How Tech Entrepreneurs Can Turn Clicks into Revenue with Sam Piliero

You keep putting more money into ads, but their profitability is questionable. The cost to get customer keeps going up, and it feels like you're paying Meta and Google just to stay in the game. But what if the problem is how you're running your ads? Hey, what's going on everybody? I'm Mike Sirius and this is Mastering Tech Growth. Each episode we sit down with industry leaders to bring you actionable insight that drive growth. If you enjoy the show, make sure to subscribe and send us your biggest growth challenge at masteringtechgrowth.com. Joining me today is Sam Pillerow, founder of The Moonlighters, a marketing agency helping brands to scale profitably. Sam started his career at VaynerMedia, running ads for top e-commerce brands, and later led marketing at BarkBox, one of the fastest-growing direct-to-consumer brands. Today, we are breaking down why most brands struggle to scale their ads and how small fixes in strategy can make the difference between running, burning cash, or scaling profitably. Sam, appreciate you joining me today.

Mike, very happy to be here. I very much appreciate your intro, and you are one of the only people to say my last name the really, really, really proper Italian way. So I appreciate that as well.

I love that. Glad to hear, Seb. Glad to hear. So let me set the scene, right? Buying traffic, aka running ads, it's a huge, huge topic. I mean, it's a science on itself. You can go from conceptual knowledge to very practical, very tactical knowledge, such as showing Meta Ads interface, Google Ads interface, what to click, how to go next, how to make creatives. I know you have your YouTube channel and people can go there, look for the tactical things. Today, what I want to be talking about, couple of things. One, I'm very interested in omnichannel, right? There's so many different channels you can buy ads on. Which one is the best? Why? And another thing, if I'm burning a lot of money in buying ads, you know, we're talking $100,000 and more, should I trust AI? You know, should I trust Google telling me how to run my campaigns, or should I be looking into, you know, into like small tweaks and actually separate myself hopefully, you know, scale and break that $1 million range, right? So before we begin, Sam, we love asking every single guest, when I say mastering tech growth, what comes to mind?

Oh man, loaded question. When I think of mastering tech growth, I immediately think of the future. I immediately think of the next 6 months and then like a 3-year window. And if I'm specifically thinking about that from a Facebook Ads or a Google Ads or a marketing perspective, I think that if we look at the next 6 months, we're gonna see an acceleration of the use of some of the AI tools and actually gaining back some control. But that sounds weird to most people. We could chat about that. And then on a longer scale, I see a really big blend between AI, AI agents, proper usage of large language models mixed and blended with media buying strategies. Now, That's not to say we're near that at all right now. It's the earliest, earliest stages of that. And businesses can't wait 2 or 3 years for that to come to be optimized, right? Every single day, every week, every month actually counts today. So when I think about tech growth, it's very much acutely to the ad space, the agency space for sure.

Okay, that's quite cool. So you saying— I don't want to front run the episode, but you just mentioned like if you're doing 6 months, you're looking at the AI stuff.

Yeah.

So are you saying AI stuff is actually healthy to just allow it to run your campaigns?

No. So the big change— yeah, don't tee me up like that, Mike. So the big change is that in the next month here, Meta is rolling out a new UI. They've announced this. It's public information at this point. Thankfully, Meta has given us some access to these updated UIs and we've been able to play around and understand what the difference is. And there's been this huge push in the last year, year and a half really, to Advantage Plus everything, broad, broad, broad everything. That UI has been super, super confusing to people. It's been very overwhelming. It has had what— it's been way too simplified, kind of like Performance Max 4 years ago where it was like, set up a Performance Max campaign in Google and sit back and hope for the rest. There's a big bridge to be crossed for allowing these AI tools to actually work within the specific refinements of every single business. So to give that an example, a business that is only available in 20 cities, let's say a service-based business only available in 20 cities, they can't just run a full broad all United States campaign and expect as good results. And when Advantage+ first came out, there was literally no way to exclude locations. Then they layered that on and they, they've started to make more and more adjustments specifically on the e-commerce side. We see similar fallacies, similar issues with these ultra broad, ultra simplified campaigns. And the way that I like to approach as a whole is today we're gonna do whatever's best today. We're gonna test in a small amount some of these newer things that are coming out. And that's why I think 6 months to a year from now, there, there's going to be changes to the strategy, changes to the structure, that we roll out at the Moonlighters. But generally speaking, you have to, you, you have to really focus on what's actually functioning the best today and then focus on 6 months, 9 months, 1 year from now.

Okay, I love that, Sam. Uh, you, you mentioned something, um, as a keyword clicked in my mind. You said smaller amounts, and I'm like, an amount, a small amount definition will be different to say a startup to medium company or to a large enterprise. So when you talk about doing a little bit of like testing and getting a feel of these newer tools before you actually commit a proper budget strategies, what is the definition of small amount? What's a small amount to you, Sam?

Yeah, tricky. If you are running with an agency, you have a massive advantage because they're going to share that knowledge across their entire clients, right? That's extremely, extremely helpful. That's something we do at the Moonlighters. On the flip side, If you're running independently, then you're gonna have to just simply try out these things and take the gamble. It sounds crazy on first pass, but taking 5 or 15 at maximum percentage of your budget to try out any new tools that come out on the Facebook side or the Google side, um, it's probably worth a shot. Now, I always like to not be the first mover on new tools and let them work out the first beta round of kinks. Then progress 1 to 2 months down the line into, into, you know, making that transition.

I love that. So, so not a specific amount. We're saying 10, 15% is a healthy budget to allocate to try these tools, but don't jump on them. Allow the market to iron out things. Be a little bit later in adopting these new things. Don't be a starter, especially if you're a small one. I love you putting agency in there and going like, look, if you're using an agency, We probably know these things, so we'll tell you what actually works. That's a good shout. But if I'm small, how likely am I using an agency? I mean, what budgets are we talking when it makes sense to use an agency? And, you know, if I'm not at that level, I'm probably just doing that myself, which is effectively, you know, I'm going to learn these mistakes from my own budget.

Totally get it. So for the, the, the bigger brands that are immediately working with agencies already, there's, there's different tiers, right? There's brands out there that are spending spending $100,000+ a day. There's brands that are spending $1,000 a day. There's brands that are spending $100 a day.

Yep.

If you're spending $100 a day, you gotta be managing this on your own and you have to find a way to get dangerous in the platform. And that's why all the free content that not only I put out, but everyone puts out is good to just absorb and pick your pieces of it that you think are most applicable to your business. When it comes to actually testing some of the new AI things, at a smaller stage, it's okay to, to try to allocate a larger percentage of your budget to it. To actually answer the question on like when to actually potentially work with an agency, um, this also depends. What I have found in the industry is that businesses under $500,000, it could get tricky to work with a proper partner. And that's because the profit margins on everyone's side are very slim. So not only on the brand side, but also on the agency side. And if the profit margins are very slim on the agency side, um, if you're working with brands under $500,000 in revenue, that means they can't hire really, really good talent, right? So you need to work with an agency that you know for a fact, the number one thing you should be looking for is who are they hiring? Why are they hiring these people? How are they trimming the fat out of their model so that they could bring amazing people to your business? And then share the learnings across the board.

Okay. So we're almost venturing into how you vet a good agency to have it as a partner. Let me, let me take us back into almost like a beginning. Let's say I'm starting. I got, you know, good budgets. I'm potentially— I'm starting a business, likely e-commerce business. That's where a lot of buying traffic comes to right now. And I have this quote from Harvard Business Review, which basically goes, companies that scale successfully evolve their customer acquisition module in, at different stages, right? So the same tactics that drive early stage growth are often limitations beyond 1 million. So this is very interesting to me. Effectively, what it's saying is that whatever is your customer acquisition module, whatever is your ad campaigns, whatever is your ad strategy right now, it's very unlikely that the same strategy will work once you pass the $1 million mark. So from your expertise, Sam, it's like, yeah, what are the biggest mistakes, you know, people do in that beginning, which effectively is a mistake later down the line?

This is— hey, that's an amazing quote, and it's completely accurate, like 100% accurate. I don't think I've ever seen a business that when they were spending their $100 a day has the same successful setup as when they're spending $1,000 or $5,000 or $10,000 per day. I think people get into this trap of thinking they need to do the setup that the $3 million business or the $100,000 a day spend is set up as, when in reality, when you're just starting out, your setup should be a little bit more simplified. It should rely on a little bit more of the AI and the algorithm to, to really run its way. As you scale, there's different barriers. Now, this is good timing for that question too. I previously just got off a phone call with a gentleman who we're considering bringing into the agency and we were breaking down his account. And one of the things we noticed in his account was that as he scales, he hits a wall. This is a very common problem. People say, hey, once I get to $500 a day in spend or $1,000 a day spend, I can't— my ROAS just declines immediately. The reason for this was simple. Every time he increased past around $800 a day, the amount of spend on new customers versus engaged/existing customers changed. So new customers now represented a larger portion of his budget. And guess what? It's harder to acquire new customers than it is to acquire existing or engaged customers. Um, so We diagnosed that really quickly and we just understood that he needs to have segmentation in his account. He needs to have buckets for prospecting, buckets for retargeting, and buckets for retention for existing customers. And when we look at it on what brands do in early stages, you don't need to be set up this way. In fact, setting up this way in very, very early stages could hurt you because you break up your account too much. So early days, it's okay to have even just 1 or 2 campaigns. Maybe you just have all new and all existing customers separate. But as you scale, there's different buckets that you need to define more properly because you will hit that wall. You will have— you will find that place where branded retention-based customers are representing a good portion of your spend. That could hurt when you're trying to scale.

Okay, so what is the most likely buckets I'm looking at? I'm starting no buckets, no segmentation. I'm just going all in. I have maybe one couple of campaigns, maybe I'm doing a little bit of A/B testing, but effectively I'm just acquiring new customers because I'm new business, I just kicked off. Yeah, I got them coming in, you know, making sales, um, selling e-commerce or service, you know, whatever is the product. So at some point in time, what is the second bucket? Is that, is that returning customers? Is that customers who bought from me once, like twice? Like, what is the most likely second bucket for me?

Yeah, right off the bat, $0 in spend, start a broad campaign. That broad campaign can target everyone. You can limit by demographics if it's necessary. Like if you're just selling women's jewelry, maybe you don't need to send your ads to men. Maybe you do. You have to think about that. The second stage is just breaking out all of your new acquisition and all of your existing customers. And what that could simply be done is by taking your existing customer list from Klaviyo or whatever CRM you're using and then Second to that, taking your, um, 180-day purchase from your pixel on the Facebook Ads pixel and putting that in as an inclusion on that campaign. And then the top of the funnel, just making sure those same two pieces are exclusions. So simply put, you have now a break in your account. You have a very small amount of budget dedicated to the existing customers that you're just working on nurturing them. And then you have most of your account really, really focus on complete new customer acquisition that's going to actually drive the business forward.

Okay. I love that. And you mentioned one thing which I was like, okay, what if you don't have that, which is the Facebook pixels? I mean, everything when it comes to retargeting requires a proper setup with your website. What if we're talking people just going like, here's my website, I just, you know, brought up some WordPress, WooCommerce or something like that. I'm going to buy ads now. How bad of an idea is that?

That's a bad idea.

That's a bad idea.

And I mean that honestly. Yeah, that is a bad idea. Now, it's not that hard to set the pixels up these days, and even the platforms that are not Shopify do a decent job of having integrations to set these up. There's 1,000 YouTube videos, not to mention you could type this into ChatGPT at this point to help set up all of these pixels and running ads without a proper pixel setup. And I don't just mean, oh, it's 60% accurate. I mean like 95+ accuracy. Yeah, really, really bad play. I would always recommend to make sure your events are 100% accurate or as close to possible before you spend a single dollar. You're spending valuable cash.

Yep. Otherwise you're just throwing your money into an oven just to heat yourself. Yep. So one thing to take from today is just don't buy ads if you don't have a proper setup to actually utilize the data which coming in from these campaigns. I've seen that done multiple times, by the way, Sam, and I'm going to be the one stepping up and saying I did that myself. I literally just threw my net ads, no pixels, no nothing. Just, I just, you know, I just need people to see me. Very bad idea.

Yeah.

Comes from experience, right? So let's talk a little bit about omnichannels, right? So, um, A study by McKinsey Company found that brands using 3 or more ad platforms saw a 30% lower CPA, cost per acquisition, compared to single-platform advertisers. So from your perspective, Sam, I know you do like Google and Meta as a main one, but I'm sure you are, you know, exposed to others. How people should approach, what should be a thinking pattern when it comes to deciding in which on which platforms they should, they should run ads.

Yeah, I think the key question is when. So, okay, at its core, Facebook and Google are the best converting platforms, period, right now. No matter which way I, I skin this cat, there's, there's never been platforms that outperform pure Facebook and pure, um, Google. Now when I say Facebook, I mean Meta. I mean Facebook, Instagram, the whole suite. When we get beyond that, there is value. But what I don't want to do, and I want to warn everyone here, if you are in the early stages, if you haven't started spending, if you're spending $100, even $1,000 a day, do not go create your TikTok shop and run 30% of your budget there. What you really want to do is you want to focus on the platforms that you're doing the best on organically. So if you are running Facebook, if you're running Instagram, if you're running Google, which should be the core, and you are viral on TikTok, I'm talking like every single time you post, you're getting 20 to 50,000 views. This is like you have a niche that just crushes on TikTok. 100%, go and spend some money there. I'm not gonna deny that. I know for a fact that's 0.01% of people. Right? Actually, statistically, it's actually slightly under that because if all content went viral, then no content will go viral. So what I would like everyone to mostly focus on are the core of meta and Google, and then only when there's a signal that is undeniable to expand beyond that.

Okay. So effectively what we're saying here, and correct me if I'm wrong, Sam, is you first, well, you have to be everywhere then to actually understand what's your organic reach, and then you just double down on the ones where you organically are quite big or bigger compared to others. Is that correct assumption?

Yeah, that's, that's a pretty, pretty fair assumption. A great book that goes over this concept, concept is, um, Gary Vaynerchuk's Day Trading Attention.

Yep.

Um, highly recommend that to anyone. It's a little bit more conceptual, a little bit more basic, but very good to go over this. And yeah, that's pretty much it.

Okay, so is there a difference when it comes to Meta and Google? What industry am I targeting? Say, you know, e-commerce, jewelry, fine. But what if I'm, I don't know, doing massages or something like that? Like I'm still on Google and Facebook, like it's still the best conversions?

Hands down, yeah, hands down. Actually, the platforms actually have increasingly better return on ad spends and increasingly lower cost per acquisitions. When you're doing geo-targeting. Most people don't really follow this too well. Most people kind of play this in a little bit different way and they think that, oh, I'm not everywhere. I can't really use Meta properly. But if you actually look at the performance of geo-targeted campaigns, meaning like I have a store or I have an offer that's specific to my store in a certain location, you obviously can't scale if you're using a 25-mile radius. Like, got to think about the number of people in that radius that are actually applicable to it. But if you crunch that math a little bit, you'll notice that your return on ad spend or your just simply return on investment from those platforms are always going to be better when it comes to Facebook and Google and Instagram as well.

So we're saying, I mean, it literally just almost like a point on a map and then you just give a radius of miles, which makes sense to you. And that's how you target.

If you have an actual physical shop, if you have a physical shop, if you have a restaurant, right? I'm not a big service industry person, honestly. I am an e-commerce guy. But we've seen this for, for some of the stores that are omnichannel where they have, um, we're using different definitions of omnichannel, but, uh, where they have a physical retail store and they have an e-commerce store, we've seen that almost every time the geolocated, um, uh, campaigns are outperforming the e-com side because we're targeting a very specific cohort of people and the pixel has a ton of data.

And when you say outperforming, you mean we're spending less money and we're getting more results as in more conversion compared to just blasting the whole country?

Yeah, either spending, we're mostly spending less money because it's such a small cohort of people, 300 million available versus maybe like 50 to 100,000. We're typically spending much less, but the ROI, the ROIs on that is typically much higher. Yeah.

Return.

Return on investment or return on ad spend.

Yeah. Okay. So you mentioned we're using omnichannel in different terms. What omnichannel is in your vocabulary, Sam?

Yeah. So I may have just said it wrong. It might just be like the omnichannel that I was discussing was like retail and e-commerce.

Okay.

So having a storefront and then also selling products online.

Is that two different campaigns then?

Yeah.

It would be, right? Like one would be for e-commerce, one would be for physical store. For physical store, we just discussed, you just point on a map where you are, you target your local area as a main. And then for e-commerce, do you still target by demographics? Like how does that work for online shops? Let's say, you know, I'm a podcast, you know, you know us, we want everybody to know about us, all the tech industry. How do I do geo on that?

So you wouldn't do geo for what, what, as a podcast, right? Because a geo target on a podcast in most cases is going to not work too well. Now you might geo your country, you might geo your languages, or that wouldn't be a geo, you might target your languages. But in the case of physical stores, it's literally just a radius around your store.

Yeah, I love that. Okay. I think that's, you know, simple concepts to sort of think about. But at the same time, when people start, I think they just go like, next, next, next, here's my ad creative, next, next, here's my daily budget, finish, run. They don't really think about any type of targeting like that. They just, they just run and they go like, oh my God, I'm spending thousands and I'm getting, you know, 3 forms being filled every week, like what's going on? Well, that's what's up, right? So I want to pick on YouTube a little bit. So that's Google still, right? Because you mentioned like, look, Meta is not only Facebook, it's Instagram, it's the whole suite. So when we say Google Ads, we actually mean as well the suite. YouTube is included when we say Google Ads.

Yeah, so when we say Google generally, again, I know I use some slang, so I apologize. It's just being part of the industry for so long. But when I say Google Ads, I'm talking about the entire Google suite. Which in this case would be search, Google Search, Google Shopping, so all the results that are literally physically showing above the Google Search, um, Google Display, Google Discovery, also rebranded as Demand Generation, and then YouTube as well.

Google Discovery got rebranded too?

Yeah, they rebranded Discovery to Demand Generation.

Demand Generation.

Discovery is Basically a mix of YouTube side placements and a mix of placements on Android devices. It's not used too often, but it is a decently popular product in the G Suite.

Okay, that's good to know. Right, so that covers thinking about big platforms. We've got Instagram, we've got Meta, we've got Google, YouTube. That's under the same umbrella. Then another one, of course, which comes out is the Twitter and TikTok. You sort of briefly touched around the TikTok and people love TikTok. I mean, I've seen people buying ads on TikTok simply because I think it makes you feel good in the sense of how many views you're getting because it jumps from like thousands to hundreds of thousands.

Sure.

But ultimately, you should be asking the same question like, what is the value? Am I just want to be seen or am I trying to actually convert and bring people you know, to the website to buy something, not just, just pure views. Do you have an opinion on Twitter though? I've seen people getting mixed results with it and X.

Yeah, so the really cool thing about X, we'll call it, the really cool thing about X is that, um, a lot of the biggest advertisers stepped away from X when Elon took it over. Right. And that's actually a huge advantage for small brands. Because whenever big advertisers remove themselves from an ad platform, the cost of advertising decreases drastically. So X not only has cheaper ad costs, but they also have significantly like incentivized packages, we'll call them, where they have like buy a certain amount of ad credits, get a certain amount free. They have some stuff in there to try to get people going on ads. Now, before anyone that's watching this just says, well, I'm just going to go buy a bunch of media on X, I still haven't seen X convert as well as Meta, even when it's half the price.

Okay. So if we take almost like, I want to say industry independent, but like everything is industry dependent. But let's imagine we have an e-shop which sells many different things like, I don't know, Amazon or whatever. We put it on Facebook, we put it on Google, we put it on Twitter, we put it on TikTok, and we put the same campaign out. And then we start measuring the results. The Google and Meta will just come out on top when it comes to conversions, right?

If you spent the same amount across the board, like let's say every account spent $1,000 across the board. Yeah. You would typically be seeing Facebook and Google outperform because Facebook, Meta, I should say Meta, the buying behavior on Meta is very strong. The feed is almost like an interactive buying experience. That's A. And then on the Google side, B, it's demand driven, not demand generating, right? So you're literally capturing people who are searching for the thing that you literally sell, which is a mega advantage for anyone.

Okay.

The other platforms though, what I would normally expect is you'd have to spend a significantly lower portion of your budget to get a similar return on ad spend because there's just less buying activity on those platforms. This is specifically for e-commerce and I'm kind of talking in the range of the medium-sized business, not necessarily the mega enterprise business at this stage.

Yep. I love that actually, that keyword buying intent, because yeah, people on like Twitter and TikToks, I don't think they dare to buy stuff like, or shop around. It's really just like scroll, scroll, you know, maybe consume some information. So if you're a brand and you just want to be seen and that's your strategy, it's just some type of like brand awareness or product awareness spread, potentially great, right? But if we talk about conversions in the sense you want to sell something, we're saying Facebook is at the top and Google is second. That's the experience we have.

Google and Facebook could go either way. It really depends on the business. Yeah. All right.

I love that. So when it comes to ad creatives, Sam, probably product-specific, industry-specific, or do you see— because you're running many campaigns for many different brands that say videos convert better or some images convert better, or some different ad creatives convert better.

The way that the algorithms work these days is you want to maximize the number of placements that you're available to show on. So every single format of a video, image, GIF, carousel, collection, all of that has slightly different placements as to not only where it shows, but when it shows. So think about if you're, if you're watching Reels on Instagram, which is their version of TikTok, um, you're not going to typically see static images when you're scrolling on Reels. But if you're in the feed, you're going to see a combination of static images and videos. Easy way to think about it.

Yep.

Furthermore, if you're in Stories, you're going to see a lot more tall images. So you have to think about having the full spread of all the different placements and very high-value creative for every single placement. There is very, very rarely, unless you have a knock-out-of-the-park creative, very rarely have I seen accounts that just run video or just run images or something along those lines outperform the other way around.

Okay, so if we're preparing a campaign Or when we're preparing a campaign, we want to prepare all the assets necessary to have a full spread. We don't want to just go like, hey, I don't have time or budget or creative energy to do video. I'm just going to do an image. No, that's a bad idea.

Generally speaking, yes.

Okay.

Now, if you're only capable, like if you can't produce high quality video, then sure, just run images, make sure they're cropped properly to all of the available formats. But the last thing I want to see is brands that are getting things out quick because they're not done yet and hoping for the best.

Again, goes back to that thing, don't throw your money before you're ready, right? Same as with the Pixel we talked about, like why would you pay for a campaign which is effectively not prepared to perform?

It's almost like, you know, your odds are lower. Not almost like, this is legitimately what it's like. You know, your odds are lower if you're not ticking all the boxes. But you're still willing to take that risk, right? And that's not an acceptable way to spend money in a business, for sure. If you want to go gamble your money away, fine, but this is analytical. This is not gambling by any means. This is very, very detailed into understanding that at the bare minimum, you need to 100% make sure you're ticking all your boxes, dotting all your i's. Before you start to spend hard-earned cash in the business.

I love that. That's a good one. That's a second one listeners need to take home.

Yeah.

You mentioned high-value creatives. Define the high-value creative. What is that? It's just production quality?

Yeah, I love this so much. It's actually not production quality. It is the final result being as close to what you your dream state of it as possible. And I really, really have become obsessed with this lately. Most specifically for myself, because I've recognized that when it comes to any social media, the more value you produce and put in a piece of content, the more views it gets, the more engagement it gets, the more shares it gets, et cetera. So we see this on my YouTube channel, for example, not to plug myself too hard here, but I think we're 30 minutes in, we could probably mention it.

Go for it.

On, on the YouTube side, um, when we produce, or when I produce a video that is super packed in value, like 40 minutes, really detailed, step by step, like very, very meticulous, takes me 3 to 5 hours to actually record. We get an outsized number of views on those videos. Not only do we get views from those videos, we get clients from those videos, we get leads from those videos, right? There's a big value add there. Now, if you don't produce that highest, highest level of content, it gets washed in the noise, right? These algorithms are incredible. If I said this before, but if everyone's content was viral, then nothing would be viral, right? Everyone would get the same amount of views and there would be no such thing as viral content. There's a reason that we all see similar content. It's because virality is not only unique, but it is actually earned. It's not chance, right? So when I think about what is valuable content, I think about what is the way that we can produce a piece of creative that it is not only engaging, but it sells our product really accurately.

Okay. So when we say high value creative, we not necessarily mean a 60-second or 30-second ad. We as well Talking about an actual value add to your network, to your customers, potential customers, to your fans, and you create that and then you advertise that without specifically creating any short-term ads or, or images. Is that like—

Yeah, so you could have— if you have a sale, right, you got to put a static image out, you got to put a video out. Sure, that's fine. But on an evergreen basis, you really want to focus on What are the ads that are going to absolutely define my business the best, put my business in the best portrayal to the end user?

Yeah.

And then ultimately you'll be able to spend a lot of money on.

That's the value, high value creative. I mean, you're still making this with like what, Canva.com and some free tools. Like you don't have to go to an agency to, to create a movie type of trailer, right? It's just what we mean here. The production quality, you still need to be there, but the value is as you just defined is, is, yeah, is that okay?

One of my, one of my favorite types of creative to simplify this a bit is the founder video where you say, I'm just gonna use this pen that I have here. And you say, my name is Sam and I created this pen because, and then you talk about why this pen is better than other pens. Now I don't like that example cuz it's sell me this pen, but use your specific product that is truly unique to the market. And explain the story of why you created the exact product. If you do that, people will resonate with that story. And if you're selling a good product, they're gonna recognize it.

I love that.

Mm-hmm. One of my favorites.

That's good. We, we going a little bit into like a, a marketing niche, isn't it? They're like how you actually use storytelling to, to, to sell your product. There's, there's some science around this and we actually have a couple of episodes in the library For our listeners, just, just put in marketing as a search term. Right. So I have another one quote, which I want to share with you, Sam. So a Statista report shows that brands increasing ad spend without optimizations see a 22% increase in CPA, but only 12% revenue lift. So that means if you don't really think about what you're optimizing and how you're optimizing, you're going to increase your spend, but the revenue coming in will be lower. So effectively just spending more money, right? And we sort of opened the show with that quote, is that you're just burning more cash to acquire customer, right? So that's pretty much where this is coming from. So if I'm in this situation right now, you know, as a small business owner, I'm seeing that, like that's coming out in the reports I'm getting. And let's say on Google Ads or Meta Ads, I'm seeing that I'm spending more money, but the results are not, you know, getting lifted up to the same level. Like, what is my step-by-step process I could do today to sort of try to create or understand a strategic repositioning of these campaigns and sort of, you know, put myself in a better situation?

If you are a brand that hits a wall and every time you try to scale, you continue to hit that wall, You need to look at where the cash is going. That's first. You need to understand what are the platforms, where, where is the cash going from a platform perspective? Once you look at the platform perspective, look at what are those platforms actually driving in terms of revenue for you. Now, I don't want to go down the third-party attribution route, but a lot of people get caught in third-party attribution here. So forgetting that just for a second, we're just going to start. If you're that brand that is hitting that wall when you're scaling, you look at your platforms, you look at which platforms are driving the most amount of revenue, what the return on ad spend is for those platforms. Then you can consider if you should shift cash around. Let's just pretend it's Meta and Google, as I like to prescribe most of the time, and you can push cash from Google into Meta and vice versa. The next thing you do is you take it one step down. You look intra-platform. So in each of the platforms, what are the What percentage of spend are you spending on new customers, engaged customers, and existing customers? Facebook makes this really easy with audience segments. You could literally click audience segments and then you could see your breakdown. Google, on the other hand, you're basically just going to look at your insights and reports and you're going to look at any time anyone's being spent on branded terms. Any money is being spent on branded terms. Consider all branded terms existing customers, even that's not perfect. And then consider anything that's not branded terms, net new acquisition. So that'll break down, that's 2 levels down. The 3rd level after this is actually understanding what time of day, what day of week, where is the money actually being spent? Not just on a platform basis, but when. Now I love this one. This is my favorite. I could tell 100 stories about this, but The, the quickest story I have is when I was at BarkBox, we would previously spend tens of thousands of dollars Monday through Sunday, every single day of the week, just like every other brand does. I can guarantee most people that are listening to this are spending the same $100, $1,000, $1,000, $1,000, $1,000 every single day. You have better converting days than other days. Some days of your week convert better because of the consumer behavior. So The example that I always give at BarkBox is we went from spending the same tens of thousands of dollars per day to— we recognized that on certain days of the week, I can't say exactly, but certain days of the week had outperformed other days of the week. So we started to spend more on better performing days of the week. The trickle-down effect of that after 3 years was the business went from about $200 million to $2.5 billion and publicly traded. Now they did 100 other things right, but that's a key everyone needs to think about. When is my money being spent? So it's where, then it's to whom, and then it's when is the money being spent. You can go further on platform placement, landing page copy, headlines. You can go way, way further. That's the core, those three.

I love these. I love these. I mean, the, the, the targeting of the time How it's called? Day parting?

Yeah, there's day parting and then there's just day of week parting.

Okay.

So day parting would be like if we only want to spend from 9 AM to 5 PM. Day of week parting would be I don't want to spend on Sundays.

Yeah. That's excellent. So would that be, if I would rephrase this question in In a more, you know, industry-specific terms, what would be the easiest way to improve return on ad spend without increasing spending? That would be the top 3 tips you could give them.

Check your top, top 3 tips. One, check your percentage of spend and your frequency of impressions on your existing customers. Make sure you're not overspending there. Most brands are overspending because they don't have exclusions anywhere. And if they're heavily overspending everywhere, they're putting themselves in a position where they cannot, um, reduce their spend, um, on existing customers. You will likely be able to reduce your spend on existing customers and get the same revenue. Uh, second tip. Would be if we're really just focused on how we're reducing ad spend or keeping ad spend the same and driving more revenue. So that distribution is so important. I know this is kind of the same thing, but these are the lowest hanging fruit for 9 out of 10 brands we see. The distribution between Facebook ads and Google ads, making sure the right amount of cash is being spent on each of the platforms. The third piece is being slightly algorithmic friendly, meaning allowing your creatives to run a bit longer, allowing your creatives to get some fresh air and actually spend, but also not putting yourself in a position where you're, you're ultimately just broad, broad, broad, spend all the time, spend all the time.

Yeah.

What that typically means is Be sure before you pause an ad down, if an ad has 5 purchases and $100 in spend, and that's 20% lower than your average, don't pause that ad down. If an ad has 0 purchases and $2,000 to spend, pause that ad down. There's a lot of levers to look at, but don't overreact to slight adjustments in the ad account.

I love that. When you say exclusions, can you give us an example, Sam, like a good use case maybe you have, or a good example of how people could approach exclusions?

Yeah. So when you're creating those prospecting campaigns that we talked about at the top, the campaigns that are gonna drive net new customers for the business, you always wanna exclude the other buckets. And the other buckets are most of the time going to be, um, anyone who's been to your site. So that could be site visitors last 60 days to 90 days, and then it could be people who have added to cart or initiated checkout over again the last 60 to 90 days. Mm-hmm. Depends on the size of your business for those windows of time. And then also excluding all past purchasers. That could be done with the Klaviyo list for all time, and then it could be done with 180-day purchasers from the pixel as well. So just creating those swim lanes in the account so that when you're spending more money, you actually know where it's going.

So this exclusion will guarantee that the ads are not shown to these people?

Can never use that word guarantee because it's Facebook ads. Um, so, you know, we never know for sure. Sure, but, um, it should do it about 80 to 90% of the way, hopefully.

And you mentioned as well branded terms. Uh, yeah, what is that?

So branded terms are just anytime your own, um, brand is the search term. Meaning if I was Nike, anytime someone types in Nike, I would consider that a branded term. Yeah, I'd also consider Jordan for Nike a branded term because they own Jordan.

Yep. I love that tip actually. And it's so like, again, no-brainer, like you don't want to pay money and compete if someone searched for you directly. Like, why would you do that? But at the same time, I mean, I see that all the time when I go to Google and I put a brand and they're just like right there at the top. Do they choose to do that or?

Well, yeah, let me clarify because this is actually important. There is a lot of studies out there. There are a lot of studies out there that have shown that branded searches are incremental to the business. They do actually drive value to the business. And I'm not saying not to do branded searches. I'm just saying, look at how much you're spending on your branded searches, the way that you're bidding on those branded searches, and then make sure you're not overspending, right? Because what we don't want to do is we don't want to pay $14 for someone to search Nike, right? Or click on our Nike ad. We want to pay like 30 cents or a dollar, depends how competitive your suite is. But we shouldn't be spending an outsized amount on brand and I'm willing to sacrifice 1 or 2 or 5% of branded searches and let them get swept up as opposed to overpaying for that 5%.

Yeah, I love that. So you mentioned algorithmic spending as well, which very nicely brings us in, you know, in a conversation about AI. Yeah, mixed messages I have in the sense that use it, it's going to optimize your campaigns, it's going to do so much better than whatever you could do as non-expert, as a person not using agencies and trying to run this ads versus it doesn't work at all at scale and it effectively just going to eat your money, which makes sense from a perspective of like Meta and Google. If you look from these businesses' perspective, I mean, they have to be optimized to on ad spending, like they just want to get your money, right? And give you some results where potentially it's not the best results. And maybe your interests are not being looked at first, right? So it's, it's a mixed messages I have. What's your experience?

I'm—

it's like, should we trust these or should we actually think here manually?

Trust is a really tricky word when it comes to these platforms at this stage, you know, It technically works in an auction, and it should be a fair auction. However, the scores around, um, what makes the— some of the factors of that auction are, um, what feels like to be subjective, and that's where things become a little tricky. Now, is it subjective versus is it not? Is it quantitative versus qualitative? That's, that's where things get a little tricky and there's a lot of blurred lines. And to be quite honest, that's why Facebook, that's why Google, that's why they have all been sued multiple times around this. So when it comes to purely trusting the algorithm, um, not a big fan. But I am a fan of thinking of the algorithm— an example I've given before is imagine if the smartest Albert Einstein is 2 years old or 4 years old, right? That's the algorithm right now. It's gonna be the best, period. Like, the best. It's going to continue to get better. It's growing really fast, but you need to give it the proper direction right now for it to have those brilliant moments for you. That's why everything that we set up has a combination of manual and really, really algorithmic friendly. That's why I use the word algorithmic friendly, not just we lean into AI. Anyone could run an Advantage+ campaign. Anyone could just go run a 100% broad campaign. When you have systems in your account that minimize your learning phase, that actually scale the most effective creatives to the top of your accounts, you're guaranteeing you're spending the most on those ads specifically. You ultimately put yourself and the account in a scenario where it could be very hypercompetitive in and of itself, basically meaning that the core of your account is AI driven or algorithmic driven, but where you're choosing to pull levers to scale is sure AI from a creative perspective, but you know definitively that those ads are working the best and therefore you're willing to push more against them.

Okay. So I have this quote, which I think supports what you just said, Sam. It's from the Ad Exchanger. So according to them, top e-commerce brands using manual bidding strategies saw a 15 to 30% lower CPA than those using fully automated bidding, which sort of as well supports the fact that the platforms will be looking to optimize for spending rather than, you know, your return of investment. Which leads to this question. You work with huge brands and a lot of them, Sam, so Like, at which point in time you sort of go like, you know, we just going to start doing like manual oversight over here, which is going to disable all the AI stuff and which is going to take over this. Or to your point, earlier point you mentioned, it's a friendly approach where you still, regardless of the size of the campaigns, regardless of the spending, you will allow AI to drive this, but there will be a manual oversight and manual tuning.

We always start at the top. We implement what we call the M3 method. It's basically a 3-step process. The entire philosophy is focused on driving the highest return on ad spend incrementally, right? Where can we drive, period, like most business, highest return on your money incrementally? So I sort of went through that phase 1 already, which is looking at the platforms, looking at the placements, making sure we're spending and the distribution of spend is correct. The second stage Excuse me. The second stage is rebuilding the structures so that they're predictable, which we've already discussed. Also making sure that we have proper segmentation in the account. We have our scaling and graduation system in the account, all really key. The third thing, which aligns to the quote that you just said, most of them are the most successful accounts are running cost controls. They're running manual bidding adjustments.

Mm-hmm.

Now what that is actually referring to, this is where Facebook's lingo gets very confusing. Um, what that's actually referring to is things called cost caps or cost controls. So most brands have heard of cost caps. They've tried them out. The really interesting statistic is that 99% of advertisers are using highest volume, which is Facebook's standard setting. But nearly not over, but just about 50% of the total ad spend is using cost caps. This tells me pretty clearly that the 1% of brands that are spending millions of dollars per month in advertising are using cost caps, right? So we always consider cost caps down the road in a relationship. We never want to just say, hey, it's day one, let's go flip everything to cost caps. There are agencies out there that do that. To be quite honest, that can create a lot of issues in your account. And most specifically, it can create massive issues on the scaling of your account. It's not something you want to do at $1,000 a month in ad spend or $10,000 a month in ad spend. This is well beyond that, $100,000 plus in ad spend when you want to start to consider pushing limitations on your account. So Facebook, like you were saying, so Facebook can't go and overspend your money. So Facebook has to be a little bit more into the constraints that you're setting on it. And really, in a nutshell, what we try to do on our side is always focused on minimizing wasted ad spend and reallocating that ad spend to the best possible place. And cost caps tend to be the icing on the cake.

I love that. That's a brilliant Brilliant tips, Sam. So if you would want the listeners to take home from all the golden nuggets you gave one thing, especially for the ones which are struggling and they, you know, they are in this position where they feel like, you know, they're throwing money and the results are just not coming. Like, what would be that, like, one thing you would want them to sort of nail that in their heads?

There's probably two different kinds of people listening to this. There's probably brand owners who are just starting or in the first year of business, and there's probably brand owners who have struck success and are hitting a plateau. First, speaking to those who are just starting or are in their first year of business, if you cannot drive results on Meta ads, Google ads, or even if you've explored other platforms, take a full step back and look at your product, look at your website, look at the value of your product and how it competes in the market. I know that's really broad, but I always like to tell people this because Facebook ads cannot sell trash. Google ads cannot sell trash. You will be so down the barrel of this algorithm if you're not selling a good product, have a high converting, uh, have a high converting website, have a product that's just valuable to people because ultimately you're gonna need a lot of people coming back. So think about that first. That's a fundamental. If you're on the flip side of this, you've had success, you're hitting a plateau. Brands that we work with are typically in the million-dollar-plus revenue range, or at least pacing to a million dollars in annual revenue. And the most common thing that we see is they're doing a lot of things right. They're doing a lot of things at an 8 out of 10, a 9 out of 10, right? They have a beautiful website, great products, high return customer rate. They just can't nail acquisition. They can't find that predictable system. So think about a lot of the tips that we've already gone through on where that distribution of spend is going, but also think about, do you actually have the capability to continuously reiterate on creative, to actually dig into the data? And I'm not just saying looking at purchases and looking at ROAS, talking about looking at hook rates, looking at click-through rates, CPMs, CPCs, the minutia That is extremely important because the devil is in the details in this game. I mean, there wouldn't be so many columns that you could add to Facebook if it wasn't. Same thing on the Google side. So if you, you have to often have a reality check at this stage of a business when you're at that million-dollar-plus mark to actually understand, do you as the owner have the capability or is it time to make that hire, whether it's us or anyone in the industry? Because it's not going to be the same and it's not going to be as easy as when you were a $100,000 business, right? Just like you started this entire episode with.

Yeah, I love that. And the first thing you just put there, Sam, it's really not even a running ads type of issue. It's product issue. Like, it's, you know, it's like we can't help you if you're selling something people don't want to buy. It doesn't matter how much money you're going to throw. You're going you will have real issues with that. So rearrange yourself to that. Hopefully you get success. And then there's going to be a level where you rightfully put, you need to consider either partners at agencies or in-house expertise to really manage all of that. That's very lovely. So if people wanted to just learn more about Moonlighters and you, Sam, uh, your YouTube channel, just, you know, maybe get more tactical, maybe ask some questions, how they can find you, how they can get in touch.

Yeah. So first off, um, we hooked up a specific URL for you guys. So you can go to themoonlighters.com/techgrowth. If you forget that and you just go to themoonlighters.com, just tell us you came from listening to this podcast and we will waive the onboarding fee. That's multiple thousands of dollars. We'll waive that. Um, Don't tell anyone else. And, uh, if you just want the free information, you just want to follow some tutorials, if you did get value out of this, um, you could find me, my full name Sam Polero, on YouTube and a couple other socials. But really YouTube is where I pack in hour-long videos, tutorials, some conceptual, some tactical.

Your videos are amazing, Sam. I watched a couple of them before this episode. I really love them. Very tactical, very easy to follow. Huge value to the listeners, as you rightfully put. And you mentioned, don't, don't tell anyone that, you know, you're gonna waive onboarding fee. I mean, we're gonna scream out of the top of the building, so we're gonna buy some ads, we're gonna optimize the campaigns on exactly that message. But jokes aside, uh, everything's gonna be in the show notes, so just scroll down if you're listening this not live, you'll have that information to just follow. This is such a broad topic. This is huge topic. Buying traffic, AKA running ads. It's a, it's a science on itself. And we just barely scratched the surface. If you're struggling with this, make sure to reach out to Sam. Hopefully you'll get the help you need to scale smarter and actually get into that profitable range. This was Mastering Tech Growth, where we go beyond theory to bring you real actionable insights. From the best in the industry. Check us online, and as always, until the next time, stay safe, see you online.