An Inside Look at CTC’s Exact Client Growth Strategy

[00:00:00] Luke Austin: But yeah, I'm, I'm Luke. I'm the VP of Strategy here. So I oversee growth, email, creative, and data departments. And I'm really gonna build off of what Taylor laid the groundwork for, which is our core belief that the path to profitability starts with clarity. We truly believe this. That is what we're building our core system around here at CTC, and that is what we're gonna continue to invest in, is the path to profitability, starts with clarity and how do we deliver the highest level of clarity to you as brand owner, decision maker, marketer along the way.

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[00:01:22] Luke Austin: An example of that is. Last, last year we talked about this in the same sort of a session. It was when we launched our incre ality tool. So this is the beta version of our incrementality tool is something that we had looked out at the space and seen the variety of marketing measurement tools available.

And we believe that geo testing was a gold standard of measurement. We believe there's consensus across this point. But there weren't solutions available in the market for two main, for two main reasons that were prohibitive. One was the cost. Many solutions that existed were $10,000 a month or more on 12 month contracts, and it was cost prohibitive for most brands being able to participate in the gold standard of marketing measurement.

And then the second was there was. A roadblock to operationalizing the result of each of these tests as well. Where these, these platforms, you'd have your incrementality tool or your MTA tool and they would lived in silos, disconnected from your financial forecast or your Shopify dashboard. And so operationalizing the result of these tests in terms of what is the impact on my business, how do I actually go and execute and make decisions on a day-to-day basis against that gets made it very challenging.

So. Over the course of the last year, we've been consistently improving our platform, expanding the test to be able to do new channels and tactics. So outside of Meta, Google, non-brand Google brand, being able to test app loving and Snapchat and Pinterest and YouTube demand gen to be able to test expanding into these net new channels also have expanded to be able to assess a brand's impact against both the.com as well as the Amazon revenue.

So understand what your Amazon. Halo effect is when there's multiple distribution points involved, which is key to understanding what the full impact of the media spend is. And then we're done more deeply integrating it into the daily workflow of how the test results actually get operationalized on your behalf so we get a test result.

How did that show up in terms of the day-to-day decision, decision making? And really what we were looking to solve for was. What we saw as the web of marketing measurement that existed, that the amount of time that we spent in conversations and you all spent in conversations and looking for solutions was was what was eating up a substantial amount of of time and resources.

And there was a lack of clarity in terms of how all of these things connected. So most of us have interacted with. Most of these tools and many others that can be shown on this. From the Al Loops to Google ads in platform reported results to Adobe Analytics, to polar analytics, to work magic, and trying to understand how do each of these platforms tie to one another and somehow to triangulate the data between them all to arrive at a decision for the business.

This is the core lack of clarity that exists in the market around marketing measurement. And the lack of tools available for those main two prohibitive region reasons that we went to solve by building out our incrementality tool and the operationalizing of the result is really, really important. I wanna hone in on this because what we're not going to do in the future is to continue to invest in our technology and provide new.

Tools fun features that show up but are disparate and disconnected from each other. What we're most interested in is how is this actually gonna make an impact for the business? At the end of the day, connecting the results of that feature, of that tool to a decision making factor that impacts you, the contribution margin of the business.

And this is how it shows up in our incrementality workflow. So on the left there we have the result of an incrementality test. We're able to see the true incremental impact of that specific channel or platform on new customer revenue on your.com store. Returning customer revenue on your.com store. And then total website revenue if you're dot com, as well as the Amazon Halo effect.

And we're able to get to a high confidence level, a PAP value of of 0.9 or better on each of these tests so that we have high confidence in the results. Then from there, we take the result, we integrate it into the SAT list settings, which adjusts the on platform, reported performance on platform, perform reported revenue for each of these channels, adjust it for the incrementality based on this test result.

So that everywhere in stat lists that we look all the reports, the home dashboard, when we set the ROAS targets for the channels, everything is adjusted and calibrated by the test result that we have 90% confidence or or better in. And then this a picture of tracker tab Taylor walkthrough earlier where every day we have targets for spend and ROAS for every single campaign on every single platform that are calibrated by that test result.

That is what we see as being the gap that exists in relation to a lot of the tools that exist in the space and what we are solving for with the rollout of the incrementality testing tool at this same time last year. And what we've been able to do over the course of of the past year is partner with you on over a hundred year mentality tests on more than 10 different platforms.

And that's given us clarity and, and confidence in the core channels that we're investing in to be able to continue to invest in those, in those channels. And this visual here, this chart on the left, plus a subset of those tests on meta Google brand and Google non-brand platforms, the core channels that make up the majority of a lot of our ad spend investment, and each of those plots is.

A test result looking at the platform roas, which is on the bottom, the, the X axis there, platform reported ROAS against the I Oass, which is on the y axis there to draw the relationship between for that specific brand on that specific platform. What is the platform, ROAS versus incremental ROAS relationship?

Is the platform over, or underreporting its result relative to what the true incremental impact was? And that blue diagonal line going from the bottom chart up the top right represents a hundred percent incrementality. So if you have a test that falls directly on that blue diagonal line, what that indicates is the platform is reporting exactly what the true incremental roas of that test was.

That represents a hundred percent incrementality. And it's really fascinating because what you can see, so meta tests are all those little blue dots. Google brand are all the yellow dots. And then Google non-brand are the off-white, gray dots there. And you can see meta tends to cluster pretty close to that line.

Across many of our tests cluster pretty close to a hundred percent increment. On the other hand, Google brand tends to fall below the a hundred percent incrementality line pretty drastically. And that's all of what our, our experiences of Google brand are in different, different spaces is the platform.

ROAS is over reporting relative to the IOS for for those platforms. And then Google non-brand tends to have the most widest most disparate results in terms of the test result against the incre mortality factor. So you're seeing dots well above a hundred percent incre mortality. Well below incrementality, and the chart here on the right illustrates this in a different way, where you can see meta is the blue here, where it indexes closer to a hundred percent or more incrementality against the against the platform reported result.

Google non-brand indexes lower in terms of the incrementality, and then Google non-brand has sort of the mo, the widest spread in the, in the test results against these, against the platform imported roas. What this has enabled us to do again, is get more confidence in terms of the core channels that we're investing in.

To inform the incrementality benchmarks that we have, how much of the spread of the results that we've see in each of these things to help prioritize where we segment, where we prioritize each of these incrementality tests and where we deploy the ad dollar. So this is our incrementality testing priority tool, where we take those incrementality benchmarks, we applied against what your platform revenue is reported on that channel, and then based on the lower bound and upper bound spread of the incrementality results.

We're able to, we're able to identify which channel represents the widest variation in terms of the potential reported result against what the incremental result will be, and that's the channel we're go, gonna go after and test first. It's Google non-brand represents the, the biggest opportunity based on where this brand is spending and the lower and upper bound result.

That's what we're gonna go off at first. Then we're gonna go off to Facebook acquisition and on, on the line from there. So. It's allowed us to get higher confidence in terms of these benchmarks, which is helpful, but it's also shown us like we saw in this chart that there's a wide spread in terms of the results on a brand by brand level, creating the necessity that every business needs to test this for that is sells.

Thus, we need a solution that is lower cost and connects to the core output in terms of the decision making and the system to be able to allow for that. So I wanted to bring us back to a year ago when we talked about that relative to our incrementality tool, and we built that over the past year to provide us that level of clarity as an illustration of what we are going to continue to do in terms of investing in our core system to provide clarity at this, at this level through tools like incrementality and the other tools that Taylor walked through earlier, our modeling, planning, and forecasting.

The tracker tabs encompass as well as the new tools that, that we'll invest in over the, over the coming months and years. But I wanna take a pause here because the path to profitability starts with clarity. But like Taylor mentioned, we're not trying to create clarity for clarity's sake. We're not starting and ending with clarity.

Clarity is the starting point for us to be able to go into novel action and then make decisions from. A point of clarity with, and we've been thinking about a visual and a metaphor to help tie all these things together because one thing that, that we've thought about and talked about a lot over the recent months is.

How many moving pieces there are in terms of CTC systems and our tools. And we tack on new things in the sidebar of stats over time and we roll out new service offerings and it can feel disjointed and disconnected in terms of what we're doing, I think at times. So we've thought about what is the metaphor for what we're doing here at CTC that brings all of these pieces together, and I think we found the perfect one.

It's a beautiful one. So, and this is dark Side of the Moon. Pink Floyd, one of the most iconic albums of, of its time. Second only maybe to Steely Dan's Asia. But what this also is, is a refractive prism. So a refractive prism is a, is a, its cut in a certain. The glass is done in certain angles. It's gotten a certain way for light to be able to pass from one side and then be refracted on the other side in a very particular manner.

The light needs to be refrac refracted at a specific angle to get to a certain target, and and the prism is what guides the light from one side into the output on the other side. So, a way to think about this that we're all probably familiar with is most cameras like DL DSLR cameras have prisms that sit inside of them.

If you're to take out that refractive prism. You would still have the camera, you'd still have the light on both sides of the camera. You'd still be able to look through the camera. You'd have all the things on the other side of the camera, but what you'd be seeing through it is upside down picture.

Things would be blurry and disconnected, and what you could do is go and take, you know, a hundred shots with the camera and, and you might get lucky and get a good shot. Through that. But once you drop the prism in, everything comes into focus. Everything's right side up, everything's clear, and now you can go and get the shot that's perfect without having to go and troubleshoot in that way.

And that's how we think about our core system at CT C as the refractive prism, that word building to be able to guide that level of clarity. So what lives inside the refractive prism is our models and forecasting in the plan section. Marketing measurement and incrementality through our study section.

It's creative demand and persona building that lives at Compass campaign level daily forecasting that lives in the tracker tabs daily targets for 35 plus critical metrics that lives in the home dashboard. And then 45 plus reports that live in the reporting section for us to be able to do the insight generation to get to the, to the result.

All of this on the foundation of stat as the, as the integration and and consolidation of your sales costs and, and marketing data. And what we're going to continue to do is invest in the core system, the core prism of CTC, to provide, provide clarity. I had a good conversation last night with Scott and, and John and Scott and I I, I really appreciate it 'cause we were, we were talking about things that are working well and not so well in terms of the relationship and technology and things that we can improve.

And, and Scott said. I, I actually don't really like Atlas. 'cause when I look at it, I always have in the back of my mind something's off. And like the contribution margin, I gotta like, you know, it's 10% inflated. So I gotta kind of like whittle it down in my mind and it actually leads to less clarity for me.

And I, and I want you to hear Scott, I want everyone to hear that we hear you in those frustrations. And it's, it's the reason why we're pursuing. And have the partnership with the Akisha group like we do. And for the, for the reasons that Taylor mentioned, these aren't easy problems to solve and we really want to we're really focused on being able to solve them to get the core system to the level of clarity needed to build this prism that sits at the intersection of everything, which gives us clarity on the decision making.

But. The path to profitability started with clarity, but clarity is not the end result. So what are we trying to get to by building the prism that sits at the, at the intersection of all of it? Well, Taylor, Taylor talked about this earlier. We look across our data set of brands and we're able to see not just the raw data, revenue and ad spend and contribution margin over time.

We also have the we're ingesting all the marketing actions that are being taken against that outcome. So the marketing calendar, new Facebook campaigns launched, new email campaigns launched, and we're able to plot those things over time and see the impact of it. So this is the calendar report and stat lists.

This is for eight brands who are sitting, sitting here for different points of time this year. And so you can see revenue and ad spend plotted over time, and then the various marketing actions. That led to different outcomes over the course of each of these time periods. And we believe it's our responsibility to be able to build a core engine, the core prism that guides clarity, but to also look out across our data set and look at these marketing actions or these units of growth that are leading to disparate outcomes and producing the best results for brands to be able to look out and see what are brands doing, what are the investments they're making that are leading to.

The growth and how do we build those services and those solutions that the broader data set can, can get access to. And so in looking across our data set in this way, we've been able to look at the various places that marketing investment is coming into the prism, right? It's the ray of light that's city in the prism.

And then identify the highest impact units of growth. Because the end goal is that the path and profitability starts with clarity. But this should enable confident in investment into productive units of growth for all of us so that we can have the clarity needed to take the swing, to make the decision to produce growth into the thing that's going to lead to the, to the highest likelihood of success.

So in looking across our, our data set, in this way, the various marketing actions and and services available, the core things we have identified as being crucial. To providing profitable growth in this way as units of growth we want to be able to offer are, are three main things. The first is channel expansion, expansion, so.

Channel expansion, thinking about this as net new channels and tactics. So this is, we're running on meta, we're running on Google, non-brand running on Google brand. How do we think about expanding into YouTube demand, gen and app loving and Snapchat. And what that's going to get us to is incremental customers that we're acquiring for the business, right.

The next unit of growth. Being creative, creative volume is crucial as we've seen. We all know, but what is also necessary is diversity in the creative. And then to be able to achieve creative volume, we need lower cost solutions available to be able to get that. In the, in the first session, Dina and I were having aside, we, we were talking about.

2000 ads, 4,000 ads. And the, the, one of the biggest barriers there is like if it's $500 per ad, like how, how are we gonna get there in terms of the investment? So we need the solutions available that provide creative diversity, but also at a cost that makes the volume possible for us to be able to scale the spend volume while keeping the efficiency constraint in line with what our goals are.

And then the third unit of growth. That's, that's crucial in terms of providing the impact for these brands is on the email side. So campaigns, flow segmentation, having an email strategy that really provides the foundation for growth. And it's, it, it's incredible, like the looking across our data set at the email and automation systems that we all have in place.

There is a wide variety in terms of how that shows up. There's not a, there's not a consistent baseline in terms of. Every brand here we have these 10 automations live and they have these many touchpoints and the segmentation is done this way. There's for this brand three here, this brand has 30 and each of them have 17 touchpoints and everywhere, everywhere in between.

So what are the gaps that exist in relation to that to help drive returning and LTV growth through email? So what we're gonna do, I'm gonna hand it over to you. Adrian here, or Actually, no, I'm, I'm gonna talk about channel expansion for two more minutes and then hand it over to Adrian. But we're gonna talk through each one of these three units of growth and how we are building solutions and services here at CTC to help partner with y'all and enable expansion into each one of them.

So first channel expansion. This started about nine months ago. We've, we've had conversations with many, many of you in regards to YouTube and have and have labeled this our YouTube 10 x initiative, which is to provide YouTube 10 x return on YouTube investment over over a course of time.

So we've really focused on rolling out YouTube. 'cause what we saw in a first group of incrementality results was that, there was high incrementality in terms of the U YouTube platform reported result against the, what the against what the incre incrementality result was for that, for that platform.

So YouTube really under reported its true, true impact on the business relative to what the platform was saying. And as a result of focusing on YouTube investment, we've we've scaled spend on YouTube for subset of customers. 400%, little over 400%. Over the course of the first half of this year, compared to the first half of last year as a core area where we're seeing high incrementality in terms of net new channel expansion and YouTube being a driver for that.

And this pairs with what Adrian's gonna talk through in terms of creator content, where we're able to fuel the account and we feel YouTube shorts placements through creator content that we have available as well. A couple, couple net other highlights here. So, this is to show increased investment into TikTok and YouTube for school candy specifically.

So, o over time here you can see TikTok ad spend and YouTube ad spend and how YouTube has grown as a percentage of the total, but then the TikTok investment has grown over that time period as well. So. In January through junior over year, 95% more incremental media dollars deployed into TikTok and YouTube compared to the previous time period.

Again, enabled by the clarity of incrementality and then leaning into TikTok and YouTube through the content that we have. Available. Another one to highlight here for Key is increased investment in TikTok, Snapchat and Pinterest. So those core expansion channels where you can see the increased investment over time from TikTok, Snapchat and Pinterest.

And 46% more incremental media dollars deployed January through June year over year. So this is what we are very focused on in terms of channel expansion into YouTube and. Channel expansion and do Snapchat specifically as core channels that we're seeing opportunity on for brands based on the incrementality results.

So find Rachel and Con, I think Con is still suck on flights, but find, find Rachel here to share all the tips and insights on what we're seeing on the YouTube side of things. And then Delaney and McKay on the Snapchat side of things. We, we, we have a partnership with Snapchat where there's a very high ad credit that they're extending for brands testing on this platform initially, so you can kinda see what that breakdown looks like here.

40 K test budget, 15 K ad credit, 60 K test, but 20 K ad credit. It's a really strong match in this platform where what we're wanting to do is between YouTube. And Snapchat, get more brands launching on those with an incrementality test. Live with the ad credits in play to produce more incremental spend on those channels while keeping the baseline of meta Google brand, Google non-brand in play as well.

It's gonna add net new growth and distribution through each of those ad channels.