This is a Canadian based homeware brand that provides kitchen and bathroom utensils.
The owner of the brand, Henry, came to us as he wanted to free up his time to focus on growing his brand and other companies.
He was already profitably spending $3K-$6K/day but struggled to scale beyond that.
Like many other eCommerce brand owners, managing the Facebook ads turned from being the growth driver into a bottleneck, stopping them from growing their company even more.
We took over the and scaled the account, and within the next 30 days, we doubled revenue, hit the initial $100K/mo profit goal quickly and increased profitability by 1.56X – all without Henry having to touch a single button in ads manager.
All figures shown are in USD.
So how did we quickly scale the account?
Step 1: Analyze
The first step to scaling this homeware brand was to look at the account before we took it on. We audited Henry’s account and picked apart what mistakes were being made, and where we could add value and scale. For example, we diagnosed that there was:
a) Little focus on retargeting.
b) No creative testing.
c) No aggressive scaling.
d) An incorrect rule setup.
After identifying where the initial bottlenecks were, and what optimizations we could make to improve scale and ROAS, we invited Henry to work with our agency to scale his brand.
Step 2: Strategize
Once Henry came on board, the next step was to develop the campaign strategy. Here we:
- Researched his product, offer & customer avatar.
- Analyzed historic data in the ad account.
- Developed profitability targets based on projected ROAS and unit economics.
- Researched his competitors, and analyzed which creatives and landing pages worked best for them.
Henry’s initial 1-month goal was to generate $100,000 profit @ 20% profitability after working with us. Using our unit economics calculator, we needed to work out what spend and ROAS we’d need to hit to achieve this. So we crunched his variable costs such as:
- COGS from the supplier.
- Cost of shipping & fulfilment.
- Payment processing fees.
- Our agency fees.
For example, we calculated that for the main SKU we’re scaling, our breakeven ROAS was 1.75. We needed to spend $200K/mo @ 2.4 ROAS in order to hit $100K profit at 20% margin. If we were hitting a higher ROAS, we could communicate this with the client and adjust the spend accordingly.
After we got clear on the qualitative and quantitative side of our strategy, we began to develop our account structure, creative and copy.
Creative is the most important part of the Facebook ad, hence why we have a creative team. We ensure our creatives follow Facebook’s best practices, and we test & optimize the whole creative, as well as thumbnails, 3-second hooks, length and more.
Once we set up the account structure, creatives & copy, we launched the ads.
Step 3: Optimize & Scale
Here’s how we scaled the account from $90K/mo spend at @ 2.58 ROAS to $273K/mo spend @ 2.27 ROAS ($620K/mo in revenue).
Despite lowering the ROAS, we more than tripled the spend, leading to a 1.56X increase in profit (after our fee) and exceeding the initial 30 days $100K/mo profit goal by 16%.
Since we added in retargeting campaigns, we were able to convert low hanging fruit and lift the overall account ROAS. This enabled us to decrease the ROAS target on our cold traffic campaigns, allowing us to scale further and spend more, knowing that our improved retargeting will swoop in and convert any site visitors and cart abandoners.
Our automated rule system also helped improve ROAS and decrease wasted spend, which previously wasn’t being used.
When spending $10K+/day on ads, you should ensure you have these safeguards in place to protect against volatile performance on bad days. On the contrary, automated rules allow you to increase budgets on good days, to capitalize on strong in-day performance.
You can see below how we were able to scale the budgets whilst maintaining a healthy ROAS, with some days clearing $30K-$45K/day in revenue.
At this level of spend, ad fatigue kicks in. This is when the audiences have seen the creatives many times that they tune out and click less. Since we added in a creative testing campaign, we were able to consistently test and cycle in new creatives to maintain high spend and high revenues.
Most creative tests unfortunately fail, and only 5-10% of our tested creatives perform the same or above our control. This is because history and engagement is retained on the creative level, which FB will favour. So, if you eventually want to beat your winning controls and scale, you need to make sure you have a robust and consistent feedback loop between your media buyer & designers to continue generating new creative ideas to test and cycle them.
And not only ad fatigue is an issue when scaling, but ensuring that the site and checkout flow is optimized becomes a priority. We consulted with Henry and gave advice to improve his page speed and layout to increase conversion rate.
One of the easy ways we were able to spend $15K/day was just surfing the budgets. If performance is strong throughout the day, we simply double budgets and raise bids before US peak traffic time.
On an account spending almost $100K/mo, we already had history and data to work from. And since it was a mass-market product, we knew there isn’t really much difference in audiences. If you live in a flat/house, you’ll want the product – simple as.
Broad audiences (no interest or lookalikes) performed best on the account along with just targeting 18-65+ males and females.
This is where staying up to date constantly with Facebook’s algorithm changes comes in useful. Most inexperienced media buyers will attempt to hyper-target their audience for a mass-market offer. Instead, we target people in the creative – through different angles (e.g before & afters vs no back pain vs save time), since Facebook’s algorithm improved over the years to pick out customers likely to purchase on a broad audience – if you feed it a great offer and creative.
We also introduced cost caps campaigns to squeeze more juice out of our ads. We’d set our cost caps at a CPA of $30 (around 2.5 ROAS), so Facebook would only deliver impressions to users who they’d estimate would convert at a $30 CPA. It’s a great way to boost ROAS and snap up customers at a lower CPA.
Overall, our 3 step eCommerce scaling process helped Henry increase his profit and scale his brand – all whilst removing himself from the handcuffs of ads manager.
He’s now evolved to become real CEO of his business, focusing now to work ON his business, developing and sourcing new products – all while being able to sleep well knowing the ads are being handled with care and confidence.
So not only did he unlock scale in his ad account and revenue but also time and focus. The two most valuable resources we have – both of which compound together to grow his business even further.
Want to grow your brand too? Book a non-obligation call with us and we’ll see if we can scale yours too.