Issue 27 - How to up your ad creative game

And why ROAS might be killing your business

Author

The DTC Times
August 18th, 2024

Summer is starting to fade and Q4 is on the horizon. 

Shopping season. Black Friday. 

A time when a lot of consumer brands make serious bank. 

We’re going to help you start getting ready this week with deep dives into how ad creative frameworks and how to balance efficiency vs growth in your business.

Also - a word of warning to Amazon sellers from Sean Frank and an easy way for you to find your Facebook ad post IDs (check out quick hits). 

And, of course, the newest way Meta ads manager is driving people nuts.

This week:

Framework for DTC ad dev

As David Hermann says in his most recent update on ad performance in DTC, “Creative is still king”. 

Recommendation? A rapid-fire creative team that will provide speed and variety that goes beyond hooks. 

Which is great, but if you don’t know what you’re looking for, it can be a waste of time and money.

Let’s unpack this a bit…

Emotion

Seth Godin put it best when he said the customer isn’t really after the drill bit, nor even the hole in the wall, but the emotion they’ll feel when people see their beautiful plants on the shelf. 

As Peter notes, “This is the intrinsic motivator, the key reason why someone buys”. 

BTW, if you’re interested in the psychology behind purchasing, we recommend Katelyn Bourgoin’s Why we Buy newsletter. 

He shares 11 research-backed emotions that may account for 95% of purchases. 

This is a great list to start from.

Of course, there are 100’s of emotional motivators, and don’t forget to consider the dark side (e.g. fear, anxiety, insecurity etc…). 

Your customer reviews are a good place to look for what emotions and the desired end state your target audience associates with your products. 

Peter’s recommendation when building creatives is to ask yourself: “will X help make them feel ?”

Angle

The second layer. 

A combination of how they will achieve the emotion and why they should care about your offer. 

Usually in the form of: thanks to  

For instance, if your targeted emotion is “standing out”, you could emphasize your product’s flashiness, novelty, and/or superiority. 

Peter explains that the customer’s inner voice should sound like: 

“By buying X, I will feel Y, and this will happen because of Z benefits, made possible through N features."

Concept

This is how you package the angle. 

This can take many forms, but 

  • What story are you telling to get your angle across? 

  • What framework are you using to present the emotional angle?

  • Are you using humor, education?

  • Is a personal tale of transformation, an unboxing event, a testimonial leveraging social proof?

Here’s when a great creative strategist comes in handy. 

Production

What level of polish and quality will the ad have?

High production conveys authority, but low production can be more relatable, especially on social. 

Remember to match the production level to your concept, the target demo, and the chosen marketing channel. 

Medium

Video, GIF, animation, photo, carousel… 

Which form your creative takes should match the preferred method of media consumption in the platforms your audience spends time on. 

However, if you want to expand past a single medium/platform, Peter recommends sticking with the winning angles you’ve found and adjust the medium accordingly.

Capturing the zeitgeist

The final layer. 

Touching upon a trendy topic can really help catapult your ad to the top and potentially go viral.  

However, this could also limit its success in time if the trend is a flash in the pan. 

Creative that sticks to timeless fundamentals of storytelling and entertainment often perform longer.

Takeaway: If you’re a DTC brand looking to advance beyond the product market fit phase of your business, then creative volume and diversity in your advertising is one of your key growth levers. 

That means taking your creative development seriously and understanding the broad frameworks that go into winning ads. 

Bonus: Peter also has a creative planning sheet for you if you’re interested. 

The ROAS rollercoaster

Preston Rutherford recently demonstrated why an excessive focus on ROAS in your business can lead to negative outcomes. 

Why?

Initially, your business (hopefully) has untapped demand. That means every ad dollar spent is both high in efficiency and clear incremental lift (purchases that would not have happened without marketing). 

Far enough along the line, you’ll have satisfied all of this demand. You’ve essentially burned through your early adopters and low-hanging fruit. 

What now? 

You need to shift to actively creating demand. This is typically more expensive and therefore less efficient, but will have high incrementality. 

So if all you do is prioritize ROAS, the target will remain your existing customers. You’ll either have to throw higher and higher discounts at them for them to keep buying, or you’ll simply saturate your customer base. Either way, no brand can just endlessly tap their existing customer list and grow. 

Even worse, once you’ve established a persistent “wait for the sale” behavior, your new customers will likely be acquired through discounts too. 

Their LTV will be automatically lower. 

You’ll be under more pressure to get repeat revenue from them, which means you’ll need to hit them with more discounts. 

That’s a vicious circle. 

So, what’s the fix? 

You need to understand and measure the impact of advertising on other metrics of your business, e.g. customer quality, retention, and LTV. 

Preston proposes: “180-day contribution LTV dollars from full-price (non-discounted) customers” so that you broaden your view of your business beyond day-to-day ROAS.

Takeaway: DTC operators need to strike a balance between creating a high volume of in-market demand (feeding the funnel), efficiency of spend, and leveraging existing customers/bottom of the funnel. 

If you’re focus is excessively on the latter, then the former suffers. But if you spend too hard and too much on creating demand (which is costly) your company will run out of money. 

We recommend reading Preston’s post. It’s great.

Sean Frank’s Gripe With Amazon

Sean Frank sells cool wallets. 

Amazon lets people from around the world (but mostly China) sell cheap knockoffs of his wallets. 

So Sean is naturally unhappy with Amazon. 

TL;DR Amazon doesn’t benefit from protecting IP holders, it profits from competitors launching ads around good products (like Sean’s). 

Even if you have an International Trade Commission ban on importing rip-offs of your products (as Sean does), Amazon will hit you with a “DON’T CONTACT US ANYMORE”. 

Sean’s sign-off message was gold, too. 

Takeaway: Amazon remains a big opportunity for DTC companies. Practically every American uses it to buy stuff. It’s an e-commerce juggernaut that you can’t ignore.

But the opportunity comes at a cost. 

Aside from Amazon’s shifting fees, rules, and ability to shut down your product listing (or store) at any time, it is also awash in black hat sellers and bad actors looking to exploit gaps and incentives in the system. 

Even IP and infringement protection can’t necessarily protect you from nameless sellers skimming a bunch of demand off the top by selling cheap knock-offs of your stuff.  

Yet another bug caught by DTC entomologist Barry Hott. 

Dave Rekuc from Bambuearth adds:

Takeaway: Meta is high maintenance. But you know that already.

Keep an eye on this space as we continue to catalog bugs as they pop up.

Quick hits

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