for brands looking to scale their operations and enhance their marketing strategies.

Listeners will gain valuable insights into the complexities of media buying and how to leverage different advertising platforms to achieve substantial growth. Sam’s expertise offers a clear roadmap for navigating the challenges of scaling a brand in a competitive market.

Don’t miss this engaging discussion filled with expert tips and strategies to help elevate your brand’s marketing efforts and drive growth. Tune in to learn more about optimizing your media buying strategy and leveraging authentic content to boost your brand’s success.

Topics Covered:

  • 00:00 – Sam’s Introduction and Early Entrepreneurial Ventures Sam discusses his early exposure to business through selling lemonade and flipping baseball cards, laying the foundation for his future in media buying.
  • 03:57 – Experience at VaynerMedia Sam talks about his time at VaynerMedia, working with prominent brands and gaining a comprehensive understanding of various advertising platforms.
  • 05:51 – Transition to BarkBox Sam shares his experience at BarkBox, where he applied his knowledge from VaynerMedia and started building his agency, The Moonlighters.
  • 09:49 – Agency Structure and Media Buying Strategy Sam explains the unique structure of The Moonlighters, emphasizing the role of growth directors and the importance of understanding both Facebook and Google ads.
  • 14:31 – Demand Generation vs. Demand Capture Sam discusses the difference between demand generation and demand capture, offering strategies for brands aiming to scale from $1 million to $10 million.
  • 30:50 – Focus on Contribution Margin Sam highlights the importance of focusing on total contribution margin rather than just ROI, advocating for a holistic approach to business growth.
  • 36:55 – The Role of YouTube Advertising Sam provides insights into YouTube advertising, emphasizing the need for high-quality production and its role in a comprehensive marketing strategy.
  • 45:31 – Importance of Authentic UGC Sam stresses the value of authentic user-generated content, encouraging brands to prioritize genuine customer reviews and testimonials.

Timestamps:

  • 00:00 – Sam’s Introduction and Early Entrepreneurial Ventures
  • 03:57 – Experience at VaynerMedia
  • 05:51 – Transition to BarkBox
  • 09:49 – Agency Structure and Media Buying Strategy
  • 14:31 – Demand Generation vs. Demand Capture
  • 30:50 – Focus on Contribution Margin
  • 36:55 – The Role of YouTube Advertising
  • 45:31 – Importance of Authentic UGC

Takeaways:

  • Focus on total contribution margin to optimize business growth.
  • Authentic user-generated content is crucial for effective marketing.
  • Structure your agency with growth directors proficient in multiple platforms.
  • Understand the difference between demand generation and demand capture.
  • Invest in high-quality YouTube ads for better engagement.

 

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🔔 Book Announcement:

📈 ‘E-Commerce Growth Strategy’ by Kunle Campbell

 

Exciting news for our listeners! Kunle Campbell, your host and e-commerce expert, has just released his new book: ‘E-Commercer Growth Strategy.’ This essential guide is packed with strategies for attracting shoppers, building community, and retaining customers in the e-comerce space. Drawing on insights from the 2X eCommerce podcast and Kunle’s extensive experience, this book is a must-read for anyone in the e-commerce industry.


Transcript

How to Scale from $1M to $10M+ with Google and Meta Ads → Sam Piliero

[00:00:00]

Introduction to Scaling Your Brand

Sam Piliero: I think this is a unique point for us, or at least I like to pride myself on it a little bit. So what I recognized specifically when I was working for a brand, and this was a Barkbucks to be very clear was a brand that was spending anywhere from 000 a day, literally per day. Budgets were massive.

And in the direct to consumer space, that’s, we’re not a bank, but that’s pretty large.

What we did and how we’ve structured our team so far is. Everyone that we work with gets a primary person. They get a direct or

growth director. We should call it really. That growth director is the main point of contact. They’re the same person that is on every single meeting in your Slack channel.

They’re also the same person. That is pulling all the strings and making all the optimizations.

The more real and authentic it is right now in this market, the better it’s [00:01:00] going to do. I’m obsessed with this product that just got sent to me for free in the mail. It doesn’t work anymore. It used to work quite well because it was new at the time and the consumer wasn’t used to it. These days, we’d like to see really, truly honestly, real.

Reviews that happen as a testimonial format.

The 2x eCommerce Podcast Begins

Kunle Campbell: So on this episode of the 2x e commerce podcast, we dive deep into the secrets of scaling your brand from 1 million to 10 million with expert advice from Sam Piliero. This is the 2x e commerce podcast. Hosted by Kunle Campbell. So welcome to another exciting episode of the 2x e commerce podcast. I’m your host, Kunle Campbell.

And today we’re unlocking the strategies to catapult your brand from a million dollars in revenue to 10 and beyond. Joining me is Sam Piliero, the founder and CEO [00:02:00] of The Moonlighters, a top notch media buying agency. Sam shares in his incredible journey from learning, marketing, and marketing. business basics as a childhood to working with powerhouse companies like VaynerMedia and Backbox, and eventually creating his own agency that’s transforming businesses today.

We’ll explore actionable insights on media buying, leveraging Facebook and Google Ads, and maximizing your brand’s profitability. So whether you’re a budding entrepreneur or an established business looking to scale, that’s This episode is packed with invaluable tips you won’t want to miss. Make sure you follow 2x eCommerce podcast on your favorite platforms to stay updated with more experts, interviews, and insights.

Now let’s get into the conversation with Sam Piliero.

Sam, it’s an absolute pleasure having you on the 2x eCommerce podcast. Yeah. Thank you. I’m happy to be here. I’m excited to dive into a lot today. [00:03:00] Yes. Yes. Yes. Yes. Yes. Same here. Same here.

Sam Piliero’s Journey: From Lemonade Stand to Media Buying Expert

Kunle Campbell: Let’s get to your backstory. I want to know your backstory. Right now. You’re founder or CEO of a, of an agency called the Moonlighters.

Yes. And. Yeah. You buy media, put all that aside for now, and I want to get to know who Sam is. Sure. Yeah. So I think it’s probably best to go way back. If we go as far back as I could think, pretty much I was the kid on the block selling lemonade with my grandma telling me to go get my friend to go get the person to go buy the lemonade.

And I learned arbitrage when I was like five years old. We’ll just, jokingly I understood business really young and I was always very attracted to business. And along the way I always tried different things. I flipped baseball cards. I literally remember this place I used to go to called squiggies and it was a baseball and Pokemon card spot.

[00:04:00] And I just loved the idea that I could go there and trade something for something else. And long story short, that kind of, bellied its way into what I wanted to do in school and what I wanted to do outside of the bounds of school. Along the way, the trading of cards, the, knock on this business’s door became, had a few clients that I worked with on the side and provided really basic fundamental, like growth services we’ll call them.

And that was when I was really young. And if we fast forward a little bit, Shopify came into my foresight in about 2014 or 15, I think it was right when they started to promote heavy. It’s not like I was the earliest, but I was pretty early on the platform. And it opened my eyes to a lot of things.

And once I was working in Shopify, that’s The same time that I started to learn Facebook ads, started to learn Google ads, which still are the dominant platforms today. So that’s around 10 years at this point. And I think the cool part for me back then was it [00:05:00] was 100 percent my own money. So there was no, use this client’s money.

This brand’s got 30, 000. I literally had a couple hundred bucks that I had saved up from whatever jobs I was working at the time. And I started to sell a variety of products. I’d messed around with some drop shipping. And again, along the way, just developed this kind of a jack of all trades skill set specifically within the Shopify realm, Facebook realm and Google realm.

So that was like the things that I knew were around there. I played with my own money a lot. And then if we fast forward a couple of years later, went to school or college, we should call it graduated college. And my first job was at VaynerMedia. VaynerMedia is the agency that Gary Vaynerchuk runs.

And I was part of the e commerce team there. The VaynerCommerce team. I believe launched about six months before I joined there and I was employee number four or five. So we were really early on the VaynerCommerce team. And I got to work with some [00:06:00] fantastic brands during that time. Some that stand out are Supergoop Liquid IV, brands that really grew quickly post VaynerCommerce.

And it was pretty cool because I got my first touch of an agency experience without being a kind of a unit in a massive agency. Because if you look back at VaynerMedia as a whole, you see this 5, 000 person business. And I think the same thing applies to most large agencies. And you never get the real experience of learning multiple things.

You’re hired for one reason. You do one thing and you get really good at it. And I think that’s, Part of the problem of media buying and agencies and consultancies these days, cause they’re super, super good at one thing. And unless you can afford to hire three or four different agencies, it gets very challenging with your bottom line to make it work.

So at VaynerCommerce, I got a scope of multiple things. We touched everything from Amazon DTC. Email SMS, like we did so many different unique [00:07:00] things not saying I was the best at it. I probably shouldn’t have had the capability to do all the things that I did. Like they probably shouldn’t have let me run as free as they did.

But I learned a lot got to work with some folks like Nick Sharma. Scott Swanson, there was quite a few guys that are known entities in the DTC space these days. And basically post Vayner. So I worked at Vayner for about a year and a half, swapped over to BarkBox and BarkBox is one of one of the largest subscription brands in the U S.

So I had to apply a lot of the things I learned from Vayner over at BarkBox. And when I was at Bark, My LinkedIn started to get a little hot. LinkedIn started to get hit up every few weeks or so. Hey, can you help us with this? Can you help us with that? Had a small book of a few clients that I was working with on the side, delegated out some things and noticed that, I was building an agency without really truly focusing on building an agency.

It was just happening. And I think some people would say that and be, Oh, you’re so lucky that [00:08:00] happened. But the reality is like I worked for hours before work and many hours after work every day. And it just fell into place over time where I had the confidence in myself. And thankfully to like people around me that were really encouraging of it.

To leave and just go build what is now the Moonlighters. So that’s the long version of the background. And I think that all of it parlays into the fact that everything we now do with the Moonlighters is super focused on what did I learn at Vayner? What did I also learn at Bark and the agency relationships that lack of a better word, we’re crappy there.

And then how do we make them better for the clients that we work with right now? Yeah, that’s super, super interesting. Some really good stuff there. Where do I start from?

The Birth of The Moonlighters Agency

Kunle Campbell: Is that where the name, the Moonlighters come from, comes from the fact that [00:09:00] you were moonlighting essentially? Yeah. So we have been working with a sales team for quite some time now, and we were originally a really.

ugly LLC name. And the moonlighters came on a whim to me, classic shower thought. And it just, it sounded right. It sounded ultimately like something that represented doing a bunch of work after hours, right? We were hired moonlighters. We were, I was a moonlighter. Um, yeah, it stuck.

I think it’s got a nice ring to it. I like your website. Your website’s very CRO driven, so your website’s, just case studies with videos, industry, client name, short-term results, long-term results, and then the founder. So it’s very impressionable and from what I can see here, your seven figure into eight figure.

So you’re moving. 1 million in revenue, profitable, hopefully profitable businesses to 10 million pluses. Is that what I’m picking there? Yeah.

Strategies for Scaling from 1 Million to 10 Million in Revenue

Kunle Campbell: Look, that’s the ultimate [00:10:00] goal, but if we’re realistic, we’re not working with a brand that’s driving a million dollars in revenue today. And then, 90 days from now, they’re at 10 million in revenue.

Anyone that sells something like that is not living in total reality. Unless you get a, Kim Kardashian shout out or something, probably not going to happen, but the long term is that exact goal. So we primarily focus like our wheelhouse is brands that are in that one to 10 million range, because it tells us two things.

It tells us that They have a good product market fit if they got to a million dollars. And then second, if they’re struggling to get past that, that range and get into the eight figure category, there’s usually roadblocks that they were able to bypass because they had good product market fit, but they couldn’t get over that hurdle of the technical stuff.

And we’re technical. So we’ll come in and revise all the media buying strategies, all the Facebook structure, all the Google structure, the growth structure as a whole. And then pretty quickly, we’re going to identify other [00:11:00] problems that are within the business. And at least at the very worst case, be able to put out recommendations for who to work with or what they need to do within their current systems.

Anything very common, like site speed just too slow. And they’ve just been getting away with it because again, good product and only reaching a certain amount of people. But to get to that next level, you really have to push a lot of these levers or pull these levers rather in order to start to scale up.

I agree. Every bit of detail, matters because sometimes you, one thing, one, maybe your ads are really done well, your landing page is well designed, or you have a, shout out from a particular person would be carrying all the weight. And if you said you distribute that weight, you go further in my opinion.

So what does your team do? look like? How’s it structured? How does it reflect the Facebook ad blend in terms of the media buying for growth and your proposition? Yeah.

Inside The Moonlighters: Agency Structure and Strategy

Kunle Campbell: So I think this is a unique point for us, or at least I like to pride myself on it a [00:12:00] little bit. So what I recognized specifically when I was working for a brand, and this was a Bark Bucks, to be very clear, was a brand that was spending anywhere from 20, 000 a day, literally per day.

Budgets were massive. And in the direct to consumer space, that’s, we’re not a bank, but that’s pretty large. So what I noticed in the agency relationships that I worked at. Where there was always an account executive who was just really good at talking to people. And then there was a bunch of media buyers or team under that account executive.

And the account executive was pulling the strings, trying to coordinate things, but they didn’t know growth. They did not know the intricacies of the platforms. And sometimes, unfortunately, they spoke off tune, right? It didn’t really make sense what they were saying, or perhaps they just had to go check back every single meeting.

That stuff was a little frustrating for me. And then second to that it’s just not fun playing a [00:13:00] game of telephone. So what we did and how we’ve team so far is everyone that we work with gets a primary Person, they get a direct or growth director. We should call it really. That growth director is the main point of contact.

They’re the same person that is on every single meeting in your Slack channel. They’re also the same person that is pulling all the strings and making all the optimizations. Furthermore, we only hire people that are proficient in both Facebook and Google. So they are essentially the person I want every client that we work So badly wish they could have found this person without us and they’re just happy that they get them anyway, right?

That’s my goal. And I think that kind of comes from Sort of what I was able to provide for some of the brands that I worked with personally because I had that, that jack of all trades skill set. And the cool part now is that as I get to, [00:14:00] as we’ve grown this agency and look, we’re not a huge agency.

We’re still what I would consider in the small size. As we’re growing, I’ve had the really just privileged to hire. People that are smarter than me in respective areas. And that’s been so cool to see because I can think that, I’m fantastic at Facebook ads and I’m sure I’m in the mix of the top side of it, but when you really break down who’s been really drilling at Facebook ads for 10 years that’s the person who’s going to be so much more elite at it and being able to hire those folks.

Especially when they have like good chops in both Facebook, Google, and other platforms, potentially that’s when we have these killers in a way, like really skilled folks. And that’s everyone we try to hire and straight up. It’s pretty hard to hire those people. It is because they’d either be working for corporations, in in the e commerce department or doing stuff themselves, on their brands.[00:15:00]

Okay. That’s very clear. So the agency structure is direct, more direct to your executive relationship and it’s that executive that’s essentially making changes to the account. So there’s the feedback loop actually is shortened because you have direct access to who’s working on your account, who has communication skills as well as Google and Facebook ad skills.

100%. Yep. Okay. Okay. Okay. Makes sense. What are your thoughts?

Demand Generation vs. Demand Capture: Maximizing ROI

Kunle Campbell: This is, I’m just going to segue a little bit to, to another topic, which is what are around demand generation. Which is essentially Facebook ads and demand creation, which demand generation and then demand capture, sorry, which is Google ads for people who are not very aware demand capture, sees existing demand, so people could be searching for pets, collars, and because they search for it, they see a [00:16:00] number of options, they choose, and they find out something, they purchase, and then demand, creation is more around, you create an ad that’s really compelling, that tracks clicks and people take action on your websites.

What ratio should brands focus their efforts on? One example here I want you to touch on is, say brand has hit 1 million in revenue, or more. And they’re looking at that 10 million mark in three years and they’ve done that 1 million exclusively from Google ads. How do you take all that data to continue to scale the Google ads, but get into the Facebook of the world of Facebook to really, take them to the next level.

Yeah. So there’s a lot to unpack. And there’s a real technical answer and then there’s the Gut check answer of it. So just defining the two, right. Demand is we are creating. literal [00:17:00] demand for our product or within our market. And then capture is like you’ve said, someone specifically is already looking for this kind of product.

You’re just showing up the right time to capture the demand or protecting your branded terms and so on. I think those would be the two buckets as you’ve already said. What I think is important for brands in let’s just say you’re in the one to 2 million spot. So this is like the spot where you could really hockey stick your way in growth.

And you’re right there. You have true product market fit. You just need to pull the right levers at the right times throughout the year. And you could probably go from 30 percent growth to a hundred percent growth year over year, not that shocking if you spend correctly. So when we look at demand capture, my recommendation right away is Start by, by taking all of your market demand and capturing it as aggressively as possible, as long as it hits your needed ROI.

That’s the [00:18:00] easiest, lowest hanging fruit that every business needs to capture. Most businesses in the one to two, even 5 million range are doing that pretty effectively. Like there, there’s not as much of a need depending on your category and product to create as much demand. As you might think using your pet collar example, if you were selling, high end pet collars, yeah, Facebook ads will probably do well for you.

You could probably get away with a whole lot of Google ads pretty aggressively. The thing that happens quite quickly to brands where they, these two lines blend and they get confused why they see what most people would just call diminishing returns. The platforms these days. are so good at retargeting and capturing conversions that were going to happen anyway.

Let’s use a performance max campaign in Google, which is like the primary most invested campaign in the last year. It’s mostly shopping, but it touches everything. So a performance max campaign, you might [00:19:00] return at, let’s just go with a five return on ad spend. And you’ll be like, cool, we’re grabbing a five or we’re looking good here.

But once you scale it up from say 500 bucks a day to a thousand dollars a day, you see this mega drop in your performance. If you’re in the position that you’re seeing something like this. The very simple thing that’s happening is it was being supported by your branded terms or demand that was going to convert most likely anyway, or people who are at the very end of the funnel.

Everyone else in, in that in between still needs to be nurtured, attacked. We still need to capture those folks. But ROI on them because the reality is those guys that are at the very bottom of that funnel You might look like you’re getting a five return on ad spend from them, but there was probably a hundred other touch points along the way.

Actually, their ROI is playing into your averages, right? So what I would prefer to do in most [00:20:00] cases is actually break out your Google account, set up brand exclusions in performance max, and then also set up branded shopping campaigns and branded search campaigns. If you do this, you set yourself up to know What is the branded search and branded shopping driving me?

And then what is the wrong terminology, but non branded performance max driving me? What is the brand excluded performance max driving? So you have a really high ROI to campaigns of branded search and Branded shopping, which technically isn’t branded shopping. It’s just shopping without exclusions and then a lower ROI that, is incremental to your business because it’s no new customers and people that haven’t searched for your specific name, that’s going to be real true demand capture flipping to the other side.

As you were mentioning before, where you have to actually drive new demand for the business. It’s just where I love Facebook. I think Facebook, or we should say Facebook, Instagram, or the [00:21:00] MetaSuite. No matter where we play, no matter where we invest our dollars. It just works so well. We have some businesses that spend 10, 20, 000 daily especially during sale times that are easily scaling into Facebook.

And there’s this huge misconception that like, things fall off the things fall off at a couple of hundred dollars or a thousand dollars, brands will always come to us and say, yeah, once we get to 500 bucks a day, would you see ROI dip? It’s the same principle that we just went through on the Google ad side happening in Facebook.

So similar thing here, we need to really refine what we’re targeting. We need to set things up in a process driven way and not make Decisions that are not data driven, essentially. Furthermore, the data driven decisions that we used to be able to make are simply often not as good as letting the platform do some of the work for us.

So when I think about demand [00:22:00] driving or demand generation I still believe that Facebook and Instagram is probably the best tool. And I think if you’re, Struggling to know what’s incremental to your business. Look at just the click data, probably the easiest way to do it. And we get caught up in some of these high rows and a triple whale and North beam and these very expensive platforms which are good for brands that are quite large, but again, in the one to 10 million range, usually not worth it.

And I generally recommend just look at your click data because it’s going to be within 80 percent accurate and always directionally accurate. Let’s take a short pause to hear from our sponsors and we’ll be right back.

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Really, just really good explanation there on, on demand capture and demand create creation, and the technical translation to that in terms of what to do and how to set up both your AdWords and Facebook really good stuff.

Navigating Data Accuracy in a Post-iOS Update World

Kunle Campbell: You talked about click data.

How accurate is the data we’re getting on, on, on meta ads now, specifically, Google wasn’t too much of a problem, even after the iOS, updates. That’s because Google owns its own data. When people search in Google, people have Google accounts, Google captures all of that. So that’s pretty accurate.

But with Facebook, there was a huge discrepancy initially. This was after COVID and where we now from from a data. Perspective. Yeah, this is a hot topic. I think like everyone has a slightly differing opinion on this. I’ll tell you what we like to [00:25:00] do. So I think that the Facebook platform is always directionally accurate.

I think that view through is a little bit of BS. I think it’s really hard to accurately look at view through and say, this is what’s definitely driving more to my business. View through is fantastic because it drives conversions and events into your ads manager that are going to help you. I think you may need to define view through to business.

Within Facebook, the default Attribution methodology, which is like how Facebook is looking at conversions is seven days click and a one day view. So if you’re if you click on an ad today and convert any time from today to the next seven days that conversion counts as a click through conversion, seven days, click the one day view.

If I see an ad and convert within the next 24 hours that also counts as a conversion. [00:26:00] So they’re not equal in length of time, but oftentimes the view through gets weighted pretty heavily. The reason for that is Facebook is super, super good at slipping in right before the purchase is about to happen.

And what’s even crazier is like our buying behavior and our use of social media is so intertwined within literally everything we do where like most folks that are listening to this right now have checked Instagram four or five times over the course of the last month. 1520 minutes.

Think about that in your shopping experience.

Decoding Digital Advertising: Insights and Strategies

Kunle Campbell: So if you’re going to buy, I was in the market for a new MacBook here. As I’m thinking about buying this computer, I’m trying to figure out which one to get. And I’m also scrolling on social media and it’s so easy for Apple to slip in right in front of me on a Facebook ad or an Instagram ad or something in that time period.

And that would count as a view through. So going back to the original point the view through often is that kind of slip in, right? It [00:27:00] often gets confused. It often gets over overcompensated we’ll say, or over overcompensated. I’m losing the word, but we’ll just go overcompensated. Inflated, excuse me.

Over inflated. Yep. Overinflated by conversions that were going to happen anyway.

Navigating Attribution Settings and Conversion Insights

Kunle Campbell: So if you just go into your Facebook account there’s a bunch of breakdowns in your column set. You can compare attribution settings and you just click seven day click. And even if you want to click 28 day, click that at least tells me that someone not only just scrolled by my ad, But they actually clicked the ad.

They made an action that I would consider valuable enough to be influential to the purchase. That’s what I think you should look at in meta to understand roughly your incrementality of things. And is this going to actually drive purchases or is it just saying it’s doing a really good job for me?

The Trustworthiness of Google Data and Attribution Windows

Kunle Campbell: I think on the Google side, I think you’re absolutely right. The data is a [00:28:00] bit more trustworthy on Google. The thing that I like to do on Google is limit some of our attribution windows as well. So by default, especially if you’re using something like Shopify they’re either 30 days or 90 days.

I like to limit those down to seven, seven day, click one day view, match it up with Facebook. You’re going to hurt yourself in terms of how many, how good you think you’re doing, but it’s just going to be way more accurate to the business because what happens when you have these huge windows is Facebook takes credit for something.

And Google takes credit for something. And Tik TOK takes credit for something. And you look at your advertiser report and you’re like, man, we did 3, 000 in sales today from advertising. And you go to your shop, fine. You’re like, how’d we only do 2000? There’s something going on there. That’s incorrect. Right?

Yeah. And you’ve got to build that ability to absorb the pain in, in seeing, okay, my numbers aren’t that great. So you take [00:29:00] action to, to make them, decent. So if you’re doing yourself a disservice, if you’re using, view through data side by side, without, just view, view through data, generally I think click data is just cleaner and gives you that stop, scroll, click, interaction.

People actually engage with that piece of media you put out there. 100%. 100%. And that’s the other thing you just mentioned there is like, accepting that your numbers are not what you want them to be sometimes, or what you thought they were.

The Reality of Advertising Metrics: A Case Study

Kunle Campbell: I’ll give you a quick example. We had a brand that started with us at the top of this year that came in and on day one during our initial audit, we recognized that they were over counting conversions.

So this is beyond the view through and click through. This is, they had essentially a double. Conversion event occurring in Google super common. It’s shocking how common this is But this brand thought they were getting from google ads like a five or even a six return on ad spend [00:30:00] And we were hey guys, you’re not doing this, right?

This is false and Long story short is it made the relationship with us very turbulent because they thought they were getting, let’s say a six. And we were like, Hey, you’re getting a three actually. And we’re going to try to make it to a four. And in my head, I was like, man that’s a big step three to four is, is it’s not easy, right?

That’s like serious structural. That’s a lot going on there. They could only see it as we were getting a six and we thought we were going to get a seven and now we’re getting a. Three and we’re getting a four. Thankfully they’re still with us today, which is a unique case, but like sometimes this stuff happens and that realization that you’re, you were mentioning too, or like reality check is really hard for folks to completely understand.

In that example, who were you speaking with the founder or an executive in the company? This is. in this case, an [00:31:00] executive of the company who’s responsible for e commerce. So they’re close. They’re not founder, but they are truly responsible for this vertical. Okay. Okay. Okay. So they just needed to tell a higher up that look anyway, that’ll put them into like, how did you not pick up on that?

I think that’s part of it, right? Yeah. That’s always it’s always a miss. And look, when we’re talking with founders and we bring this up, you’re actually right. Like most of the time they’re like, that they’ll mutter something under their breath and say, damn, I wish that we knew that.

I cannot believe we didn’t know that. But when you’re working in between, that’s when it gets a little awkward. Cause you know that, someone else is going to lose face because of a problem.

The Importance of Accurate Data and Comprehensive Account Health Checks

Kunle Campbell: Ultimately we, we do all of our contracts primarily on revenue shares or amount spent shares. And they’re usually smaller when their revenue shares and larger when their amount spent shares.

And basically. I can’t bill you on incorrect data, right? That’s just talk [00:32:00] about doing bad by people. That’s the last thing I ever want to do. So the first thing we do before we launch anything, before we make one single change in every account is we go through a comprehensive health check.

And it’s just a huge checklist that we put together and we just check everything. We just. We check every conversion event, make sure everything’s accurate. And if it’s not, we call it out before we launch. And even then sometimes, like I said, it just ticks the person the wrong way. It’s like a little jab.

Absolutely. I’ve been there. I’ve been there. Trust me. Okay. So just a quick fire question or lightning question, which is really. Profitability or raw ass? Profitability. Okay.

Maximizing Business Growth Through Financial Modeling

Kunle Campbell: A lot of brands are facing challenges with profitability and scaling. How are your portfolio of brands are navigating? How are you seeing the best in class businesses navigate, this territory?

Model your [00:33:00] business to maximize contribution margin, total. Don’t worry about. What the ROI of a single channel is. Don’t worry about what the ROI last week was. Think about total contribution margin and strip ROI away from the conversation more often than not. Simple example, make sure you spend. More if it’s going to drive more money, overall, more dollars for your business.

And then you can have a baseline ROI that you need to hit. Once you could start to incorporate that sort of modeling within your business, or at least that framework into your business, you unlock doors to say, Oh, who cares if we, if our ROAS or our cost per acquisition changed month over month or year over year, because we just drove.

twice as much business, right? That’s what we want to do. Definition time. Do you want to help listeners get a clear enough definition of total contribution [00:34:00] margin? Yeah. Uh, I think there’s like EBITDA, but really profit, just like total profit. Easiest way that I could say it, just take how much you’re spending or rather take how much you made minus how much you spent and then line item, a couple other things down there.

Get your credit card fees in there and get your employee fees in there. Get the basics in there, wait it out properly. And then there’s your essentially contribution margin. There is more to it in reality, but if you just start there, you’re going to get 80 to 90 percent accuracy in any sort of initial forecasting that you’re doing.

So you’re taking a P and L approach to marketing. So a P and L approach, topically, typically is a top, top down approach or finance, approach to, to, to marketing. And a lot of the time you just allocate your budget to marketing and say, make sure your return, but you’re now saying, okay, you’re empowering marketing with the P and L [00:35:00] and saying, you take decisions.

And if this total number makes sense. continue to do what you’re doing. Yeah. So I think there’s agencies out there. And not to stray people too far away from us, but I think there’s agencies out there that Do a that truly their primary focus is financial with a dose of media buying. We’re the opposite.

We are growth advertising with a dose of financial. And usually the financial conversation starts to come in after we’ve been working for a client with, for a long time, after we’ve been working with a client for a long time, like six to nine months, I’d say, is at the time when we’re They understand that we know what we’re doing.

We’ve helped them. We’ve improved their numbers. There’s trust between us and the client. And now we can move in a way that’s just overall more fluid for both parties and have those conversations that are, they say, Hey, we had a really bad April. I say, Let’s check it out. Let’s open the books together.

You [00:36:00] trust us now. Let’s open the books That’s when the financial play starts to come for us. But if you’re really like really want to grow you do need financial modeling in your business No doubt and I would be an advocate to say you should be the person that does it Within your team internally, because you’re always going to have more context as to what’s happening in the business and what’s changing.

And last thing, it will open up your eyes to ways that you can improve your business. Like you’ll notice glaringly with a brand that was had a huge return percentage to a very specific collection. And we just recognize guys, if you just either don’t offer returns to this collection, do something to address this.

Your whole business. Contribution margin is going to improve by 10%. It’s that’s like massive amounts of cash, like massive amounts. And I think that it’s important that the founders or that the CFOs. Are the people that are digging in there and [00:37:00] learning what’s happening as the business is like breathing, like living organism.

Yeah. It’s a very interesting take and it chimes in well with brands or businesses at the revenue level you’re talking about, that’s one minute because what they’re looking for do the ads actually work? And if the ads are taking them in the direction they’re seeing they want to get to, then you can start to, figure out and piece out elements or line items in your financials that would essentially take them to their targets, so they should, it’s a shared vision.

So that, that makes a ton of sense.

Exploring the Potential of YouTube Advertising

Kunle Campbell: In the world of Google ads, what are your thoughts on YouTube advertising? If you, do you do YouTube advertising? Yeah, we do. It’s not Like a core of most of what we recommend. Most of the brands we do work with are like I said, that one to 10 e commerce focused.

When you’re at that range, it’s pretty [00:38:00] hard to chalk up the cash to really create a high performing, beautiful YouTube ad. I think of YouTube ads these days as What was CTV and OTT. So like streaming five years ago, like pretty much I think they need to be polished pretty well to work. And I think it’s hard to quantify them as, as well as a straight up normal ad.

For anyone running YouTube, I would just be a bit more careful about how you’re measuring it. How you’re trying to really understand the impact of it. And if it doesn’t work, you’re going to have to rotate new creatives and really focus on your hook, the length of the ad and the quality of the ad, because you will stand out potentially in the wrong way.

If you watch a YouTube ad, that’s. just not polished as it needs to be. That’s interesting. Very interesting. So what I’m noticing on YouTube is in the info marketing [00:39:00] space, I’m still seeing quite organic ad shots on the iPhone, and sideways, And it’s almost like a very native conversation they’re having.

There’s a lot of interruption there. But on the flip side for brand, as you said it’s high production. Most of the time it’s just high production. Some go as far as TV production, which I think is a bit too far. I agree. But it’s high production with performance in, in, in play.

And I think really big players like, Shopify and Wix, the, from the SaaS space are really, putting in a lot of resources in their YouTube ads. I agree. I think YouTube is a fantastic place for info. Info, info ads, excuse me. I think that commerce has always been there, but it’s never been the strongest play for commerce.

But back box, did they use YouTube? We did. Yeah. Okay. How big was the department for YouTube? This was specifically the, one of the [00:40:00] departments that I oversaw. And we thought of YouTube as a mix within TV and OTT and CTV. So it was just incremental to everything we were doing. Meaning if we had to, what we would call silent, like if we had to slow down performance for a period, it’s the first thing we would move down.

It was not directly generating pure sales on a click basis or anything like that, that we could quantify even at that level where talk about attribution models, it was crazy. The mix for us was understanding that YouTube has an impact that you can’t necessarily see right away.

And we did primarily use highly produced assets that were also being cross played in things like TV and so on. Okay. Okay. Makes sense. Makes sense. Yeah. And then fast forward to 2024. Sure.

Optimizing Facebook Advertising: Technical Tweaks and Creative Strategies

Kunle Campbell: Now, meta ads. Where should brands listening to this in [00:41:00] this range in the one to say 5 million focus their attention on the technical media buying side of things, tweaks within meta platform or on on creatives, on ad creatives.

So technical side is. Condense your structure a bit, but don’t go over the top. I think there’s two, two simple rules here. The Facebook platform is smarter than you. Don’t give it all the control. Don’t just throw it all into one advantage plus campaign and call it a day. Have a setup that is scalable and our simple setup I’ll go through super fast is advantage plus as a scaling campaign, a primary prospecting campaign that has somewhere in the range of two to four interests.

And then a retention campaign for your existing customers. We let retargeting happen within the advantage plus campaign at this point. We’ve done a few studies seems to work just as well, if not better and condenses the learning down. [00:42:00] So you want to get all your creatives out of the learning phase.

Second piece, run a cost control of some sort, especially if you’re ROI or CPA driven. I always prefer to run a cost control. You don’t have to limit yourself or cramp your cost control too hard. Just give the platform some guidance. So you avoid days where if ROAS target is three, you don’t have the day where it’s.

0. 65 or you have less of those days with the cost control. That’s our preference. The only other rule of Facebook ads is if it’s working, don’t touch it. Can’t even stress this part enough. I’m on Twitter all the time and I’ll look at examples and someone will say something like, This ad is crushing all of a sudden, like what should I do?

And I’ll always just chime in and be like, nothing. You should do nothing. You should just let the ad do its thing. Go make more of those creatives. And that probably bells into your creative question. What do you do creatively right now? We think of things in a process driven format. So once per month we meet with a client and we try to find [00:43:00] four iterations of top performing ads.

And then one home run iteration is literally, let’s say you took a selfie screenshot, holding your product up and that worked. Hey, so and so let’s go make five more selfies, please do them in different environments. We’re not going to over prescript the direction of it. Just do what you did. Be happy, smile again, show the product five of them.

Okay. That’s an iteration. Very simple. The home run is something that technically shouldn’t work. Now clients get excited by home runs because they want it to work, but most of them fail and a home run example that we’re trying recently is disruptive ads. So disruptive ads are hard cut ads that essentially you think you’re, you think they’re going to tell you one thing and they tell you something completely different within the first two seconds.

So it’s an interrupted hook. Other examples are things like ugly ads, memes. There’s a whole lot of different formats that you could test. These are home runs and they work like 10 to 20 [00:44:00] percent of the time for businesses, but when they work, they unlock new scale and that’s what we’re looking for.

That’s a lot to go through. It’s a lot. It’s a lot. I, yeah I got most of it. So from a Facebook advertising standpoint, your, Talking about less control you want to trust the algorithm, but you want to keep some control. So you’d have an advantage plus campaign that gives a lot to the algorithm to figure out.

And then you have another, campaign where you have more control, more manual control. Yes. And then I think the other point was the cost cap or to really guide the algorithm. So you don’t have like really dismal, low ROAS days. And then you talk through a range of of creative types to work on.

And the other thing really is do not touch your creatives if they’re working. Yeah. It’s the hardest thing to do is don’t touch that ad set. [00:45:00] Don’t touch that creative. Let it go.

The Power of Authenticity in User-Generated Content

Kunle Campbell: What about UGC? What is the how do you, what, how do you approach? I think one of the challenges for Facebook, ad agency is who, depending on their model, really, this depends on the model it’s the creatives, the supply of creatives.

Yeah. So how would you suggest. listeners or navigate the creative supply side just ensuring that the engine or the beast is fed all the time. Yeah. So I think that every brand should have a creative person, either in house or a consultant. I think it should be separate from their agency. And that’s the reason we never built it into our offering.

Typically when these things are mixed together they become so templatized. It’s painful. It’s just like, every brand gets the same thing. We see it all the time. So if your brand is unique, which most people would think their brand is unique in some way, shape, or form I’d recommend an [00:46:00] outside sort of consultant.

And what we see from a UGC perspective the more real and authentic it is right now in this market, the better it’s going to do. The I’m obsessed with this product. That just got sent to me for free in the mail. It doesn’t work anymore. It used to work quite well because it was new at the time and the consumer wasn’t used to it.

These days, we’d like to see really, truly honestly, real reviews that happen as a testimonial format. Yes, you might be asked to do the review, but as raw as it can get, truly down to Yeah, I love this camera. You should go get one. That would probably do better than someone opening up a box and over hyping every single thing up.

So the authenticity is super key from UGC right now from what we’re seeing. And it doesn’t even have to be UGC. It could be founder quote UGC, right? It could be someone just sitting in front of the camera. I think a [00:47:00] long form explainer is a fantastic way to, to approach. creative, right? Hey, my name is Sam Pallaro.

I own the Moonlighters. This is what we do. I’m going to tell you about us. That’s it. Hey so and so from this makeup brand, we make makeup products that are biodegradable or blah, blah, blah, blah, blah. That is equally, if not more valuable than a, B level celebrity or influencer repping your brand right now.

Authenticity. Yes. Is what I picked up from there. Okay.

Planning for a Deeper Dive: The Promise of Part Two

Kunle Campbell: Sam, I, I could go on and on. I have a head stop, but would you like to do a part two? Absolutely. Let’s jump on soon. All right. I would schedule a part two, which would just go back on back with this for this one we’re recording because I don’t feel like we have gotten into the [00:48:00] technical bits of ads, managing ads.

And I really want to jump into the more technical bit. So I would love for us to record fairly soon for listeners. So this is back on back really. But yeah, thank you for coming on part one and we’ll speak very soon. No, my, my pleasure. I appreciate the questions. It’s always nice to get good challenging questions.

And I think what I’ll say is let’s get on as soon as possible to let’s continue the conversation. Let’s keep it rolling. Cool. All right. Awesome.

About the host:

Kunle Campbell

An ecommerce advisor to ambitious, agile online retailers and funded ecommerce startups seeking exponentially sales growth through scalable customer acquisition, retention, conversion optimisation, product/market fit optimisation and customer referrals.

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