Unit economics is hands down the biggest lever in business, especially with paid acquisition
People preach that CPA is the only metric that matters and soft metrics to be “vanity metrics”
But through analyzing soft metrics you can gauge if it it’s even mathematically possible to acquire customers profitably
You can be the best marketer in the world and still not run a profitable business because there will always be a price floor set by the auction
And there will ALWAYS be a price floor in competitive US markets. The lever of lowering CPC is not always possible, no matter how good your creatives may be, unless you pivot to some sort of arbitrage (platforms, GEOS, etc..)
For example if you sell a 40$ product, cogs being 10$, with a 1.5-2$ CPC. You would need a 5% CVR just to breakeven!
It is fundamentally impossible to acquire customers with a healthy 30%+ margin left over
The only realistic way to offset these costs is by increasing customer LTV through subscriptions or a dialed in backend
I was stuck in this cycle for a while thinking I could compete from a pure marketing standpoint not understanding the math to be impossible..
This is why its not always a marketing skill issue but a fundamental unit economics problem
@DTCMidas How involved are you in the creative process of your ads?
Are you still handling the ideation & scripts mostly on your own or is this mainly outsourced to strategists?
@conortrains When you say “we” who/what roles does your team consist of?
Also any hires from day 1? Or did you fully figure out the creative side as a solo operator first
@nicktheriot_ Easy way to ruin the authenticity of your personal brand, which in my opinion outweighs the benefits of having a few more followers/reach
How to never have that happen and never get locked out
- Create a Meta Dev Account
- in the BM Create an "app"
- give the system user admin rights
- store the api key for the system user
This user will never get blocked ever no matter what and with the api key you can add new profiles to the bm even when all others are blocked
Unit economics is hands down the biggest lever in business, especially with paid acquisition
People preach that CPA is the only metric that matters and soft metrics to be “vanity metrics”
But through analyzing soft metrics you can gauge if it it’s even mathematically possible to acquire customers profitably
You can be the best marketer in the world and still not run a profitable business because there will always be a price floor set by the auction
And there will ALWAYS be a price floor in competitive US markets. The lever of lowering CPC is not always possible, no matter how good your creatives may be, unless you pivot to some sort of arbitrage (platforms, GEOS, etc..)
For example if you sell a 40$ product, cogs being 10$, with a 1.5-2$ CPC. You would need a 5% CVR just to breakeven!
It is fundamentally impossible to acquire customers with a healthy 30%+ margin left over
The only realistic way to offset these costs is by increasing customer LTV through subscriptions or a dialed in backend
I was stuck in this cycle for a while thinking I could compete from a pure marketing standpoint not understanding the math to be impossible..
This is why its not always a marketing skill issue but a fundamental unit economics problem
Let it run for a couple days, CPMs will come down
Algo changed a lot past year
Meta sending hyper targeted high intent traffic early on for learnings which inflates the cpm
Once meta learns the audience pool expands lowering the traffic quality (no longer hyper targeted) and cpm drops too
After seeing what happened in Dubai
Taxes no longer seem like a bad idea anymore
You cannot place a price tag on your safety
My profits going to Uncle Sam ensures I will never have to experience this terror
Yet another reason why America is the greatest country on the planet
I remember seeing @spencepawliw talk about re-formatting winners in one of his videos.
Voiceover to UGC
Static to video
Realized you can do the same with organic content.
If something is ranking front page on Google News or pulling views on YouTube, the angle is already proving it works.
Take the same messaging, reformat it into a video, and suddenly you’re not guessing what performs anymore.
Essentially format arbitrage.