hero image

Optimizing Your Marketing Funnel with Brendan Hughes - Honest Ecommerce Ep. 147

Brendan Hughes has been “doing” Ecommerce and digital marketing since 1997. For much of his career he was responsible for implementing digital marketing strategies in large consumer organizations in Europe. 

After spending some leading digital transformation in a large news media publisher and as a board member of IAB, Brendan realised how intransparent the entire ad industry had become. 

He wrote extensively on the topic and has recently published his first book providing practical advice to eCommerce store owners on how to get better returns when advertising across the big walled gardens that dominate the industry. 

Brendan now leads the team at Optily, an innovative solution to cross-platform ad optimization. 

In This Conversation We Discuss: 

  • [00:00] Intro
  • [01:18] Coding in the 90’s
  • [02:47] From building websites to Ecommerce
  • [06:25] Analyzing the marketing funnel
  • [08:52] Cognitive biases that affect marketing
  • [10:15] Quantifying the success of your process
  • [11:19] Fine tuning the top of funnel
  • [12:09] Success in short form video
  • [14:04] The research and evaluation mode
  • [15:29] Tackling the lower end of the funnel
  • [17:39] Funnel inefficiencies and plateauing
  • [19:01] Sponsor: Electric Eye electriceye.io
  • [19:32] Sponsor: Mesa apps.shopify.com/mesa
  • [20:05] Sponsor: Gorgias gorgias.grsm.io/honest 
  • [21:32] Sponsor: Rewind rewind.io/honest
  • [22:04] Sponsor: Klaviyo klaviyo.com/honest
  • [22:52] Shortening the funnel through data
  • [25:27] Why you should still consider retargeting
  • [27:14] Acquisition vs retention marketing
  • [29:36] Setting the ROAS expectation
  • [34:13] Goals, data, and experience matters
  • [36:23] Short-term vs Long-term
  • [38:18] Acquisition costs are based on the channel
  • [40:08] Best fit customers for Optily
  • [43:39] Optily does not replace SMEs or contractors 
  • [46:46] Optily specials offers for listeners

Resources:

If you’re enjoying the show, we’d love it if you left Honest Ecommerce a review on Apple Podcasts. It makes a huge impact on the success of the podcast, and we love reading every one of your reviews!

  Transcript:

Brendan Hughes  

Advertising is complementing everything else you're doing when those consumers are not on your website.

Chase Clymer  

Welcome to Honest Ecommerce, a podcast dedicated to cutting through the BS and finding actionable advice for online store owners. I'm your host, Chase Clymer. And I believe running a direct-to-consumer brand does not have to be complicated or a guessing game. 

On this podcast, we interview founders and experts who are putting in the work and creating real results. 

I also share my own insights from running our top Shopify consultancy, Electric Eye. We cut the fluff in favor of facts to help you grow your Ecommerce business.

Let's get on with the show.

Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host Chase Clymer. And today we're welcoming to the show, Brendan Hughes

Brendan is the CEO of Optily, a software solution that combines proven digital ad strategies with innovative technology to enable marketers to accelerate their Ecommerce Store growth. 

And one thing that I actually absolutely loved with Brennan's biography that he shared with me that I read just a minute ago is "Brendan Hughes has been doing Ecommerce and digital since 1997." 

So take me back to way back when you first cut your teeth in this industry. What was going on back then? Where did you get started?

Brendan Hughes  

Yeah, I was in college, starting to do Nixers, either for people I knew or for college projects. 

 

The first website I ever built was... I went to Trinity College in Dublin, and built the homepage for them and then built micro sites around the place. 

 

So we were building very simple things back then, and coding in HTML. And using things like --if you remember-- Macromedia Flash and Director, building out Shockwave videos and animation. 

So it was... Yeah, it was a completely different world back then. Dreamweaver was pretty cool, too, that has emerged on the scene. It was making our lives easier for building websites. So...

Chase Clymer  

Yeah.

Brendan Hughes  

... Long before WordPress and Shopify and all of these, yeah. (laughs)

Chase Clymer  

Yeah. I was around when Dreamweaver came out. And it was wild. 

I remember when I was younger, I was playing around with Dreamweaver and PHP-based websites, and you'd get templates off of it.

It was before Reddit. IRC Channels and stuff.

Brendan Hughes  

Yeah. Yeah. Yeah. It was a massive innovation at the time, because everybody was hand coding. 

So every website that existed was hand coded. And we're all learning HTML and JavaScript. 

You still needed it with Dreamweaver, you still needed to be able to go into the back end on the code view, and do things as a tweak to size sheets, etc. 

Yeah, that was all just became redundant very quickly.

Chase Clymer  

Oh, absolutely. So after diving in and just experimenting in the world, where did you  settle in the Ecommerce space? And what was your first real job in the industry?

Brendan Hughes  

Yeah. So I worked for quite a number of years in insurance and gaming. So gaming/gambling. So for most of my career, I was on the buy side --we call it-- which is buying media. 

Being the Ecommerce guy in a traditional business and doing what were then called the "digital transformation", which is turning it into a digital first company. So I then switched and I worked in one of the --actually at the time was the world's largest poker affiliate. 

 

So at the time, when online poker was still illegal in the US, it was legal everywhere else in the world. And so we were on the.. I was on the other side of the fence, really finding audiences and bringing poker operators like Full Tilt Poker and Pokerstars

And before I joined them, we can [talk for] this a little bit. But I worked with a large news publisher and media publisher, so I was actually selling ads on the other side. 

So I spent most of my career either buying or selling advertising. And really,  when I worked in the publisher, I realized how intransparent and how burdensome the whole ecosystem had become. 

Because if you were buying advertising, then you were paying a certain fee to access certain audiences. 

And there was a massive gap, especially in programmatic advertising between what a publisher was then able to offer and the price they were getting paid. 

And so I became a bit obsessed with how murky the ecosystem had become, and how many middlemen and tech providers and solutions were in the middle. 

And then meanwhile, the big platforms,  the Google’s and the Facebook's, and now the Snapchat’s, and the Tiktok’s, then the Pinterest’s. They're all dominating the world. 

So when I encountered... Optily has been around since 2011, [I was] mostly working with large media agencies helping them with automating workflow around and buying social media, in particular, Facebook and Instagram. 

But the guys had built some really clever kits that were creating a bridge between the Facebook and Google worlds. 

So getting those 2 big guys working together in a way that they'd never do themselves. I met the co-founders of the company. I really liked what they were doing and jumped in to help them commercialize that and bring it to market. 

And so our proposition really is for an Ecommerce brand who is living in the big platforms --the Google's, the Facebook's, and the other big platforms-- is unifying data in a way that the platform's will never allow you to do. 

But then driving insights and automation on the back of that. So based on a unified view, rooted in an Ecommerce strategy --so a funnel marketing strategy-- and then starting to drive, provide recommendations, expand a little bit more money in this campaign, because you're delivering better results at the top of the funnel

And then with our automation, we make those changes. So we take money from Google, and we give it to Facebook. 

We take money from Facebook, and we give it to Google. And so that the... we're playing one after the other. And that's the sweet spot. And so that's where we try and make a difference.

Chase Clymer  

Absolutely. With all of our clients that we're working with, it's definitely those are the 2 biggest players in the space.

Right now, Facebook, and Google are definitely the big drivers in paid media, especially with prospecting.

So you touched on it just a second ago, a little bit, but I know we're gonna dive into it. So let's just do it now. 

Let's talk about the 3-step funnel for those that are just starting to get into paid acquisition and getting into prospecting, and how the funnels work and  what your goal should be at each step. 

So I'll hand it over to you and let you kind of get started wherever you'd like.

Brendan Hughes  

Yeah. You obviously stopped me because I'll keep going. But the reason...Take a step back. So the funnel is one of these constructs that's been around since some young media exec in 1898, Philadelphia, invented the AIDA funnel that we're all familiar with.

And a lot of research has gone on to debunk the funnel and say, "Look, it can take many touch points for an individual to make a purchase. How can we control that? How can we configure that?" 

And what I saw when we stepped back to is all of the research around consumer purchase behaviors, they all align around 3 or 4 stages that we all go through on a purchase journey, regardless of whether that purchase happens in an instant, in single sessions, or so it's an impulse purchase, or happens over days, weeks or months. 

The first stage is typically... I need to identify a problem that I want to solve or a need that I want to fulfill or desire that I want to satisfy and I'm either consciously or unconsciously aware of that. I became aware of that somehow. 

And unless that happens, then stage 2 doesn't happen. I start to undertake research and evaluation, looking at my options, and information gathering. 

And if it's in a single session, that's leveraging the frame of reference that I already have, because I already know about this category or this type of product.

And so I'm information gathering, looking at a website or looking at an article that I'm seeing in front of me. And the final stage that we all tend to go through is the actual decision. 

So actually making the decision to purchase and The Behavioural Architects only took some research with 300,000 in market shoppers, and identifies 5 or 6 --what they called-- cognitive biases, that influence [or] that heavily influence that. 

So for example, scarcity bias: the more scarce something becomes, the less stock is available, the more desirable it becomes and things like social proof or authority bias: we listen to other people and we trust other people; 

The power of free, so something is available, but actually there's something free that comes with it or there's some extra thing that's available now, then that drives [sales]. 

So, when we are constructing an ad strategy, then where we see the advertising, the role of advertising is to support what we call your owned and operated activities in Ecommerce and digital marketing. 

So typically, the people that we will engage with around optimization strategies are... They're very much involved in conversion rate optimization, so making sure the website is working an awful lot better and driving up the conversion rates. 

We would work with them or they would typically be heavily engaged in CRM, email marketing, SMS marketing, understanding the segmenting to database... 

So, advertising is complementing everything else you're doing when those consumers are not on your website. They are somewhere else and you're paying to engage. So there's 4 or 5 things that come in at each stage of the funnel. 

So there's creative... And creative is typically the most impactful thing on the success of your advertising campaigns. Creatives and copy. Those audiences might be aligning audience strategies with creative. There's [also] the platforms and placements.

So where are you positioning your ads and what particular placements in the various platforms? We get into goals and metrics. 

So what are you actually measuring at each stage of the funnel? What are the specific objectives? And how do you measure and where you measure? 

And then there's... So how much am I spending each day [at] the funnel? So if I take you back through a third of the... At the very top of the funnel, (laughs) 

So at the top of the funnel, my team says, "Brendan, we're not really doing... When we recommend to people in Ecommerce top of funnel, we're what we're actually doing is we're intercepting the middle of the top of the funnel.'' 

Because what we're finding,  when we're going to the big platforms --the big ad platforms-- we're saying, "Hey, find us people who are in the market for our products, but are not actively searching."

And so we're not very often... Ecommerce brands are not comfortable spending huge amounts of money, building markets and creating markets. 

We're allowing the platforms to help us find people who are already in the market. And so for example, we'll be using broad lookalike audiences from our existing customer base or visitors to our website, etc, or interest-based audiences or purchase intent audiences

And what we generally see successful direct-to-consumer brands [are] doing is using video --short form video in particular. And that [is] because, hey, we can build audiences very cost effectively. 

So in the US market, we can get somebody, an in market consumer to watch probably 15 seconds of our video on Facebook or Instagram or on other platforms, probably for less than one cent for that 15 second view. 

And so, on a per human basis, that's probably one of the cheapest ways to find people who are engaging with our brand story. 

And if somebody swipes through our video after one second we kind of ignore them and say, "They're not really that engaged." Whereas if somebody watches 15 seconds of our video... 

Sorry. At this stage of the funnel, what we often say is the product is not the hero. The consumer is the hero or the problem we're solving is the hero. 

So we're chatting and it's a much more emotional engagement. So very often it'll work with a lot of pet brands. And at the top of the funnel, the video won't be about the flea collar, which is going to stop the itching and scratching. 

It will be about the cute puppies and how much fun they're having when they're not annoyed and frustrated by it. So we're putting the character, the human, at the center. 

And we're using that video to build audiences as cost effectively as possible. We're measuring  engagement with our video. So cost per view through... But also with a secondary metric of clickthrough rates

So which ads and which audiences are more likely to 1, watch the entire video and then 2, drive clickthrough (rates) but particularly, it's not our final metric. 

What we're then doing is we're taking that audience and we're nurturing it through the next stage of the funnel. 

The next stage of the funnel is the research and evaluation mode. There may be coming from the top of the funnel or maybe we might be using custom-intent audiences in YouTube and search and saying people who are in markets searching in Google,or maybe over on YouTube, we're showing them a video which is maybe a little bit longer. It was a 30-second... 

Maybe it's actually highlighting features and benefits of the product in the Facebook and Instagram world. We like to use carousels because each frame is almost the frame of a storyboard where we can highlight different features and benefits of our offering. 

At this stage of the funnel, we're typically driving traffic like what the traffic was... So we're trying to find the cheapest traffic and drive it to a website but again with the qualitative kicker that it has a high propensity to convert. 

So at this stage what we will see is conversions. We'll see... We'll be driving people to our landing pages and we will be seeing them purchase. 

But if we're getting, for example, an overall return on ad spend... Let's say it's 10x overall. So for every $1, we're spending, we're getting 10... Across all of our campaigns, we're getting $10 of revenue that we can attribute back to our advertising. 

But maybe at the mid stage performer, we're getting between a 2x and a 4x ROAS. So it's a much lower ROAS than the overall.

And at the lower end of the funnel, then we're really talking to people who are at the point where they've demonstrated purchase intent, either on our website or through engaging with our channels or through search. So we're very often using very product driven ads. 

So obviously Google Shopping kicks in here, using dynamic product ads, and the Facebook/Instagram world, and over the platforms, in Snap[chat] and Pinterest. 

So we're actually putting the product back in front of people that they were interested in and with very strong calls to action here. 

We're not in the learning mode anymore. We're in the shop. Now, we're introducing scarcity and urgency. We've got strong offers in place because these are people who've probably spent time on our website, researched our products, maybe added the product to the basket, but haven't converted. 

And now we're saying, "Okay, what do we need to do to get you across the line?" and the other cohort that comes in here at the bottom of the funnel... 

People who've purchased from us previously, so we're integrating our email lists or our CRM data and our customer segment data and we're getting that data back into the ad platforms that's speaking to the customers at the right time about the products that we believe they might be interested in. 

And sometimes people say to me, "Why would I spend money with Facebook and Google to talk to my own customers because I have their email address?" 

And what we… The way we think about this is, "Yes, you're going to spend money. But you're actually not going to spend an awful lot of money because you've a very defined set of customers and it would be relatively small compared to the universe of audiences. 

And you're giving them a very specific message. And they're seeing the same message in their emails that they're getting from you." They're seeing the same messaging when they go on to the web on the various platforms that they're on. 

And then when they clickthrough on their website, they're seeing the same message and the same offer on the website. 

So there you're hitting them in as many different places as possible in a very cost effective way. So the reason we do this right. 

So [I'm so sorry] Chase for my ramble (laughs)... 

But most of the clients who come to us right when they're in Ecommerce... And we all believe in the funnel in some way where everyone, every marketer kind of gets it. 

But by and large, most of us are stuck in the bottom of the funnel. We were doing all of the smart shopping campaigns and we're doing all the product ads... 

And the reason people now go to somebody like us or go to another organization or marketing agency is they are struggling to scale and hit a plateau. 

It has become inefficient or they're competing head to head, sometimes with their own partner retailers if they're direct to consumer brands and it's not scaling. 

And time and again, what we find is that when you invest a little bit more in the middle funnel and then maybe in the upper funnel, all of a sudden the lower funnel becomes much more efficient. 

And actually, your overall funnel becomes much more efficient as well. 

So I guess the final message is what we're trying to do is to nurture people through your funnel, the platforms that you can control, and the ad placements that you've built, so that they spend less time researching and comparing you on just on a pure price basis with others in the market who have maybe similar products.

Sponsor: Electric Eye

If you're struggling with scaling your sales, maybe Electric Eye can help. 

Our team has helped our clients generate millions of dollars in additional revenue through our unique brand scaling framework. You can learn more about our agency at electriceye.io. That's E-L-E-C-T-R-I-C-E-Y-E.io. 

Sponsor: Mesa

Mesa is the Shopify expansion pack to level up your brand. 

By turning all your internet connected apps into your business epicenter, Mesa can lighten your workload and tame the day-to-day chaos of running your store. 

Join the other successful brands that have learned how to balance clever workflows with a solid infrastructure to get more done without additional overhead. 

Whether you need to order data in Google Sheets, add products on Etsy, or get customers added to HubSpot, Mesa has you covered. 

Peace of mind is right around the corner when all your apps are working seamlessly together. 

To put it quite simply, mesa is a better way to work. 

Search Mesa --that's M-E-S-A-- in the Shopify App Store and download it today. 

Sponsor: Gorgias

Is your store holiday ready? Now is the time to make sure you and your team are prepared for the busy season ahead. 

Gorgias, an omnichannel help desk built for Ecommerce has machine learning functionality that takes the pressure off small support teams and gives them the tools to manage a large number of inquiries at scale, especially during the holiday season. 

Gorgias combines all your different communication channels like email, SMS, social media, live chat, and even phone into 1 platform and gives you an organized view of all of your customer inquiries. 

Their powerful functionality can save your support team hours per day and makes managing customer orders a breeze. 

They have allowed online merchants to close tickets faster than ever with the help of pre-written responses integrated with customer data to increase the overall efficiency of customer support.

Their built-in automations also free up time for support agents to give better answers to complex product-related questions, providing next level support, which helps increase sales, brand loyalty, and recognition. 

Eric Bandholz, the founder of Beardbrand says "We're a 7-figure business and we have, essentially, 1 person on customer support and experience. It's impossible to do it without tools like Gorgias to help us innovate." 

Learn how to level up your customer support by speaking to their team here. Visit gorgias.grsm.io/honest. That's G-O-R-G-I-A-S.G-R-S-M.I-O/H-O-N-E-S-T

Sponsor: Rewind

Our partnerRewind, can protect your Shopify store with automated backups of your most important data. 

Rewind should be the first app you install to protect your store against human error, misbehaving apps, or collaborators gone bad. 

It's like having your very own magic “undo” button. 

Trusted by over 100,000 businesses from side hustles to the biggest online retailers like KnixGatorade, and MVMT Watches

Best of all respond to any of their welcome emails and mention this podcast, Honest Ecommerce, to get your first month absolutely free. 

Sponsor: Klaviyo

Getting an online business off the ground isn't easy. 

So if you find yourself working late, tackling the to-do list that's a mile long with your 5th cup of coffee by your side, remember, great email doesn't have to be complicated. That's what Klaviyo is for. 

It's the email and SMS platform built to help Ecommerce brands earn more money by creating genuine customer relationships. 

Once you set up a free Klaviyo account, you can start sending beautiful branded messages in minutes thanks to drag and drop design templates and built-in guidance. 

And with Ecommerce specific recommendations and insights, you can keep growing your business as you go. 

Get started with a free account at klaviyo.com/honest. that's K-L-A-V-I-Y-O.COM/HONEST. 

Chase Clymer  

Alright, Brendon, I didn't let you... I didn't want to interrupt you. And I was taking notes during the whole thing. So I got a couple of questions for you. 

And the first thing... I guess it's more of a statement. I really like how you pointed out that with modern... The data that we have through all these modern platforms is... 

We're not really doing prospecting with cold traffic anymore, because we can get a lot more targeted. And so I really enjoyed hearing that from you. And I'm going to be stealing that and using that when I'm talking to clients in the future. 

But I guess what I wanted to point out for our audience was how to differentiate it so they can understand what we're talking about here. 

So historically, let's say that you did a magazine campaign --traditional print media-- and you did a magazine article or magazine advertisement about --let's use dog treats again-- about dog treats. 

And you're putting it out... Obviously you can get a little more targeted [by] putting in a dog magazine, or maybe you're putting it in a more broad audience type of magazine, but you have no idea that the person picking up that magazine is interested in buying those dog treats or not. 

With Facebook and Google now, you can do intent-based search, you can do lookalike audiences where it's like, "Well, based upon all this statistical data about this person, there are these 1800 people that have bought this product before, so they're probably gonna want to buy this product." 

So it's definitely... We are going. Maybe we're shortening the funnel these days with all this technology, but it was a cool concept. And you're the first person to point it out to me.

Brendan Hughes  

Yeah. No, it is. It's an opportunity. Because these platforms have so much data and whatever. It may be in time that gets restricted, but for now, because their Pixels or the conversion API’s, or maybe even Google because they have all those search intent data

And if there are available tools, it means that as you know, as young brands or as kind of problems that are kind of trying to make a breakthrough. 

We don't need to spend a huge amount of money with spray and pray and spending money in the hope that people might be interested in our category or in our product. 

The platform is going to allow a lot of heavy lifting for us and they can be much more cost effective. So yeah. So... Yeah, feel free to take that (laughs). 

Actually, I think I've heard it described a bit like, we're in the disruptive marketing space because other people maybe have done a lot of work and [already] done the heavy lifting.

And we're coming in in the middle of the top of the funnel or the bottom of the top of the funnel and trying to intercept those purchase journeys.

Chase Clymer  

Yeah. And something else that you highlighted on was, "Why do I want to retarget through Facebook and Instagram, or Google or any of these other social or search platforms, when I have this person's email or phone number?'' 

And everything you said, I 100% agreed on and I just kind of wanted to double down on it. You need to talk to your customers where they are. 

Oftentimes, even if you have their email, they're probably not checking your newsletters for half the time. 

If you can get in front of them, where they're hanging out, maybe Instagram is where they're hanging out, you can drive that awareness backup and increase your repurchase rate. 

Obviously, it's a lot cheaper through SMS or email, but with all of the platforms working in tandem, you're going to see a lot more repeat customers.

Brendan Hughes  

Yeah. If you remember, in the old days, Chase, brand marketers and before the concept of performance marketing, [we're] used to saying, "Well, people need to see our ad in at least 5 different locations before they'll actually kind of engage with us as a brand or product on the site." 

And that's kind of what we're saying is do your email marketing. Do your SMS marketing. And, do all of the things that you're doing. 

But it's not going to cost you an awful lot to also talk to those customers and be very specific with them, that this is a product message, maybe an offer for you and that you've seen in multiple different spaces and you're trying to interrupt them. Because they know your brand. 

They're ready for you. They're open to you. And now you're trying to say, "Hey, jump back in here." And you're repeating the same message in multiple places. So yeah. 

Chase Clymer  

Yeah. I completely agree. At the agency, we consider [those] 2 different approaches. So you've got your paid media approach... It's basically your Facebook, your Instagram, your Google, Pinterest, Tiktok, whatever advertising you're doing. So there's a whole strategy behind that. 

And then you've got your retention marketing strategy, which is more like, "Okay, you have their email, their SMS push notifications or address if you're sending physical mailing stuff." 

While they work in tandem, they are separate strategies, so you need to approach them both in the proper way. 

Because what you're gonna say to someone who is vaguely familiar with your brand versus what you're going to say to somebody that has purchased a product or 2 are 2 completely different styles of copywriting.

Brendan Hughes  

Yeah, great. Yeah And what we see is just from a practical perspective, platforms like Klaviyo and MailChimp, they now integrate natively with the big ad platforms. 

So we're increasingly seeing people with their email lists, which are probably segmented, as you say, based on recency and frequency and models of, "Maybe these last customers are my most valuable customers." 

Those mailing lists now exist in parallel in the ad platforms, and the same styles of messaging are being used with the same offers and same creative as in the email and other channels. 

And obviously, the important thing there to think about is how we measure and compare what we're doing there with what we're doing as we're nurturing unknown audiences or new consumers into our funnel. They're different. 

And you can't... It's a bit like brand search. We got to put that into a different bucket and not mix it up with the common prospecting and the generic work we're doing because they're different. 

And the efficiencies you get from talking to your existing customers is completely different than when you're out and trying to knock your people through a funnel. So we are very... 

Increasingly, we're seeing so many brands, as they're integrating all of their different data sources into one. So again, that data layer working as efficiently as possible is key.

Chase Clymer  

Absolutely. So my next question was around... Earlier we talked a bit about return on ad spend and how they vary at different parts of the funnel. 

And the example you used was retargeting... Middle of the funnel, you could maybe see a 10x return or a blended would be a 10x return where in the middle it'd be a little bit less than 5x and bottom would be a lot higher. Maybe at 20x, your blended will be around 10x. 

What I wanted to dive into more is proper expectation settings about return on ad spend, especially in Ecommerce. 

Because I know you're just pulling numbers out of thin air. But I don't want to get into the game and expect those numbers. It is really what I want to talk about.

Brendan Hughes  

Okay. Okay. So people always want to know. They want to ask the question and come at it from a couple of ways, right Chase? So one is, what do you need to make, right? (laughs) And what's the margin your business is running at? 

And increasingly, we're trying to shift the conversation to customer acquisition costs. Because if you've got your... Your website is converting at a certain level and then your CRM... And your customer lifetime values and your ability to retain customers. 

And then it shifts the conversation away from the roll off on one single purchase. And that's where we want to get to. And especially subscription brands, they have that nailed. 

They know that 30% of their customers will jump into subscriptions, or be repeat customers. So therefore, I'm willing to have a lower ROAS --return on ad spend-- on that initial purchase, because I know I'm going to... 

Customers are going to stay with me and be loyal and recoup. I think what I find is that most Ecommerce brands have an expectation of somewhere between 5x and 10x [ROAS]. It seems like a reasonable expectation. 

And then we get into... Well, it depends. Because it depends on the purchase price of your product, how big your audience is... And so for you and I to toss it around and say, what should we be setting the expectation at? It's gonna be hard. 

So I'll give you one example and show you how wild it can be... So a regional bookstore. And probably 20... Just over 20 bookstores in a region of 5-6 million people. And they use Google... Bottom-funnel activity in Google and actually getting online getting 35x to 40x ROAS. 

And you say "Wow. Okay, amazing." So, look, we want to do Facebook and Instagram. This is where our expectations are. There was a lot there but that's not gonna happen. But actually in the middle of the funnel, because they've done nothing big there was a latent market appetite. 

And it was a regional sort of relatively well-known brand in the region. Launching mid-funnel actually kicked on to about 25x ROAS straight away. 

So we're driving just traffic campaigns, doing lots of highlighting value props etc [is what] their offering. 

And then the lower funnel stuff actually scales towards between 45x and 50x. We put an initial bump of maybe 4 to 6 weeks. And of course, then it settles down. 

And it's probably overall tracking at somewhere between 8x to 10x overall. So you get this initial bump, especially if you haven't been active in the market and there's some level of familiarity or there's a latent market appetite. 

And that's for... Think about a book and you're competing with major online retailers in that space, etc, etc. So that's how great it can be. But on the other end. And of course, everybody's... 

And most people are down, looking to get a 5x or a 10x on an initial purchase. And  then increasingly, actually happier with lower if you're... If you know that you're acquiring a customer and you're able to retain that customer over time.

So somewhere in there is the spectrum. I don't know if that's... If you concur, or am I obviously setting expectations way too high? We're starting with 25x ROAS. Yeah.

Chase Clymer  

Well, you're hitting the nail on the head with it all over the place. And then the one thing that I guess I need to highlight here, too, is each of these numbers don't exist in a bubble. 

When people are like, "Oh, our return needs to be above 10." I'm like, "Okay, well stop prospecting." That's an easy way to do it. So  you got to understand the whole picture really…

And like you said, it goes back to "What are your goals?" So are you trying to just sell out of inventory or are you trying to grow the business and grow the customer base and scale things?

So it does go back to "What are your goals as a business?" And what you mentioned earlier with the bookstore, we've seen similar results of just crazy returns for brands that haven't been doing anything, and then they start to start getting into the paid game. 

But what I do need to highlight here is these aren't startups. These are brands that have data to back it up.

Brendan Hughes  

Yes, yes. Yeah. And I agree. 100% Yeah. And when you're talking about a, like a bookstore, what I'm saying is there's, there's already brand awareness and there's a latent appetite for engaging with his brand. They just never did the Facebook Instagram stuff before. 

So people know the brand. So what they were doing was tapping into an existing audience. So yes, you can get that bump. 

For startups, yeah, there's a lot more work to do. So we would [notice] with startups very often... Where's your core conversion rate on your website? Who are those audiences that are converting?

And now let's go find those mice. And let's start small. And let's build from there. Getting 2x to 5x ROAS early doors is good. Very often what you find is people are in that space is working. 

And now they want to know, how do I grow without... How do I scale with the same level of efficiency? And it maybe comes back to maybe we're getting caught up because of the numbers... But it's about...

Chase Clymer  

Yeah. 

Brendan Hughes  

And you said there is the difference between: Is it short term goals you've got? You're trying to clear out some inventory and you got a really strong price position, just want to kind of empty the warehouse? 

Or is this... Are you doing some longer term brand building? So there's a marketing effectiveness topic, which we talk about quite a bit, but it's less than that. And Peter Field did a lot of research. 

He says, "Look, what's the right balance between what's called an 'upper funnel activity', where you're brand building and generating a lot of awareness of your brand and engaging with your brand, purely on a brand new level and then the performance marketing side?" 

And the research that they would have done over a number of years would suggest for achieving those long-term sales objectives, you've got to be spending 60% in the upper funnel and 40% in the lower funnel. 

There very few startups or Ecommerce brands that are willing to invest 60% of their ad dollars in long-term brand building, because we don't have enough, usually, enough cash or time to do that. 

So what we're trying to do is to help people move from where they're spending maybe 90% to 100% of their activity, of their money in the lower funnel, and actually start moving it further up the funnel. 

And if possible, having some budget set aside for experimentation. So once people get settled and mature, see this as well, they're comfortable in the Google world and what they're getting. They're comfortable in the Facebook/Instagram world. 

Maybe they're also comfortable in the Microsoft Bing world. From now they're putting 5% to 10% of their spending into maybe Tiktok or Snap or Pinterest...

Or maybe Quora or some other platform where they think their audience might be because that might help to broaden out their market efficiently. And because maybe those platforms aren't as competitive as the ones they're on at the moment.

Chase Clymer  

Absolutely. I think the experimentation budget is... Once you can get to the point where you can afford that, it's really interesting. 

Because seeing acquisition cost per channel is very surprising. We see insane returns on Pinterest for some of our women's brands. And it's just because...

Brendan Hughes  

Yeah. 

Chase Clymer  

...nobody. Not many people are advertising on that (Pinterest) versus Facebook and Instagram. It is that simple at times. You just gotta step back and think about it.

Brendan Hughes  

Yeah. Yeah. They're auctions. So we're bidding for eyeballs or for humans to interact with our brands. And if there's not as many people bidding for the audience, we're chasing them. That's the opportunity. 

And yeah, and we find [that] you're right. Pinterest is probably an underappreciated platform for Ecommerce for certain cohorts, especially for a lot of direct-to-consumer brands. We're creating new and interesting products. 

And, again, Pinterest describes it as the home of unbranded search. I'm looking for a new pin cushion for a new dog toy to something relatively specific, in terms of what I'm searching for in that platform. But I'm not generally not searching for specific brands. Because it's not what you do there. 

And so it creates a great opportunity for discovery of your brand on that platform. And then the job is to nurture them through. 

And make sure they don't then jump elsewhere and start price shopping with somebody else that's doing or selling this product. So it's a great place to actually go find those people who are in the market, and then nurture them through the funnel.

Brendan Hughes  

Absolutely. So I do want to quickly touch on the actual product, Opily, a little bit more. What would be like the best fit as far as a listener out there? What bucket would they fall under  to see some decent results from partnering up with you guys?

Chase Clymer  

Most of our clients who are jumping onto our software, they're probably advertising on Facebook, and Instagram and on Google, maybe on YouTube. 

And there's a bit of display advertising. What our platform does is helps to simplify the complexity when you're advertising across multiple platforms. 

And what we've done is we've taken the funnel strategy we've been talking about, and we've baked it into the software. 

So what our platform will do is, you connect your ad accounts, connect it to your analytics --for example, your Google Analytics account-- and our platform will start to organize all of your ad campaigns into different stages of the funnel based on the objectives and the bid strategies that you have in place. 

So to give you a suggested structure, is to show you how much you're investing at different stages of the funnel and the different types of results you're getting.

And then our optimization engine looks at the ad platform data --so hey, what does Facebook say-- that it's delivering, but then also, what does your analytics platform [does]. 

So for example, in Google Analytics, Facebook doesn't know that this consumer also saw an ad in YouTube and also on Google and clicked and bought or clicked on something in an email, etc. But Analytics has that data. 

It has that attribution going on, especially in the Ecommerce reporting. And so we blend the data through. So we take the data from analytics for that campaign, and we take what the platform itself is saying. 

And then our platform starts to give some recommendations about where to invest. "And so this platform is more likely to drive or this campaign, this ad campaign is more likely to drive direct results. Whereas this one is a little bit more indirect." 

So the investment level might be different there. So typically, our clients are probably managing their ad spend on Facebook and Google themselves internally. They're scaling up and the pressure point comes when they want to... 

They are very often good at one platform --so you maybe good at Facebook, or maybe good at Google-- and they're looking to scale up. Advertising is not keeping up with the growth of the business. 

And what our platform does is it gives them a place to see everything from the different platforms in one environment in one dashboard, and then starts to give recommendations and suggestions which they can action through our platform. 

Or they can say "Actually, no, I'm okay with what I'm doing here." which  they can pick and choose to ignore as well. So you don't have to implement the action. So it's really for the scaling of Ecommerce direct-to- consumer brands. 

What we find is that founder-led,direct-to-consumer brands, in particular, tend to want more control internally. They want to retain transparency in terms of what's happening. 

Maybe a little bit micromanaging to what's going on, s looking for tools that they can plug in into their stack, and to help them with that. And so that's where we slot in. 

It's really [about] supporting the internal teams as they're trying to scale in their advertising.

Chase Clymer  

Absolutely. So you said supporting the internal team. So what I want to ask here is if we don't have any internal expertise, this doesn't replace the need for a subject matter expert on a team or contractor to be helping out, right?

Brendan Hughes  

Yeah. No, it works hand-in-glove. So usually, the person who uses our platform is comfortable in Facebook and/or Google worlds. So usually... 

And they're still building the campaigns there. We're an optimization solution. So you're you're you're living on Facebook and Google, building your campaigns, aligning your audiences with your creative, etc. 

And where Optily comes in is it gives you a dashboard where you can see everything across the different platforms together, because that's hard. That's either spreadsheets or maybe it's Data Studio, or maybe if you're in Power BI, or Tableau... 

So it can get very complex very quickly, putting everything together. And then what we do that's quite a bit different is we're very agnostic. 

We don't care whether you're spending money on Facebook or Google. We're looking at your campaign based on your goals. 

So my goal is to maximize visibility right at the top of the funnel. So here's all the campaigns from across the different ad platforms that are doing that. 

Now how are they working together? Which is most cost effective? Which is driving the highest click through rates? 

And between those campaigns, where should I be spending more time and money? 

So I sometimes describe it as it's a bit like if you're in the Facebook world, we treat the different campaigns and the different platforms as if they were ads, ad sets within the Facebook campaign.

And if you're in the Google world, and it's probably like, yeah, it's just keeping different keyword groups. So we don't care that it's Facebook and Google, Instagram or whatever. 

And so we're trying to just break down the barriers between the big platforms and actually have them playing off each other a little bit. 

"Hey, I'm getting better value from this YouTube campaign today. I'll put a bit more money into that today. And I'll take a little bit of money from Instagram because  it's not doing so good today."

Chase Clymer  

Absolutely. And I'm glad that you highlighted that because I feel like some founders are always looking for shortcuts, especially with marketing strategy or just advertising in general. 

And I really want to just harp on. There's nothing that will that will help if you don't understand the core principles of it. 

You still need to have that understanding before you can make it work for you. So I appreciate you diving in there and  laying down the wall, I guess.

Brendan Hughes  

Yeah, No, actually... I'm about to say I think part of it is... As you probably will, if I'm speaking with a founder or marketing and directors who's interested in our product. 

Before I go talk about the product or selling the product, I have one slide and we talk about strategy. And we talk about funnels. And we make sure that this makes sense. 

And if people don't buy into that and the need to invest, then it's probably not the right solution for them.

Chase Clymer  

Absolutely. So you have an offer that you wanted to share with our audience today. I'll let you give the pitch before we go here.

Brendan Hughes  

Yeah. So look, our software is self-service. It has a 14 -day free trial. You can simply connect within 2-3 minutes, connect your Facebook ads and your Google Ads analytics accounts and you get free insights. 

So for all of your listeners, we're delighted to also add in an extra 15% discount on their first year with us. 

And a free 1-hour ad strategy consultation with one of our ad strategists. So the link will be in the show notes. And yeah, the lifestyle for that to all of your listeners.

Chase Clymer  

Absolutely. Brendan, thanks so much for coming on our show. And I can't wait to talk to you next week and jump on yours.

Brendan Hughes  

Yeah, looking forward to it, Chase. Thank you for your time. 

Chase Clymer

Alright. I can't thank our guests enough for coming on the show and sharing their knowledge and journey with us. 

We've got a lot to think about and potentially add into our own business. You can find all the links in the show notes. 

Make sure you head over to honestecommerce.co to check out all the other amazing content that we have. Make sure you subscribe, leave a review. And obviously if you're thinking about growing your business, check out our agency at electriceye.io. Until next time.