5 Takeaways from a Year Spent Focusing on All Things Growth

The past year flew by so fast. It was a rollercoaster type of year for many people, myself included. I was fortunate to have worked with a consulting / growth partner company JC+CO growth accelerants. JC+CO partners with growing D2C / Ecommerce brands in fashion and apparel, CPG, and food space to unlock growth through expert web work (Shopify Plus), email marketing automation (Klaviyo), and paid media (social and search).?

As a Head of Growth, I’ve been closely involved in the strategy and acquisition & measurement side of things. I would like to share 5 observations that could be useful to D2C/Ecommerce brands focused on growth. While I’m not able to present hard data behind these points, I chose to only write about things we had experienced, tested or tried ourselves.?

Observation #1: You Should Not Ignore the Upper Funnel Activity (no matter the size of your business or budget)

For many years I’ve been working with brands that have either had all the brand awareness in the world or none. For those who were just getting started and had no awareness, every paid media dollar was treated with a lot of care and scrutiny. Therefore, our immediate go-to-market plans would (normally)bypass all the TOF activations and rather get straight to traffic and conversions, just because immediate (this week) sales were critical to a client and its stakeholders. It’s just what matters most. This was always done with the right intentions - small businesses cannot afford to allocate 20-30% of their budgets to building awareness and views long enough to make these efforts pay out. But that is where the problem lies as I learned - Middle Funnel and Bottom Funnel activities that start in the middle of the pyramid - click or an opt-in - are usually expensive and have short-term effects: you convert low-hanging customers first whose path to conversions are quick (1 to 2 touchpoints at most). Inevitably, you then face an uphill battle with CAC remaining in that middle and lower funnel space where your intentions are acquisitions, ASAP.?

One thing to always ask yourself is - “What organic foundation do I have to always be reaching more potential customers with paid activity? How do I introduce them to my brand, make them simply informed that we exist, and communicate our value proposition?” Playing on the upper funnel requires some patience, lots of testing, and confidence that this activity will pay off in the long run (depends on the definition of a long-run, I know). Reach and frequency isn’t sexy, it’s even a bit of an insult to a performance marketer to talk about those, but it is a critical oxygen line that allows those performance campaigns to thrive and scale. That I’ve seen plenty of this past year.?

Observation #2: The Way Platforms Optimize Delivery, You May Think Fewer Creatives are Needed

If you spend decent $$$ on ad platforms (and I mean social platforms - Tik Tok, Meta, Twitter, Snap), it may look as if less is more these days. This is an accurate statement when it comes to the number of campaigns and complexity you bring to ad accounts (more on this in the next observation), but there are still good economic reasons for making and testing more creative themes on the platforms. The question is where and how if campaigns run on the Campaign Budget Optimization feature - rolled out on most ad platforms by now - generally, have 70-80% of the budget going to 1-2 ad sets and 2-3 ads at most? How and where to introduce/test more creatives? And are they even needed if a winner can be discovered with fewer assets? In my opinion, you always need to be ideating, making and testing new creatives because they: a) create different types of responses (CTR, CPC, CVR %), b) relate to different user pains and needs - emotional vs. functional vs. economic, c) have the power to lower blended CACs and outperform the long-established winners in ad accounts. Also, a bigger variety of creative messages (served at controllable frequencies) create a “big brand” perception to users, exposing them to different stories and angles which form brand perception, brand recall, and a sense of familiarity that you want. When I think of recovery shoes these days, I think “Kane Footwear” - all because of the variety of creatives they exposed me to on Facebook / Instagram with a strong frequency and variety of short and long-form content that pulled me in. Great job by them! I’ll soon return to my abandoned cart, I’m sure.

But back to the question of how would one test a bunch of creatives on platforms where fewer layers and complexity generally lead to better results? [Gone are the days when 10 ads per ad group gave you meaningful insights on Meta]. I must admit I struggled with this for a while trying to balance the ad performance (Web Conversion campaigns optimized to Purchase) with a genuine desire to inject and “prove” new creative themes or messages. Experimental campaigns (those A/B test experiments) failed hard every time due to lack of budget - again, the goal was to test creatives AND to continue driving acquisitions. Soft injection of new creatives to well-oiled campaigns with good history and data didn’t move a needle, either. Creating additional campaigns to test new creatives was the only feasible option, but it also increased competition for the audiences and drove average CACs up. However, if you don’t operate in a province/state or tight Geo zone, you might not experience any of this. What could be one of the best solutions for testing more, faster, and without heavy disruptions to your metrics that matter the most (CAC, CVR, ROAS) is to move the testing to the upper funnel realm and create softer benchmarks there from which to conclude. You can test a lot of creatives in a reach/awareness setting capping each creative at a certain frequency (1 campaign with 5 ad groups at 1 impression per 7 days, and 5 unique ads). You could also run softer Web Conversion events to a blog/article page or your FAQ page and pair it with new creative themes. These campaigns would have no immediate sales KPIs and you could remove them from your weekly CAC calculations but include them for traffic/reach reporting. It’s perfectly fine to find 1-2 creative themes that would convert most of the traffic into sales (bet social proof will cut every time as we’ve seen again and again), but the goal is to first bring qualified/informed prospects to the site who would reach key stages of the funnel faster, at higher CVR and lower cost. You can optimize for this with more creatives than ever.?

Observation #3: Keep It Simple Stupid (the Ad Account structure)

I should have added “..and keep your performance marketer ego in check as you simplify things.”

Look, let’s be honest, those who spent years harnessing the skill of media planning, buying, and optimizing ads do like to create masterpieces in the ad accounts with sophisticated structures aimed at testing, experimenting, slicing, and dicing the audiences in some smart ways that some in-house marketing teams would never have time or expertise to do. This is part of the job, part of the craft.

Powerful ad technologies, AI tools, and some data privacy regulations have made these complex methodologies a bit outdated (IMO). What used to be a logical, sophisticated and strategic way to route users to conversion may now lead to a bunch of ads spend with very few results that are worth celebrating. The one principle that seems to rule is keeping things consolidated, especially when your average CAC is high and your budgets do not look like they can afford to reach 50 critical conversions per campaign per week (those are some minimums Meta tells us we should aim for). Consolidation means keeping more things in a pack and keeping the restrictions on geo/age/gender/placements as wide open as possible. We had a shocking observation when we went from 8 campaigns at launch - all mainly with the Web Conversion objective optimizing for ATC/Purchase events- to 20 campaigns and our CAC shut up to the sky even though the spend was adequate for most of those campaigns to reach 20 or so conversions per week (not 50). After months of suffering and shifting the puzzle, we scaled the structure down to 7 campaigns with ? of the budget we had the month before. This resulted in the same amount of transactions at 50% lower CAC. Less budget, fewer campaigns, less active ads, better results. I learned a good lesson here. This was not an expected result, to begin with. If only Meta data scientists could explain any of this to me (sigh). [A bunch of ad gurus on YouTube keeps telling me they know the secret, but I never click their ads to ask. Maybe I should?!]

To conclude, if you want to take away anything from this, take this formula to help you calculate how many campaigns you should be running with your budgets - and to keep your temptations to mushroom the structure away - if you need to get 50 conversions per week at your average CAC. The formula is [Your total ad budget for the week] divided by [50*Average CPA/7]. It will tell you how many campaigns you can fund with your total budget assuming you aim to reach 50 critical conversions in each of those campaigns. Use CPA in this formula as a cost per key conversion - Purchase, View Content, Add to Cart - you are optimizing your campaign for.?

Observation #4: Don’t Ignore Lead Generation Activities and Email as a Channel

Before working at JC+CO, I haven’t had much direct experience with Email marketing to see how it stacks up in the big customer acquisition/retention picture. The past year showed me how extremely valuable Lead Gen and Email is to D2C/E-commerce/Subscription brands. To those of you fully immersed in the world of lead generation and email marketing, this will be a no-brainer and maybe even too basic (skip to Observation #5 if so), but it was a bit of a new reality to me personally. Here are some takeaways on this…

• Lead generating activities (on-platform or website lead gen forms) should be a part of the Always-On activity feeding the Mid Funnel stage with new contacts. The quality of leads on social is generally not the greatest, but Meta is rolling out new filters to instant forms to better qualify contacts as lead vs. no lead. This should help increase the quality.
• We discovered that lead magnets offering FREE products/samples/giveaways tend to work better than welcome offers/discounts when advertised to cold audiences - CPLs may be comparable, but the CVR of leads to customers was better for giveaways (1.5-2% for giveaways vs. <0.5% for welcome offers).
• Shopping spree giveaways or $$$ gift cards could attract good quality leads that convert via welcome series flows and regular campaigns.
• The lead acquisition should be set up/tested on multiple social channels (Snap, Meta, Twitter, Tik Tok) with separate segments established (by channel) on your email marketing platform to better track their quality, CVR (Leads to Customers %) and ROAS.
• The email channel should be generating 25-45% of your revenue and be one of the most stable channels.
• The most effective use of Email as a channel is seen during peak sales/holiday seasons. If leads are built up, segmented, then there is less pressure to run paid re-marketing during Q4 when CPMs are at their absolute max.
• Testing frequency of campaign sends / number and order of emails in top auto flows/email template design and segmentation should be key optimization areas. Evaluating this monthly / quarterly could lead to easy wins and major shifts in how Email nurtures, converts, and retains customers
• Combined with Paid Social and Paid Search, Email represented about 65-80% of all gross sales for our clients

Observation #5: Open Your Eyes with 3rd Party Attribution Tools

For the longest time ever I’ve been craving to test an attribution tool to see how it would present the alternative view of the digital channels’ performance in acquiring and retaining customers. This year was the year when we partnered with Wicked Reports and plugged the tool into the back systems of five of our media clients. The floodgates were open. The truth shocked and surprised us, but also empowered our decision-making. In a nutshell, Wicked Reports is a software that runs a proprietary system that stitches together all customer touch points leading to the first click to the website and follows a user’s journey to the lead stage (email opt-in) and then to the purchase (1st time) and any subsequent transactions. The tool has 6 unique attribution models to choose from, two of which are multi-touch (Linear Model and Full-Impact).?

The one key outcome of using the system versus relying on in-platform data and/or Google Analytics is that the tool can demonstrate a full journey from initial click to the conversion events and display the data in a very user-friendly and actionable manner. With confidence, it could be said that a majority of our Meta paid ads were overstating their results (even with iOS 14 limitations) and were modelling a higher amount of view-based conversions than Wicked Reports would attribute to the channel. The gap between Meta Ads Manager and Wicked Reports was larger when more channels were actively contributing to the online store traffic.?

In addition, I was able to see how big of an impact Q4 activity has on acquisition and CAC and how the cohort of customers brought in during the Holiday sales season purchases throughout the year.?This has a major impact on financial planning for Ecommerce as CACs vary largely between peak and slow seasons, as well as AOVs / CVRs. Wicked Reports displays this information in a very simple format for you to crunch these numbers into internal sales or budget plans.

I'd like to conclude by saying that marketers and agencies have choices on how to present their data, how to defend their work (there is more than just pushing random buttons on platforms), and how to convince clients that channels are working and that strategies support their objectives. If you are looking for an independent, no-bias type solution to put your overall strategy to the test and to give a more realistic picture of what is working, then try Wicked Reports. It will be a good magnifying glass - it will make your acquisition wins larger (the more your clients buy over time, the better your ROAS on prospecting campaigns look without a time window restriction), but will also likely present a tougher picture when things go south. Why? Wicked Reports does not attribute a single penny to views/impressions, only to what generates clicks - if CTR drops or creatives don't work or there is less traffic to site, the channel's poor performance will be in plain sight. But, hey, at least your Meta results won’t be so out of this planet when you report on a 3.6% CVR (Landing Page Views to Purchase) when your site average is 1.8% - something of a norm for marketers too reliant on in-platform metrics. Becoming more transparent, believable, and actionable will be easier with Wicked Reports.?