Listen Now
In the debut of The DTC Hotline, Richard Gaffin is joined by Tony “The Chopper” Chopp (VP of Paid Media) and Luke “The Weatherman” Austin (VP of Ecommerce Strategy) to take real questions from ecomm. operators and ADmission members. No fluff, just unfiltered answers.
They tackle:
- Why your Meta cost caps aren’t spending (and what to do about it)
- How much creative is really “a lot” in today’s ad environment
- The best tools for competitor research and ad spying
- What to do when LTV is low and repeat purchases are rare
- When to launch a new campaign vs. just adding creatives
- Why AI is more valuable for strategy than production
- The truth about when (or if) ecommerce is “getting better”
Call, text, or listen in … this is where your DTC questions get answered in real time.
Show Notes:
- Call or text us: 866-DTC-2263
- Explore the Prophit System: prophitsystem.com
- The DTC Hotline mailbag is open — email us at podcast@commonthreadco.com to ask us any questions you might have about the world of ecomm
Watch on YouTube
[00:00:05] Richard Gaffin: Alright everyone, welcome to the DTC Hotline. Call or text, 866-DTC-2263 to get your burning ecomm. questions answered Our operators are standing by now, we've got coming in live from CTC HQ in Costa Mesa, California. Mr. Tony Chopp “The Chopper,” our VP of Paid Media here at Common Thread. He'll chop it up!
Next to him is CTC’s VP of Ecommerce Strategy. Mr. Luke “The Weatherman,” Austin … “The Weatherman” because he's so damn good at forecasting. What's going on, Luke?
[00:00:32] Luke Austin: I am ready to jump into the most burning questions that exist out there, Tony and I, the chop man are here for it.
[00:00:40] Richard Gaffin: That's right. Alright, so here's how this works. So we get questions from listeners as well as questions from members of our admission, which is our ecommerce training subscription service here at Common Thread. So we get those questions. We let these two Mad dogs off the leash at themselves.
I'm not gonna waste any more time. Let's go into our first question. And guys, this question is one that we get from a lot of people a lot of the time, particularly with smaller accounts. But also this can be an issue with large ones as well, which is that my cost caps aren't spending. Despite the fact that I'm adding lots of new creative, what should I do next?
[00:01:11] Tony Chopp: Ooh, I got a hot take.
[00:01:13] Richard Gaffin: Okay,
[00:01:14] Tony Chopp: don't have enough. You don't have enough data, you don't have enough signal. So hot take we love seven day click super tight attribution. If you're not spending significant amount, 50, 70, a hundred thousand dollars a month. You need to look at something like seven and one to get more signal into the platform and so you don't burn yourself.
You need to get into incrementality testing to understand what the impact of that is on your target setting. take. What do you think, Luke? How am I, did I just light a bunch of money on fire?
[00:01:49] Luke Austin: It's, it's fantastic. I'll build, I'll build upon that foundation. No disagreement there. And Richard, who is this question from?
[00:01:55] Richard Gaffin: This is from just one of our admission members. So this particular one, and I will say this is aggregated across a lot of admission members because again,
[00:02:02] Luke Austin: Yep.
[00:02:03] Richard Gaffin: brands, they run into this issue, particularly with smaller budgets. So yeah, so I think from that lens, like what advice would you give?
[00:02:09] Luke Austin: So a lot of creative that that phrase right there everyone would define differently.
[00:02:18] Richard Gaffin: Mm-hmm.
[00:02:18] Luke Austin: people, a lot of creative might look like 50 ads a month. For others it might look like 500. For other brands, it might look like 5,000 ads per month. Look at some of the brands out there in your industry or vertical.
That you are seen as successful, you expire to be like or growing to be. Look at what's running in their Facebook ad library. Look at the volume of ads that they're running. You could do this through a few different ways, but a ads library is a great way to get there and you'll likely see hundreds of active ads within their accounts.
And then what we see is for the brands that are. Consistently putting pro, putting up profitable growth on meta. There are thousands of ads that they're launching every month that's contributing to that. So a lot of creative means very different things. I would wager that for most people that feel like they're launching a lot of creative if they were to stack it against some other competitors in the space they, they likely aren't aren't close to the level of, of creative and the volume output related to those brands.
So give your camp, give your campaigns more signal. Like Tony said and then give them more creative. And then the third, the last thing I would add in is once you've done those things. You may not be able to media buy or creative your way into the outcome you're looking for. There are other signals at place in the auction auction.
One of the core inputs in the meta auction is expected conversion rate on every click that you're getting out there. So you may be seeing high interest, high click-through rates, all the things leading to a low ECR, and those ads and the campaigns are being throttled as a result because meta sees a low expected conversion rate from each of your campaigns.
That is going to be more related to the offer strategy, where you're driving people, how cohesive the landing page destination is to your specific ad landing page. Do you have specific funnels built out? Is everyone just going to a generic collection page? Is there a bundle or an offer that you could be positioning to change the expected conversion rate equation in a higher lever impact outside of giving the campaigns more signal, giving them more creative volume?
[00:04:15] Richard Gaffin: Okay. So actually that leads nicely into the next question that we have here, again, from another admission member who was asking the question, what's the best tool? For competitor espionage in this space. Right. So you mentioned, for instance, meta Ads library, like looking into getting a sense of the volume that your competitors are pushing based on what's in there. But what, yeah, what other tools exist? What do you use to get a sense of what's going on in the space more broadly?
[00:04:42] Tony Chopp: I find myself going to the ads library like first and foremost. So I know that's not, that's not a hot take. That's like an anti hot take.
[00:04:50] Richard Gaffin: Yeah.
[00:04:52] Luke Austin: Yeah, so. There, there are a number of tools out there that, that can that could do competitor insight. That'll aggregate that'll aggregate search trends across the category that'll look at the, the meta ad library. If, if I were to start right now, what I would start with is, is a deep research prompt on chat GPT oh three with my specific brand, the category I'm in, and, and getting as much data and insights on competitors as possible.
And then from there, go deeper on, okay. Looking at the Meta Ads library for each, looking at the socials for each. Looking at key search terms and when I go into Google search, what their, what their SERP looks like and the competitors in that space. So then I'd go down the road, start to look at their landing pages and the funnels that they have, that they have cooked up on that side of things.
But to get the, the highest level window into the things that I go deep in. Statue BT oh three deep research against the your brand and competitor set. Then. Then from there, go deep into, okay, this specific brand, what are the ads they're running on meta? What landing pages are they sending those to? What sort of bundles and offers are they running in the backend?
Okay, that brand or this category, who's showing up in the. Google shopping, who's showing up in the Serb? What does, what does that competitive space look like that I'm actually up against to get a more tactical insight and getting insights on, okay, this is the landing. What, what my landing page strategy could, could adjust to this is the creative diversity I'm missing on meta relative to these folks.
And, and go deeper from, from there.
[00:06:14] Richard Gaffin: Yeah. Tony, any thoughts there?
[00:06:16] Tony Chopp: Yeah, you, you made me think about the. mentioned the search stuff. The Google Google Trends report is pretty interesting. So you can overlay like keyword volume data for several keywords. I think you can put three of them in there. So you put your brand in there and several of your competitors based on that GBTO three research.
And, the, the other thing that the Google Trends output the platform outputs is like spiking keywords or like really rising trends which we find useful to sort of spot. Things that are are becoming spicy, if you will.
[00:06:49] Richard Gaffin: Love it. All right. So let's, let's let's move on to, again, this is sort of another strategic question. This is from an admission member who has a home goods business, and this particular business has a very poor LTV, and his question was around. What do I do to improve it? really, I think then pushes into the broader question of like, if you are in a situation where LTV is going to be a slog to push for particularly this guy's home goods high a OV, not really a lot of reason to subscribe to anything or to replace it within two or three years if he's making it properly. So, in that situation, what do you do? What do you, what do you
[00:07:27] Luke Austin: Don't, don't fo don't, don't focus on trying to increase your LTV, you're, you're in a product category that has very specific buy and behavior related. It to it that trying to alter the repeat purchase dynamics within that it is, is, is a very challenging problem that is going to require a lot of effort for very minimal change in terms of the repeat purchase rate in the LTV rather.
Understand the industry you're in and the buying behavior related to it, and lean into the opportunities that that, that, that gives you. You don't have LTV, you don't have the repeat purchase rate. What you have is a high a OV product that, that is primarily first time acquisition. Having a high average order value is a strength in and of itself, right?
Like it allows you to do a lot of things in terms of in terms of the acquisition costs that you're able to pay for a net new customer. And likely this brand has a pretty wide catalog in terms of number of items that they can sell within the first purchase. So, and side, side note. LLTV. The first 30 days is, is, is the highest impact, has the highest impact on LTV over, over a longer time period.
So brands with high LTV, they're realizing the majority of that within the first 30 days anyway. So think about how you can increase the marginal value of each of your initial orders by ways to increase the free shipping threshold by getting people to add more products to cart, which is gonna allow you spend more on first time customer acquisition to, two you know, when someone buys X product in this category, they're gonna get a discount on this product when they add the card as well. Like there's, there's a lot of different ways you can, you can splice that, but focus on how am I gonna improve the marginal outcome of my first time customer acquisition orders, and then what is the best distribution mode to get there.
I'll give like another example that's really, a tangent in terms of the product category, but could be helpful to think about. So we work with hat brand that many of you many of us know similar, similar story. It's all first time customer acquisition for them. Very, very low repeat LTV. And that's, and that's what you'll see from most footwear brands as well.
So they've realized that and they are world class and first time customer acquisition. By. Launching net new products in new collaborations with sports teams, licensing, brand collaborations, et cetera. But how they, they figured out. This is gonna be a first time customer acquisition product.
So the way that we need to win is we need to find ways to break into net new customer audiences in a really effective way. How we're gonna do that is we sell hats, but now we sell hats that's licensed with this sports team. So I can break into this audience in this specific g geographic area. We sell hats that are co-branded with this customer base that is work wear or western wear.
And now I'm, now I'm into that category. So. Find, find ways to do that through artists and design collaborations for your home goods, right? And getting into their, their pockets collaborating with them on co-branded products. But first time customer acquisition is gonna be where you realize the value focused on winning, on winning that game.
You're not gonna change the dynamics of a customer buying behavior and a product category where it's, where it's baked.
[00:10:31] Richard Gaffin: Yeah, that makes sense. Tony, any thoughts there?
[00:10:33] Tony Chopp: Yeah. Yeah, I think that's all. I think that's all right. Like play to your strengths. I, I guess the thing, the thought that was playing through my head as we were talking about is there can be differences in LTV based on the product or the product category specifically. So like for example, like, you know, like if you're selling a couch or whatever yeah, there's probably not a l lot of LTV off that, but you said home goods, so. You know, if they're selling, like, you know, we, we worked with a brand for a while that sold like cool, like dishware. Like flatware and stuff like that. And, and I think there, there is more LTV sort of in, in that space. So I, I would ask some questions about the product mix itself or the category mix. And I, I agree with everything that Luke said that. Sort of play to your strengths, but I think it's also worth asking that question, like one level deeper, like as opposed to the LTV of my business is bad like what is the LTV at the category level? And, and I think there's, there's potentially some, you know, advertising strategies or considerations based on that.
Like, I, I, I give you one more analogy. Like, let's, let's say you sell shoes, right? And one pair of shoes you make. It makes people jump 10 times higher and the other pair is made of concrete.
[00:11:46] Richard Gaffin: Mm-hmm.
[00:11:47] Tony Chopp: One of them is gonna have a much higher LTV. So the product matters in this, in this particular example.
[00:11:54] Richard Gaffin: Mm-hmm. So, sorry, wait. Clear that up. So the concrete, which one's gonna have the higher LTV.
[00:12:00] Tony Chopp: Well, I'm assuming the ones that the ones that make you jump 10, 10 times higher because people are gonna come and buy more.
[00:12:05] Richard Gaffin: is like one pair of shoes is good and the other pair of socks or something like
[00:12:08] Tony Chopp: Yeah.
[00:12:08] Richard Gaffin: what's the like, okay. Yeah,
[00:12:10] Tony Chopp: Yeah.
[00:12:10] Richard Gaffin: sense,
[00:12:11] Tony Chopp: It's a terrible hot take. Yeah. My point, my point is like LTV is a function of like how, like how much people want to buy more of the products that you sell.
[00:12:20] Richard Gaffin: Yeah. No, that
[00:12:22] Tony Chopp: Also, the, the A OV, obviously, like people don't buy couches like every year, so.
[00:12:27] Richard Gaffin: Right. Yeah. So I mean, one, one other thing that, like I've thought about with this, and I've talked with Taylor about too, has been the idea of like expanding into a product line that is kind of symbiotic with your product, but is also has like some sort of like subscribe ability element to it. Like one example would be like you sell headlights or whatever, which is low LTV product, but then you also sell the batteries.
The batteries or high LTV product. So you could sort of expand the product line with that sort of thing. Does that.
[00:12:55] Tony Chopp: Yeah, I mean, we got Luke, you probably know the one I'm thinking about, that they sell a, a, a pet product, which is a single purchase. But then they got into a subscription. Like software product to, to go along with it, like an, like an app that actually looks at the the analytics from this product.
So that's, that's exactly what you're talking about. They, they, they developed an ancillary product to sell alongside the single, like the, the product that's like a one-time purchase. And that's, that's been very beneficial for them.
[00:13:26] Richard Gaffin: Yeah. Alright. Yeah, it's interesting. It's a, it's a very much a creative exercise. Like what, what makes sense? What do people buy? How do people treat this specific product? That sort of thing. Okay.
Hey everyone. I just wanted to take a few seconds here to talk to you about admission. Our membership program here at CTC, that gives you access to one-on-one consultations with our growth experts, as well as weekly live events and access to our gated library of ecommerce trainings. This is the best way to work with us here at Common Thread Collective if you're in the six to seven figure range.
Now, to get started, all you have to do is book a call with me. To talk more about it@youradmission.co. That's your admission.co. Alright, back to the show.
[00:14:10] Richard Gaffin: Let's let's jump into again, some more like meta, kinda like tactical stuff. So this is a question that we get a lot from a lot of different admission members.
Just people generally,
[00:14:20] Tony Chopp: Make my ROAS go up.
[00:14:23] Richard Gaffin: Yeah, yeah, yeah. Why? Why are, why do my ads suck? But this is like, particularly like as the Andromeda changes have come through, a question that we get a lot is like, when is it worth it to create a new campaign? As opposed to just throwing more creatives in the same campaign
[00:14:36] Tony Chopp: I, I have the, I love this question.
[00:14:38] Richard Gaffin: you,
[00:14:40] Tony Chopp: What, when you need a different setting? That's the answer to the question.
[00:14:43] Richard Gaffin: yeah.
[00:14:44] Tony Chopp: by different setting, I mean, bid or budget, right? And you need a different bid or budget setting based on some sort of, some sort of unit economic consideration. So a OV or margin is a really obvious example.
Let's go back to the home goods one. The couches need a different campaign than the pillows now. Now you could do it at the adset level too, so that, so there's a little bit of nuance in how. and like, like structurally how we're talking about that. But the reason for a different, something net new is because you need to, you need to use some functionality in the platform that's like at, at the setting level.
That's my take.
[00:15:24] Richard Gaffin: Yeah, Luke.
[00:15:25] Luke Austin: Yeah, it, yeah, it, I would simplify it even further. The, the bid, the bid is the main setting net. That you would need a separate campaign campaign for. 'Cause the budget, once the bid is set, un uncap the budget, as long as your inventory can, can withhold that, let the bid be the constraint around the volume.
And so as soon as you need a new bid that is related to unit economics around the product or a different offer that you're pushing, right? You have one funnel that's pushing pillows, but it's buy one get one half off and the other one is pillows, but it's buy two, get the third free or whatever. Okay.
Separate offers around differing unit economics around each of those funnels. Rule work that requires a different bid, separate outta campaigns. If no bid different meta knows where to spend the money better than you do.
[00:16:12] Richard Gaffin: Right. I mean, I think like what one of the impetus behind this question is like a lot of people think, well, if I'm targeting returning customers, should that be a new campaign? If I
[00:16:21] Luke Austin: Yes.
[00:16:22] Richard Gaffin: two
[00:16:22] Tony Chopp: Different setting.
[00:16:23] Richard Gaffin: yeah.
[00:16:24] Luke Austin: it's a different bid. So that you're, that that is, that, it's a great example. But the, the framework is the same, which is if you're running an acquisition campaign or you're oriented around new customers, how you should be setting your ROAS target is based on what your what your acquisition or a MER target is, or your return on first order.
Adjusted by your incrementality factor for that acquisition campaign. So for meta on a seven day click window, baseline incrementality factor is 120%. If you've run incrementality test yourself, then you have your own factor, but you're adjusting your pro your profitability target by the incrementality factor or acquisition.
Retention campaigns have a different incrementality factor. They're, they have a lower incrementality factor than acquisition campaigns. Our, our baseline based on our data set of tests is a 60% incrementality factor for retention campaigns on meta seven day click. So that means your ROAS target is gonna be twice as high for your retention campaign than it is for your acquisition campaign.
Thus, you need a separate campaign because the bid that you have, whether it's roco cost cap, or bid cap, is going to be different for that campaign.
[00:17:30] Richard Gaffin: Right. So another, another sort of angle people take on this or another form this question takes is around the creative, which is like, I'm selling the same product. But I'm targeting a different audience with it. It's not necessarily new versus returning, but it's like, like you were saying, Western wear versus just straight up baseball or whatever the case may be. Now, in those situations, what it sounds like we're saying here is that there would be no bid change, they would all end up in the same campaign. Yeah.
[00:17:57] Tony Chopp: You could do it at the ad set if you, just for the purpose of organization, if you want to keep it, keep it clean.
[00:18:02] Richard Gaffin: That's an interesting take too, just for the, for the sake of your own sanity, putting them in different assets so you can just at a glance to see what's what. Okay. final thing on this, this is also a question we get a lot. What if you hit your creatives limit
[00:18:18] Tony Chopp: Call Matt. Tell him to
[00:18:19] Richard Gaffin: it is?
[00:18:19] Tony Chopp: tell him to raise it.
[00:18:22] Richard Gaffin: Call your meta rep.
[00:18:23] Luke Austin: Because there's, there's limits that exist at the campaign level, and then there's limits that exist at the account level as a whole as well. So the account level limits, yeah, I think is a, is a meta thing in terms of the campaign level limits, in terms of where, what type of campaigns you're using.
Then. Yeah, launch a new campaign. I don't, I don't think there's anything to be worried about there. Right? There's no sort of like dogmatic stance as it relates to not having a new campaign related to it. If more, more creative, as much creative as possible, if that necessitates a new campaign because of the structure that you're using, as long as you're using a SC and optimize towards those campaigns.
Yeah. Launch the new creative. Don't withhold launching the new creative for the sake of launch, not launching a separate campaign.
[00:19:09] Richard Gaffin: All right. Okay. Let's switch to some a couple bigger picture questions here. Well,
[00:19:13] Tony Chopp: Which is also a funny thing that they, that there's a creative limit and like every, every like. out of their, out of the meta platforms and our mouths is like more creative. Whatever side note
[00:19:25] Richard Gaffin: exactly. I mean, it was, it was one 50. Now it's 50. Right. Do you have
[00:19:29] Tony Chopp: I,
[00:19:30] Richard Gaffin: is?
[00:19:31] Tony Chopp: we observe different limits in diff in different accounts, and I'm, I'm not totally sure.
[00:19:36] Richard Gaffin: Who knows? It's always a black box. Okay. Well actually one quick tactical one, because I think this is just worth, worth getting to. my highest volume campaign is performing, is it worth it to switch it to cost caps anyway to get more efficiency?
[00:19:52] Tony Chopp: Oh, sh. This is hot. Take territory right here.
[00:19:56] Richard Gaffin: That's right.
[00:20:00] Tony Chopp: Much to say. Perfect. Go
[00:20:03] Luke Austin: the,
[00:20:03] Tony Chopp: ahead.
[00:20:03] Luke Austin: so. There's, there's no, don't, don't turn it off, would be the short answer. Keep it going. And any new campaigns that you launch, launch on launch with launch with bid, bid constraints against them, set against your business goal with inflated budgets. But but adjusting that campaign like.
But now here's, but here's the more nuanced answers. Like there's a couple problems I have with the question, like the campaign's working, but should I adjust it to get to be, for it to be more efficient? There's a lot tied up in there. There, there's like, there's a whole sort of line of questioning that I would have to clarify what, what, which sort of like, it's working, it's driving purchases for me, but I would like it to be more efficient than it is, is like sort of what it, what it, what it feels like.
So anyway, without knowing the, the context of those questions. I'm assuming that campaign is operating at your profitability target that's adjusted for incrementality. If it is, I, I'm, no, don't like, keep it going, but new campaigns launch on launch, on launch with bid constraints set at that target with inflated budgets.
And, and over time they're gonna, they're gonna get more volume as you feed them more creative and they get, they get more traction behind them. And the problem will sort of take, take care of itself is my perspective.
[00:21:18] Richard Gaffin: All right, Tony. Let's see where your hot take.
[00:21:21] Tony Chopp: I guess it's same, same thing as Luke. Like why are you calling us? Like you're camp for your high, you got a highest volume campaign that's, that's working. But like what, what is the impetus for the change, I guess? Other than curiosity. So, but, but same thing. I wouldn't turn that off. In fact, I've seen a lot of damage be done by, by doing that sort of rip sting, try to try to move from one ideal ideology to another. This game, this game doesn't work that way. There's, it's there. These are all like tools in the tool, in the toolkit.
[00:21:51] Richard Gaffin: Mm-hmm.
[00:21:52] Tony Chopp: Yeah. So yeah, I, I, I agree with everything that Luke said in the sense that leave that thing cooking. Go build some new stuff, cost control it, work your way into that. Ultimately what you're gonna end up with is more control.
So the thing, the problem with highest volume campaigns is they're like, they're wild.
[00:22:11] Richard Gaffin: Yeah.
[00:22:12] Tony Chopp: So maybe, and maybe that's like if I were to like read deeper into the question, maybe that is actually the root of your problem. Maybe it's working today and last week it wasn't. And on Black Friday it works great and then for a month in the summer it's, it's garbage.
So yeah, I think heading, heading in the direction of sort of cost control bidding is gonna require more, more energy and more effort probably, and definitely more creative fuel, but it will yield you more control.
[00:22:38] Richard Gaffin: it'd be more consistent ultimately. yeah, I think, I think the context of this to answer some of your questions there, Luke was around, like, this is performing at, it's at target in terms of efficiency, but would it be more efficient somehow? Is there like some unlocked untapped margin that we're not getting because this isn't being switched over to cost caps or whatever.
[00:22:56] Luke Austin: And that, and that would be, and, and yes. Like it's, it's a good, like to that question, yes, that would be our perspective is in a longer time horizon, there, there is gonna be more. Margin upside that you can capture by having this constrained against a bid that's that's adjusted for incrementality and an inflated budget against that because you're gonna get delivery that's gonna fluctuate against your your, your efficiency target rather than consistent delivery no matter what the what it is, right?
Highest volume is gonna deliver the budget in full every day, regardless of the outcome. So yes, that's why we'd say launch all your new campaigns against a, a bid constraint, because in the long haul. That's what, that's what we've seen lead to better outcomes. Now, if that campaign is a foundation of your account, keep keep it going while you build up that foundation over time, it'll, that stuff will become the, the bid constrained, inflated budget stuff will become the majority of what's driving the account.
The other one will slowly die off and you won't have had to risk the downside in at on the front end.
[00:23:57] Richard Gaffin: Cool. All right. Let's let's switch to a couple of bigger picture questions before we get outta here. So, the first is generally speaking, how are we at CTC using AI tools right now? more generally, what is your guys, both of yours general feeling on future of AI in ecommerce?
[00:24:21] Luke Austin: So there's.
I think still there's a, the idea that AI is coming for the, for the production layer. And initially that was where most of the conversations were, were happening around AI's gonna come for production and, and Jet can now do image generation, so you don't have to pay designers and you can produce ads that way.
That's not our experience of it. Our experience is AI is coming for the strategy layer, enabling, enabling smart people to have more output and be even smarter by leveraging AI capabilities. And so we are, we are being relentless with how we think about AI enabling the production layer and executional things in terms of making design output quicker.
So we're leveraging tools in that process, which has led to reducing. The cost per ad output that we can, that we can develop. We're looking for ways for it to get after building out campaigns in meta through, through technology. So there are ways we're going after that, but where we have been focused and been realizing more the value related to AI enablement of of the work that we do on behalf of our clients on a dayday basis is.
In the category of strategy and not production the, the majority of the time, which is that it is enabling better thinking, deeper thinking, but it's also it, it's also enabling us to take the aggregate dataset that we have of hundreds of DTC ecommerce brands. Instead of just sort of aggregating the data and distilling those insights and reports and things like that, we can go way deeper in analyzing hundreds and hundreds of reviews for the history of your brand and creating audience personas against them leveraging ai, that that would be hours of.
Someone's work, you know, like to be able to sift through that much data and come up with the audience personas and strategies. As an example we're leveraging it in the forecasting and planning process by having AI look across years of marketing calendar events and synthesize a. What type of, of the impact that different types of events have on your forecast in each of the marketing calendars where it's taking the strategy work to a whole nother level, increasing the impact of it and the output that already smart people can have on the brands that the, that we work with.
So that's, that's we're looking for opportunities everywhere, but that's where we see most of the value realization thus far.
[00:26:46] Richard Gaffin: Tony, how about you?
[00:26:49] Tony Chopp: Yeah, I think, I think the thing that I'm sort of anchored into right now on the, the whole AI premise is. Like the, the context, like the source data matters.
[00:27:05] Richard Gaffin: Yeah.
[00:27:05] Tony Chopp: And so what I've been having this experience recently, you know, using GPT for, for a while now. And and then over a couple months ago I started using Google's tool Notebook, lm.
And the, the key difference between these two products is, you know, GPT. Sort of run runs everywhere for its sources. You can feed it files, but still it kind of goes everywhere. And Notebook, LM is like confined to the source data that you, that you feed it. Right? And the, the source data that you feed, it can be really disparate.
It can come from all sorts of different places taxed. And PDF files, images, connects to Google Drive, everything. But the, the end result is that it's sort of a. It sort of combines the, the, the thinking power of the, the LLM technology with the very specific source data that you give it. And I think this is a metaphor of what, of what we're, what we're trying to build into stats and, and what Luke's describing where we're, we're connecting the dots we're using AI as the glue and the analysis and the strategy piece. But it's really, really specific to your source data, your business's source data that, that we have in status, and that we go through this incredibly laborious labor of love to get, to get to a really high level of data integrity, that we understand how you think about your costs, how you think about your revenue. so yeah, I think like generally speaking, the, the sort of broad promise of like, AI does everything all the time, I think is. know, I, I'm sure everybody here that's listening to this and, and you, and each of you have had the experience of using GPT and kinda like having it go into some sort of weird rabbit hole that's like, wait a minute, this, this kind of, this got, this, got off track somehow. Where, where I, where I see it going for CTC and the tools that we're building. Is the starting point really matters. The context, the source data is, is sort of the, the root principle that makes it useful. And then, and then to Luke's point it does a great job of synthesizing all of that data and relating it to strategy concepts and CTC frameworks and how we think about strategy.
So it's really good at processing tons of information. It's just, I think it's really important and it's really important. It's really high in my mind that the. it's processing, what it's working on is, is hyper relevant for the, for the questions that we're asking.
[00:29:27] Richard Gaffin: Okay, well that's a good note. Like it's only as good as what you feed it or if it's, if it's being fed the right things, it's going to spit out the type of information that you need. If it's not, then it's probably not, I guess is maybe a way we could think about it. Okay, cool. One la last question and then we'll get outta here. And this is a question that we got a few days ago from an admission member who was asking something that I think is on everybody's mind. And we'll get your, both of your hot. Quick takes on it, which is when is the ecommerce industry going to get better? Things are pretty bad for everyone right now. Do you guys see any hope on the horizon? I'm sure you do, but let's throw it out to you guys. What's, what's your take on where we're at right
[00:30:04] Tony Chopp: I, I mean, what do you mean by better? Like, 'cause we're like, we're out. We're out here winning. But what I can tell you is it's not gonna get any less competitive,
[00:30:12] Richard Gaffin: Yeah.
[00:30:13] Tony Chopp: No, no way. In fact, the opposite. I think it's gonna get more, more competitive. At least I for sure. It's gonna become more competitive. so I think what that, what that, what that means to me at least is back to my point about like in AI systems to enable like tools and technologies for our, for the folks at CTC to deliver these outcomes like. And this is the only way to win in this fight as far as I can. As far as I can tell.
[00:30:45] Richard Gaffin: Luke, what do you think?
[00:30:47] Luke Austin: We don't have any signal that that shows us there's going to be any meaningful change in terms of. The market conditions, the demand, less competition in the space relative to, to where we've been. So we're approaching the rest of this year and heading into next year the same way that we've been approaching these recent months and this past, past year or two which is every dollar every day needs to be accounted for and tracked.
And the brands, the. The standard and the bar has been raised because when the cost of capital is not next to zero, there is much less margin for error. There's much less liquidity available. And and then to Tony's point, the barrier to entry is lower than ever related to competition entry and, and entry into the market.
And so that's, that's just going, going to perpetuate as technology and, and AI continues to enable that, that workflow. So what we're seeing is. The winners are winning more, but there's more losers right now as well. And that's, that dynamic is going to perpetuate from our perspective because of the market condition.
It because of what we see in the macro, which is not, not, not a signal that, oh, in three months from now things are, things are going to be massively improved in, in any of these categories. And so, our, our approach and perspective is this to, this is we are. Continuing to try to make the tools and team and strategy that's available to the a hundred million dollars, $200 million, $500 million DTC eCommerce brands.
Available to the $10 million brands, the $5 million brands, $30 million brands and everywhere in between because the state, the, the, the bar is higher than ever. So the ex, the operational excellence, the forecasting, the planning, every dollar, every day, the creative output necessary, it's just higher than it's been.
And so our goal is to equip through the through. The experience of the people here through what we're seeing work well and not work well in our data set of brands. And then through our ability to operationalize ideology and technology, equip every brand with having that level of skillset, because that's what's needed to operate at the level of the tools that the a hundred million dollars brands have.
If you're a $5 million brand.
[00:33:02] Richard Gaffin: Yeah, that makes sense. So the idea is like sensation that people have, maybe that things aren't. Uniquely difficult or whatever in this time is maybe just the sensation that things are not as easy as they were in COVID. Maybe something along those lines because, 'cause obviously there's macroeconomic
[00:33:19] Tony Chopp: That was a free for all.
[00:33:21] Richard Gaffin: Yeah, yeah, yeah, exactly.
Or I mean, and even before that too, when, there wasn't as much competition on Facebook or whatever, it's like this is kind of the new normal and despite the macroeconomic factors that may or may not play a role in over the next three to six months, the basis of like, yeah, you just have to grind for every dollar every day.
That's not really gonna change. You just have to keep pushing forward with best practices and that'll get you where you need to go. Yeah.
[00:33:42] Luke Austin: And, and, and to add on to that, like the, the bar higher outside of the, the media buying and creative output and operational excellence, sort of the core growth engine that, the brands that are winning, the level to which they are investing in the in the ideology and the planning around their biggest product launches and marketing moments and brand collaborations, the level of thoughtfulness and complexity, the levels to which that game is being played is higher than ever as well.
And we're, and we're seeing this play out across, across the board, so, I think that that represents opportunity for opportunity for some to continue to eat or who have the ability to be able to to flex into that sort of a that sort of workflow to be able to continue to grow in that way.
The, the thread is for for those that you, you can't just run the same playbook that you ran four years ago, right? Because everyone else is running. Yeah. Everyone else is running, is running. Is trying new things, testing new things, and operating at a higher level. So that's, that's what's necessary if you wanna be able to compete.
[00:34:41] Richard Gaffin: Yeah, sorry.
[00:34:42] Tony Chopp: Yeah, I want to circle back to that because Luke, Luke mentioned this earlier, like the, there's lots of things that you can do, like tactically to burn a lot of money at the, at the end node of this system, the, the media buying system. and strategically there's, there's things that you can do, right?
But the, the media, media function. To, to your question about that, it being really hard, like what I'm hearing is like potentially somebody that's really focused on like, what, what do I do tactically in my Meta Ads account and. the, the answer is like, for sure a big part of what Luke's talking about, like product design, offer strategy story and brand.
And those are, those are big levers. Now, in the media account, I'll, I'll tell you what, I'll tell you what we're doing. We're running incrementality tests to understand the impact of meta so that we can push our Miro targets down so that we're beating everyone in the auction. Like tactically, that's an example of like really sharp tactical pressure that that CTC is out here putting on all y'all, to be honest with you. So.
[00:35:45] Richard Gaffin: no, that makes sense. Alright, cool. Well, appreciate the insights guys. I think we gotta wrap for now. So that's gonna do it for this week's episode, but for everybody out there listening, remember if you want your questions answered on the pod.
Leave us a voicemail or text at 866-DTC-2263. That's 866-DTC-2263. And we might play or read your question on a subsequent epi episode. We would love to hear your actual voices get your actual questions in here from you, the listeners. And then also we'll continue to grab them from our admission members as well.
But until next time folks. Welcome to the DTC Hotline. We would love to hear you on it. And on behalf of Tony the chopper and Luke the weatherman. Austin, I'm Richard signing off. Take care, everyone.
[00:36:33] Tony Chopp: Call us.