Happy Sunday! Man I spent this week nearly bedridden with the flu and I'm finally feeling like a person again. I certainly hope your week was better than mine. Happy to be back and feeling good enough to write this for you. Down To Chat Season 3, Episode 2 with none other than Kendall Dickieson talking all things influencer marketing and social went live last week. Peep it here, and listen to episode 1 here. One of my favorite things to do is to take Mentorpass calls with new brands and help them launch, specifically their ad account. I also love doing it with smaller brands who need an "ad account makeover." It's really cool to get the founder of Mentorpass saying one mentee reported their conversion rate increase by nearly 300% after a session. I've felt like a broken record with some of these calls though, because I like to keep it super simple. So I've distilled my advice for launching a new account on Facebook or making over a broken one into 5 key areas.

1. Offer Configuration

I think many people are surprised, but I often spend most of the first Mentorpass session just talking financials. They expect to talk audiences, interests, and FB set up. But none of that matters if you don't get your numbers right. There are four numbers you need to know post click. You need to know your average order value, or AOV and you want it as high as possible while limiting discounts. Then you have your gross margin, which is simply what it costs to make the products, or your COGS. Ideally you want this at 70% or higher. If you're well below that, it's going to be really difficult. I'll be very honest with people and let them know that being profitable with ads is going to be very tough, and they might want to invest in other channels. Then you have your landed gross margin, which is how much profit you have net of any other variable costs like shipping in and out, merchant processing, returns, etc. Ideally, your landed gross margin is at least 50%. This number is really important to know. In fact, when starting out advertising, it's the most important to know because you don't know your CAC, and this tells you how much you can spend to acquire a customer at break even. Ideally you want to be first purchase profitable, but while you're just launching you'll need to test and if you can spend and break even while learning and acquiring assets, keep spending. Then, you have your contribution margin. This is the holy grail metric for advertisers. To get contribution margin, simply subtract your CAC from your landed gross margin. You can figure out how much contribution margin you want on acquisition. Ideally you can turn 10-20% profit on first order. You should NEVER go negative on acquisition while you're starting out; I wouldn't do it for several years so you have actual LTV data, rather than just models.

Now here's the key, you likely will need to create offers to increase your landed gross margin and ultimately your contribution margin. How? All the same tactics you see; bundles, upsells, volume discounts, etc. The key here is to model and test. I see too many people upselling with big discounts and only looking at revenue or AOV increases without calculating margin dilution. For example, what good is increasing AOV by 5% if you offered a 10% discount to do it? I reccomend testing multiple offers in a contribution margin calculator to make sure your gains in AOV aren't offset by bigger increases in discounting.

What you offer is going to depend on what you sell. If you're selling a consumable, an offer structure with price discounts is going to do very well for you. You should test offering 1,3, and 6 with escalating discounts. If you sell skincare, no one needs 6 bottles so you're better off testing bundles with a combo of a few products. Find the right price point and discount level in your margin calculator. Try to keep your gross margin above 70% and landed above 50%. It's table stakes to have multiple rounds of upsells now. You just need to do it. You likely should have upsells on the PDP, in cart, in checkout, and post purchase. Often on these calls I will get asked what I use or reccomend. One great option is Monk Upsell App by Monk Commerce. There are a few problems with most apps; one they charge a % which gets really expensive, and others only do one part of the funnel. Monk is great because it works across the funnel from pre-purchase PDP upsells, in cart with a progress bar, in checkout, and post purchase. Monk even has bundles, so everything we talked about in this section, you can do with Monk. They offered to hook up my readers with a special offer; either an extended 30 day free trial or 20% off for life when you use code CODY on signup here. Sponsored

2. Ad Creative

Once you give yourself a chance of succeeding with the right unit economics, it's time to focus on the second most important factor which is ad creative. Ad creative is a paradox at this stage. In the beginning, you really have no clue what is going to work so you need to test a lot but you likely have a small team so you don't have creative production capabilities in house and your ad budget is not huge so huge either. I normally think video is king, but at this stage the majority of your creative should be static. It's a lot cheaper to create, it's easier to get a working version out the door without being a creator, and it's easier to test a high quantity for testing. You can easily pick up something like Creative.io (no affiliation, just looks awesome) to help you get started. The key here is that you need to test to learn, but you are likely only going to have budget to launch 5 ads per week. This means they need to be high impact tests, and you need to learn from them. Two main things:

1. Don't worry about testing every little variable. Don't test ad copy or headline. Test the style of creative and the messaging.

2. Make sure you control variables to generate learnings which you can take into future creative variations.

For example, let's say you're testing 6 new ads a week for a brand selling a pair of stretchy, Lulu style shorts. Here's how you could go about it:
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Ad 1 - Headline 1 - Image 1
Ad 2 - Headline 2- Image 1
Ad 3 - Headline 1 - Image 2

Ad 4 - Headline 2 - Image 2

Headline 1 is "Shorts that won't rip" and headline 2 is "Athletic shorts that look like casual shorts".

Image 1 is a product on white, and image 2 is a product on model image.

By testing this way, you are isolating variables so you are elarning for sure what is working and what you should discard. If you don't have the means to launch 6-8 ads per week, skip the multivariate testing and just do

Ad 1: Headline 1, Image 1

Ad 2" Headline 2, Image 1

Ad 3: Headline 3, Image 1

Then the following week, take the winning headline and test it with 3 different images

Once you get some learnings from static creatives, you can take them and brief some content creators for video. I'd start with IG reels style, short form "UGC". Keep your winning angle from statics and test 3-5 different hook variations on the same ad, shooting for a 30%+ Thumbstop rate.

3. Landing Pages

I almost never see PDPs perform better than dedicated landing pages, yet I see 90% of new brands launching to PDPs. Nearly every Mentorpass call I've done that has tested landing pages has improved their performance. To keep things really simple, I'd stick with a 5 reasons why landing page, which we call a Listicle. It's not always the best performing style for brands, but I've seen it work in the majority of accounts to be the style I'd reccomend to start with. They're the easiest types of pages to build and design, which is a plus at this stage. Plus you aren't really winning with design at this stage, so this forces you to just focus on messaging. The first thing you should do is test headlines by creating identical pages except for a new headline, and test this as a redirect in Google Optimize. I'd take your top headlines/ angles from ads and test them here. That's what we've found works best for us. As you get more sophisticated, you can create avatar, use case, or problem specific funnels. This helps you scale be appealing to more people. Targeting no longer happens at the ad set level, it happens at the ad level now with your creative, and sells on the landing page. Let's take my stretchy short example. They can appeal to golfers, workout enthusiasts, Crossfitter, and more. Each avatar might appeal to a different message and style of creative. Here's how I might set up funnels to target each demo:

Crossfitter:

Image: Test showing Crossfitters in your ad creative

Ad Headline: A casual short you can lift and run in

Listicle Headline: 5 Reasons Why Crossfitters Love Lifting In This Casual Short

Fitness Enthusiast/ Lifestyle Angle 1

Image: Lifestyle image, or video showing someone lounging and running in the same short

Ad Headline: Shorts for gym or brunch

Listicle Headline: 5 Reasons Why These Shorts Are Perfect For Going To The Gym And Out To Brunch

Fitness Enthusiast/ Lifestyle Angle 2

(In this one we're going after the same demo but testing a different angle)

Image or Video: Someone swimming, working out , and brunching

Ad Headline: From burpees and surfing to brunch, our xxx shorts will be there

Listicle Headline: 5 Reasons Why These Shorts Can Take You From The Gym, To The Pool To Brunch Without A Change

(Then the 5 reasons can show features like the moisture wicking, how the seams or blend of materials allow stretching, and social proof)

Now listen, this was pretty terrible copy but hopefully you get the point, and you're only limited by your imagination here. The best thing to do is survey your customers and understand who they are and what problem your product solves for them. It likely won't be what you thought when you originally launched the brand.

Now if you're asking, the best way to get going with landing pages is Replo. It's like Webflow for Shopify. It's by far the best landing page builder I;ve used, and all of our pages are built with it. Try it here.

P.S. I'm sitting on a great domain of Thelandingpageguide.com and I want to do something with it. If I created a little e-book on everything I know about creating great landing pages and offered some tested landing page templates to import, would you pay for it? Thinking around $90. If so, please reply and let me know. If not, or if you have another idea please let me know that too! All replies are welcome.

4. Ad Account Setup

I saved the least important and simplest part for last. Don't mess with targeting, bid types, optimization settings, etc until you're spending $50k a month. The key here is to not fight the algorithm . Rule of thumbs is you want to do everything you can to get to 50 conversions per week per ad set. If you have a $50 CP, you need to spend $2,500 per week per ad set, which is just over $350 a day. If your total budget is less than $500, you should only have one ad set and campaign. You can't have a dedicated testing campaign. I would use Advantage + Shopping and run 6 creatives at a time. I'd use a challenger style campaign, where you will do "scale" or always on winners and creative testing in one campaign. Let's say you launch 6 ads into a new campaign. 2 of them will do well by getting spend below your allowable CPA. 4 won't spend; by the way the way to know if an ad is good or not is simply does spend go towards it? So pause the bottom 4, keep the 2 running and challenge them by launching 4 new ads. Say 1 of them does well, and 1 of the old "winners" dies off. Now you still have 2 good ones running, and 4 new to test. I would do this weekly and just rinse and repeat. Don't need to do retargeting or introduce extra campaigns until you have the budget to do so.

What are your thoughts? Was this helpful or not? What follow up questions do you have? I can expand in next week's issue so hit me. Also I have room for 1 more paid Ad Account audit right now, reply if interested or book me on Mentorpass here.

Also still looking for 1 to 2 more newsletter sponsors for Q2. If interested, please reply or message me on Twitter and I can send dates and stats. Have a great rest of your weekend and week ahead. Q2 is amongst us.

-Cody