One of the most frequent questions I receive is “How do I spend more on Meta ads?”
When you put it that way, the answer is simply “increase your daily budget”. But in reality, there are multiple questions behind that question.
Some brands can’t manage to drive a single conversion at their target ROAS. Other brands are “stuck” at a relatively high daily budget–$5k, $10k and beyond.
Before we get started, I want to thank this week's sponsor: Segments Analytics.
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This is going to be a two part series. This week I am going to tell you what to do if your Meta ads can’t spend at all. Next week, in the members-only issue, I’m going to cover ways to break through higher level plateaus.
Going to toot my own horn for a minute: my members-only content is very valuable, and the membership has a very low churn rate. Click here to get a membership. If you implement what I write about, you’ll make back your investment in under a week.
Here are 5 common reasons your brand can’t get traction on Meta, and what to do about them:
#1 Unreasonable Payback Expectations
Most fashion brands that scale beyond $5k/day on Meta are targeting an in-platform ROAS between 2.5-3x, max. I’ve spoken to brands targeting a 4, 5, even 6x ROAS. That’s nearly impossible to achieve unless you’re generating qualified awareness outside of Meta.
Even within the Tapestry family of brands (where I used to work), during the height of the pandemic eCom boom, ads promoting full price products were driving a maximum ROAS of maybe 3.5x.
If you think you need a 5x in-platform ROAS to scale, map out your unit economics and find out why. Perhaps this expectation is based on an outdated understanding of how to set eCom KPIs. Or maybe your margins are just bad…
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It's easier to scale your Meta spend when you have a strong, predictable base of repeat customer revenue.
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#2 Lack Of Product-Market Fit
Sometimes the market for your product is too niche for Meta to reach profitably, or at your desired ROAS. This is frequently the case for brands at the highest end of the luxury market that don’t have mass awareness. It can also be the case for brands targeting a really small niche.
Sometimes, lack of PMF is also an issue with a lack of perceived value. Your product is overpriced based on what the market is willing to pay. Remember: the market (ie your competitors and mass retailers) sets consumer expectations about what a given product is worth.
I wouldn’t default to this option until you’ve ruled out everything else in this list. But a good litmus test is to hang your product next to comparable products from similarly priced competitors and BE HONEST about your relative hanger appeal.
You can sell a relatively undifferentiated product on Meta as long as it has a large TAM, scroll-stopping design and good price:value ratio. There is almost infinite demand for $149 colorful printed dresses.
#3 Advertising The Wrong Products
The brands that most often make this mistake are “collection” brands with a large wholesale business. They will feature the “seasonal statements” in their one photo shoot of the season (ack!), throw those 8 carefully curated images up on Meta, and then let it ride for like 6 months.
If you want to scale Meta, you need to put products in your ads that have the strongest product-channel fit. What are those products? Read my guide to merchandising for Meta ads here.
#4 Outdated Media Buying Tactics
The first time I managed Meta ads for a brand (in 2018), I scaled us up to $1k/day within a month using a 1% lookalike audience of the brand’s best customers. We were regularly spending $1-3k/day using these micro-audience tactics and maintaining a 3-3.5x ROAS.
That doesn’t work anymore. I’ve done numerous account audits where the brand is running 20+ micro-campaigns targeting different LAL and interest audiences. Each campaign has the same creative. This is a surefire way not to scale.
Audience targeting has a role in growth, but broad strategies (all US women 18+) should be the foundation of your account. Before iOS14, broad was for the biggest brands. These days, things have flipped–broad is your starting point, and audience targeting is used to drive incremental scale.
#5 The Brand Is A One Hit Wonder
This one hurts, because it feels like you have a scalable business on your hands, but then that hope gets snatched away.
A new brand develops a 10 piece collection. One of the pieces has excellent product-channel fit and scales quickly. Any ad featuring the product takes off. But nothing else in the collection is selling, and ads featuring those products flop.
This is the small brand manifestation of the “hot item problem”. To escape this cycle, the brand needs to develop new products that appeal to its hot item customer, because the rest of the assortment fails to do so.
This often requires customer research. The brand lands in this spot because its actual customer is different from the avatar developed by the founder.
Next week in the members-only issue I am going to cover some tactical plateau-busters for brands spending $1k, $5k, $10k, and $20k+/day.