Happy Sunday!
Yesterday, I stopped by the CUTS Clothing store opening in Soho (neighborhood in New York City) and copped some joggers. So I hope you’re sitting back on a couch, cozied up in some joggers, and ready to dive into a classic Nik Sharma Sunday newsletter.
Today’s topic might be the single most important topic in all of eCommerce, and that’s the category of paid media. I’m pretty sure that I could write 3 books on this subject, but I’ll try to keep it to 8 pages or less for today.
For context, I began running paid media in 2014 for publishers who were looking to arbitrage ad revenue on their sites. You know those recommended articles that are all just clickbait and then full of ads? Yep, that’s where I started media buying. I learned Facebook ads by (figuratively) having a gun to my head to keep the CPC under 2 cents and CTR incredibly high, which forced me to quickly understand how to set up ads in a way that makes people really want to see what you’re pushing. After a couple of years, I began buying all the ads for one of the fastest-growing beverage brands. In 2 years, we did $40m in DTC sales, pretty much all driven by spending millions across Meta, Pinterest, TV, Google, and others. Today, my agency, Sharma Brands, manages paid media for some of your favorite brands.
So why is paid media so important? Well, for the vast majority of brands, it’s the number one way that companies actually drive growth and make money (and if it’s not done right, it’s probably the number one way that brands LOSE the most money, too)!
Let’s also be clear: paid media isn’t the only way to grow a business. In fact, you shouldn’t just launch and run paid. You should sell to your first 1,000 customers through word of mouth, earned media, talking to people, etc. In the background, you’ll quickly understand what makes people want your product, why they come to your brand, and how you should be talking about what you’re selling. Once you’ve gotten past this, then it makes sense to turn on paid media.
Think of it this way… You put an image in Google Docs. You have the 4 corners to pull from, but the more you pull and expand the image, the blurrier it gets. If you rush to get to paid media, too early before building a foundation, you can’t really stretch the image much. It’ll get too blurry. But if you put a high-quality image there, aka a brand with its foundation set and is ready to scale, you can continue stretching.
This email was inspired by a few calls I had this week for a brand that is pre-launch and a few that are in retail but not pushing heavily online. I hope that you get 1-2 nuggets from this email!
What metrics should you track?
The metrics that Moiz and I look at in FB Business Manager are:
- CPM (Cost per 1000 impressions)
- CTR (Click Through Rate)
- CPC (Cost Per Click)
- CPV (Cost Per View)
- CPATC (Cost Per Add to Cart)
- CPA or CPL (Cost per acquisition or cost per lead)
- CAC (Customer acquisition cost or the cost to acquire a paying customer)
- ROAS (Return on ad spend)
- PRoAS (Profitable return on ad spend)
- MER (Media efficiency ratio)
Of course, there are other metrics you can look at, but these are the ones to focus on. Knowing the numbers in each step (while they won’t be 100% accurate) will help you understand where the issues in your funnel are.
If the CTR is low, it’s your messaging and creative. If it’s ATC, it’s your offer. If it’s Initiate Checkout, you’re not hammering your benefits home as you should.
Speaking of 100% accuracy, I recommend implementing Smart ID by Black Crow. Their integration solves the issue that FB pixels have when being able to report 100% of data back to Facebook (and also Klaviyo). Plus, if you’ve been hearing that the FB pixel is going away, it is, and Smart ID solves that.
What Really Matters in Paid Media
If you were to open Twitter and try to figure out what you need to run paid media effectively, you’d think you’d need 46 SaaS applications and 4 ad account strategies to test against one another. In reality, paid media is just stretching the image… It’s generating more eyeballs for what you put out. So here are the 5 things that really matter:
- The angle
- The audience/targeting
- The ad creative
- The web experience
- The offer/merchandising
I’ll quickly explain them:
Angle: The angle is your hook to get people interested. Let’s take HOOX for example… if we tell people we make landing pages, sure there’s a TAM that exists for people who are actively thinking about needing landing pages. But if we say “We will double your Black Friday revenue”, a lot more people will be able to relate to that.
If you’re selling a body lotion with sea moss, just saying that you sell a sea-moss infused lotion won’t get people to stop scrolling. But something like “No more itchy feet at night” would capture a lot more attention.
The angle is probably the main thing people forget in advertising. Brands that are big enough don’t need it, because they have awareness, but it would still make your advertising much more effective. Brands that are just starting out have zero chance at getting market share unless they have a great angle to go out with.
This is why my company is named HOOX… the idea is that with our landing pages, you’ll be able to effectively test different hooks and angles to acquire new customers.
Audience: When I say audience, I’m talking about your channel and targeting. Who are you going after? What channel is it on? What is the interest group or behavior group? And what is the problem you’re solving for them, specifically?
The audience directly correlates to the problem you’re addressing in your angle. For example, when we started scaling Cadence’s ads, the travel audience had a TSA-approved angle, versus a mid-20’s audience which had an angle about making sleepovers at your partner’s place easier.
Creative: Your creative is the finesse of the copywriting in your ad, your brevity in design, and your concise ability to get to the punchline while being entertaining. All those things about a good hook, stating the problem within the first 3 seconds, the product within the first 5 seconds and then a CTA are true… but, is what you’re putting out there something that people would watch if it didn’t have paid dollars behind it? If the answer is no, then you’re already at a disadvantage.
At this point, you’re seeking to earn someone’s trust, to get a click. People are on social media and TV to be entertained, not to see your ads.
Experience: The experience is what comes after the click. Most people go to some part of their website, usually a homepage or a product page. Generally these are terrible places to send traffic. If you’re properly using an angle to get people hooked and earn the click, the next place they should be going is a landing page that continues that messaging. When someone clicks on the sea moss cream, it should go to a landing page still talking about being itch-free.
When you go to a PDP, you’re going to a page that starts with selling them the product, and then might have more detailed information on what the product is and what it does. The other problem with PDPs, in my opinion, is that you don’t have any real estate at the top to position the product differently, depending on who is coming to the website.
With a landing page, even if you create something simple like a hero-product-focused landing page (like this example), you have the room at the top to decide how you want to differ the copy and imagery to match the incoming traffic’s intentions and needs.
Your page should answer the following questions:
- What is the product?
- Why does it exist?
- How will it benefit the buyer?
- How does it compare to what else is on the market?
- If I order today, how soon will it ship and arrive?
Offer: This is what you’re offering a new customer to your brand. Some brands, like Jolie, don’t have to discount their product because their discount is incentivized when you subscribe. Consumable brands might lead with an offer that gets you to trial their products. If you’re a snack, beverage, or fragrance, you might make it easy for someone to sample different variants, to figure out which one they’ll come back for.
Snif makes it easy with travel-size fragrances. Hint encourages you to try 3 flavors at a discount, while limiting the selection to flavors they know are well-loved by first-time customers.
Merchandising is best understood from the scene in The Office when they have a warehouse/garage sale, and Dwight shows how he puts the best beets up at the front, because they are more enticing to bring people in.
Simple Tips To Follow:
In a conversation with Moiz Ali, the founder of Native Deodorant, here are some nuggets about running paid media:
- If your click through rate is below 2%, you have a creative problem.
- If your CPM is above $20, you may have a creative problem. High AOV products can get away with higher CPMs but good creative will generally still lead you to lower CPMs.
- You should spend up to $1000/day per million people in your audience. So, if you have an audience size of 20M people, you can safely spend up to 20K/day before you begin to saturate this audience.
- If you are spending less than $100k/month, only focus on Meta. Win there first, then expand.
- If you’re spending $500k/month, you should run a test on TV to allow your lower-funnel performance marketing to be more effective.
- Add branded search as your second paid channel. When you are getting tons of reach on Meta, consumers will go to Google and search for your product. The next thing to do is to protect your turf by buying branded search terms for your business or product name on Google. As a rule of thumb, you can spend anywhere from 2-10% of what you spend on Meta on Google per month to achieve this unless you are in a highly competitive space where the branded search terms cost more.
- TikTok is a cheap way to get discovery and awareness. Jolie is my favorite example of a brand that’s crushing it on TikTok right now. They have very native ads and I know it’s working for them. The CPMs are typically lower on TikTok and it’s a great way to build large scale exposure for your offer and brand.
- Focus on comment moderation. When you are spending anywhere from $1k-20k/day, the number one thing you should be doing (outside of making the best creative possible) is to focus on comment moderation. Someone hating for no reason? Hide, block, delete (in that order).
- Respond to every comment. Beyond hiding, blocking, and deleting negative comments, you should be responding and engaging with every positive comment or question that you get on your ad. This is by far, the easiest way to lower your CPMs on your campaigns and keep your ads juiced for a long time. Plus, customers and prospective buyers LOVE to see responses from the brand.
We talked about a bunch of other nuggets that come in this week’s Limited Supply episode. After we talk about the tactics above, Moiz and I spend a full 25 minutes on creative and why we think it matters so much. I share 20+ more things that you need to do outside of the 10+ nuggets above to make your ads successful. I might save an 8-page newsletter for just creative… could talk for hours about:
- What a realistic budget for developing creative should be
- How often a brand should refresh their creative
- The different types of creative that brands should try
- Whether or not brands should make creative in house or outsource it to agencies
- How to make variations of your top performing ads
- How long static and video creatives typically “last”
- How to tell if your creative or ads are “working” within the first hour or day
- And what to do if your CMO says “That’s not on brand!”
Did I miss anything in the holistic view of paid? Reply and let me know!
Okay, onto some fun stuff…
Vendor of the Week:
Black Crow — A marketer’s best friend, allowing all your site data to securely get passed back to Meta and Klaviyo, with zero leakage.
I’ll be straight with you… I’m a massive fan of Black Crow. In a few instances, implementing their app has saved the paid media performance for a few portfolio companies of mine. Black Crow does 3 things really well:
1. Black Crow passes back the data back from your website to Meta and Klaviyo with minimal loss. Right now, you’re likely doing this through pixels (and BTW, the FB pixel is going away), but with Black Crow, they’ll know when someone comes back has been there before. So if I go to the Jolie website the first time and put my email in, the next time I come, I won’t be prompted to input my email, because Black Crow has told Klaviyo, “Hey, Nik is back again, let’s just ship him a retargeting email for the color he views.” Most data doesn’t get passed back, but with Black Crow, you don’t have to worry if your data is getting passed back — it does.
This also helps your Meta ads be so much more effective because you’re passing back more data points. When I did this with Cadence, we saw a 20% better CPA overnight. It’s something I recommend to everyone, simply based on this.
2. Because Black Crow is also a Shopify app on your store, they are tracking about 450 different data points on your website when someone visits it. As a result, they can understand who is likely to purchase, and segment your audiences to retarget more effectively. Someone who comes to your site and bounces is worth a lot less to spend on, than someone who looked for their favorite style of jeans and chose a size. Black Crow helps you segment your audiences to make sure you’re not overspending on people who aren’t likely to buy.
3. Black Crow is working on being a lot more focused on the website, and their first foray is with the email pop-up. With Black Crow, based on those 450+ data points, they know the optimal time to throw the email pop-up in front of a site visitor, which has led to 40% more email collections.
Why am I telling you all this? Well, now is the time to get this setup for the upcoming holiday season. I just set this up for a brand of mine, and the entire setup process is 4 minutes. You install a Shopify app, connect your ad account, and add Black Crow to Klaviyo. Then you’re all set. Within a week, your optimizations are live and working.
Book a call with Black Crow today — I can’t recommend it enough!
LP of the Week:
This week’s LP of the week comes from Omorpho, a brand that helps athletes with weighted vests and training gear. It’s a beautiful LP that makes something so complex, feel so easy to understand.
This landing page has amazing copywriting and does a phenomenal job of making it easy for someone to understand why they should buy the product. Going back to the angle… a weighted vest isn’t a big TAM, but burning more calories for your workout absolutely does.
The best part about HOOX is our landing pages immediately help brands increase their conversion rate overnight. Sundays had an 8.56% conversion rate with our page, and it amplified their quarter’s revenue.
We’re currently running a Black Friday offer for HOOX pages (see the deal here). You can book a call with us on that link, and we can show you our best page examples, or if you’re ready to buy a landing page, use this link, and we’ll get started.
That's all for this week
I was at an eCommerce brunch today that Moiz hosted in New York City, and I was talking to someone from the Everyday Dose team. He mentioned that these newsletters are great for his team — not everything applies to their business, but they can always pick out 1 or 2 nuggets from the newsletter, which is exactly what I want.
I’m currently watching the US Open, and hoping that Medvedev takes the championship home, but I hope you have an amazing week. Get those 9 hours of sleep, get a workout in, and eat some ice cream.
I’ll see you next Sunday!