How We Spent $1,046,323 In 90 Days Profitably!
Spending over a million dollars in 90 days sounds awesome (at least to us media buying nutcases!) but there is a stark reality that comes with this. Sadly just increasing the budgets doesn’t even come close to cutting it at this level, neither does any gimmicky tactics that worked in 2015.
This predominantly Amazon based beauty brand with a very strong customer base and repurchase rate was struggling to scale up whilst running all facets of the business (Amazon and Website) and had come to a crossroads. Get external help or let the business not reach its full potential.
Time, and experience. Like many Amazon brands we’ve worked with they have a great product, offer, and plenty of purchasers. However, like many, they were at the mercy of Amazon and lacked knowledge and experience when it came to advertising. Already running a profitable 7 figure Amazon business they want to grow their own direct-to-consumer website off the platform to mitigate risk moving forward.
We can’t stress the importance of knowing your numbers. Luckily you don’t usually get to this level of success without that. With a strong grasp on repeat purchase rates and LTV the ‘rules’ were simple, acquire as many customers as possible providing the Cost Per Purchase remained under $45.
Explosive growth was spoken about at length so robust testing, optimizing, and scaling strategy was implemented to ensure that we maintained profitability whilst drastically increasing spend.
1) Overcoming known hurdles
Beauty and the Beast, a great metaphor when it comes to the beauty industry and the Facebook Ads platform. Facebook is very well known for being extremely tight on regulations in certain industries, beauty being one of them. BUT, we know this and have faced these challenges before.
Overcoming this specific compliance issue is all about ad creative. For example, this means no aggressive ‘Before and After’ or ‘Magical Transformations’ style creatives are acceptable anymore. The creative approach has to be much softer and inclusive.
The other major hurdle you face with a radical increase in spend is with the ad accounts themselves. All ad accounts have pre-set spending limits which require removal prior to being able to rapidly increase spend as we did here.
A small side note, if you intend on replicating this. When you increase spend by such a large amount your accounts can get flagged for review. This is because hackers have hack into ad accounts before and spend 10’s thousands so Facebook put in safety measures when large changes happen. So don’t be surprised when this happens, just make sure you have backup accounts ready to go while the review takes place.
2) Testing system
You never burn out an audience, you burn out the ad. Having a system to test ad creative is essential when it comes to achieving rapid growth, profitably. It’s imperative that you produce a wide variety of angles, sizes, and hooks to entice more of your target customers.
When testing creative it’s important to keep as many variables as possible static so that you can test and fairly. Obviously the main variable we can’t control is Facebook but we can mitigate that by doing multiple rounds of testing if necessary.
In this case, we are keeping everything static except for a single, unique ad creative in each adset. We then test based on impressions, not spend. We do this because we want each creative to get the same visibility regardless of CPM. We usually assess ad creative based on CTR after they have had 1500-2000 impressions. (We cover our testing strategy in more depth in another case study)
3) Funnels & Granularity
It’s great having a website but they just don’t tend to convert as well as product-specific funnels. We not only implemented product-specific funnels with upsells and down-sells to increase AOV and Conversion Rate but we took it a step further with geo-specific product funnels.
Using geo-specific funnels based on IP address meant we not only increased AOV/CR but we were also able to further tailor the experience to nationalities. A prime example of this would be the currency, language. This, in turn, meant that the resonance was even higher and impacted conversion rates positively.
4) Harnessing The Power5
“The days of manually hacking your way to ad success are no more. Top direct-response advertisers are now leveraging a specific set of automated ad tactics to unlock new phases for growth. We call these tactics the “Power 5” and when used together, they have the ability to transform ad performance and scale across the Facebook Family of Apps.” – Facebook (https://www.facebook.com/business/m/power-five)
Using this exact framework we simplified our account structure and put what we new worked from testing into big campaigns and let Facebook do the heavy lifting for us.
I’d be lying if I said at first it isn’t rocky, but the point of CBO is it needs more data to start. Once stabilized, CBO’s scale much more effectively, predictably, and rapidly than Adset budget campaigns.
Power5 allows you to get time back from day-to-day management and give it to more creative tasks that in this day and age, move the needle considerably more than ever before.
With plenty of wiggle room, things got off to a good start however we knew that the first month or 2 would be the worst as this is when the majority of negative ROAS testing happens. However, as you can see we were able to not only stay under KPI but within the first month, we had enough testing completed so we could scale a lot more efficiently.
Cost Per Purchase
January (30 Days)
February (60 Days)
March (90 Days)
Month 1 (30 days): We did a lot of analysis on the data that had been acquired. We started testing very aggressively and scaling what was showing positive indicators.
Month 2 (60 days): Continued testing aggressively, whilst scaling rapidly. We focused on quickly culling what wasn’t working and re-allocating the budget to the performing campaigns.
Month 3 (90 days): With 60 days of data, we started to have a really good understanding of what’s working and what isn’t. We started to double down and we saw a dramatic reduction in CPA.
Overall Growth: With over $1 million in profitable spend for this brand in 90 days we now have the foundation for building their empire into the future.
(09/05/2020) UPDATE: Things have continued to improve, CPA’s have dropped and we are continuing to scale. $1 million p/m in spend coming soon.
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