How to Win Q4 with Data, Not Guesswork

[00:00:00] Richard Gaffin: I'm just gonna say this up top, we're offering 12 custom creative demand model builds right now for free to brands that are in the eight nine figure range. Now, to just give you like a really quick summary of what that is. A creative demand model essentially gives you the sense of given a certain spend like budget goal for an upcoming month, let's say, how many ads are you going to need to create in order to reach that goal? That's the simplest way to explain that. And what we're gonna talk through today is exactly how the creative demand model and then our spend and a MER model, which is again, the overall forecasting model for new customer acquisition, how those things for a very, for a specific client. We're gonna do kind of a specific case study here, how that impacted upcoming Q4 strategy.

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[00:01:49] Richard Gaffin: Hey folks. Welcome to the E-Commerce Playbook Podcast. I'm your host, Richard Gaffen, director Digital Product Strategy here at Common Thread Collective, and I'm joined today by our VP of E-Commerce strategy here at Common Thread Collective, and my co-host on the D two C hotline podcast, Mr. Luke Austin himself, Luke Austin, our war reporter, our e-commerce, or growth strategist, extraordinary.

[00:02:10] Luke, what's going on, man?

[00:02:12] Luke Austin: What's going on? The, the, the, the gap between the Q3 to Q4 sort of progression and specifically this October month is, is just, it's just fast, fascinating. Because it sort of sits at the intersection of wrapping up Q3. Q4 feels really real and the plane associated with it. And then also 2026 is right around the corner.

[00:02:35] So we're, it feels like, you know, like, you know, if we had like, it's sort of like plain twister, I guess, where you have like one arm over here and one arm and then one leg over here and it's like, okay, let's like try to balance balance in this position.

[00:02:47] Richard Gaffin: Yeah, that's right. It's sort of like balance playing twister while you're like on a, the roof of a train or something like

[00:02:53] Luke Austin: Yeah.

[00:02:53] Richard Gaffin: like never, it just never stops moving. But,

[00:02:56] Luke Austin: Yeah.

[00:02:56] Richard Gaffin: mean, but essentially that's what we're here to talk today about is sort of like untangling that mess. And particularly what we wanted to point out is, is a couple things.

[00:03:04] So one, and I'm just gonna say this up top, we're offering 12 custom creative demand model builds right now for free to brands that are in the eight nine figure range. Now, to just give you like a really quick summary of what that is. A creative demand model essentially gives you the sense of given a certain spend like budget goal for an upcoming month, let's say, how many ads are you going to need to create in order to reach that goal? That's the simplest way to explain that. And what we're gonna talk through today is exactly how the creative demand model and then our spend and a MER model, which is again, the overall forecasting model for new customer acquisition, how those things for a very, for a specific client. We're gonna do kind of a specific case study here, how that impacted upcoming Q4 strategy.

[00:03:48] So they came in, they had a specific, they had a plan for Q4, they had some expectation of what they were gonna do. We ran these models. Discovered that actually their strategy and their approach was going to need to be radically different. So we wanna talk through kind of exactly how that works. So I'll turn it over to you, Luke.

[00:04:03] Let's let's, let's dive into it here.

[00:04:05] Luke Austin: So I'll tee it up again. We're, we're going through a number. Of these projects right now related to building out profit systems for Q4 media impact as well as 2026 planning. And so we are, we're having, having a lot of these conversations and they're, they're a lot of fun. Fascinating. Like what the, what the output and the outcome is of these processes.

[00:04:24] So what I'm gonna do today is actually show one individual brand. What the result of engaging in the profit system and building out the spend a R model. And they created a demand model, which are two core, those are four of our core models that exist within the profit system. So the two of the four models walk through spend a R model and created demand model and what impact that is leading to for this brand.

[00:04:47] Their Q4 strategy is different now than it was three weeks ago prior to us engaging in this process. And so we'll walk through what that output looked like for them specifically and what is changing.

[00:04:58] Richard Gaffin: Let's do it.

[00:04:59] Luke Austin: Okay. So for those listening, watching in a visual format, I'll, we'll be sharing the spin R model and create a demand model on screen.

[00:05:06] And then for those listening in, we'll be we'll be chatting through all of the pieces. So I'll pull that up so that we have something we can reference and go from there. So the spend a ER model as a reminder for those, the spin a ER model or spending power model is. The model that we have created, it's an ensemble model of over 30 different models that look at historical degradation of efficiency, seasonality.

[00:05:31] We even look at Google categorical competitive search trends. 30 different models that we then ensemble into one master model, an ensemble model the spending power model that helps us have the highest confidence that we can in terms of. What new customer revenue and contribution margin to expect at varying budget levels?

[00:05:52] This is for us to to, to help in the process of total budget allocation. What is the optimal amount of total budget that I should spend in a given time period? To maximize against the business objective I have set for that point in time. And so, there's sort of three out of the box optimization selection selections that we've built the model around.

[00:06:14] The first is maximize contribution margin in month one. So I want the maximum contribution margin dollar volume for my first time customers in month one. The second is max, max revenue from new customers at break even cm. So I want the maximum amount of first time customer revenue at break, even on first order.

[00:06:30] And then the third is I want the maximum amount of contribution margin, but in a defined LTV period. So I want the maximize maximum contribution margin, but I'm willing to wait. 60 days, six months, a year to realize that. And I don't need that directly in month, month one. And then what we're able to see is.

[00:06:48] Each of those different optimization scenarios, you can see sort of here in the table below. What we have built out is this chart where you can see the degradation curve for any point in time, but then we have a table laid out where we can see for every additional $10,000 in spend for this brand, what is the incremental A MER, that additional $10,000.

[00:07:08] And then what is the resulting new customer revenue, new customer contribution margin? At each of these intervals so that we can land on the budget that, again, is best suited for the business objective for that point in time. So that's spinning power model at a high level. Now what we do is we'll build, we build this model as part of the profit system, and what we like to look at first is.

[00:07:33] What is what? What is the current budget allocation of the business or their current pace for the year prior to any of our recommendations in any of our perspective to sort of like have a comparative state. And what we have up on the screen here, and we'll talk through first, is the brands budget allocation for Q4 prior to engaging in conversations with us and building out the profit system.

[00:07:55] So they were planning to spend total in Q over the course of Q4 one point. Two, $4 million in total spend. And you can see here in October $370,387,000 was the budget for that month, November was $404,000. December $454,000. The aggregate of those 1.24, so aggregate 1.2 4 3 87, 4 0 4, 4 54. For each of those months, and we can see the resulting new customer revenue for each of those courts.

[00:08:30] 600 K in October, 800 K in November, a million in December, and the contribution margin for each of those months as well. 123 K in contribution margin. October 300 K in November, 330 K in December. Now. Now as we. Look at this, the thing that becomes very immediately apparent, and in some of those numbers it, it, it may have jumped out to folks, is the A MER.

[00:08:55] The acquisition efficiency in each of these months is very different based on this current budget plan, right? So in October, again, the business, the current budget plan prior to this process would've been $387,000. To drive $621,000 in new order revenue. That's a 1.6 a MER in October, so 1.6 a MER. In October, November, their plan was to spend $404,000.

[00:09:21] So that's $17,000 more of spend, right? But like a basically flat month of a month spend from October. But to drive $857,000 in new customer revenue to two one 2:00 AM ER. So October a MER at 1.6, November a MER to 2 1 2. Basically flat budget allocation between those months, wildly different outcomes in terms of the new customer revenue and the contribution margin.

[00:09:45] And then December actually increases more slightly more spend than November. But the A MER is yet higher than November at a 2 2 2 versus the 2 1 2 the month prior. And this was sort of the first part of the exercise of us identifying the opportunity and being able to see that there's. Likely opportunity as it relates to the budget allocation in total, but also the budget allocation between each of these months relative to the A MER efficiency and the, and the discrepancy we were seeing on a monthly, monthly level.

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[00:10:59] Richard Gaffin: Gotcha. So, I mean, to, to kind of reiterate a bit of what you're saying, like the, the thing that jumps out to me is that like, as you grow spend, I mean, even though like October, November is flat, but November, December there's a bit of growth. As you grow spend, the expectation ought to be that MER would go the other direction. So is that, so I, I guess kind of beyond that, what's, what's the opportunity here? Is it to spend more at a lower A MER or how does that,

[00:11:24] Luke Austin: Yes. Yes. So the second part of this process then becomes, okay, we have an understanding of the current save business. We have the model built. We have understand at these budget levels, we have clarity on. Okay. Brand A, if you were planning to hold your budget level consistent, this is what you can expect for your new customer revenue and contribution margin, right?

[00:11:42] And then there's some, some gap that exists. Then what we get into is the second phase, which is what, how could this look different to improve the business outcome for for this month? And that's when we start to look at the model output for each of these months and start to identify. The based on max contribution margin or max revenue, whatever the optimization scenario that we're going for, what the optimal allocation for for each of these months is for, for the business.

[00:12:11] And so, we'll highlight a couple, a couple of these to sort of illustrate the point. October, the brand's existing budget allocation optimization is $387,000. Right. Okay. So that's what they're currently planning to do. The max contribution margin recommendation from the spending power model is $196,000.

[00:12:32] So that's a cut of $195,000, somewhere in that range. A substantial cut in the ad spend recommendation for October. Okay, so 3 87 down to 1 96. Now let's look at December. December, they're planning to spend $454,000. The max contribution margin optimization. So again, the same. The same thing. We're optimizing for maximum contribution margin at the business objective that's staying consistent between these months.

[00:13:00] In December, they're planning to spend 450 4K. The models recommending they spend 488 K in that month for the same optimization selection. So what we just did is if the goal is to maximize contribution of margin in month one. What we identified is we should cut almost $200,000 in plan spend from October and allocate some of that to December.

[00:13:20] And then the story, the same story holds for November as well, where they're currently planning to only spend $404,000 and the model's recommending four max cm to spend $461,000.

[00:13:33] So that's, that's the second part of this process. The current state. What clarity on what new customer revenue and contribution margin outcome your current spend will have for the business.

[00:13:44] But then the second phase being, okay, if we are going to optimize this against the set defined business objective, then what, what should the optimal spend look like? And in this case the movement is a lot less budget in October than planned, and there's a lot more ru room to run in both November and December against the current, just the current trajectory of the business.

[00:14:05] Richard Gaffin: Yeah. Let's jump back to October real quick 'cause I wanna highlight this for our listeners to like, make this kind of particularly clear. So, what, what are they planning on spending in October? Here it's 400.

[00:14:15] Luke Austin: October is plan span. Three. Three. Yep.

[00:14:18] Richard Gaffin: Okay, so let's look at what the model would spit out. Like if they spent 387 K,

[00:14:23] Luke Austin: Yep.

[00:14:23] Richard Gaffin: contribution margin be?

[00:14:25] Luke Austin: So they con

[00:14:26] Yep. 120 4K in contribution margin. That's right.

[00:14:29] Richard Gaffin: And so they're recommending, our model rather is recommending that

[00:14:32] Luke Austin: Hey, we sold,

[00:14:33] Richard Gaffin: spend 196 K, which would result in 180 5K, K in 185. in contribution margin. So the idea, like what we're pointing out there is that if they were to reduce spend by, as you say about 90 K, they would actually contribution margin. What is that about 60 K ish. Right?

[00:14:56] Luke Austin: Yes.

[00:14:56] Richard Gaffin: that's kind of like the revelation here that this model provides is the idea that you would make more money on the bottom line if you spent less.

[00:15:02] Luke Austin: Yeah.

[00:15:03] Richard Gaffin: once that we have that sort of understanding, because the model can reveal that to us, then all of a sudden, the way that we distribute the budget across those months has to change dramatically in order for us to achieve that goal of maximizing contribution margin.

[00:15:15] Luke Austin: Yes, that's exactly right. And the, this is further highlighted when you look at, this is further highlighted when you look at the new customer revenue outcome between these levels of spend. And this is the thing that, what. In this conversations where we deliver the profit systems and talk through the spending power model, the, the thing we always communicate is the spending power model.

[00:15:35] Has yet to deliver a result for any brand that's sort of a increment, recommended incremental change to your current business. Like, hey, just like tweak 5% here or there, and like

[00:15:46] that's an improvement. Which by the way, 5% against millions of dollars of ad spend is still a meaningful impact. Right? So not to sort of diminish that, but typically what the model recommends is like.

[00:15:56] Spend 40% less in this month and ramp up 60% into this month. Right? Like a, a, a much more, a much more wild outcome. And the, the reason for that is the way that efficiency degrades and every month it, there's a different relationship for every brand for every month of the year, which is what the spending power model is, is ultimately getting at, and the, the incremental A MER for each of these incremental $10,000 levels of increased spend.

[00:16:25] Is diminishes much more quickly than most folks realize. And so for the October example that you just walked through, so the max contribution margin scenario, the models recommending 196 K in spend, expect 460 5K in new customer revenue, right? Okay. So 1 96 K for four 60 5K in new customer revenue.

[00:16:43] They were originally planning to spend $384,000 and the new customer revenue out outcome would've been $621,000 in terms of the recommended new new order revenue. So three 80 4K for 6 21, or 1 96 for 4 65. So they would be, they would be spending $180,000 of additional ad spend. For $160,000 in additional new customer revenue

[00:17:13] Richard Gaffin: Right.

[00:17:14] Luke Austin: if they had stuck with their original budget plan for a brand that has substantial increase in LTV, repeat purchase behavior, built in subscription, whatever it might be, that's a trade off.

[00:17:23] That mini would take any, any day of the week sort of thing. Like, okay, cool. Like a point 0.9 A MER, like that actually works out for us in 90 days. But for this business, there's, there's there's there, there isn't that dynamic that exists and that's not a trade off that makes that, that makes sense.

[00:17:38] Richard Gaffin: Right. All right. So with those kind of like that discrepancy between the old, the old model and the new model established, so what's, what are the next steps then?

[00:17:46] Luke Austin: Yes, so the discrepancies are established and we're seeing this trend of there's more opportunity in October, November, and December. Now, there's a whole other layer of this related to the marketing calendar and the event effect model and how we think about those moments. Just for the sake of time, I'm gonna sort of breeze over lightly, which is we see this, the current state, we see the dynamic of shifting the spin between October, November, and December.

[00:18:10] And then what that starts to bring up is conversations around how we can adjust marketing calendar moments to further sort of build upon or exaggerate this impact for the business. And so what we ended up doing for this time period was not just making these initial budget reallocation between October to November, December but we actually.

[00:18:33] Move forward with replacing last year's 50% Black Friday Cyber Monday offer with a BOGO offer. And then bringing spin down in October and then November and December compared to what they had done in 2024. So based on, again, the marketing calendar in VIN effect model. We've talked about this in previous conversations.

[00:18:52] Won't get into those specifics, but based on the impact we'd seen of historical marketing moments. On driving volume and efficiency at the levels that we needed to see BOGO offers heavily outperformed against 50% relative to the marginal profile of these offers and the amount of volume that we can drive from them.

[00:19:09] And so in addition to pulling the ad spend away from October, then the movement was let's adjust the marketing calendar and offer strategy in, in November and December to align around this offer that has higher impact based on. The effect that we've seen in the marketing calendar of Infect model. And that's how we landed on the final plan recommendation for them, which we have here.

[00:19:31] And I'll talk through sort of briefly. So what we landed on was. October, we cut budget back by about $80,000 relative to their initial plan. And then November we increased from $404,000 original plan to $563,000. So we increased $160,000 in the recommended output for November and then December $454,000 to $670,000.

[00:19:57] And so the net, the net impact of. The spending power model combined with the adjustment in the marketing calendar events for the business resulted in in over $200,000, $220,000 in incremental spend for this time period, and resulted in over $400,000 in incremental contribution margin and about $700,000 in incremental new customer revenue budget allocation, aligning with the the highest impact moments and then adjustments to the marketing calendar and the effect of those events.

[00:20:28] Adjusted spend between the months more spend overall, more new customer revenue overall, and higher contribution margin over the course of Q4 that we can now expect that's built into the plan.

[00:20:40] Richard Gaffin: Okay, so you sort of pointed out how we've shifted the expectation because

[00:20:44] Luke Austin: Yep.

[00:20:45] Richard Gaffin: opportunity there, and you've started getting into this a little bit, but let's unpack it more, which is if you do nothing. Except business as usual, this isn't gonna

[00:20:53] Luke Austin: Yep.

[00:20:53] Richard Gaffin: The adjustment to the plan means an adjustment to behavior.

[00:20:56] So you already mentioned switching up the offer switching to a bogo, which obviously is, would be better for margin, which impacts the contribution margin number. what other changes have to be made in terms of behavior over these next three months in order to bring about this change other than just kind of like turning up the spend or whatever.

[00:21:14] Luke Austin: Yeah, so the. The expectations are set. We have daily targets that then are set against these. So the execution to your point, has to, has to map against that on a daily basis. There's downstream effects now with the marketing calendar on the email and SMS calendar and the send plan associated with, with those things.

[00:21:30] So there's, so there's a few, a few buckets worth of things, but I think. The the main impact as it relates to a planning from a planning perspective that then this leads to in October is we're planning to spend $220,000 more than the original budget plan and shifting a lot more of the expectation in November and December.

[00:21:48] Yes, the marketing moments are gonna propel that, but we need additional fuel within. The ad accounts and specifically meta, which accounts for the majority of the spend to be able to drive that outcome. And so the question becomes naturally how much additional creative volume do we need to be able to to be able to achieve this plan, knowing that we're pushing incremental spend in a different way than we had originally planned to.

[00:22:09] And so that's where the creative demand model comes in for us, in helping us to answer that question of exactly how much creative do I need to hit the spend forecast that I have for. The coming time period and the created demand model. So to give the sort of high level overview of this, we've, we've sort of unpacked in a, in a few different episodes at this point.

[00:22:31] But just as a refresher, the creative demand model is ingested based on all historical performance data across the, across the account. And we look at five different core creative metrics as the output. We look at zero spend rate, which is the percentage of active ads that had zero spend during the measurement period.

[00:22:50] We look at ad concentration, the percentage of total ad spend concentrated in the top five performing ads. We look at ROAS degradation and spend degradation, which is the change in spend in ROAS after the initial launch week. So there's a improve or degrade after the initial launch week, and then we look the fifth metric at evergreen share, which is the percentage of ads that have been running consistently four 30.

[00:23:15] Plus days, these are your sort of evergreen, stable foundation of the account. So we, we build out the creative demand model looking at these five metrics and we benchmark against our broader data set. And that culminates in for every brand a creative score. And the creative score is the combination of those five metrics.

[00:23:33] And it is a percentile rated metric. Where if your creative score as a result of these five creative metrics is above 50, that means that you are going to need to create less ads than you did historically in the coming time period, because the efficiency of your meta relative to your creative performance is improving over time, relative to some combination of those five metrics that we walked through.

[00:23:57] So above 50, you're gonna need less creative volume, you're doing better, you're gonna need less to get to where you need to go. Create a score below 50, you're gonna need more ads than you did in a, in a similar historical time period to achieve the same outcome. So if we are needing to spend more than we did last year, which is what the output outcome of this Q4 plan is spending more than we originally planned to.

[00:24:22] And what we have up here is they created demand model output for the same exact brand, and their creative score is a 43. That means. We're gonna need to create more ads, even if we were just trying to spend the same amount, because our credit score is below 50 at a 43, and we're needing to spend more in total.

[00:24:38] So it's sort of a double whammy on the additional ad creatives that we're going to need to output to be able to get to the spend goal for the quarter.

[00:24:47] Richard Gaffin: Yeah. So yeah. In other words, like if, if they were to have spent, let's say.

[00:24:53] Luke Austin: Yep.

[00:24:53] Richard Gaffin: than plan last year or $500,000 or whatever it would be. They would've required less ads to do that than they would this year, given the way that some of these metrics are kind of have shaken out. So obviously they

[00:25:05] Luke Austin: Yes.

[00:25:07] Richard Gaffin: Kind of suite of evergreen ads, let's say. But across the, the other metrics, it, what it's sort of showing is like the degradation of specific ads is like maybe relatively high zero spend rate. For instance, meaning like, what percentage of ads get zero spend at all?

[00:25:21] Luke Austin: Yep.

[00:25:22] Richard Gaffin: because of those factors, there's going to be some percentage tacked on top of the increase in spend of extra ads that need to be made in order to hit those numbers.

[00:25:30] So what are, what are, what are those numbers? What does that look like?

[00:25:33] Luke Austin: That's exactly right. So, a couple different ways that we can, we can look at it. So we have the specific number of actual ads that need to be created for October, November, December to hit those goals. So I'll talk to those, the, I'll say those numbers really quick in October to hit the spin budget. This brand needs to create 303 ads.

[00:25:51] In November 618 and in December 345. So that's the total between those three months, 3 0 3, 6 18, 3 45. That as an average is right around 323 ads, I believe so on, or sorry, 452 ads is what they, what they need. 323 ads is what they, what they've been creating so. They'll need on average over the course of Q4, 452 ads per month with more of them sort of loaded into November and December.

[00:26:22] But you wanna get started on the production of those in October, as soon as you can, right? Because you're gonna need to launch those in just a few weeks from now. So 452 ads over the course of October and November, December on average is what's needed. Broken out by each of those months that I just talked through, and they have been creating over the recent months, an average of 323 ads per month.

[00:26:42] We can see that here in the chart in the created demand model where we're able to see actual ads created. So a actual creative net new creative ideas in the account for that time period, actual ads created versus the optimal ads to create for each of these months. And this brand is like, is really strong in terms of the creative output relative to what what we see on average, like creating an average of 323 net new creative IDs within your meta ads account on a monthly basis.

[00:27:07] Is really strong outcome. And for some of these months they're, they've been creating the necessary or even higher than the necessary amount. Now, what's happened is in September and in October, so far, the actual ads created has been lower than what the expectation is. And so we need to ramp that up heading into the rest of the year.

[00:27:26] But the headline here is you need 452 ads on average the recent months you've been creating 323 ads on average. So you're gonna need about 120 more ads outputted every single month over the course of Q4 on average to get to your spin goal. So we, we need a production plan and we need a strategy to be able to increase ad output 120 additional ads above the current average baseline of what our creative system has been outputted.

[00:27:55] Richard Gaffin: Right. So yeah, obviously like there's some really clear action steps that come out of this and some particular urgent ones as well. Like the, the sort of immediate action that needs to be taken over the next 30 days is to figure out for this brand, the production, how, how to pull the levers in their creative production side to actually

[00:28:13] Luke Austin: Yep.

[00:28:13] Richard Gaffin: extra a hundred and something ads per month.

[00:28:15] Right. Which is a significant amount.

[00:28:17] Luke Austin: Yep.

[00:28:18] Richard Gaffin: so. But I think like, to summarize then, like there's a very clear path here from this is what they thought was going to happen. This is what the model revealed pretty clearly, needed to happen in order for them to kind of hit the goals for their business, which are around contribution margin. And then gives them a sense of exactly like the volume of execution that needs to happen in order for them to get there, which as it turns out, was, is much greater than their kind of original expectation, or rather their original like. The original capacity of their creative production machine. So I mean, I think that this is like overall just like such a great example of what the spend spending power model and the creative demand model kind of reveal for brands is that like there's, there are some real gaps between what they're currently doing and what the potential is. And I think these make makes, these. Really clear. So, so kind of what, what comes next then for them? Is it just like, hey folks gotta ramp up creative production, or like what like what

[00:29:17] Luke Austin: So,

[00:29:18] so two things. Two things come next. So we have the, we have the monthly sort of p and l level forecast for each of these months build out. But then what we have is daily targets already set for the course of October that we are now partnering with the brand and tracking against those on a daily, on a daily basis to be able to make sure that they get to the outcome they need.

[00:29:37] So what we need to do is. Track every metric, every single day to make sure we stay on track for this plan. Because if we're pacing 15% behind October's expectation, when we go to update the models and reforecast November, December, there's gonna be a higher expectation that's needed, right? So don't get behind the plan is the first, is the first sort of action item coming out of this.

[00:29:55] We locked in the plan, now let's go execute on it and make sure we don't start falling behind in any area on on a given day. And then relative to. The marketing calendar, there's a whole sort of subset of activities coming out of the conversation we had with the, with the brand last week. They had, all sorts of things in production and design relative to the 50% off offer that's getting switched to BOGO offer, right? So there's like all sorts of things that need to be adjusted there on the website and the codes and the design materials, et cetera. That it was an immediate action item. And then the other piece is on the creative demand that that needs to get in production as well, which is, which is already rolling.

[00:30:33] Combination between what their internal team is done doing and, and then potentially with us supplementing what that, what that looks like. But. The thing I'll add to the earlier point that you brought up, Richard, which is there's additional creative investment that needs to be made to get to the goal, but we've just created a few hundred thousand dollars of incremental contribution margin that's going to help sort of fund it, that investment into these additional areas, which, which is the important thing, which is like the, what we have many conversations that the output is different than this example where the output is actually spend less overall because you're so far past your, your level of efficiency degradation on the A MER curve and those conversations, it's important to make that initial adjustment. But the, the even more important thing after the initial adjustment of pullback and be more efficient is now you have saved those dollars that you were going to.

[00:31:31] Spend at a very low incremental A MER redeploy those dollars into growth into areas through. Creative volume and diversity, net new channel expansion, specifically more diverse creative so that you can improve your A MER car so that you can improve against the model. And then net new channel expansion, launching app love and YouTube and some of the channels that we're seeing produce the most growth, redeploy the dollars that have been saved to go and improve the model.

[00:32:00] 'cause that's, that's the whole thing we're all after is we build the model, we set a really good expectation. But what we're almost interested in is going to beat the model. Let's improve the business outcome so we don't continue on this trajectory. So we've identified where we can reallocate and improve the contribution margin, and we've actually saved some dollars in October.

[00:32:17] Those need to be reinvested for growth to make sure that we stay on plan for the rest of the quarter.

[00:32:23] Richard Gaffin: Right. So what you're saying is essentially this plan puts the cash in your pocket that you would need the very simplest way to put it, the cash in the pocket that you'd need to invest in, the creative production that you would need to make to the numbers that you're planning for

[00:32:36] Luke Austin: Yes. Yep.

[00:32:38] Richard Gaffin: And to your point, I think it's important to highlight that the original plan basically had them. almost 90 K in spend on Meadow, right? I mean,

[00:32:47] Luke Austin: Yep.

[00:32:47] Richard Gaffin: that's pretty much, frankly, what it was like. You could see on that report that the, the incremental roas on each one of those, like tranches of 10 thou, 10 K or a thousand dollars or whatever it was, was like

[00:32:56] Luke Austin: Yeah. Yes.

[00:32:58] Richard Gaffin: means that every dollar spent over that kind of original amount was. Was lost, they were just sort of throwing it away.

[00:33:03] Luke Austin: Yep.

[00:33:03] Richard Gaffin: now what we've done is readjusted it so they're not throwing that 90 K away that's in, that can be reinvested in a manner that's actually going to generate more cash so that they can kind of make the investments that they need to make. So,

[00:33:14] Luke Austin: Yes. Yeah, that, that's exactly right. And there's mo Most, most brands have a list right now of ideas and desires in terms of new investment areas, new campaigns and creatives and channels they wanna expand to and things to. Understanding how much budget they can actually save and reallocate in some places to deploying those without having a meaningful impact on their top line or the contribution margin is, is the first critical step.

[00:33:38] So to your point, going into Q4 and the planning, and then also going into 2026, that it's getting clarity on that. Is one of the most critical first steps in this process so that you understand, okay, what is the necessary budget that I need to spend to maintain sort of the baseline expectation of where I want to go?

[00:33:55] Right? But then there's some gonna be some delta between where you're currently at or pacing to relative to that. That then becomes, okay, this is what we can think about as the budget that we can reinvest into growth, into net new things that are going to improve the model, improve the business trajectory against our current baseline.

[00:34:15] Richard Gaffin: Yep. Alright. Anything else? Anything else you wanna hit on this, Luke?

[00:34:19] Luke Austin: I don't think so. I think we, I think we covered all of it.

[00:34:22] Richard Gaffin: love it. Cool. Well, if you want us to do this for you. we are giving away 12 creative demand models right now, four brands that are in that eight, nine figure range. If you're interested, comment thread code.com. Hit us up, hit that higher risk button. We would love to chat about building one of these things for you because as we pointed out here and we've sit on the pod many times, likelihood that you're under or overspending by a lot. Is, there's a high likelihood of that, and this is gonna reveal that to you and kind of show you exactly the path that you need to take to get to actually a, a plan that's going to maximize the business outcome that you're interested in. So check it out. Give us a call. We'd love to chat. And until next time care and we'll we'll see you next time.

[00:35:04] Bye.

[00:35:06]