The Metrics That Truly Drive Success For Your Ad Accounts
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In this conversation, Brad Ploch, Owner WRK Marketing discusses the importance of contribution margin and other key metrics in direct-to-consumer (DTC) marketing.
Brad emphasizes the need to focus on new customer acquisition and repeat customers, as well as setting realistic goals for contribution margin. He also cautions against relying solely on metrics like ROAS and click-through rates, as they can be misleading.
Key Takeaways:
Why contribution margin is a paramount for measuring profitability in DTC marketing.
How new customer acquisition and repeat customers are crucial for maintaining a positive contribution margin.
How metrics like ROAS and click-through rates can be misleading when trying to scale your accounts
The importance of setting realistic goals for contribution margin and consistently measuring against them.
If you'd like to connect with Brad and the WRK Marketing team you can find them here:
If you'd like to learn more about the Founders Community or want to become a member you can do so here.
Full Transcript:
Brad (00:00.456)
Hehehehe
Tris Dyer (00:00.7)
Right. OK, so what we're going to do is I'll intro. I'll say, listen, you know, I'll I'll just say, you know, it started about three and a half years ago, just Brad, just there.
Brad (00:10.952)
Five, five realistically, yeah.
Tris Dyer (00:14.556)
Where's the time go? Okay, I'll start that and Edwin, you will kick off then and we'll go into that. We'll record for about 25 minutes or so and then we'll do an outro and we'll be on our way. All right. Super. So this is episode number 15. Hey guys, welcome to the Foxwell Founders Forum. This is podcast number 15. This time we have Brad Flock and he is an absolute banger. He is the co -founder and the director of work marketing.
Brad (00:16.232)
weird.
Tris Dyer (00:44.156)
So we have an absolute banger coming up for you. We're gonna talk all about what matters in DTC. Edwin, do you wanna kick us off?
Edwin @ Snappic (00:51.032)
So Brad, you are the one that focuses us in on what numbers actually matter. So tell us, what are the numbers that we need to be focusing on and what is not? Like what should we not be focusing on?
Brad (01:05.32)
Yeah, so there's a lot in there. So I'll kind of work through my order of operations and the things that we pay attention to and the things we try to coach our clients to pay attention to. And at any point in there, if you stop and want to go deeper on anything in particular, holler, let me know and I will stop and go deeper. I've also got, I've got TripleL pulled up on the top here because that's, I wanted to follow through and go through, cause we set up all of our dashboards to represent the information that we think is most important. So the...
Edwin @ Snappic (01:12.042)
Yeah.
Edwin @ Snappic (01:21.016)
Awesome.
Brad (01:33.256)
order of operations and kind of the way that we go through this. And we've got the scoreboard that we measure success on. And that metric is contribution margin. I know that's kind of like everybody's saying contribution margin, that's buzzword and like, it's all we hear in EECOM. Yeah. Yeah. So it's a great question. And I think just for anybody that doesn't know the way that we are calculating contribution margin is you're taking revenue, subtracting out cost of delivery. Cost of delivery is anything that is a variable cost associated with getting that next sale. So.
Edwin @ Snappic (01:45.016)
What is it? What is it?
Edwin @ Snappic (01:53.656)
Thank you.
Brad (02:02.44)
cost of goods, shipping, landed costs to you. So not just the cost of unit costs to produce the next unit from your manufacturer, but you wanna include the shipping from that kind of all in costs to produce the next unit and then get it to your customer on a variable basis. So revenue, subtract out those costs, subtract out ad spend, bang, you're at contribution margin. That's basically how we calculate that. So that's the metric we pay most attention to because spend and revenue can fluctuate.
Tris Dyer (02:25.884)
Okay.
Brad (02:29.928)
but if that number is on your goal, in most cases, you're probably on track. Now there's some caveats to that, which is why we look at a couple of other metrics. So I can kind of keep digging into some of those. So that's number one.
Tris Dyer (02:40.412)
So talk just about contribution margin specifically for a second, right? Because this is the new buzzword, right? I mean, there was first of all, you had ROAS, then you had MER, marketing efficiency ratio, and now it's contribution margin, right? Us marketers love a good buzzword, right? Sounds like it's the most logical thing to start tracking, right? How much does it cost you to land the product in the customer's hands versus how much are you spending on it, right? Why wouldn't somebody use something like this? Is there...
Is it, does it get too technical? And you know, is there something that you found that you get pushed back when you say, hey, what's your contribution, Martin? Marge.
Brad (03:11.816)
Yeah, I think the general, I think historically, from my experience, is that revenue is easier to track because when you pull up your Shopify dashboard, that's what you see, right? And that's until the tools of NorthBeam, Triple Whale, and then the other ones that people are using these days. Shopify has really kind of made revenue really sexy, which is cool. And that's the screenshots that we all see on Twitter. And it's super fun to see everybody sharing those numbers, but that's not really the reality of the business. So I think it's been historically very easy to track those things.
And contribution margin is kind of this lagging thing that eventually your bookkeeper tells you at the end of the month when the month finally closes and you wrap everything up. But at the end of the day, if you're not producing a positive contribution, you are at the risk of running out of business, potentially. There are other things associated with that, operating expenses that have to come out of that and you still need to produce a net profit. But I think it's just generally been very easy to focus on.
revenue first and then work your way back to a contribution margin. So I would say honestly that's probably one of the reasons why. It's just been historically a little difficult to track.
Edwin @ Snappic (04:17.816)
And so what is a what are the benchmark contribution margins like and if the answer is it depends like tell me the brackets like tell me the brackets and tell me the benchmarks.
Brad (04:27.944)
Yeah, so it depends on, it depends on, of course it depends on several things, but generally speaking, if you're trying to produce, if you're trying to build a profitable business, contribution margin needs to be higher than your fixed operating expenses on a monthly basis. So if you have a team that you're paying five grand a month and you have a warehouse lease that you're paying five grand a month for and $5 ,000 of other expenses, you're at $15 ,000 in OPEX. If you can't produce more than $15 ,000 in OPEX,
Edwin @ Snappic (04:32.952)
Always.
Brad (04:57.0)
you're not producing a profit. Now you may have cash in the bank, if you had $15 ,000 in revenue, you might have $15 ,000 that you can put towards that OPEX, but every single month that you aren't producing a positive contribution, you're working yourself towards a more negative cash position, which means you can't afford things in real time. If you need to buy inventory, you're not gonna have cash to do that. You need to pay your employees, you're not gonna have cash to do that. So that's like the basis of it, and that's where we start with a lot of our clients is,
Okay, we need to make sure that that number is higher than OpEx, bare minimum, and then we'll focus on setting new targets and goals from there.
Edwin @ Snappic (05:33.592)
And so, but what are the percentages? Because sometimes we walk through our customers the same math and then they want unreasonable, like, contribution margins. Like, they want like a 40 % contribution margin. And then I say, I would like a lot of things in life as well.
Tris Dyer (05:33.884)
Hmm.
Brad (05:51.656)
Yeah. Yeah. Percentages are difficult for me because I think percentages can be, can cover up a lot of things. Right. So our clients generally, we hear very similar things. I want to have a five X E R. Well, it's like five E R or ROAS goals need to come with an expectation of spend because you could have a five X E R and spend $10 ,000 or you could have a five X E R and spend a hundred thousand dollars. And those are very different outcomes.
You could have a 3X MDR at $100 ,000 in spending. You have a very different contribution margin. So percentages for that reason are difficult for me. But at the same time, I understand if marketing is taking up, I think I saw Himm's earning reports and they spend half of their revenue on marketing. And there are businesses where that just doesn't make sense to do. Some businesses cannot do that. Their cost of goods is too high. They just cannot afford to do that. So it depends a little bit on the business.
Edwin @ Snappic (06:37.208)
Makes sense.
Brad (06:47.944)
So it's really hard to give like a specific range but from a from a percentage basis You know, we've seen net profit as a 10 to 20 percent is kind of a range So contribution generally sits a little bit above that but percentages can can hide things as well So just a little difficult to give a number there
Tris Dyer (07:05.916)
for sure. And then you've got your CAC as well. So like you look at your CAC to LTV ratio, that's going to have a massive impact on it as well. It is depending on how much you want to spend. If you've got a really good LTV, especially from a six month LTV point of view. So that's lifetime value. If you're getting a six to a really strong six month lifetime value and people keep coming back in over and over again, subscription models are pretty good at this. Then you can afford to spend a little bit more depending on your operating expenditure.
Brad (07:31.527)
Yeah, absolutely. Yeah, absolutely.
Tris Dyer (07:33.884)
Mm -hmm. Mm -hmm.
Edwin @ Snappic (07:34.2)
And so what do you say? So contribution margin, that's one of your metrics. What are the other ones that are on your board?
Brad (07:42.152)
Yeah, great question. I'm glad you mentioned. So I'm looking back up here to follow through this and I need to give a little bit of a shout out. I can't take too much credit for this because we borrowed this format from CTC a little bit. We added it a little to add our own flavor to it, but I need to get that out before I take too much credit here. So, contribution margin at the top. We call that the scoreboard. The next thing is these business level metrics. So that's gonna be total sales. You can include all channels, inclusive of Amazon or retail if you'd like.
but for a lot of our clients is Shopify. So total sales, ad spend, MER, and then AOV is one we just throw in there. We're looking at AOV, you really want to split it between new and returning customers, but that kind of business level metrics tells you really quickly, if you have an understanding of what your general cost of goods is, when you look at MER, you know if that number is good or bad, right? Once you start to really understand your numbers, you say, hey, I need a 3X in order to be profitable on new, or on...
on this business or produce a positive contribution. If that number says two five, you should immediately throw up a red flag and say, okay, I've got a course correct and do something here. But it doesn't stop there at those business level metrics. And I think it's really important to take a one layer deeper minimum and go down and split out new versus returning customers. Because new customers you could be acquiring unprofitably and repeat is covering up some kind of mess that you've created for yourself. And this is, we see this a lot where a lot of clients will come to us. They're spending a lot of money.
Tris Dyer (08:57.34)
Hmm.
Brad (09:08.456)
And they're probably overspending because new customer acquisition has been running at a net negative for a long time, but they're sending enough emails, they have a decent LTV, the people are coming back and buying, but they're spending themselves into a little bit of a hole. So that customer layer is new customer revenue, CAC, AMER, which is just acquisition, and then new customers as a percentage of revenue. And then the same thing for returning customers, basically the next line. So.
Tris Dyer (09:36.42)
So you mentioned AMER there. That's another little one there. So what's that difference in AMER and MER for those who aren't aware?
Brad (09:37.384)
Those are like the 12 metrics.
Brad (09:45.192)
Yeah, great, great call out. The reason we look at that, so MER is taking total sales divided by total ad spend. AMER is taking total new customer revenue divided by ad spend. And the reason we split those out, we spend a lot of time paying attention to AMER. And one of the reasons for that is because attribution is a funny game, right? I think we've all collectively spent years, we've lost years of our lives debating attribution. And we probably will continue to debate it.
Tris Dyer (10:07.804)
other me.
Edwin @ Snappic (10:08.408)
I think that's an understatement.
Brad (10:13.96)
So attribution can be a tricky thing and I think it's a worthwhile pursuit to try and pay attention to and solve and understand and hold Facebook and Google and all these channels accountable to producing positive returns for our businesses. But at the end of the day AMER is telling you whether you are or are not profitably or contribution positively acquiring net new customers. If that number is below break even without intentionally being there because you've made a cognitive decision to do that, you know if you're in a tricky spot. So...
That's kind of why we look at that number and how it differs a little bit from MER. Because MER can be propped up by repeat customers. As I said, you send an email and all of a sudden you're out of 5X MER, but you can put yourself into a wonky position pretty quickly.
Edwin @ Snappic (10:56.408)
So let's step back. You were talking about that secret number, right? That secret hidden number that people don't pay attention to. Tell me how you're calculating that. Like what is that number, how you're calculating that with that new customer?
Brad (11:12.456)
The new customer AMER. Yep. So new customer AMER in terms of like setting a goal for what it should be or how you actually get to it.
Edwin @ Snappic (11:21.656)
or just how you get to it and then setting the goal for it. Because in case our listeners, they don't know, like how are you calculating it? How do you get that number? And then how do you get to the goal?
Brad (11:32.968)
Yeah, so calculating is really straightforward. Total new customer revenue divided by total ad spend, that's AMER. So pretty simple. TripleL or other dashboards allow you to set that up pretty easily. And it's something that we have right at the top of ours and make sure we look at it every single day when we open up our accounts. In terms of setting a goal for what that should be, there's probably a lot of context that needs to be added into this. But if you can set, I would say if I could give general advice, which is probably difficult to do, but...
In order to make sure that you're not driving yourself out of business for sure, a good way, particularly for smaller or newer brands, is to make sure that every next dollar that you're spending is producing at least a break even on customer acquisition. Because then you're not gonna be able to reafford, you're gonna be able to afford inventory and kind of work your way there. So the way that you calculate that and come up with an understanding of what is AMER, and I have a spreadsheet that maybe I could share with you guys, if that would be helpful to link for people to help calculate this.
but it's doing all the things I mentioned before. Taking your first time average order value, so new customer average order value, what is the general cost associated with that order? So it's simple if you have one SKU. You take the SKU and you see how many of those people are buying on average. You know the cost of that SKU. You know the cost of getting it to the customer. You subtract out all those variable costs associated with getting that next sale. So what are people spending? What does it cost you to get it to the customer? That tells you, you take that.
Edwin @ Snappic (12:47.288)
Yeah.
Brad (12:59.016)
You divide it by, you take first time AOV, subtract the cost, you're left with margin. You take revenue divided by margin, that's your breakeven AMER. And now you know what your breakeven AMER is. If you have a lot of SKUs, it gets a little bit trickier. You're just trying to do a blended version of what AMER should be. But generally speaking, that's kind of how you arrive at that.
Edwin @ Snappic (13:18.648)
Yeah.
Tris Dyer (13:21.052)
you can have your overall goal. So sorry, I'm gonna ask you something there now that's not on the questions before, but actually comes really nicely into that. So we had Jenny Lin on the pod there a couple of weeks ago, and she was talking about how she has weekly releases or a couple of events a month in terms of her guaranteed revenue sources on those, which is really, really smart, especially at scale. You can start to have guaranteed revenue sources each month, and then you can build out on top of that as well.
From a customer acquisition standpoint and looking specifically at your AMER and your peaks and troughs, obviously when you have sales and launches like that every week or every second or third week, that's gonna really hurt in terms of measurement, because it's gonna be very difficult to measure it as a whole. How are you finding that when you're looking at a Triple Well dashboard that might have all of that information in there, especially when it comes to contribution margin, you've got all of that information you know, but then...
how are we getting new customers? We're not necessarily talking about attribution, but like you look at the month and you're like, I acquired all these customers, but where do they all come from? How do you manage that?
Brad (14:26.056)
Yeah.
That's interesting and I think it's difficult and probably depends on the business specifically, but it comes a little bit with having a plan for what you expect to happen and then consistently measuring against that plan because you're probably gonna be wrong at first, but it starts with, I'm gonna make an assumption around how many new customers will come from this product release. So if you look historically, maybe you can look at the last three and say, okay, I released these flavors for, I think she sells tea. I released these three flavors. Here's the average of new customer revenue when,
Edwin @ Snappic (14:35.672)
Thank you.
Tris Dyer (14:36.54)
Hmm.
Brad (14:57.37)
we've released those three flavors. That becomes your baseline expectation for the next couple of launches that you do. When you get to the next launch and you say, hey, my expectation is it's going to be $15 ,000 from new customers. And you just, if you're wrong, you try to figure out why you're wrong. AOV was off, conversion rate was off. People didn't like the flavor. That's where you start to get into using those quantitative numbers to try and understand what went wrong. But I think using historical data to kind of set an expectation and a goal, and then just consistently measuring.
against that goal is really important to see where you are right or wrong. Yeah.
Tris Dyer (15:31.036)
Yeah, was the assumption correct or not? Yeah, that makes sense. Interesting as well, just on that. So we had Will from, we had Will there, he was talking to us there, just briefly about, you know, creative, about making personas on those as well. He's the CEO of Selfmade. And one of the things they do is they create creative specific to do with different personas and stuff like that as well.
So one of the things, one of the questions I had was like, okay, so you've got your contribution margin, your understanding of different products, but then they go and target different products and grow that out, like, you know, in different pillars, for example. So are you, you're saying that, you know, your basic is obviously with one product, but then you're doing it with multiple products across the board. Would you ever have a client that you're working with that has multiple contribution margin goals? Or do we have a three -letter acronym for contribution margin yet?
Do you just call it CM?
Brad (16:26.216)
Yeah, yeah, CM is great. CM is great. Yeah, it is wordy. That's interesting. So there, I think depending on...
It definitely gets triggered the more skews that you have. And that kind of goes back to this plan. And that's where I think the movement towards media buyers being more involved in this planning. I think the media buyer role, I promise I'll get back to your question, but I think the media buyer role is shifting much more from, hey, I'm just pulling levers inside of an ad account and hoping that spend goes up and ROAS looks nice, into like, I'm having a plan for what my expectations are for the month, the quarter, and then the year. And I'm figuring out where,
Edwin @ Snappic (16:43.768)
Good luck.
Edwin @ Snappic (16:59.704)
Thank you very much.
Edwin @ Snappic (17:04.536)
Okay. So.
Brad (17:05.146)
to deploy dollars. So if I have a goal of $100 ,000 in revenue this month, I need to come up with a plan for spending dollars at my ROAS target that is going to get me to that. And that can be across multiple skews. So what we do and the way that we kind of set this up is every single time that we launch a new funnel, and I'll use that word because I think it's pretty common, the funnel, the way that I would describe the funnel is a new product, a new offer.
anything that when we set up a campaign, if we have an expectation of what AOB is going to be and what we want customer acquisition costs to be. So we'll go into our calculator and we'll say, great, we're selling these joggers. Here's what we expect AOB to be on this pair of joggers. Here's where our ROAS goal is because that gets us to contribution. Great. Now we're going to go set up that campaign. We're going to hold that campaign accountable to a specific margin target, which might be different than the t -shirt campaign, which might be different from the backpack campaign. Right. So.
Tris Dyer (17:59.804)
Mm.
Brad (18:04.552)
It's for each product, each funnel, I guess, and that's why we build campaigns in the way that we do, is to be able to hold those accountable to a very specific expectation of what we want ROA as a contribution margin to be.
Edwin @ Snappic (18:06.936)
Thank you.
Tris Dyer (18:08.124)
Mm -hmm.
Edwin @ Snappic (18:14.552)
What are common gotchas that you're so once you get someone on the contribution margin bandwagon right they got the t -shirt they got swag they got everything right what are common common gotchas that people run into that they might have not expected when they first got on?
Tris Dyer (18:16.54)
Makes sense.
Brad (18:35.496)
Yeah, so from like a client perspective.
Edwin @ Snappic (18:38.84)
Yeah, like for example, I like we had we we preach Contribution Marching a lot and I had a swimwear brand in February call me and say we're at zero Contribution Marching. Our accountant is telling us to pull the plug on ads. And I told her account to go f himself because he understands the spreadsheet. But I understand the business. And then in March, they had their best month ever. Right.
And so what are common gotchas that you encounter because you've been doing it for so long?
Brad (19:11.112)
Yeah, I think I'm glad you said that because that gets me a really nice starting point. So thank you for tearing that up. Seasonality is a big thing because you can't have the same expectation of contribution margin on a monthly basis if you have a highly seasonal business. Swimmers are great one. We have a client that sells dog products that help dogs be cool during the summer. February looks miserable, right? Like you can't have that same expectation of February that you're going to have of July. So.
Edwin @ Snappic (19:28.98)
or
Brad (19:35.112)
having a seasonal expectation of contribution margin is definitely important. And I think kind of along with that is that repeat customers can cover up the contribution margin problem as well. So that's why, although that's a really important number to look at, it can't come without the context of new customer acquisition and repeat customers. Because if we're saying, if we're calculating contribution margin as, hey, we're taking new customer revenue, subtracting out the variable costs to get there, subtracting out ad spend, and that's where we're left. There's a lot fewer dollars there.
as when you're sending an email to repeat customers and you only have to pay for the cost of getting that product to them, there's a lot more margin there. So I think just having that context that when you do a sale and when you send an email and when you get a lot of repeat purchases, that can inflate contribution margin in the short term. And if you don't have an expectation of, you know, kind of how would the repeat customers feed into making money, you could think things look great. And then you continue to run sales and you continue to send emails.
Edwin @ Snappic (20:11.192)
Yeah. Yeah.
Brad (20:32.392)
And so you deplete your list to a point of where they're not coming back, but you weren't filling up that, I guess, funnel is maybe the word you use there, you weren't filling up that funnel to eventually continue to be squeezed. It needs to be this constant ongoing filling of that funnel.
Edwin @ Snappic (20:36.92)
Yeah.
Edwin @ Snappic (20:49.56)
Yeah.
Tris Dyer (20:51.036)
Sure, so we talked a lot about contribution marketing, we talked about CAC. One of the big things is obviously, so what are the main goals or KPIs that you would see in the platform that is a mislead, right? So people talk about hook rate, hold rate, all this stuff, which is great. It's great for engagement. What's the one that people, is the red herring that is coming up these days?
Brad (21:11.688)
Yeah, I think ROAS can be one of them. I think ROAS is, yeah, it's interesting. And I think people get married to ROAS being high and the goal always being a higher ROAS when the goal is necessarily it's a higher ROAS, it's understanding the relationship between what Meta is reporting, for example, and what AMER is reporting inside of whatever dashboard you're using. Because you could have...
Edwin @ Snappic (21:15.064)
Whoa, hot take, hot take.
Brad (21:36.776)
We have clients of ours where they have a really long purchase cycle where a seven day click is never gonna capture the full attribution of what that's responsible for. And then we have people where one day click is capturing 90 % of it and we feel really confident that that's reporting very well. So I think understanding the dynamics of your business is really important. And then understanding that the goal isn't to maximize ROAS. Obviously getting ROAS higher while maintaining spend is great, that's cool. But the goal isn't always to make ROAS go up, it's to...
Edwin @ Snappic (21:42.712)
Never.
Tris Dyer (21:43.932)
Hmm.
Brad (22:05.64)
try and spend more while focusing on that efficiency not dropping too fast to make sure that the next dollar was always worth spending. So I think raw is helpful. I'm not trying to say that it's not helpful. And I think the ones that you mentioned are actually probably more red herrings, right? Like thumb stop is a thumb stop and click through rates and things like that. I think people can get a little bit like making a decision to turn ads off based on click through rate is probably something we really don't ever do because I don't.
I don't see any correlations with performance. I understand the use case and creative iteration potentially. But I think if you looked at an ad that wasn't getting any spend and you looked at an ad that was getting a ton of spend and not working, you make the assumption that they're both not working. You can come up with a million different reasons on your own by looking at that ad as to why it's not working. And you didn't need Thumb Stop to get you to do that. I think you can make some more assumptions. So a little bit of deviation there. But I think ROAS can be misleading depending on how you're looking at it.
Edwin @ Snappic (22:34.072)
No.
Edwin @ Snappic (23:01.88)
Thank you.
Tris Dyer (23:04.284)
For sure, for sure, absolutely. Edward, do you want to ask your next one?
Edwin @ Snappic (23:08.504)
I think I'm good to go. I'm good to outro unless do do you have more? Well,
Tris Dyer (23:14.268)
Well, just one more. I mean, Brad, this is class. There's so much to say. Okay, cool, cool, cool. Yeah, so I mean, look, when it comes to, so I suppose, let me just go back into this grand market there. So when we talk about, you're looking at Triple Whale there, you're looking at a dashboard that you have, you've got your Northbeam, you've got your Google Analytics, you've got Shopify data. Obviously, every brand requires a single source of truth and requires something to...
Brad (23:18.44)
Yeah, I've got plenty of time, so feel free.
Tris Dyer (23:43.548)
to kind of lean towards. Now, obviously, Triple Whale sounds like the one that you love, but without kind of picking up Triple Whale too much, why using that versus, say, a Google Analytics or something like that when you've got, say, I'm a brand spending a couple hundred grand a month, I'm running Facebook, sorry, meta, TikTok, Google. How do I know where my cack is coming from if I'm not using something like that?
Brad (24:07.208)
That's great. I should add a caveat that we reinvested in Triple Whale. So like if I sound biased, and I'm going to try to be very objective here. So like that's where my bias is potentially coming from. But I'm not saying Triple Whale from a perspective of using Triple Whale and Triple Whale's pixel or believing Triple Whale's pixel. I'm looking at Triple Whale and the flexibility of how their dashboard has allowed us to set up the dashboard. I spend most of my attention to spend on those metrics that I mentioned, which have nothing to do with the pixel at all.
Tris Dyer (24:26.332)
Thank you.
Brad (24:36.392)
You don't need a platform like TripleL or NorthBeam to get to that. You just need the ability to see contribution margin, total sales, total spend, new customer revenue, AMER, and anything that can get you there is the essentials. And I think to your point, there are so many different things that you can look at and say, okay, well, Facebook says this, Google says this, AMER says this. At the end of the day, it's focusing on, I think, AMER and AMER, and then making an assumption around what Facebook needs to be.
I need Facebook to be at a 2x on a 7 -day click basis this month. I'm going to spend this accordingly. Here's what I think is going to happen. If you go that month and you hit those numbers and Facebook was a 2x and you hit your spend goals and you look at AMER, you're like, shit, I missed. Your assumption was wrong. You need to go back and revise the assumption. So it's not, yeah, it's not, you don't need Trip Oil to, you don't need Trip Oil Pixel or Northbeams Pixel to get you there. Maybe those are things that help. I'm not really a huge, like,
fan of them one way or another. I think if you like them, great. It's all about, I think, sticking with something, making assumptions, and then looking back to see if those assumptions were correct.
Tris Dyer (25:43.644)
Absolutely, that makes a lot of sense to me. And this is the thing, right, where we've talked, I think we've probably used every three letter acronym there is out there, right? But I guess somebody getting into this, somebody starting kind of five, 10, 15 grand spend a month that makes that return, you don't need to have a degree in maths and accounting to be able to do this stuff. It's basic maths, right? Spend less than you're making. You know, it's as easy as that. That's what business is, but...
people have find we and marketers especially find a very easy way of complicating it. So, you know, all these, -E -R, A -E -R, C everything else. It's just a fancy way of saying spend less than you're making and you'll do well. And keep some money for tax as well. That's an important thing as well, just to be clear. Yeah, damn. Okay, Edwin, want to add to us then?
Brad (26:22.056)
Yeah. Yeah.
Exactly. Yeah. Yep. Yep.
Edwin @ Snappic (26:27.06)
Yeah, so we're gonna outro. I'll say the outro and then I'll say, my name is Edwin. Then Tris will be like, my name is Tris, my name is Brad. Just a heads up, I say my name is Edwin like pretty abruptly. And so Tris knows this. But yeah. Okay, cool.
Tris Dyer (26:48.54)
Yeah, just get ready.
Edwin @ Snappic (26:56.728)
All right, cool. Let's do it. All right, guys, we had a ton, a ton on the plate today. We were talking with Brad about contribution margin, the latest buzzword. We gave you the buzziest buzz buzz about it. All the stuff that you need to pay attention to, you don't need to pay attention to. It's been wild. I'm Edwin.
Tris Dyer (27:16.796)
I'm Trace.
Brad (27:17.352)
I'm Brad.
Edwin @ Snappic (27:19.512)
We'll see you on the next one.
Tris Dyer (27:19.58)
Good to see you guys. See you next time.