DTC 22: 📦 Monolithic Profits
May 21, 2023
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Greetings earthling. Have you noticed all these weird DTC Monoliths showing up all around the USA? In the movie Space Odyssey 2001, the monolith appears when species are ready to evolve to their next form. 

DTC monoliths, like this one in Utah, bode well for our readers, as they signal that the world is ready to level up their customer acquisition practices by reading our newsletter. 

Did we mention you’re in epic company? TWENTY-FIVE of the world’s Fortune100 CPG companies subscribe to DTC Newsletter along with baller agencies like Barbarian, Hawke Media, and up and coming brands like Tide To Table, Lovecrafts.com.

Ready to level up with us? This monolithic issue will impart to you:

📦 When, how, and WHY to use manual bidding options on Facebook Ads

📦 How to MAXIMIZE the holidays with the biggest takeaways about BFCM from Pilothouse’s Facebook and Amazon leads. 

📦 How to activate your GIFT marketing this holiday season

📦 An invitation to join our next Workshop: Standing Out on Snapchat

📦 Why bold experiments are the key to growth with Neville Medhora

Come for the monolith jokes, but stay for some juicy ‘Things We Loved” this week to learn how Warner Brothers just went full DTC and changed the movie biz forever 🤯)

How + When To Use Manual Bidding Strategies In Facebook Ads

Marketers have two choices in Facebook ads bidding; use automatic bidding (Facebook’s default setting), or choose between three bidding strategies: highest value or lowest cost, cost cap, and bid cap.

We touched base with Pilothouse’s FB ads wiz Nate to talk us through the difference between auto and manual bidding and how to activate these different strategies. 

What is Auto Bid? 

  • Facebook’s algorithm works to find you the lowest cost per objective you’re optimizing toward. It activates Facebook’s intelligence to maximize your budget, defaulting to the lowest cost per conversion. 
  • You’ll want to use Auto-Bid if you’re new to Facebook advertising, trying to determine benchmarks for your ad objective costs, or if you have a limited budget that you’re looking to maximize.
  • We find that this is also the most scalable bid strategy.

What is Manual Bidding? 

  • Facebook’s manual bidding strategies let you set a cost control against an objective you’re looking for. You set a cap on how much you’re willing to speed on conversion or objective, and Facebook uses your budget to achieve these goals. Manual Bid alters how Facebook uses your budget and can be activated to manage campaign costs and be more competitive. 
  • With Cost Cap, you give Facebook the cost per result (in most cases purchases) that you want to stay under - a good option if you need to stay within a certain cost threshold. The downside is that you may not attain your target conversions as Facebook will try to find conversions that sit within your cost cap and may not spend your full budget. 
  • With Bid Cap, you’re capping how much you’re willing to spend in any given auction. This strategy isn’t a favourite, but it can increase your competitiveness in customer acquisition. Also, this is another instance where your full budget may not be spent. 

Manual v Auto - What should you be using? 

Both! Cop out answer, we know. BUT it’s genuinely important to test all bidding strategies to find winners. 

Nate estimates that approximately 90-95% of his budget goes through the default bidding strategy. He saves that extra 5-10% for testing manual strategies.

If a campaign performs exceptionally well, he’ll build out a duplicate campaign and test it with different bidding strategies. This is an excellent way to scale horizontally. 

The main reason to override auto-bidding is to make sure you're covering all bases. Although most of your volume will come through lowest-cost campaigns, it's good to have alternate bidding strategies running to pick up conversions you may not have gotten if using only Lowest Cost (because you may not have won the auction with that strategy).

Nate also suggests that manual bidding is best explored for lead generation rather than e-commerce. Lead generation has fewer factors in play than instances where you’re pursuing an actual sale, so CPA is usually lower and target costs are easier to attain (which means different bid strategies have an easier time spending budgets effectively).

Also - there’s minimal downside to testing manual bidding if done correctly. Since the Bid Cap and Cost cap often have trouble spending your full budget, you should know fairly quickly whether or not the strategy will work (and if the budget is spending fully and not hitting targets, lower your caps). 

Bottom line: Never not be testing. YOU HEARD ME. It’s always worth testing different strategies, and worst-case scenario, you won’t spend too much money if your campaign isn’t working as Facebook won’t spend your full budget. Sometimes these explorations really pay off - you don’t want to miss out. 

BFCM Retrospective (PLUS: Maximize Q5 - the time between Christmas and New Years Eve)

As promised, we sat down with a full panel of heavy hitters from Pilothouse to break down their Black Friday/Cyber Monday 2020 experience. 

These all-stars offered a ton of actionable insights. Let’s jump right in: 

🚀 Value Rocket: Start 👏  Sales 👏  Early 👏 

The major BFCM trend of 2020 was the extended window for BFCM sales - no longer a weekend-long event, sales went all week at least - all month for some (one Pilothouse client launched a BF sale ten days into November). 


This year more than ever, consumers were primed for online shopping. They activated on presales and early access way earlier than previous years. Given the pandemic climate, everyone was already shopping online, so there was no need to limit yourself to the four days of the BFCM weekend. It’s Cyber Week now. 🤟

💥 2020’s record-breaking Black Friday sales

BFCM 2020 was a flip of the script. Last BFCM, Cyber Monday was the biggest sales day, but this year we had an unreal record-breaking Black Friday with the biggest sales we’ve ever seen for eight of our ten largest clients. 

For example, last Black Friday, a Pilothouse client saw double conversion rates over BCFM weekend. This year they saw triple - the only reason they could handle that scale was all the prep done for inventory, creative etc. 

💥 Power in planning: balancing prospecting & retargeting over BFCM

Our BFCM strategy this year involved a lot of planning - the Pilothouse teams had campaigns running in Sept/Oct to build up their BFCM audience. 

In the weeks/months leading up to BFCM, we focused on prospecting, building out lists so that we could then crank retargeting leading up to BFCM. The early fall prospecting paid off come November when they were able to crank their retargeting leading up to BFCM. 

After the early fall prospecting focus, our team realigned to a 70/30 prospecting to retargeting ratio closer to BF. Over the BFCM weekend, we noticed that our prospecting campaigns were converting a lot better and pivoted to a 50/50 split. 

For a few clients, BFCM scaled them to a new plateau, and Pilothouse is projecting an even bigger month in December, cashing in on that BFCM prospecting. Again, this comes back to strategic fall audience building, plus the prospecting push over the BFCM weekend itself to acquire an audience in a shopping mindset, primed to be converted over the holidays. 

Strategy-wise, it makes sense to accept a lower ROAS leading up to Black Friday. Then leverage your spend to convert your newly built audience over the BFCM weekend. A less profitable period in the early fall will pay off over BFCM and the holiday season. 

Planning is vital, but don’t be anchored by your plan. Don’t be afraid to pivot and be agile over the weekend - Nate saw 28% of revenue for one client come from ads made day-of. 

TIP: We start testing our sale strategies on earlier holidays (like Labour Day), so by the time it’s the big event, we know we have our best foot forward 

💥 Inventory 

One of the most significant pain points we had leading up to BFCM was 2020’s ongoing difficulty regulating inventory and the stress on logistics and distribution lines. This wasn’t an issue unique to us - brands everywhere were feeling the inventory crunch. 

We wanted to avoid a situation where we were succeeding and scaling only to be shut down by inventory issues. 

Overall we saw very few inventory problems as we encouraged our Amazon clients to go with FBM listings, using either their own fulfillment house or 3rd party logistics services. They had back up SKUs at the ready and were able to avoid selling out and losing rank. 

💥 A two-pronged approach to BFCM creative

There’s no need to pause your evergreen content for your BFCM push. Our team found that evergreen content often performed as well as BFCM specific ads and was able to scale both pretty easily with similar ROAS. 

TIP: Don’t worry about frequency too much over the BFCM weekend shoppers are flooded with a tonne of ads, so if they see your campaigns 4 or 5 times over the weekend, it won’t be an issue. 

💥 How to approach “gifters” and our 🔥🔥🔥  Amazon storefront 

On Amazon, our team is bidding on gift specific keywords and running sponsored brand ads. These ads go top of the page and have headlines like “Best Gift for Mum,” “Best Gifts for Dad,” “Best Perfect Gift this Christmas,” etc. These ads direct to a custom page based all around gifting with Christmas imagery, reviews and gift testimonials. This November, one of our clients is seeing  $100,000 rev with this strategy. 

And finally, here are some ideas from Pilothouse co-founder Kyle Hitchcox to ‘squeeze the rag dry’ in Q5:

Phew - this was a big one! Be sure to save and share this pod with your team so you can activate these strategies next year.

DTC+ members can head to the vault for a detailed summary of BFCM 2020 trends

Activating Gift Finders this Holiday Season

‘Tis the season to activate on product match quizzes, aka gift finders. 

Gift finders are exactly what they sound like — a quick interactive quiz to help direct consumers to the gift they’re looking for rather than having to scroll through a (seemingly) endless catalogue of options.

One brand that’s a pro at this type of experience is Boden. Last holiday season, they created a gift finder to help their customers find the perfect item for anyone on their list (including themselves).

Quizzes gamify and simplify the shopping experience curating assumption-free recommendations that match consumers to products they’re actually likely to purchase. Gift finders facilitate a seamless and intentional shopping experience, replicating the personalization of an in-store shopping experience. They are quickly becoming industry standard, just like the lead capture and exit-intent pop-ups.

Why are gift finders so powerful? 

Gift finders offer genuine value to both the customer and marketer. 

For the customer, quizzes entertain, educate, save them time, provide recommendations aiding their shopping process, and unlock benefits. 

For marketers, gift finders help make the sale while providing valuable data to better understand consumer needs to continually power greater personalization. They allow you to match, convert, and follow up. 

People often say that “context is everything,” and that’s never more important than during the holiday shopping season.

During these months, consumers are buying not just for themselves but also for friends and family members who have wildly different tastes and preferences. In these situations, basing your marketing on behavioural and transactional data often leaves you trying to sell the wrong product to the wrong person.

Who else has bought a gift for someone else and then had that product proceed to stalk you over display ads, email, and social media for months? It’s a bad experience for you, and it’s a waste of the brand’s marketing dollars because you’re never going to buy that product for yourself.

Quizzes capture and save information for better retargeting, circumnavigating this holiday shopping induced bad data pitfall. 

How to launch your gift finder 

The best part? This is a strategy you can activate today through Jebbit - no devs required. 

Here are some tips from the Jebbit team to optimize your gift finder  

  • Maximize quiz engagements - Allow unlimited consumer engagements and responses to enrich your CRM with qualified data and leads, and deliver more relevant retargeting messaging to more consumers. 
  • Prioritize data collection - Jebbit recommends a 4-6 question structure that either captures an email or appends data to an existing consumer profile. Use that information to generate audiences for social targeting, email, and SMS. 
  • Make Experiences Accessible - your quiz needs to be mobile-first to a bulletproof degree and accessible by any channel. One way you can launch a Jebbit experience is through a standalone link that will load within the walls of any social app or email platform your consumer uses for a seamless experience. But you can also launch onsite or on any other channel. 
  • Let Your Brand Voice Shine Through - Quiz finders are a chance to present your brand in a content-rich, beautiful way – make sure you have the customization abilities you need to ensure your quiz is an elevated brand experience. 
  • Self-Service is Paramount -  You should look for an agile, nimble tool that you can use hands-on. The tool you use should enable you to create the end-to-end customer experience, manage the data you’re collecting, and analyze all the reporting details.

We love that this is a strategy you can act on immediately - let us know how it plays out for you this holiday shopping season!

Next DTC+ Workshop

Have you been snoozin’ on Snapchat? The next DTC+ Workshop, Stand Out On Snapchat, is your chance to start leveraging the most powerful platform for Generation Z audiences (an audience that has a spending power of around $300B).

To keep things simple, we’ve decided to only sell these workshops through the DTC+ membership, so if you were on the fence, hopefully this makes your snap decision easier. 

Get on the waitlist for the next DTC+ Workshop now

😎 Keepin’ It Simple With Neville Medhora

Our pod guest this week is Neville Medhora, the brain behind copywriting agency and training business, Copywriting Course. He’s also the author of three books and an advisor to AppSumo, The Hustle, and swipefile.com. 

Thousands have viewed his training videos, and he currently advises numerous companies on making their copy awesome and increasing conversion rates across all the materials they produce. 

We know we have some big-time copy nerds in our audience - this one’s for you. 

✏️ Write exactly like you talk 

Why are you overcompensating tho? One of Neville’s key copy hacks is separating yourself from the need to use big words. 

We’re conditioned to include fancy words in our writing, but in most cases, they complicate the message. 

Aim for simple, succinct language that conveys information properly. If you write as you speak, you’re on the right track. 

The goal is to make the message so simple that you can’t mess it up - leave no room for interpretation. Drill down concepts to their core - get really granular and basic, and build from there.

✏️ An act-first approach 

Neville is all about putting out content fast and seeing what happens, rather than sitting on material and perfecting it before a release. 

*Perfectionists everywhere gasp*

This is something a few DTC team members are working on - and Neville provided an insightful hack: Think of blog posts as a living document. Once you’ve published it, you’re permitted to update it - it’s allowed! Give yourself some breathing room and permission to fail, and get your content out in front of an audience. 

✏️ The not so secret sauce to building your audience 

No surprises here - if you want to build your audience, all the strategies you need are just a Google search away. A relentless strategy of paid ads, co-promotions & collaborations, and giveaways are a proven formula. Bottom line: it takes time, money, and consistency. 

The truth is out there - no, really, just Google it. 

✏️ Creating content that pops 

Usually, the content that comes out and crushes it is doing something totally different. Neville has had success actually employing his suggested tactics and conducting experiments. Create content that demonstrates its value immediately, rather than just breaking down theoretical value. 

Here are some tactical ways you can make content ‘pop’:

  • Think of an interesting experiment you can run with your product right now - then do it. For example, send your product to 10 people for free and ask them to record their results from using it over the course of 1 month. They’ll be happy to have free product, and you’ll likely get powerful user-generated content.
  • Document the production process that your product goes through. Showing the detailed inner workings of what goes into your product can be a powerful differentiator. The classic example is when Schlitz Beer ran a 1900 ad talking about their filtration process. They thought it was nothing special because every other brewer did the same thing. But because they were the first to share this process, they were able to own greater 'mindshare.’ As a result, the ad catapulted their sales:
  • Catalogue the problems that your product solves. Positioning is all about hanging your product on a ‘hook’ in someone’s brain -- and people remember your product based on the problem(s) it solves. Once you’re clear on those problems, create simple case studies that show step-by-step how the product solves those problems.

Listen to the full pod for why your Amazon listings should have an image focus and how to jolt energy into B2B copy - plus, there are plenty of copy-focused tips sprinkled throughout the conversation. Enjoy!

Things We Loved This Week

🎥Movies: This week, in the biggest DTC movie news ever, Warner Brothers announced that its entire 2021 slate of films would be released on HBO Max. This means you’ll be able to watch The Matrix 4, Dune, and SpaceJam all in your jammies on the couch. The move, which apparently caught the other major studios totally flatfooted, signals a seismic change for the entertainment industry and is a devastating blow to theatres everywhere. Follow this upheaval, as massive change means massive opportunity (and lots of unemployed creatives.) 

⭐️ 2021 Social Media Predictions: As 2021 approaches, most social platforms (sorry, LinkedIn) are continuing to push for e-commerce integration. Instagram and Facebook are well on their way with Shops and Marketplace, but Tik Tok and Snapchat still have a long way to go. Bytedance (owner of Tik Tok) had until December 4th to sell the app per U.S order, but that day has come and gone, and the White House plans to take no immediate action. For now, Tik Tok can relax, but we're expecting big e-commerce moves from them in 2021. 

👹Ryan Reynolds & Match: In case you haven’t heard, Ryan Reynolds has been on a tear with his ad agency Maximum Effort. Their newest piece with Match.com is perhaps the most 2020 ad we’ve seen yet. Check it out

🧛‍♂️ Dark Arts: DO NOT DO ANY of the things in this article/video about Dark Patterns, which are tricks used in websites and apps that make youdo things that you didn't mean to, like buying or signing up for something. We only highlight these so you can know to avoid them like the plague. 

😨Logistics Nightmares: Okay, so we don’t exactly Love” this, but it’s crucial we highlight the shipping concerns many DTC brands are facing as BFCM passes and Christmas and Hanukkah approach. Web Smith of 2PM writes, “There is credible concern that shipping lines are further disrupted as big-box retailers, direct-to-consumer brands, and distributors of vaccinations converge on an already strained capacity.” Many analysts believe companies will start offering discounts on future purchases, free events, loyalty benefits, and more in order to slow shipping expectations. For more, check out this thread

🦷Quip Launches Gum: The oral health powerhouse launched a sugar-free gum line in a sleek dispenser that some are calling “ a modern-day Pez dispenser.” The only thing missing is Santa's head. Refills come in packs of 9, 18, or 27 and are delivered in a recyclable paper box 🌍. 

🧵Influencer Equity: For many start-ups, distribution is a major pain point. Facebook, Instagram, and Adwords help solve this challenge but are increasingly expensive. As creators start to become celebrities, start-ups are beginning to think about life without FB, IG, and Adwords (gasp). @ianrborthwick writes, “Suddenly, startups could avoid the Facebook & Google tax by partnering directly with creators. The problem: prices aren’t cheap.” While creators deliver a massive boost at launch, a sound FB, IG, and Adwords strategy is crucial for long term success. 

🍗 From the team that brought you KFC flavoured edible nail polish and the KFC scented yule log, now comes a new original Lifetime mini-movie, A Recipe for Seduction, starring Mario Lopez as Colonel Saunders.  KFC describes the 15 min flick as “full of mystery, suspense, deception, “fowl” play and - at the heart of it all - love and fried chicken.” Catch the premiere of what will surely be the cinematic masterpiece of our lifetime, Dec 13th. 

🛍️ DTC-Trend: From The Verticale to Co-op Collective, more and more companies are trying to "re-invent the shopping mall" as a digital-first experience. These online marketplaces aim to curate the best digitally native brands for customers to know and trust all in one space. As this trend grows it will be interesting to see if one player emerges as the dominant go-to source to find new brands.

🌎 Macro-Trend: Stripe is launching a groundbreaking API that will allow platforms to have bank-like relationships with their customers 💸. Shopify has raised its hand✋ to be one of the first businesses to participate and will offering personalized financial products to merchants starting soon. This furthers the macro-trend of the financialization of everything.

🚪Find The Side Door: Back in September, Tim Ferriss shared a chapter from Guy Raz’s new book: How I built this. The chapter highlights a quote from Peter Thiel saying, “If you’re the founder-entrepreneur starting a company, you always want to aim for monopoly, and you always want to avoid competition.” One way to accomplish this is through a “side door.” It’s the door or route that no one thinks to take. Early on, RXBar utilized this approach, selling in CrossFit gyms instead of grocery stores where the competition was extremely high. Read more here

🧵Best Brand Tweets: Twitter marketing (@twittermktg) released their “Best Of Tweets” from 2020. The list includes big guns like Gatorade, Uber, and Verizon, but also highlighted a small business in Chicago called “Manny’s Deli.” The family-owned business won “Best campaign that rallied their community.” Proof that one Tweet can save a business.

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