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Struggling DTC Division of Legacy Brand embraces Risky Modern Paid Social Strategy and Tactics
TiVo was a household name in the 2000's. Facing disruption by streaming platforms, TiVo's product team developed a new streaming platform to stay competitive in a world of Netflix, Disney+, Hulu and the hundreds of niche media streaming sites beyond. TiVo was using a legacy ad buying structure and traditional advertising that was working for years with Paid Social. However it got to a place where placing any video ad would lead to profitable conversions. Our founder worked on at a previous Agency as the Lead Strategist of the TiVo account. He introduced consolidation and mobile-first creative which was just an emerging recommendation by Facebook at the time. TiVo supplied branded creatives by Traditional Commercial Creative Agencies that had struggling performance. To address this our founder got buy-in with TiVo's internal marketing team to run with UGC/raw and unpolished creatives. It wasn't an immediate success but with testing, iterating, and testing new angles as a team, TiVo's internal marketing team and the Performance Agency team was able to increase MER by 15.5% Year over Year.
The Brand
Birchbury combines class and comfort with their modern barefoot leather sneakers and dress shoes. Every pair offers the natural movement of feet in flexible leather and no-tie laces for effortless style and comfort.
The Challenge
Matt, Birchbury’s founder, was juggling Facebook and Google Ads himself but needed to shift focus to other crucial parts of the brand. He sought a reliable team to handle the day-to-day of DTC marketing, ensuring growth in direct-to-consumer sales while hitting profitability goals.
The Gameplan
To transition smoothly, we kicked off our process. Here's what we did:
The Execution
We first introduced new KPIs for daily performance tracking. Metrics that are closely tied to the efficiency of acquiring new customers and growing the brand. We focused on MER/blended ROAS, Acquisition MER/New Customer ROAS, and Contribution Margin (Dollars Left Over for Operating Costs and Net Profit).
Initially, we maintained Birchbury’s Facebook legacy campaigns, transitioning only after improving performance.
On a regular basis, we provided a Performance Tracker—an extensive report highlighting progress, challenges, and action plans. Key slides included an Executive Summary and Success Metrics, detailing targets, actuals, challenges, and dependencies. This let everyone know where we were and where to go.
With earned trust through growth and diligent effort, Birchbury expanded our partnership to include Google Ads management. We identified untapped Google Ad keywords, expanded sponsored ad inventory with Callout, Review, and Sitelink extensions, and discovered that the Free Shipping extension in Google Shopping led to higher CTRs.
Implementing fundamentals allowed us to break past $1.45M to $2.8M in order revenue in the first year working together.
However, growth came with its challenges. High sales months would lead to inventory shortages of our most popular products when there were manufacturing constraints. This had a negative impact on demand leading to less order volume.
As a result, Negative Contribution Profit days occurred due to returns. Because we use cost controls, a common challenge is not getting spend within our campaigns an ads. Suggesting that based on what we set our cost controls, we could not get Facebook to spend profitably at the scale we wanted to. Our conversion rate would always be higher when we were fully in stock but it would decrease as inventory sold-out.
To address this, we captured more demand by giving Meta more to work with to spend more profitably. We made sure to keep our efficiency high with the control of budget towards certain products and varying cost controls depending on unit economics of the products.
We diversified creative formats, we tested more niched angles to inform Meta to capture new audiences we hadn’t. Niched angles that were further down in our customer research that weren’t as common.
We tested different link destinations from homepage to product page. We launched advertorials and listicles to open new demand in campaigns. In many cases, changes were small or negligible. But it was the steady, thoughtful test that would put us back on target. With these learnings, we regularly calibrated our inventory pacing aligned with sales from media buying and restock dates.
As a result, in our second year working together, we went from $2.81M in order revenue to $3.59M in revenue.
Challenges Tackled
The Outcome
2.48x Growth in 2 Years
14% Increase in YoY Contribution Profit
Ad spend varied from $1,000/day to $7,000/day for Facebook and $1,000/day to $5,000/day for Google based on demand, inventory, and seasonality.
Overall a theme with Birchbury has been valuing incremental changes. That steady growth driven by first-order profitable marketing, a fantastic product, and loyal returning customers, is a highly valuable asset.
Prompt, reliable, and essential in any digital marketing team - Kenny proved to be invaluable when it comes to managing digital campaigns at scale. Working in tandem with Kenny to ensure campaigns performed within CPA threshold was a blast. Always tackling problems instead of allowing blockers to prevent optimization implementations, his ability to problem solve in addition to excellent adhoc analysis makes pivoting easy when necessary. I give strong recommendations for Kenny and his solid understanding of social media channels as a digital mix driver.
