Derek Stroh: How to Build Ads That Actually Grow Your eCommerce Biz

Paid ads work wonders for businesses, especially in the eCommerce industry. And while we’ve seen many eCommerce businesses being hesitant about running paid ad campaigns – there’ll come a time in your business when you realize that you need to run paid ad campaigns to scale.

In today’s episode, we’ve with us the brilliant mastermind – the founder of Horizons Digital Marketing, an eCommerce growth marketing agency – none other than Derek Stroh.

Throughout this episode, both Adam and Derek dive talk about running ads across different platforms and share key insights that will help you succeed.

Key Highlights:

Derek’s background – How he kickstarted his digital marketing venture and how he has evolved over the course of the last few years?
Why did Derek choose to focus on eCommerce businesses?
How to overcome different challenges while running paid ads, including small margins?
How important it is to build marketing funnels and implement the right set of strategies to have a profitable eCommerce business – it’s not as simple as it used to be 10 or 15 years ago.
The importance of making a great impression and building trust to grow your eCommerce business.
How important it is to focus on just a single platform in the initial stages and strategically expand rather than just trying to juggle between different platforms at once – how important it is to understand where your target audience hangs out and their intent on a particular platform.
Is Facebook good to run ads? Facebook advertising patterns.
Derek & Adam have a technical discussion related to their experience with advertising across different platforms.
Derek shares insights into Sandbox Testing.
Derek shares his five-step advertising framework.
What mistakes do most business owners make when it comes to advertising?
Derek touches down on the budgeting side of thing when it comes to paid ads – what’s the minimum budget Derek proposes and why?
Once you start generating sales after running ads and implementing a certain strategy, what’s the right way to scale?
How to rightly scale your advertising efforts
Derek shares his experience helping a client scale from scaling to the growth pattern.

Conclusion

The world of eCommerce is saturated. You can’t expect the same level of growth today by applying the same set of strategies that worked for eCommerce businesses years ago. It’s really important to be strategic with your efforts.

Derek shared a lot of actionable insights – which you can implement to run successful paid ad campaigns. And if you’d like him and his expert team to help you out, you can reach out to him by clicking HERE.

And if you want to build long-lasting relationships and build a rock-solid brand, contact Adam today.

Book a call to chat with Adam at: https://studio.changecreator.com

Episode Transcript (unedited, will likely have typos):

Adam G. Force 0:00

How do social entrepreneurs and small businesses create an authentic brand people love so they can get the edge they need to stand out, create Predictable Revenue and compete against the big guys. That’s what we’re here to discuss. I’m Adam forest, the founder of change creator and this is the authentic brand mastery podcast.

DEREK STROH 3:38

Yeah, absolutely. Thanks for the intro. And again, Thanks for Thanks for having me, man. The so so kind of taking a step back. Both five years ago, I got started in this space, digital marketing got started in really just like posting organically. Back when organic posting was actually a thing on Facebook and Instagram, you’d actually get some reach there. And I started dabbling a little bit in the paid side of things and the paid side of things really caught my interest after we sold one boat. We sold one boat and that just got me hooked right away. It was a $300,000 boat, we spent $300 in ad spend. And I was just like, This is an incredible thing. These Facebook ads really work. This is awesome.

Adam G. Force 0:34

What’s up everybody, welcome back to the show. excited to have you here today I got a really special guest who I met in a mastermind group. And he actually runs a company called horizons digital marketing, which is an E commerce growth agency. And they’re based out of Vancouver. So they’re media buyers, and they get you traffic, right. And they are niched down focus only on supporting e commerce brands. So we’ve been talking and I wanted to bring them on, because he has a lot of insights when it comes to driving traffic and, you know, running on different ad platforms and stuff. I think this is an area where people struggle, so you could be in between where maybe you’re looking to, to kind of do some things yourself, you’re not ready to hire someone. And so we want to bring those insights to the table. So that’s gonna be what we talked about here today with Derek. And if you missed the last episode is a very, very powerful episode with the one and only April Dunford. She specialises in positioning. So really, how do we position our product or our brand in the marketplace, this is such a critical part of successfully selling. And so that is something that you don’t want to miss. So if you missed it, go back, check out that conversation with April Dunford really going to get a lot out of that one. Okay. So if you guys have been enjoying some of the show shows that we’ve been putting out there, I hope you have been getting some good insights out of it, we’d appreciate your support. If you want to give some love. Just leave a review on iTunes. Just pop into your app and go to our show and scroll down. It’s right there. That goes a long way and we appreciate your support. And guys, don’t forget to stop by change creator.com You can check out our services there. We are currently taking on some new clients, we have a pretty full roster, but we brought on some new people and we’re doing some really amazing work right now. So we’d love to connect with you if you’re running an E commerce brand. We’re really dialled into working with E commerce brands at this point in time. So yeah, just go to our services page, book a call and we’ll see if we can help you out. All right, we’re gonna get into this conversation with Derek let’s do it. Okay, show me the heat. No, you gotta do. What’s up there. Welcome to the show, man. How you doing?

DEREK STROH 2:59

I’m doing great man doing great. Thanks for having me.

Adam G. Force 3:01

I’m excited to have you here. You know, just full disclosure like Derek and I, we met in a mastermind group. That’s what we’ll call that. And, you know, we’ve been doing a little work together because his world and my world really kind of jive. So it’s been kind of cool. And I wanted to bring him on the show, because I know he has a tonne of knowledge and experience that is going to be extremely valuable for you guys and your businesses. Derek just give people that beautiful little snapshot of kind of like where you’re at with things today in your world and how you got there, just so we know.

DEREK STROH 4:23

And since then, it’s been kind of just growing ever since we’ve got a you know, 14 person team at this point. And we’ve really really niched down into EECOM and this is where you know you and I have some synergies to where our clients are all selling physical products and we’re just looking to to help them grow, help them scale and do everything we can to do that for them. So

Adam G. Force 4:44

I love them. And why did you dial into EECOM?

DEREK STROH 4:49

Honestly, the the ability to control things a lot more. And that was the biggest thing for me. What I found with candidly, what I found with lead gen is you generate these leads, and you didn’t have control after you generate the leads, it was up to the salesperson, right? To a certain degree, it was just up to them to close the deal, right. And sometimes they wouldn’t follow up. Sometimes they wouldn’t follow up for two weeks, three weeks, it’s like, well, those people don’t know you exist now, right? So more So diving into a space where we have a lot more control, where we can help and give guidance on Hey, these are the things we need to do on the website. This is the creative we need. This is the and we can control the narrative in terms of the ads as well, that was a huge thing, right? Putting in $1, seeing three, four or 510 Come out was really, really rewarding. Right? You know,

Adam G. Force 5:44

it’s interesting, because a lot of players in the media buying space, they’re afraid of E commerce in some regards, because the margins are can be slim, so it’s harder to be profitable. So they go after the service companies and stuff who are selling, you know, things that are a few $1,000, which gives him a lot more to work with, right. So, I guess, what are your thoughts on, you know, dealing with, like, the products that, you know, if it’s a $50 product, and you know, you gotta run ads, it’s like, is there a challenge or a strategy that helps you overcome, like the small margins and stuff like that?

DEREK STROH 6:24

Yeah, great question, man. I think the biggest thing that we do starting off with clients, it’s just understanding what that profitability looks like. Yeah, understanding where their breakeven point is understanding where they’re profitable, where they’re happy, where we can actually scale like, that’s the biggest thing to figure it out on our end first, before we even start. Once we figure that out, once we have a good idea about their ARV, their breakeven point, we can kind of reverse engineer, excuse me, reverse engineer what we need to hit in in terms of Facebook’s aufsatz Tick Tock Google soft stats to make things actually work for them. So once we have that, if we’re working with a product that, you know, for the most part, well, we’ll recommend people, you know, if they have a $30 product to make sure they typically will contact you first, right? We need to we need to build out something for you, we need to build out something that increases your AOP increases your LTV, and ultimately makes this a game that you can play, right? Because Gone are the days of 30 cent cost per clicks on Facebook, Instagram, like that. We’ve seen the odd one, but for the most part, like, that’s not gonna happen anymore, right. So at that point, you just need to start looking at how can you improve ARB and prove out LTV,

Adam G. Force 7:44

I agree. So people just listening and making sure you understand improving ao V today is your average order value. So you’re getting more on the upfront sale with your ad spend, right? And then lifetime value is what’s going on on the back end. So I have found Derek and about you but like, a lot of E commerce folks are not thinking about the email lead generation as much. It’s just get the sale, I want to run ads to my product page, get a sale. And that singular step sales process is very difficult to be profitable sometimes. Right? So we this is where you know, Derek and I have kind of started Joining Forces where he’s on the front end, bringing all the right people at like great price points and getting high engagement. And then on the back end, we’re doing the sale setups for increasing ARV and conversions and all that kind of stuff. And so it’s been kind of exciting. But that is the game day like I was, you know, just talking to someone I was, I was telling her I was like, nobody in e Commerce today is doing seven or eight figures without these like funnel strategies and things like that. It’s very difficult without that.

DEREK STROH 8:56

Yeah, yeah, exactly. And I think, like to that point there, there was a time where you could build a seven, eight figure brand on just the backs of Facebook, Instagram. Yeah. And it was those were the main platforms, right, like, throw Google into the mix there too. But yeah, yeah. Oh, there’s so much volatility. And I just, I just wouldn’t be relying on one platform, right. It’s really an omni channel approach and how we can get your ARV up how we can increase your LTV, how we can make sure that once a customer buys you have a high repeat customer, right so they’re buying again and again and again. You know, if you’re selling dresses, they think of you when they want to buy their next dress if they’re selling you know shoes, they think of you the next time you want to buy shoes, right? Yep, those types of things and focusing more on I would say like branding versus the marketing side of things to write. Hmm,

Adam G. Force 9:51

that’s interesting just to make that impression, build trust, that kind of stuff. Yeah. And I think the omni channel is so valuable Um, that’s something that you bring to the table. Because, you know, I had a conversation with Aaron Parkinson on the show here just a little while ago. And he made a great point saying, because I was like, Yeah, you can be successful, you should be able to sell on any platform. If the product is good, your positioning is good, like you could sell anywhere, but your money might go further on, you know, a tick tock or whatever, so you can get more for your money. That’s, that’s true. His main point was, you have to be able to understand that they take different approaches on every platform, you can’t just take the same ads on Facebook and put them on tick tock, right. And I think that’s where, you know, a team like yours comes in, that’s so valuable, because it’s a lot to wrap your head around and deal with and like, as an owner, I do one platform Facebook, right. So because I can’t even I was like, I can’t even get into it. I have to hire people like you to do other platforms, you know, because it’s too much. So I think that that’s, that’s a key point, though, to conversions too, because you need to bring in different traffic from different places that have different intentions.

DEREK STROH 11:12

Exactly. It’s just like understanding the intention of the platform and understanding how people are consuming content on the platform, right? people consume content way differently on Tik Tok versus Facebook versus Instagram, versus Google. Right? Yeah. Like, all of those are different. And the approach needs to be different. The typically the language will it can be similar, but the content you’re making should be different to reflect whatever intent level people have at a certain step of the funnel. Right? Yeah. So you’re on Google, and they’re searching for a very specific product, or they’re searching for your brand. That’s very high intent. Right? You can’t get much more high intent than someone specifically seeking out your brand. Right? But right, you know, if someone’s on their Tik Tok feed, they’re on that platform for entertainment through videos, right? At the end of the day, creating some entertainment or educational type content on Tik Tok. I mean, that’s what we’ve done, right? We actually different to you, like we, we used to generate almost all of our leads through Facebook, Instagram, for our business, we have shifted almost all of that to tick tock, we still do some Facebook, Instagram, but in tiktoks, I would say it’s more to manage, because of the content side of things. But that’s how their algorithm works, too. Right? It’s its content base, as opposed to more the social graph. So it’s like content graph versus social graph. Yeah, really interesting.

Adam G. Force 12:39

I just don’t even have the brainpower to try to wrap my head around another platform. You know, but I do see Facebook and like, you know, it has its challenges. It’s still a great platform, but it’s a little more expensive and saturated. And it’s very up and down. I noticed like, I run ads on a Monday, I like start on Monday, Monday, Tuesday, Wednesday could be great. But then like, Thursday, Friday, it starts like cost just get crazy. I don’t know what it is. But I see that do you? Are you seeing patterns like that?

DEREK STROH 13:09

I, I look, I try to look at data on like more of a weekly on a weekly basis, because there’s got to be those fluctuations throughout. And that’s like what we kind of tell our clients to like there’s going to be daily fluctuations, there’s going to be even weekly fluctuations. And sometimes those things can impact like overall numbers for the month, but what we look at is like, hey, are things growing overall? Are things improving overall? Like if our cost per lead goes from 50 bucks to 200? It stays at 200 for like, a week? Or five days, I’d start to be concerned.

Adam G. Force 13:42

I’d be concerned and 20 Yeah, but if

DEREK STROH 13:45

it’s like one day or two days, it’s like, hey, you know what? Like, because to be honest, we’ll have some days where we get like 12 leads, and then we’ll have other days when we get like two. Right? Yeah, okay. Yeah,

Adam G. Force 13:57

I mean, it all is just about the average costs, averages, averages is just in that conversation, too. It’s like, we got to look at them. At the most the minimum is like weekly, like because you gotta give it time to average out to see where you are. If you look at the daily, you might just drive yourself insane.

DEREK STROH 14:14

Yeah, yeah, that’s like, I mean, there used there was a time in place where like, you could go into Facebook, like tick tock, for example, tick tock doesn’t react, well, their algorithm just doesn’t react well, when you’re making changes every single day, right? Just launched tick tock ads, leaving for a little bit, leaving for five to seven days, and then go back in figure out okay, what’s working, what’s not Facebook, Instagram, there used to be a time well, now there’s like a delayed attribution, right? So it’s at least three days, right before you really want to change anything. So if you’re changing everything on daily basis, what you might end up doing because we did this early on with with iOS, we’d like turn something off and then have a clock in sales. Right? Yeah, yeah, delay and we’re like, Oh, shit.

Adam G. Force 14:57

Yeah. 72 hours. Whereas you have to give it 72 hours to, to really get the data sometimes for the data to actually populate, right? And I, that was a heart, I didn’t realise that too. So I always give everything at least four days, right? If I’m just testing, right. And one thing that I didn’t realise is you have to, because it always goes in that learning phase. So I know there’s a bunch of you listening that are trying to run Facebook ads, so I’m gonna share this with you, you know, that learning phase, you got to get 30 to 50 pixel triggers. So if it’s for leads or sales, you got to hit that like 50 sales in a seven day window for that to stabilise. And I didn’t realise that for the longest time, because until you do that, you could just be doing small budgets, and all of a sudden, you’re just drifting along for a month or two, and it never stabilises you’re just all over the place wondering what the hell is going on. So that is that was a thing for me. And it changed the way I thought about my budget. I’m like, Well, if I have to get there, how much am I willing to spend for our customer boom, and that’s my budget for the week, you know?

DEREK STROH 16:07

Yeah. Yeah, that’s exactly it right. Like with, that’s the optimal level, what we’ve noticed is like, sometimes it doesn’t make sense, right? Sometimes it’s like, well, our cost per conversion is 100 bucks or something along those lines, right. And if a client doesn’t have that budget to work with, sometimes it’s a little tricky. So we’ve actually we’ve seen to your point, I think there’s like some stabilisation issues. Sometimes it just doesn’t quite stabilise if it’s in learning limited, but it’s still it’ll still work. So typically, the it’s funny because Facebook to fix that there’s two solutions, right? One is changed the optimization event. So instead of optimise like, if you’re selling a product, instead of optimising for purchase, change to add to cart 99% of the time, that doesn’t work very well for you. works great for Facebook. The other solution? What a surprise is to increase budget. Yeah, exactly. For as well. Probably Facebook, right. Yeah. Budget, you know, so it’s like, yeah, it’s a it’s an interesting, I tend to ignore a lot of the the warnings that Facebook gives sometimes

Adam G. Force 17:17

Yeah, oh, I never pay attention to the war no errands Oh is like not after that, that’s that’s just trying to mess with you to spend your money, don’t worry about it.

DEREK STROH 17:25

The amount of calls, you’ll get to like, you know, we’re managing a tonne of client campaigns now, like, I probably get seven calls a day, just from random marketing experts, quote unquote.

Adam G. Force 17:41

So tell me a little bit about I know we I always talk big picture when it comes to these strategies and stuff. And I kind of did that with Aaron. And I want to dig a little deeper here. So as people are listening, you know, there’s two different worlds in my mind when it comes to ads. And it’s, you know, the sandbox testing. And then, once we know, like, what creatives and audiences like we really want to start leaning into, it’s like moving those forward, right? And scaling them. Can you tell me, can you talk a little bit about sandbox testing. So like, maybe a few tips just on how to think about it, you know, budget, especially ecommerce worlds, because you’re the E commerce guy. So I think that would be helpful for people just to, because not everybody may be ready for your kind of service just yet. So they gotta like, get their feet wet. And then they can be ready for that, you know?

DEREK STROH 18:37

Yeah, no, no, absolutely. I think, um, our process, we have like kind of a five step framework, the first thing we start with is just identifying the goals, identifying goals, identifying kind of your profitability, your breakeven point, where things actually make sense, because without that, you kind of just run in blind, and a lot of business owners, like, candidly. And I know I did this when I was first starting, I was like, I don’t really know, like, I know, we’re profitable. But I don’t know exactly what I don’t know exactly where we’re spending money. And I’m just kind of going, right, yeah, because that’s the thing that you need to do at the beginning is just go, right. But at a certain point, it starts to become very important to really understand those numbers. So that’s step one. Step two is just understanding where where the bottleneck is. So if you could change one thing in your business that would improve things the most, what would that one thing be? So we use kind of a top down approach, and we try to figure out, okay, is it you know, your average order value, or is it your CPA? Yeah, because those are the two primary drivers of rulez. Right? If it’s your CPA, is it your conversion rate? Or is it your cost per click? So is it like how many people are converting or is your cost of traffic, right? Just like walking through that sequentially. I can go you know, into a lot of detail on that. But that would be that next step is just really analysing and understanding where you should be putting your efforts because if you put your efforts in an area where you’re good have marginal returns, not as much of a point to it, right? If you’re putting your efforts into like something where, hey, you know what our conversion rate right now is? Point five and industry standard is three. Okay, we should probably fix that. Right? Yeah. So just understanding that first. And then what we want to do is kind of start a testing phase. Right? So the first thing we start with is like building out an avatar. Right? Who are you actually targeting? Right? I was I was just on a call with a with a prospect the other day, and we were talking about who they’re targeting. And they were talking about, hey, we’re targeting teens, because they’re selling teen skincare. Right? So I was like, well, are the teens the one actually buying it? No. And we had this like he had this like revelation on the call where it’s like, well, actually, we’re not we’re not even targeting the teens, where we should actually be targeting the parents. I’m like, well, there you go. That’s step number one, if you if you’ve got a great message if you’ve got a great product, but you’re targeting on people. Yeah, kind of an issue. Right. So that’s kind of where we start is just avatar testing. Yeah. That gives you a very long answer to the question. The first one is that avatar testing and then we start testing out hooks and offers, and then we start testing creatives and content. Ad copy those types of things. Yeah. Depends on the platform. Right? Because tick tock, you’re not going to test ad copy. Right now? No, like, there’s like four words that you can actually see. It’s gonna have the least impact. Google, you’re not gonna test creative? Because you can’t. Yeah, right. So we amend things depending on which platform we’re on. But right, typically, we kind of take that top down approach, start with the biggest thing start with like, Who are you actually selling to really understand that? Yeah.

Adam G. Force 21:54

How many like audiences? I’m, you know, on the Facebook world, because that’s just all I know. So, you know, somebody’s getting out there? Are they testing? Like, I always like to go and find out what creatives are, are, like engaging? Which audience the best, right? So I’m curious and like, because everybody has different approaches, in you know, just how many different creatives do you actually test out? How many audiences do you actually go after? You know, are you i, this is not, you know, for me like to understand it in the in the E commerce world and kind of get some insight around it? Because, you know, is it? I think budgets are different there too. So I like to help people understand, like, you don’t need to spend $1,000 A day when you’re testing out audiences and creatives. So trying to get a scope, I guess, is what I’m trying to give people a picture of here.

DEREK STROH 22:48

For sure. Yeah. So I’ll touch on the budget side of things first, this is gonna vary, right? Like, some of you guys listening might might have been on calls with, you know, agencies, or freelancers or anything, everyone’s gonna have their own quote, unquote, minimum budgets. And typically, that’s probably because they have some degree of a testing framework. So all of my budget recommendations would be on our testing framework, based on like, what has worked really well for us. But I would say in terms of budget, you don’t need to be spending 1000 bucks a day, you don’t even need to be spending 500 bucks a day, what we usually want is at least 100. And the reason for that is kind of the answer to your first question, is because if you’re spending less than that, typically you won’t be able to get much meaningful data on any number of audiences. Right? So what we want to make sure we’re doing is testing out. Typically, it least I mean, if we’re starting with a very low budget, it’ll be like three audiences, right? Just start dividing the audience.

Adam G. Force 23:51

Each each one would be like $37, then each on Yeah,

DEREK STROH 23:55

and it depends on the store too, right? Like if if a store is brand new, you might allocate more to top of funnel, cold traffic versus retargeting. But if a store is really well established, and they don’t have any ads going, you might allocate more to retargeting and then also push some into cold traffic, you know, that that could vary anyways, anywhere from like a, you know, a 70 to 90% Focus on cold traffic, depending on how much traffic you already have. Now, beyond that, in terms of the actual kind of breakdowns, I’d say usually about three audiences. Maybe two, depending on you know, if you’re right on that $100 mark, you know, then I’d have probably about three creatives initially, cash too much. Exactly. Because if Well, here’s the thing too, right? If you throw in 20 creatives, what’s going to happen? You’re gonna have 20 creatives, and you’re gonna be spending if you do you know, call it $90. De divided by three audiences, so you have 30 audiences. And then if you have 20 creatives that’s like, what, $1.30 per day,

Adam G. Force 25:08

you’d be there forever.

DEREK STROH 25:09

Unless you’re selling like Q tips or something like, buy the 10 pack, like you’re not, you’re not going to be making it very far right? You’re not gonna get into a lot of kind of measurable data in there. So

Adam G. Force 25:21

while let me point out, one, that just hold your thought, if you can, sorry, I don’t mean to interrupt, but it’s just one of the things that has come up. And I want to make this clarification. So running that test. Now, again, this is your methodology, right? And everyone’s different. One of the things I have learned from guys like Aaron, is, you know, you could let’s say you do the 20 creatives. And the only thing you’re going for is to see which audience in which creative is most engaged. So you might say, How much am I willing to spend on a click? Right? And if you’re saying, I’m willing to spend $2 on a click, so Aaron’s philosophy is, if you want to move fast, you can do a lot of creatives, a lot of audiences, and then if it gets to $2, on that ad, that individual ad, and it doesn’t have a click yet shut it off. You know, and it’s like, so now you’re just saying, Hey, here’s my, it may later get a click. But typically, you’re kind of getting an early read sign. And so you could just be testing a lot of different things up front, where you don’t need the single ad to get to a sale, per se, if you just want to know, am I getting a click? And what’s my click through rate or whatever you might be looking at, right? Just to see the engagement. Is that like, do you guys, is that part of like your philosophies as well as, as you guys move forward with these things?

DEREK STROH 26:42

I would say yes, yes. And no. The reason being is because our for the most part, what we’re looking at is, what’s our cost per acquisition? What’s our cost per sale? Right, like, how are we looking there? Yeah, right. So for the most part, I would say, We’re most moreso focusing on that, versus the cost per click side of things. And the reason we wouldn’t necessarily have 20 in there, at the same time is because typically two or three of them are gonna get all the budget anyways, hey, yeah. So it’s not like it’s not, it’s not useful for us to throw in 20 ads, and then be like, well, 17 of these are losers, because they only spent 53 cents, and they didn’t get a purchase, right? Because it’s just yeah, at that point, it’s like, well, it’s not really like accurate data, because if we remove the three top spenders, we’d have 17 other ads, and maybe it would be three different ones. Sure. Sure. The ones that Facebook allocates budget to isn’t like they are always the ones that are the best. Through Yeah, right. Yeah, they they know pretty well. But we like we kind of prefer a little bit more of a manual approach. It’s a little bit more work to do. But it is it typically pays off. Yeah. Right. Yeah. Like, that’s my two cents on like the

Adam G. Force 28:05

cost. I like looking big picture to cost per acquisition, you know, like the big numbers, because you can get really lost in the weeds. So I’ve kind of taken a twofold approach with everybody’s insights, kind of like you’re like what I’m hearing from you, like, I’ve heard these things, and then from other guys like Jason Horner, and era and all those guys. And it’s like, I’ll do a testing phase for creatives, like at where I’m shutting them off, and we’re not getting the clicks, the ones that are winners, then I move into larger budget campaigns, and I will only really be looking at my cost per lead and my cost per sale. That’s it. Yeah. Right. Because then everything else, I just don’t want to be lost in the weeds anymore. It drives me nuts.

DEREK STROH 28:47

You know, sure. No, I feel that man.

Adam G. Force 28:50

What point like, How does somebody know? So to your point, guys, you got to know your numbers, like what what are your numbers? How much are you willing to spend? What’s your breakeven point? You know, like all the things you’re considering? So, I mean, you mentioned all that upfront thinking before you actually run the ads, because you got to know what you’re aiming at. Because that’s going to tell you what the winner is and what the loser is, right? Because you can’t really move something forward to scale. So let’s say you’re running sandbox, and you find a couple of winners who, you know, how do people start thinking about growing those?

DEREK STROH 29:25

Yeah, great question. So the I mean, there’s a couple of different things that we would look at one, if it’s profitable, right? How much margin do we have on that? Like, how profitable is it? Is that something that yeah, we’re, we’re shooting for a two times row and we’re at a five because that indicates like a high degree of scalability. Right? I’d look at that and be like, okay, cool. We can we can scale this to the moon, right? We can scale this for quite a long time, depending on what our budget is, right? So that would be the first thing and then once we determine Yeah, okay, this is something that we can scale? There’s different scaling approaches. It depends on how it depends on your goals, ultimately, right? It circles back to that. Number one, it’s like, well, what do you really want to do? Are you trying to maximise enterprise value? Or are you trying to maximise profitability? Right, right? Are you trying to just pump as many sales as humanly possible? Do you have the inventory for that? Like, can you do that? Sure. Yeah. Like, is that your goal? Yeah. Okay. Like you want to garner more investor interest or whatever, great focus on that. But if you’re focusing on profitability, then okay, how, how can we scale efficiently, but also not break the system? Right. So like, how, you know, maybe maybe that looks like a 25 30% budget increase every two to three days? Right. And we’ve done way more aggressive scaling, like we scaled one brand from in six days, we scaled them from $200 a day to about $8,000 a day. That’s insane. Yeah, that would not recommend that. Right? It was like very, it was very, very high touch and very, like we were scaling three times a day. Pretty much. Yeah. Wow. Right? It gets intense.

Adam G. Force 31:11

Yeah. And things can go

DEREK STROH 31:12

very wrong very quickly.

Adam G. Force 31:14

Well, that’s the thing. And you know, you duplicate a campaign or an ad set, and you can what, I’m just gonna make this up double the budget on it. Right. And then I guess you’re looking at and saying, is it going to hold? You right?

DEREK STROH 31:25

Yeah, yeah. And everyone’s got their own, like scaling approach to right. Some people do perfect. We, when we were doing that scale, we did, we were just doing budget increases. So we were doing CBO, big CBO campaigns, we were scaling up, you know, for example, we’d have a campaign that’s doing 100 bucks, we’d scale 100 to 200. At the beginning of the day, if numbers were looking good from yesterday, halfway through the day, we’d scale from 200 400. Halfway through the day, again, we’d scale from 400 800. Or sorry, just beyond that, like five o’clock, five, four or five o’clock, we’d scale again to like 800. And then we’d see how it was going in the morning. If it was just kind of level in the morning, we’d leave it if it was starting to increase bump that 800 to 1600. Right, so

Adam G. Force 32:10

Oh, my God. Yeah. Easy. Wow. Yeah. Yeah, that’s moving pretty quick. Right there. I had a thought I wanted to ask you about when it came to that, but I lost it. But okay. So that’s, that’s scaling pretty quick. And you’re actually updating budgets? And yeah, so I guess tell me, that was one interesting case study any, any others just, you know, that stand out to that might have any kind of interesting insights on scaling, you know, from sandbox to to a growth pattern, basically. Any, any stories that come to mind from your client experience?

DEREK STROH 32:53

Yeah, well, I mean, I mean, there’s a tonne, right, it depends on the situation. There’s, there’s so many, I mean, we had a couple situations where we, a bunch of brands, actually, we scaled them very, very quickly. And then they ran out of inventory. Right. That’s it. And we have to do pre orders, or we have to do something else. So it’s like, being adaptable to it. Yeah, I meant, like being adaptable to the things that are happening, things like that, right? Where if we’re scaling, we’ve had to like pull back adspend or hold off on the ad spend, or we can’t increase because of inventory issues. Yeah. Whether that’s like that was pre pandemic, even right now post pandemic, or, you know, as we’re still not even post pandemic and like the supply chain and everything, right. It’s, it’s terrible, right? So even pre pandemic, we were having those types of issues with scaling. And now it’s just a little bit more exacerbated. So it’s just a matter of looking at K. Are we actually in a position where we can scale incredibly quickly? Yeah. If If not, then how quickly can we scale? What can we do? How long are people going to wait? Like, are people going to wait a year for a pre order? or eight months for pre order? Some people will we have one client who we did like, I think it was like a week or two we did 200k or something in in just preorder sales, just preorder sales? And it was six months out? Oh, my Yeah. Right. Wow, what? So like, six months? That’s how people are willing to wait.

Adam G. Force 34:29

Interesting, interesting. And how long do you like run a test before you say, Hey, these are winners? Is it four days, seven days? What’s your model?

DEREK STROH 34:40

Typically, we kind of look, look more so at the results that they’re generating and consistency of results that the generating versus a timeframe necessarily. So an example of that would be like, like we at least want six data points, right? And six data points would look like Like, six purchases are consistently getting X amount of purchases per day, we look at those six data points, because that makes it statistically significant. And then basically just saying, Hey, okay, this is this is on the right track, or that we’re getting, excuse me, we’re getting consistent sales. Yeah. Right. If we’re if we launch an ad campaign, and they’re starting to get 10 sales 20 sales per day, and that happens for a week or two. Yeah, we might call that stability. But again, it does depend on like, what the goal is, right? Yeah. Yeah. Like if the because it’s not, it’s not super high risk to change the budget by 25%. Right. Increase the budget by 25%. Can it break? Yeah, Facebook loves to break things.

Adam G. Force 35:46

Does Don’t touch it. Yeah, exactly.

DEREK STROH 35:49

But it’s also not like, incredibly high risk to do that. It’s not like you’re going in there. You’re increasing from 100 to 1000. Oh, yeah. Yeah. Right. The odds of someone breaking there are exceptionally high.

Adam G. Force 36:03

Yeah, I mean, I liked the idea of kind of just making it statistically relevant getting, you know, you consistently getting the cost per click, you want purchases. I like the idea of getting multiple, like several purchases to really show that it’s kind of consistent. And you’ll see that once Facebook, kind of like latches on. You start seeing this like consistency. Yeah, I noticed that too. And the last thing I want to just kind of touch on and we’ll wrap up here is helping people understand maybe AV over CBO. Like, are you? You know, everyone has different philosophies and ideas about it. I see people they do all their testing and scaling and CBO. And some people do testing and abo. And then scale and CBO. What’s What are your thoughts on that stuff?

DEREK STROH 36:51

Yeah, so it’s a great question. I would say it depends on the platform. Typically, what we do, though, is we test in abo. And then scale and CBO. The reason behind that methodology for us just because we like having a little bit more control and abo for testing, because sometimes I know with, I mean, Facebook’s a little bit better at this, but sometimes with tick tock, you throw things into a CBO campaign, and you know, 80% of the budget is going to one ad set. Yeah, right. Yeah. So that becomes like a, hey, is this actually real test kind of issue? Right? It’s not? Exactly right. So it’s like, well, if you’re spending 80% of the budget here, and then 10% on these other two audiences, that’s not really fair. So typically, we do our testing and ABO and then we scale and CBO.

Adam G. Force 37:41

That makes sense. That makes sense. Awesome, man. Well, lots of helpful information. Appreciate it. Yeah, you guys are doing awesome work. Why don’t you give a shout out? Where do people find you and learn more? If you guys need support with your media, like everything we talked about in the E commerce space, Derek and team are rockstars and a preferred partner for us. So definitely recommend. Fire it up.

DEREK STROH 38:04

Ya know, appreciate it man. You can find us just on our website horizons digital marketing.com You can check us out on Instagram or on Tik Tok or on Facebook. Also at at horizons digital marketing are not.com at horizons digital marketing there so yeah, hit us up on any of those platforms. websites usually the best there. Yeah, thanks. Thanks for having me, man. I appreciate it.

Adam G. Force 38:30

Yeah, just mentioned my name. He’ll give you the first year free just kidding.

Brother, I appreciate you. We’ll catch you next time.

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Transcribed by https://otter.ai