Diagnose Your Ecommerce Growth Potential in 5 Minutes

[00:00:00] Richard Gaffin: Hey folks. Welcome back to the Ecommerce Playbook Podcast. I'm your host, Richard Gaffin, Director of Digital Product Strategy here at Common Thread Collective. And I'm joined as I always am Taylor Holiday, our CEO here at Common Thread. And Taylor is still rocking the playoff mustache. So I, what that tells me is that the coast of me, of the Yankees are still in it.

So give us a little update there First.

[00:00:20] Taylor Holiday: Yeah, they are. We are in the championship game coming on Tuesday, so the stash will persist. And then we have to go to TOC play against the other city. So I, it's just, just think of it as a permanent accessory at this point.

keep it around, but

I wanted to get your opinion on something, Richard, 'cause I

[00:00:36] Richard Gaffin: Okay, sure.

[00:00:37] Taylor Holiday: I've got a, the All American rejects in my head. Have

have you been following their like, sort of comeback tour?

[00:00:45] Richard Gaffin: Of the All American rejects? No, I have not.

[00:00:47] Taylor Holiday: So they, they started doing this thing where they basically made it so that you could sign up and they would come play your backyard.

on this like backyard concert tour all across the country.

[00:00:58] Richard Gaffin: Wow.

[00:00:58] Taylor Holiday: like all these clips of it all, all over social media.

It's kind of a genius marketing tour for,

[00:01:03] Richard Gaffin: Yeah.

[00:01:04] Taylor Holiday: school band. And, looks like people are having a good time. So I didn't know if you had come

[00:01:09] Richard Gaffin: That's awesome. No, I, you know, I do like the All American rejects, but I had no idea that they were, they were back in the back in the mix. Is this so I could see this being a Taylor Holiday backyard party? Are they, are they coming your way?

[00:01:20] Taylor Holiday: no, you know, maybe, I don't know. We've got a big announcement coming soon, so maybe we'll have to schedule them. But I just thought, like

[00:01:26] Richard Gaffin: I.

[00:01:26] Taylor Holiday: a band like that, that's like nostalgia vibes and the idea of like, here's a website, we'll come play your backyard is like, you know,

[00:01:34] Richard Gaffin: I know

[00:01:34] Taylor Holiday: good, pretty smart idea.

So

[00:01:36] Richard Gaffin: genius.

[00:01:37] Taylor Holiday: getting, I hadn't seen that guy pop up in 15 years and all of a sudden he's all over my TikTok feed, so,

[00:01:43] Richard Gaffin: I know. Crazy. Well, I remember when when that song gives you, hell came out. 'cause that was 2009.

[00:01:48] Taylor Holiday: Yeah.

[00:01:48] Richard Gaffin: That felt to me like it was a comeback because all their hits were like 2003, 2004. And of course at that time I was like, I. 19 years old and three years felt like an eternity.

[00:02:00] Taylor Holiday: Right,

[00:02:00] Richard Gaffin: so I was like, oh my God, they've, you know, I haven't heard from them in, in three years.

They must be completely vanished, but.

[00:02:05] Taylor Holiday: and now here

[00:02:05] Richard Gaffin: That's not how it works.

[00:02:07] Taylor Holiday: It's coming back

[00:02:07] Richard Gaffin: Yeah, yeah, that's right. Exactly. All right, well, speaking of bringing old things back, how's that for a segue, folks?

[00:02:13] Taylor Holiday: done.

[00:02:14] Richard Gaffin: Thank you. We're talking about our new strategic growth scorecard. So, some of you who have been following us for a long time, we'll remember back in 2021, we put something out called the Antifragile Scorecard.

And the idea behind that was to sort of give you a sense because this was particularly in the time when we were coming out of Covid when. Sort of the, the, the initial kind of storm for e-commerce hit, right. We put together the scorecard. I mean, it was primarily you, Taylor, I think, to give you a sense or a rubric to judge whether or not your brand had the ability to withstand that type of uncertainty.

Now we're in a similar-ish. Different in many ways, but a similar position right now where economically things are kind of all over the place. It's a little difficult to understand what's coming around the pike. And so what we wanted to put together was something called the strategic growth scorecard.

The idea here is this scorecard gives you a sense. Whether or not your brand has the ability to or has growth potential in the context of volatility. So we have it's seven metrics, really nine metrics across, I would say five different buckets. And again, talking about bringing old things back. Some of these metrics are gonna be familiar to those of you who have ever seen our e-commerce diagnostic toolkit, which produces our GQ score.

This is a similar version of that although it takes a little bit less. To kind of get into it and create your grade out of it. So, anyway, all that to say, this is something that we're gonna be rolling out tomorrow. It's something that you can go ahead, download, get the score for your own brand, to give you a sense of where you at and are you, where you are at in terms of your ability to grow during rough or volatile times.

So what we wanted to do is kind of get into some of the metrics here and and kind of break down maybe what's included in the scorecard. But first I wanted to talk maybe a little bit about. The idea, Taylor, behind the original anti-fragile scorecard and how you feel like the environment has changed between then and now.

[00:04:07] Taylor Holiday: Yeah, it's funny, I was just thinking about how had, the Power Five,

[00:04:14] Richard Gaffin: Mm-hmm.

[00:04:14] Taylor Holiday: like these, like five media buying tactics that they turned into, like the profit five. You know,

[00:04:18] Richard Gaffin: Mm-hmm.

[00:04:19] Taylor Holiday: sort of like take the same ideas but evolve them to meet the market. And in many ways this is the same thing, right?

Is that began with. Trying to think about this question of midst. The Covid era and the extreme volatility, what would be true of the brands that were winning despite the environment, or in fact the idea of anti-fragile, is that they actually gained an advantage. The more

[00:04:41] Richard Gaffin: Mm.

[00:04:41] Taylor Holiday: the environment became because they were set up to create a wider gap between themselves and everyone else in that moment.

And so I was looking across. A number of the businesses that were accomplishing that and tried to identify common traits. And so that was what the initial list was, was what was true of the brands that were winning in that era. And if you think about the, the complexity of that era, right, it was that the demand went really fast and supply chains were hard.

And so there was like, it wasn't a, a necessarily a problem of solving. Growth. It was

[00:05:11] Richard Gaffin: Mm-hmm.

[00:05:12] Taylor Holiday: supply the demand, right? Like it was about this capacity to clearly and efficiently execute against the market with pace and and towards a sudden change upwards. All of a sudden we came out of it and.

There was, we put together the GQ score, which is like sort of a variation of it, trying to like quantify the scorecard into what it might look like to produce growth. And the era sort of shifted where the complexity sort of moved the other direction. Demand creation became hard. We got to a post IS world, and so you, we, the metrics sort of shifted to like, do you have organic audience?

What is your, you know, how much LTV can you generate off of these customers? Like the things that would happen when net new customer acquisition gets hard. And now we're we're sort of in this post austerity era, I like to call it, where everyone just has gone through this process or maybe some of them are still in it, where they're getting really lean. They've eliminated a lot of waste, and now they're trying to figure out how to grow from that spot. I. In many ways it's the hardest. It's like you just went on a really big diet and now you're gonna go to the weight room, right?

[00:06:13] Richard Gaffin: Mm-hmm.

[00:06:14] Taylor Holiday: in the process cutting fat, you inevitably cut some of your muscle too.

And so you're trying to now go back and rebuild it. But those muscles have atrophied a little. And so this next era and the scorecard is a focus on, I. What we're calling strategic growth. How does that happen now with a new, thoughtful, financial oriented decision making? And so one of the big introdu introductions is something we'll talk about as it relates to IMR and how we think about marketing measurements evolution through this process.

[00:06:37] Richard Gaffin: Yeah, so let's go through the metrics and, and I think we can, we can kind of breeze over the first set. So, like I said, there, there are nine metrics in roughly, I would say five different buckets, which are overall with your lifetime value. Costs. Then new customer acquisition and growth. And then the kind of two new buckets or, or rather, sorry, new customer acquisition and then the efficiency.

And then the two new buckets are new customer growth and then IMR like you were mentioning. So this is margin with incrementality as taking into consideration. So the first two metrics in the LTV bucket are 60 day LTV, and one year LTV, which is again, what is the percentage that your revenue grows from first order?

To kind of the 60 day mark. So what's the short term? Value generation or value growth rather. And then the year long growth. Then opex percentage or operating expenses as a percentage of revenue, cost of delivery as a percentage of revenue, which is roughly your fixed costs as a percentage versus your scaling costs as a percentage of revenue.

Then first order value to N cac, which is the ratio of first order value after cogs have been taken out. Two new customer acquisition, which gives you a sense of how efficiently you're requiring new customers. And those are all important and kind of worth going through, but I think because they're new, we should talk about the next set of metrics here.

It's too really, it's got, it's four-ish, but. This is how it kind of plays out. So year over year, trailing 12 month new customer revenue growth is a new consideration that we're pulling into the scorecard and that we'll probably pull into the overall GQ score at some point as well. And the idea there is what we're talking about is the per percentage increase or decrease in new customer revenue over the last 12 months.

And part of the reason we wanted to take that into consideration is we had really no consideration around around volume in the old, scorecard and in the old GQ score and we wanted to bring some of that in as well and actually bring rate of growth into the equation. Not just potential for growth, but current growth as well.

So maybe let's talk a little bit Taylor, about that metric and its specific importance.

[00:08:39] Taylor Holiday: So the best predictor of future revenue is the size of your active customer file times the efficiency of your new customer acquisition, right? So this idea that I. in the future is gonna come from two core areas. One is your existing customer base, and the question is are have you squeezed that sponge or is it filling, is it depleted or is it a growing active file?

And so what happens right now is that the big signals when you come out of an era of austerity or where where you're cutting, is that you often tend to lean heavier on your existing customer base because the acquisition of those customers is functionally zero. 'cause you're primarily using email and SMS to drive that acquisition. And so. If you wanna drive MER up or capture more margin in any short period of time, the best way to do that is basically to over-index the percentage of your revenue that comes from existing versus new customers. Now the problem is that's a very short-term game. It's actually something that can cause long-term risk if you aren't continuing to grow your new customer file.

So we can, when we, we start with a business, we can often look very quickly at their active customer file. And when we say active, what I mean is. Customers that are have made a purchase within the normal range of time. Where the days between purchase would be like the 80th percentile. So if, if, if the at let's, just contextualize that, if I buy on day zero, long does it take before I make my second purchase?

Well, if the median is 50 days and the 90th percentile is like 140 days, then like active, we usually cut off at like the 80th percentile. So it'd be somewhere in the hundred day range. For most brands, it's somewhere around that apparel brands. It tends to be a little longer depending on the cycle of purchase, but somewhere around that is the normal window between.

Your first and second order where you're still likely to make a second order, that we call that an active customer. And the size of your active customer file is a great indi indication of your future existing customer revenue. So, is all driven by are you continually effectively acquiring new customers.

And what has usually happened is in this moment, and this is one of the first sort of red light indicators, we talk about this a lot on the macro level. If we see, a MER declining or new customer revenue declining year over year. It's a bad sign for the industry that like the future's about to ha be problematic.

The same is true for any individual brand. If you aren't continually adding new customers into the mix and you're depending too much on your existing base, there's gonna be a problem in the future.

[00:11:04] Richard Gaffin: Right. So then let's talk about, and, and that, that's, I think we

[00:11:08] Taylor Holiday: Sorry, lemme

[00:11:09] Richard Gaffin: yeah. Yeah. Sure.

[00:11:11] Taylor Holiday: And, and the challenge is, what it's really important that we do for those situations is let, is get the brand bought in that we're about to go on a longer journey than maybe we had

[00:11:20] Richard Gaffin: Yeah.

[00:11:20] Taylor Holiday: right? Because the first steps are going to be reinvesting in new customer acquisition, which is inevitably gonna be margin compressive, right? So even if we're acquiring customers at first order break even. right now we're saying 60% of the revenue is coming from existing customers, which are full margin, and then 40% of the customers are coming at breakeven, if all of a sudden I shift that mix, then I'm gonna have a, a bunch more zero con contribution dollar revenue. so all this new revenue that I'm drive, all these new customers, they're gonna drive the margin percentage down. Now, as long as you're doing it at first order break even, it's not gonna actually deteriorate the total contribution dollars, but it's gonna make your margin percentages worse.

[00:11:58] Richard Gaffin: Mm-hmm.

[00:11:58] Taylor Holiday: that can be very scary for people.

If all of a sudden they're running at 12% ebitda and then all of a sudden we're like, Hey, for a little while, we're actually gonna run at six, but it's gonna be the same amount of dollars. That's

[00:12:09] Richard Gaffin: Mm-hmm.

[00:12:09] Taylor Holiday: people are latched onto percentages. So there's some education and work that for a while. And in reality. For a brand that isn't acquiring customers at first order profitable, that actually can be margin destructive for a period of time, but it's a necessary reinvigoration of the growth engine to get through. And so there's like this, this, this really thoughtful process and communication that has to happen about how long this is gonna take and what the end product is gonna be.

[00:12:33] Richard Gaffin: Right, and, and I think that's maybe part of the reason that we have this metric alongside FOV to nac. 'cause in the past, like. I mean, the idea is in the original GQ score and, and kind of the original set of growth metrics that we had, the idea is that having a positive FOV to NAC is fundamentally ideal.

Like if it's over one, you get the score that you get or whatever, it's higher than being break even or less, however, which of course still makes sense if you are higher than breakeven on F or on your FOV nac. That's great. But what we're saying is like there's a relationship between FOV to NAC and new customer growth, and that sometimes one will have to be sacrificed for the other to grow in the way that it needs to grow.

Which, so it's not, maybe that's, we are putting the scorecard out, but it's not as straightforward a relationship as FOV to NAC being positive. Good. And then new customer revenue growth being positive. Good. It's like one can be a little bit. Sort of subpar for the sake of the other. Does that make sense?

[00:13:33] Taylor Holiday: That's right. And, and I think that's why we sort of made this revision is because a ratio volume sort of tie our,

[00:13:41] Richard Gaffin: Yeah.

[00:13:41] Taylor Holiday: intention. And so just having a great FOV to NAC is insufficient to tell the story of the growth potential of the business.

[00:13:48] Richard Gaffin: Right. Okay, so let's move on then to our next kind of bucket here, which is incremental marginal return. And we've talked about this a little bit but I'll quickly define it for everybody. This is revenue times incrementality factor minus cost of delivery, minus spend, overspend. And so what this gives you is essentially a version of contribution margin.

That includes an incrementality factor in it. What we've done with the scorecard is break it down with the three most sort of common growth levers, right, which is one meta two Google non-brand, and three Google branded. And part of the reason we did that is that we can provide a specific incrementality benchmark, that kind of incrementality factor that generally speaking, kind of applies across a lot of the different businesses we see.

So for instance, there's 120% incrementality factor on meta. Revenue times 120% minus COD minus spend. Overspend would give you that meta incrementality or your meta IMR. But talk a little bit about just generally speaking, let's maybe go over the reason that we kind of brought this new metric into the conversation, and particularly into the scorecard.

[00:14:52] Taylor Holiday: I think most people recognize that there is a limitation in ROAS as a turn return on ad spend, in that in most cases, the return is simply calculated as revenue over ad spend. Even though return. In many ways speaks to a marginal result. For most people, ROAS is a calculation of revenue over ad spend.

So what that doesn't tell you is did you actually make money?

[00:15:21] Richard Gaffin: Mm-hmm.

[00:15:21] Taylor Holiday: has a gap for a consideration for margin. The other thing I think most people would acknowledge is that platform reported numbers or even MTA reported numbers have limitations in their capacity to tell you exactly what's occurring. And so what we wanna try and combine. Is the best in class measurement solution around incrementality to get to an actual experiment design that gives us a view of the true incremental meaning would not have occurred otherwise. Revenue generated from an ad channel I. And then we want to consider the marginal value of that revenue based on the product sold at the price at which they were sold, and the current underlying cost to the, to sell the product your ad spend or investment to give you what is your marginal return on investment. And if we think about. The way that we all view our personal investment portfolios, I've thought a lot about this like view into what we're doing is we're taking dollars and we're buying functionally little stocks. We're

[00:16:26] Richard Gaffin: Mm-hmm.

[00:16:27] Taylor Holiday: meta ads, we're buying Google ads, and we're looking for a return on our money, meaning we put a dollar in.

How much money did I have after the fact? That's really the question is I put a dollar in. How many dollars do I have after everything in the middle? What is the result? And that, if you think about, if you open your Robinhood or your Wells Fargo or your Merrill Lynch account or wherever you your investing, you see is a stock and then you see plus 12%. see, plus 34% you see minus 8%. Or you could toggle the view and go from percentage to dollars, I'm plus $1,000. I'm minus $820. That's how we should look at media. It's an investment with a return profile. And the calculation for that return profile is IMR. It's incremental, marginal return. You put a dollar in, how many dollars did you actually make back? And so it allows us to get to a definition using experiment design that's devoid of having to debate about platform reported results, or MTA. It's the real revenue generated to your account. You could even include multiple points of distribution in that calculation if you want to do Shopify and Amazon is an example. then it allows you to compare. Investment into both cam at the campaign level, if you have tests at the campaign level or channels on a, like, for like basis. So I can actually compare the incremental impact of my branded search campaign to a meta acquisition Ross, like with one number.

[00:17:56] Richard Gaffin: Mm-hmm.

[00:17:56] Taylor Holiday: and that I think allows you to sort of look at it an index of all of your investments and see the percentage return against each. Now just like the stock market, just because I'm plus 30 today doesn't mean if I put 10,000 more dollars in tomorrow that I'm gonna get the same return. That's a different question of what I do with, to scale it up or to generate additional returns, but just answering the question of what is the value I've created off of this investment? IMR, in my opinion, is the best solution to that question. And a brand's capacity to generate a positive return on the dollars they're deploying is a case in consideration for more capital to flow to them and more growth to be funded.

[00:18:35] Richard Gaffin: Right. I mean, and so I think like a, and a simple way of saying this would be that, or one of the reasons that we're putting IMR in the place of contribution margin is simply that it's more accurate. So ultimately, like if you want a sense of what's truly happening with your ad dollars IMR is, is the way to get to it, is that more or less accurate?

[00:18:55] Taylor Holiday: I is this moment in time. I believe that it's the best, best answer to the way to assess your media and especially to assess it cross platform, cross campaign, is to be able to have an experiment design against all of them that gets you to an incremental weighted factor against the platform reported number to get you to a revenue that has a consideration for the marginal value of that revenue over

[00:19:19] Richard Gaffin: Mm.

[00:19:19] Taylor Holiday: ad spend.

And that's, that's ultimately what I care about. And, and the other thing it does is it I could not open your meta ads dashboard or your Triple O dashboard or your anything else and see your Ross and know if it's good.

[00:19:32] Richard Gaffin: Mm-hmm.

[00:19:32] Taylor Holiday: to know. It's impossible, but IMR that's not true. I could open anyone's ad account and see are they generating positive return on investment, yes or no? if that is displayed correctly, it's, it's considering the marginal value, it's considering the incremental impact, telling me whether or not. am putting dollars in and making dollars back. And that could be true for every brand in the world, right? Suddenly. So, so that to me says that if a da, if the, if the answer to is a data point good is, well, you need more context, then I think that data point lacks story.

It lacks power. And so I think what this does is it gi it's a better metric because of its capacity to tell our broader story faster.

[00:20:09] Richard Gaffin: Right. Okay, cool. So speaking of that broader story, I think like part of the reason, and we talked about this at the top a little bit, but part of the reason that we're putting this scorecard out. Now is that like we've alluded to, the, the sort of overall situation with the industry has changed. It's not like it was in 2021.

It's not like it was in 2020. It's not like it was in 2023. So I'm curious to talk a little bit about what you are seeing and hearing in terms of like what people are, what they're worried about, what their expectations are, and just sort of like the general sort of vibe that we're sort of speaking into with the scorecard, I guess.

[00:20:47] Taylor Holiday: Yeah, I think it's hard. I, I think you have brands that are trying to learn to do more with less, and there's sort of two camps there. There's these people, like, I think about, like the guys at baseball Lifestyle or

[00:21:00] Richard Gaffin: Mm-hmm.

[00:21:00] Taylor Holiday: Bart from Dad Gang, like where over the last maybe decade or however long they've been investing in, building community and relationship, they're sort of reaping the benefit of this in this moment where they don't have a large scale dependence on this like. Paid media hamster wheel, and they're sort of going, everything's great. What's everyone talking about? We're out here crushing it and good for them. Like they're reaping the benefit of a decade of investment into organic audience development and community and placement. And so I think there's people like that that are like in that pocket and. That the struggle of maybe moment where some of this is becoming more complicated is being offset by like a ton of great work. And so that, that's out there, there's, there's stories like that and there's witnessing, and then there's people that I think are, more native to, I'd say the more modern way of building an eCommerce brand, which is leaner, high volume of creative production. Everybody's doing everything. We don't have a hundred team members, we have four. And we are sort of in this really lean opex fuel growth with through a large investment of a portion of our p and l into, ad spend and off we go and we're making it work and growing fast and successful. And that's like one system. Where I experience a lot of our conversations to sit is sort of people that are hybrids of an era that doesn't exist, which is that they're businesses that, benefited and grew a ton from the demand in covid. They have maybe systems that were constructed in that world, which maybe it was more people, maybe it was a creative development process that didn't necessitate tons of output. Maybe it was a higher a, an era when there was less competition

[00:22:45] Richard Gaffin: Mm-hmm.

[00:22:46] Taylor Holiday: certain keywords or more demand. And so now they're trying to. They've gone through this like revising themselves. So they've edited down, they've gotten leaner, and now they're trying to figure out like, okay, what is our UVP? How are we gonna win in this new thing? they're really trying to reconsider that. Maybe the metas has tailed off over time and they just haven't been able to get it back. Maybe there's not as much Google search volume that they're benefiting from, or if it's become more competitive, branded search terms are starting getting chipped away. They've got distribution in multiple places. They don't really know how to sort through and define. So it's all feels more complicated and harder is the sort of the sentiment. And so I think for a lot of that when that happens, we try and just point back to some basic elements like we're doing here and to, I. Go back to really forcing brands to consider, okay, how are you in your unique set of attributes gonna win this game? 'cause there's no one way to win it. But you have to understand your input in order to design a plan that allows you to win based on what is uniquely true about you. And to consider what things might we need to change about ourselves in order to make us able to capture this moment.

And so I think that's a lot of the, the conversations and patterns and behavior things that we're engaged in with our people.

[00:23:56] Richard Gaffin: Yeah, sorry. Yeah, so, so I think like per our conversation that, that Taylor and I had in the earlier episode that came out this week, we talked a little bit about sort of the quote unquote unlikelihood of making it to that 5% of businesses that become worth something. And then we talked a little bit about, you know, what were you saying 40% of businesses make it out of the startup phase and 7% of businesses make it to a million dollars in revenue, whatever.

So I think part of what this. Allows you to do is it allows you to put into practice some of the things that we were talking about on that episode, which is understanding where you are, what the DNA of your brand is, and what your current sort of the reality of your situation is in this moment. So if you're in that position where you've leaned down and you're ready to figure out what it means to grow right now, this is a great way of understanding what that potential might be.

So, the scorecard will be available soon, I believe, I believe tomorrow if I'm not speaking out of turn there. And then one thing I did wanna say right now is that we were having next week we'll be, be ha we will be having a webinar. On the scorecard with ct, the CTC team that is going to be exclusive to brands that are in the eight figure range.

So if you're interested in that, please get in touch with us. We would love to talk to you about joining. We'll go over your scorecard together, get a sense of where your brand is, and give you a sense of what next steps might be. So go ahead, check that out, common thread code.com. Hit the highest button, get in touch, check out the scorecard.

We'd love to chat. Taylor, anything else that you wanna hit on this subject?

[00:25:20] Taylor Holiday: I do think there's, there's potentially another metric here

[00:25:24] Richard Gaffin: Sure.

[00:25:27] Taylor Holiday: What I would call cost of a quality ad, like, is what does it currently cost you to produce an ad that you're willing to put in the ad account? There's two sort of caveats there. One is you have to be able to assess cost, right?

So you have to actually have visibility into the supply chain of your creative, and then you're the governor of quality, like your own brand. You get to decide how high you want that bar to be. I would try and figure out right now, how much does it cost you to make an ad you're willing to approve in the ad account?

And

[00:25:55] Richard Gaffin: Mm-hmm.

[00:25:56] Taylor Holiday: whatever that dollar amount is, the higher it is, the harder you've made advertising success

[00:26:02] Richard Gaffin: Mm-hmm.

[00:26:03] Taylor Holiday: your IMR calculation needs to probably include the that cost. And so every time you run an ad, there's an underlying cost to make it that also include, then there's the cogs on top of it and everything else. And what we, what we see about the average spend per ad ad accounts is pretty low for most brands, which means that cost has to be low just as a baseline to even have a chance to be successful in this game. And so this is another attribute of brands that are succeeding, is that they've developed systems to produce ads they're willing to put live at the lowest possible price.

[00:26:38] Richard Gaffin: Right.

[00:26:39] Taylor Holiday: and I think it's a, a thing worth constantly considering is just your, it's, it's like a cogs function. It's no different really in terms of the game that we're playing and how much it costs to, to play it for your business.

[00:26:51] Richard Gaffin: Right. All right. So whether we slap that on the scorecard or we

[00:26:54] Taylor Holiday: know I

[00:26:54] Richard Gaffin: we,

[00:26:55] Taylor Holiday: that in there, but.

[00:26:56] Richard Gaffin: or reproduce something else. 'cause I, that could definitely be a whole thing in and of itself, because I think that's fascinating. The idea of like to your, to your analogy about like Robinhood or whatever, it's like what if you had some control over the cost of the stock before you purchased it?

And that's a little bit of what's going on here, right?

[00:27:09] Taylor Holiday: ex No, that's exactly what it is. And, and so there's two ways to change it. Lower the cost or lower your standards.

[00:27:14] Richard Gaffin: Mm-hmm.

[00:27:15] Taylor Holiday: like really need to consider those choices.

[00:27:17] Richard Gaffin: Yeah.

[00:27:18] Taylor Holiday: I, I, I experience a lot of brands that wanna hold a really, really high bar, which is great, but they have no way through it.

They have no

[00:27:25] Richard Gaffin: Yeah.

[00:27:25] Taylor Holiday: gate at the pace they need to get through it. And, and so I go That's awesome that you think that this AI ad is a little too ai. What are you gonna do instead? Like,

[00:27:35] Richard Gaffin: Mm-hmm.

[00:27:36] Taylor Holiday: just gating it is not a solution. And so I think that's where there's really a, an expectation that's like, I'm fine.

I, I respect every brand's right. To hold whatever standard they want. Sorry, this is kinda a rant that came to my head, but, 

[00:27:47] Richard Gaffin: that's all right.

[00:27:48] Taylor Holiday: But I think, I think like fueling this, this system is something we think a lot about. And in this moment, like growth is not just going to happen. It

[00:27:56] Richard Gaffin: Mm-hmm.

[00:27:57] Taylor Holiday: it really has to be.

And so when I think about this idea of like a muscle that's atrophied, like I think the creative production muscle is just like, it's, it's, it grew in the wrong direction in some ways relative to what paid media is becoming. How people are able to win it. It, it's just so something to think about on

[00:28:13] Richard Gaffin: Okay, obviously I have so many questions, so let's do another episode on this 'cause more to come. All right folks, well, appreciate y'all listening. We'll talk to you next time. See ya.