One of the biggest, most harmful myths about Meta ads: that Meta ads are a plug and play cure-all for every brand’s growth issues.
Most of the content you’ll read about Meta ads focuses on two things: account structure (bid types, campaign structure) and creative strategy (how many and what kind of ads). Today, we're going to focus on another, often neglected, aspect of scaling ads.
But first, I want to thank this week's sponsor: Segments Analytics.
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The key to scalable growth via Meta is the “work behind the work”–how you set your KPIs, your product assortment, your ops and your cost structure.
Scaling Meta ads for fashion brands requires partnership between marketing, creative, media buying, eCom, merchandising and finance. It also requires a tight feedback loop between those departments, and a willingness from all parties to act quickly and prioritize the channel.
This week, I’m going to share a story from a prior role in my career to prove my point. Next week (in the members-only edition) I’m going to outline a “people, processes & technology” playbook for scaling Meta ads.
Scaling Meta At CoolBrand–The Problem
I was hired full time at CoolBrand (all names have been changed, but you can go to my LinkedIn and guess what brand I’m talking about) to help turn around their digital marketing strategy.
This brand was experiencing a common problem: total sales had plateaued, and the brand was only growing YoY during its most promotional moments. I did some digging, and it turned out that new customer acquisition had plateaued. During full price moments, it was down YoY.
As we all know, eCom brands depend on new customer acquisition to grow. When I looked at the marketing mix, it was obvious why this was happening.
Media allocation decisions were being made based on last click ROAS. The brand was running Google Ads (mostly branded), remarketing through Criteo (don’t do this, lol), and affiliate marketing (mostly discount sites).
There were no Meta ads and no dedicated source of new customer acquisition. In order for this setup to succeed, the brand needed to be creating a ton of demand IRL, which they weren’t.
The solution was obvious: Meta conversion campaigns. But the execution was…less obvious.
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CoolBrand’s Resource Stack
CoolBrand’s revenues were approximately 30% eCom and 70% wholesale. The brand launched in the early 2000s, before eCom was “a thing”. For that reason, the operational architecture of the business was tailored to the wholesale business model.
In practice, that meant that the marketing function was focused on traditional PR and building “clout” with the fashion press and wholesalers. The brand shot four photo campaigns per year, which were primarily used in the wholesale lookbook.
Even the brand’s office configuration was wholesale focused–half of the physical space was dedicated to a “showroom” that was only used roughly 10 weeks per year. Everyone else was crammed into a bullpen where sales reps were constantly making calls.
The first step in launching Meta ads wasn’t building out campaigns or cropping ads, it was explaining to management why we couldn’t manage the budgets based on last-click results.
Some brands (typically impulse buys with AOVs <$75) can actually manage Meta based on last-click results. But we were selling contemporary price point clothing, with AURs between $250-1,000. The purchase journey was longer, although many journeys did take seven days from start to finish.
The proving and convincing process took several weeks. To move forward, I had to promise aggressive in-platform and business-level ROAS targets. I will take some blame here: I thought these targets would be easy to achieve, based on some bad data and (frankly) bad judgement.
In terms of account structure, I had a plan–start with lookalike audiences to get a sense of what products worked on the platform, then potentially scale from there.
In terms of ad creative, I was limited to the photos that had already been produced for the season’s wholesale lookbook + eCom photos. To launch ads, I had to approve them with the brand’s creative director.
If a brand came to me today with this resource stack, I would say they were set up for failure. To learn what you should be doing, you’ll have to sign up for a membership and read next week’s email.
Proof Of Life
Despite these setbacks–which I didn’t even recognize as setbacks at the time–the Meta campaigns I set up started delivering results almost immediately. Within a month our new customer counts and revenue were up meaningfully YoY…although they were behind forecast.
We quickly realized most of what I outlined in the Merchandising For Meta Ads issue–ads featuring product priced <$500 that was brightly colored or “scroll stopping” performed the best.
Unfortunately, I had about 16 total photo assets from the brand campaign, and maybe four or five featured products that fit that description. To “refresh” the creative, we would lay out two photos side by side and (sparingly) start incorporating eCom photography. The creative director hated that.
I’m going to admit fault here again: I didn’t think to request a separate in-season photo shoot dedicated to eCom-friendly styles. I was too focused on making the ads work (to follow through on what I over-promised) to build a strong relationship with the creative team and the founder.
Topline Success, Bottom Line Pain
Our winning, Meta-driven product for the season was a series of neon-colored faux-fur coats, kind of like this. These coats were oversized, so they weighed a minimum of five pounds. For that reason, they were expensive to ship.
Something you’ll quickly discover when you run Meta ads: the more you scale, the higher your return rates will get. These coats were definitely impulse buys. And, because our site experience was more focused on aesthetics than information, many shoppers didn’t realize just how oversized these things were.
At the topline level, we were doing great (if below forecast). But when you looked at the bottom line, the cost of shipping these coats and then processing the above-average return rates was majorly eating into our profitability.
Why did this happen? There was no feedback loop between merchandising, design, marketing, eCom, performance marketing (me), and finance.
Post-Mortem/What Happened Next
CoolBrand’s initial foray into Meta ads was a classic story of “everyone wants to be a bodybuilder, but no one wants to lift no heavy-ass weights”
This gets into the deeper topic of change management, but I’ll stick to the more tactical lessons you can learn from this story:
1. If you want to make money running Meta ads, unit economics matter a lot. Study them in detail. There might be products or categories you cannot advertise on Meta.
2. You can’t scale Meta without dedicated, optimized ad creative. Meta needs, at a minimum, its own quarterly photo and video shoot. This shoot must be planned and art directed by someone who knows Meta ads, not a creative director whose entire career has been magazine advertising and fine art.
3. You can’t scale Meta if you need to achieve a 5x ROAS. Using the ad:sales ratio target from your P&L will not allow you to scale. You can read my guide to setting paid marketing KPIs here.
4. You can’t use Meta ads to “push” demand into products with soft product-market fit. In fact, you will lose money if you do this.
5. You can’t use “brand statements” in your creative to effectively sell more mass-market products. The products you feature in your ads are the products folks will buy. If you want to benefit from bigger TAMs and higher conversion rates, put your best sellers in your ads.
If you want to find out what happened next, Google “Surviving Fashion's Summer From Hell”.
I think things are going better now (I had moved on by the time that story was published), but the brand is not running many Meta ads, and the ads they are running are not particularly optimized.