Episode Transcript
[00:00:00] So finally we reached a certain point of having 800 billion. The global market being for e commerce fashion brands. And I'm not talking only us, that's in the whole world. The percentage of rise actually was around 10% and now it's growing in the US at around 20%. We finally beat the 2020 peak that we had back in the pandemic and we are actually growing very fast. So what does this mean for us? Well, in reality it means that we have to adapt and we can grow as fast as possible. We around 2050, 100, 200, 1000% each month. But that's not all simple because actually the statistics show that not much strategy and expansion has changed for consumer brands and especially fashion brands since 2019. They're treating the Facebook ads, talking to the customer and communication in general the same way they did around six years ago. Of course, it's a huge, huge problem that you have to deal with. So we also see that around 95% of budgeting and tracking has been wiped out by Apple's new invention of actually limiting tracking. Of course, you have heard this everywhere. The tracking has made it much worse. But Facebook also adjusted since 2025. You cannot target interest anymore the same way you did before.
[00:01:24] The way it works now is that there's Advantage plus campaign that you have to focus on and you have to use. And there are many other things in Facebook tooling that you can use now in order to really boost your performance of your ads without specifying what exactly the customer did in other apps without the tracking. On top of all that, we see that the average rows right now for fashion brands is 2.89 very low, while at the same time the ones who are performing and growing and in the brands they have ROAS of 8 and 8.5 and above. So you can imagine the difference when you're spending around three times as much and getting three times as much value out of your ads. Of course, how you do that by actually focusing on smart things in your ad campaigns instead of brute forcing your way through the ads with actual budget. So what am I talking about? First of all, we're going to have the first segment of the foundation. Why? Segmentation, especially in Facebook marketing, is super important right now. And also later we'll talk on how you can use it in order to basically boost your rows and boost your performance and adjust. Later we will talk about other things like for example, which segmentations you can use, what I did and how it worked when I exited my 100 million exit in E commerce. So it was pretty good.
[00:02:43] So what do we have? We have first of all the 10 billion problem. Metalost this much is estimated 10 billion by actual iOS changes. With the tracking, not only Facebook lost 10 billion, they actually have much lower performance overall because of that changes.
[00:03:03] Overall 10 billion is a small amount. If I think also 73% of Gen Z are buying online. That's much higher than any other segment of the population, especially baby boomers who have all the money because baby boomers actually prefer Amazon for a. So our E commerces basically are useless to them because they cannot and won't buy from us. And of course that's a good thing that Gen Z is growing and they're buying more. The problem is is that only 40% of them show loyalty to a brand which they buy from. What this means they means they can switch brands very fast and it's not only interesting to them to try different things. It's hard to keep them around to keep on buying. So the other thing is the segmentation shift. I think that the AI driven advantage post campaign in Facebook has basically tackled all the questions I had about segmentation. Right now if you don't segment, you're actually losing out to those who do and use it correctly because Facebook is pushing it so hard. They even removed ways to target without segmentation. So if you're using their Facebook ads the same way you did a year ago, they're already wrong. You all have to change them.
[00:04:17] So let's see which actual thing you can think about. So look at your Facebook ads and check in your CRM. Do you see the same type of people buying right now as you had a year ago? If it is, then you have to change your advantage post campaign to match the new criteria for your existing audience in order to boost it. If you have a different audience who is buying your product now through Facebook ads, try why are they buying? What is the roles, how are you targeting? Are they your target audience? Have you spoken to them and try to adjust based on that. The second thing is are you still trying to narrow down your Facebook ads by using targeting specific interests, anything like that? If you are, stop it, restart your campaigns and try a different approach or if they're working for you, don't stop them. Try a new approach with another Advantage plus campaign or something else and see if it outperforms or it doesn't and learn from that.
[00:05:13] There is also actual Facebook AI that they promise and I have seen that work really do the heavy lifting of segmenting your audience and looking for Those who have interest. Because Facebook doesn't see much anymore, it only sees things inside of their apps. And for WhatsApp, Facebook and Instagram are basically the main sources of this information.
[00:05:35] So what Facebook can do is actually use that with AI to give more specific interests without relying on outside data. So of course it's going to perform much better. So the next thing we're going to talk about is the free tier foundation of segmentation. So what I mean by that, we have the foundation audience, your safety net, that's around 40% of your actual ad budget should be spent on these customers. Those are the customers who actually are very much buying anything online and especially in your shop. I think that those who buy in your brand should be around buying 5, 10, 20 times and retention being 5, 10, 20 times before they churn. And what does this mean? It means that you have to spend 40% of your ad budget, total ad budget, just on those people.
[00:06:28] And how do you do that in Facebook you can specify by tracking the actual conversions that the person has bought and exclude those that didn't buy. Right. So you basically are focusing your ads, your campaigns and Advantage plus campaign on exactly targeting this exact audience.
[00:06:46] Then we have the growth audience. So those that are lookalike to our customers, we basically put the lookalike base in there and we specify that they haven't bought yet. Right, It's a growth audience and you allocate around 35 to 40% of your ad budget to that. And what you basically get is audience who is very much like your already existing buying audience, but they haven't bought from you and you target specific their questions, problems, pain points to switch from existing brands, you know, because Gen Z very much like to switch to your brand, that's very important. And then we have the discovery audience, which is your future customers, which is around 25% of your ad budget. Again, what we're doing is we're doing broad demographic, not really specific, not really specifying anything. And we have the performance and Advantage plus campaign to those who have not bought. So we exclude those who bought and we're not doing anything else, no lookalike, nothing. We just let Meta find the customers and show them ads. Here we can be very broad, we can test many different creatives, we can actually change the content to be influencer, integrated, udc, integrated, anything like that, anything you want to think of. The problem is that you're not specifying the interest because Meta's AI always will do it for you.
[00:08:05] So after that we actually really try to Focus you on writing down 12 narrow audiences that you want to target for your ads for your business. Why 12? Because on average we think that restarting your ads on 12 segments is actually the best way to go about testing your audience. Because you never know what Facebook AI actually thinks of your audience. Do they consider them a luxury buying or a cheap buying? You don't know. So you work you do is you write down what exactly is your audience. You do it 12 times and then you try with different creatives for this exact audience in a narrow scope of for example all buyers in us who are female. Right. If you have a female fashion brand then what we have is we actually have a case I wanted to show you. So first of all we have a menswear transformation blueprint where we see a very significant increase in rows. We see on very much high improvements in all of the data with which goes with and that's very easy things.
[00:09:09] It's called the C think do implementation. So C is awareness. We use Advantage plus campaign where we basically do a broad fashion interest in without knowing specific specific by doing just creative that is interesting to our audience. Then we do the think consideration. We do retargeting website visitors with social proof and egc.
[00:09:32] All right, we have different ads to exactly those who visited but didn't buy. And then we have conversion high intent audience. So it's cart abandonment product view with urgency driven creative. So for example sale offer to them with the for example a specific gift or a bundle they can buy or anything like that. And on top of that the best thing is you also do content, organic content in your reels, in your Instagram, in your Facebook, in your TikTok where the customer will see it because they have interacted with your ad. And if it's good enough content it will be pushed up to the exact audience that you target your ads to because your account already linked to your ad account. So what you have is basically free engagement with free organic content that other people like. They see the likes, comments and shares and that how they purchase.
[00:10:21] Then we have specific results I would say month one to increase the basically to implement this campaign. And we'll usually see around 11% increase in revenue just from implementing this. Then in month six we see actual insane sales compared to any year before because new customers are coming who are engaged and want to buy. And then we see an X Ross for this exact approach because of retention and customer coming back. And of course creative strategy is always very important. So you want to be organic to your brand. You want to understand how why the customer is buying. You want to understand there are jobs to be done. But overall, just implementing the simple things of adjusting your strategy for your ads budget and for your ad campaign will improve your work significantly.
[00:11:10] So the second thing that we have in this part of case study is scaling strategies by business size. So of course if you have for example, let's say a budget of $1,000 to $3,000, which is the lowest of budgets you probably can have in a fashion brand right now, I suggest, and we have seen this work much better, is to spend around 60% on remarketing to those who visited, to those who have had card abandonment, product view or even purchased. Right. 60% goes to this. Why? Because getting the customer back is around 10 times less expensive than getting a new customer on our way. In fashion brands, in fashion DTC brands, 10 times cheaper. The next thing is you spend 40% on prospects.
[00:11:58] So don't overstegment with small businesses because you don't know who is buying and how to do ads right now. And even if you're doing agency, forbid them from over specifying your audience. Because if you're spending 40% of $1,400 per month, you're basically trying to get as broad audience as you can to try it to see to Facebook to learn who is your target audience. Because if you overspecified, you will not get any clients. Facebook will not learn and you will not get anywhere. So make sure to do that. And of course I think the audience should be around 500k in your Facebook interface in the ads interface. Otherwise this strategy will not work.
[00:12:40] Then once you get to $1 million in revenue, annual revenue, of course, I suggest increasing your ad budget to around 10 to $25,000 a month.
[00:12:50] If you are for example doing, if you think about calculating it, it's 120,000 per year to 1 million in year in revenue. You have a good ROAS here already if you for example, manage that. So I suggest increasing to that amount and not going above. Because what you're trying to do, what you should try to do is get the ROAS to 8 in order to really drive your traffic before scaling. So what do I mean by that? Before you have $5 million in revenue in America in US Inflection DTC brand, you only trying to get product market fit. If you have lower, you are not relevant. You don't have clients, you don't have a perfect business. You're just a small business who is trying to find the customer. And you don't have loyalty customer as well. So why are you doing that? You are doing dynamic ad products on around 40% of the budget. Again, it can be retargeting, it can be prospects and retargeting. You can see for yourself because on that scale you have enough products to do dynamic products which actually improve your roas and conversion by around 40%. Especially in retargeting it works very, very, very well.
[00:14:01] Why? Because you actually try to focus on the audience who already seen the product, add it to cart, bought it, maybe need to buy it again or a similar product that they already see in your branding and in your collection so it works much better. Why that matter? Because now you're scaling past the 500 like I said and going to 5 million people. You're expanding your broad audience because you're not doing interest, you're doing advantage plus campaigns and so you're trying to target them as much as possible.
[00:14:30] Next we have the $10 million stage. I think that this is actually enterprise already for fashion brands because what you need to do, of course keeping it clean, like I always say, don't make it more than around 10 people or maybe 20 people maximum in your team once you're 10 million because the cost of hiring people will eat everything up. And e commerce we to be lean especially right now. So what you're trying to do is you're doing customer data platforms with syncing with real time audience insights for your customers. You can do anything. I use Tableau, I use it together with Shopify, CRM and with Salesforce sometimes. So we are mixing and matching it. But at that point what you need to know is really drive forward what your customer is doing. There are Northbeam I think they call the platform which many e commerces use right now that also give you insights into your ads based on the customer. So you can use that and there are many others. But what's important is to get insights from your data, from your people, from those who are coming to your website and actually working with them, improving them, improving their experience, improving their retention, LTV and working with data to make a new collection, to run new ads, to make new creative, to hire people to improve your performance and everything like that. So on scaling mistakes that we see is people only run Facebook ads. I think that if you're not running email, SMS and many other retention tools, you will struggle to retarget and work with your customers until any point. I think that as soon as you start your business, your fashion business, you cannot rely on Facebook marketing alone. You should rely on emails, sms, talking to your customer, content, blogs and everything like that. Because if you're not most likely your roles will be lower, you will have much worse experience and in general you will not survive most likely. On top of that, if you don't have referral product and you're not asking constantly people your customers to refer your churn, people who just forget about your brand or don't want your brand or change countries or anything like that will be much higher than the new customers coming in and you will struggle to keep up. So a referral program is insanely important, even if it's not giving much money to your customers. Maybe it's free.
[00:16:51] Just asking for referral is already a first step to getting somewhere.
[00:16:55] Campaign budget optimization is very important. I think that understanding how it works is very important. We see many successful campaigns actually using that and without it, most of them actually don't work. And frequency gap is also very important. So ad fatigue is a thing in fashion. So understanding how it works and how you can make decent and good ads constantly and updating them and improving them is very important because most likely you're showing it 10 times times to your customer before the ad stops showing to him. So you need to make sure that you actually have new ads constantly. If your ad budget is high, 10 times in a month is super easy to show to a customer, then we have the algorithmic updates in 2025 and what they mean to you. So again, Advantage plus automation showed us 28% lower CPC and 7% lower cost per conversion. And I'm not only meaning the purchase the cart as well, view page, anything you want. So we've seen a very good improvement in that one to you using Advantage plus.
[00:18:02] Maybe Facebook is doing that because they want to push the advantage so to get more data. But for now you can use that to improve your business. The creative prioritization is very important.
[00:18:15] I mean it has been for five years since COVID or since even before that 2018 when TikTok arrived with a new short form thing. But if you're not using and you're not creating short form content, you're missing out, you're doing something wrong. And most likely you're not really understanding your customer because your customer watches short form content. Everyone is Gen Z anyone? I see too many people in a subway, in a train, in a taxi, in a coffee shop, in a restaurant watching videos and it's crazy. My most successful people, friends or just acquaintances who have huge businesses or they work corporate C level, they all Watch short form content and sometimes I see them watching cooking shorts when they are supposed to doing work, you know. And it's crazy to me because I thought that short form content six years ago was just for kids. Now everyone is doing it, everyone loves it, everyone wants to watch something interesting. And it's a pattern that is so embedded into our life that if you're not doing short form content, I mean you're doing something wrong. You have to understand it and you probably do.
[00:19:20] I hope then we have attribution improvements. So incremental conversion tracking showing is around 20% better performance on ads. And if you don't have all of your conversions set up in Facebook, in Google, in any system that you use for tracking in Tableau, you have to set it up. It's very easy, not that hard. Even if you don't know how to code, if you don't have a coder, you can use no code tools to actually implement that. GTM Google TrackManager also actually supports that and helps you with that. So make sure you have that set up. Of course a B test, I'm not even talking about it because everyone should be ab testing all their pages, all the things that they have. So it's super important. Then what we have is.
[00:20:07] Yes, we have of course already done test advantage pass right where you have to test it. Then we need to do video creative production to improve CTRs with quality videos. What you also can do is try to take your best performing organic content and try to use it as an ad by adding a CTR at the end by asking a person to purchase and then implement the Facebook pixel and conversion API for complete tracking so you can retarget correctly again. Audit all your ads campaign, check that you're doing everything right in next seven days. Create your free tier audiences framework with proper budget allocation like I said try see thing do campaign that I asked. And in 90 day I think you can fully automate and integrate scaling optimization in order to grow your fashion brand. Yes, and I think I also wanted to talk about a little bit order value and how you can make it so that when you have a customer and you have a customer acquisition cost of $100 and the benchmark right now is 42, what you can do is do actual average price order to increase that. Basically what I mean that let me rephrase. So you have a hundred dollars cost of getting a customer. If your order is $300 per customer on average and your margins are around 30, 40%, you're basically not really earning much because your ad budget is 30% raw is free.
[00:21:44] As again we said you need to be at least at 8, right? So you need to cut it down. How you can do it of course by improving your ad budget, but also you can improve it by increasing average order value.
[00:21:55] So instead of letting a customer buy one thing, make him buy more. How we can do that? Social engineering, conversion rate optimization in a product page, add more things, Add different things right next to the size button, right next to add to cart button. Add different options. I really love how Ridge is doing it. If you go to Ridge website when you're in their product page, you have hundred options, what you can add. There are bundles, there are different things you can add. When I was trying to buy something, I had a $40 wallet or $50 wallet. But at M it was $500 order because I added magnetic strip, max safe and something I think like pickpocket. Basically a lot of things I added into that and it was a $500 average order and I didn't know how I got there. So what you can do is with your customers do the same. Because I wanted to buy all those things when I was choosing them, but then I realized how much more expensive it was. So when you're selling a T shirt, add, I don't know, pants, add the sweater, add shorts, socks, underwear, right next to the choice. Because you with the data will understand what people are buying with what. And so you can increase average order value by adding it to the cart, adding it to product page, adding it to checkout, to everywhere in order to boost that, in order to lower how much percentage the customer cost is actually costing you in the grand scheme of things. So that's super important. Now of course, emails with additional offers, SMS with additional offers to increase that and to keep them coming back, even if it's not first order, second, third, fourth order, just make sure they do them instead of relying on a first order paying for everything. And I think that if you like this and you think that this actually is very beneficial to you, you can always come to me and I can help you implement this. Again, I don't run and my team doesn't run Facebook ads. It only suggests and only gives you strategy and outlook and everything about your Facebook. We don't run Facebook ads. We're not marketing agency. But we know what you need to do and we know what your marketing agency, who is running your Facebook ads or your expert, what he needs to do. Because in most cases they are trying to maximize their value for the time, not your customer value for the time. So make sure you work with them. And if you want to work with me and with consulting with anything I talked about, you can always write to me or connect with me on LinkedIn and you can check out my website below as well.
[00:24:32] And I think that if you're trying to scale your business, there are so many things to do in E commerce. Make sure that you first of all be lean, then focus on your Facebook efficiency and then work on retention. I think if you do those three things, you will scale without any problems. Thank you. And I hope I see you next week in the episode where I have something really exciting prepared for you.
