What is the right way to run Meta ads in 2024? Don’t let the gurus fool you: it depends on the product you’re selling.
This content first appeared in the No Best Practices newsletter on 03.17.2024.
Going to expand on this Tweet I posted a few weeks ago.
There is no “one size fits all” strategy for Meta ads. There are a few things you can do to sabotage yourself, but I don’t agree with “one account structure to rule them all”.
The average consumer has a different relationship to different product categories. Think: sneakers vs toilet paper vs cars. This determines how easy it will be to convert the in-market audience for that product. It also makes certain media buying strategies more or less effective within a category.
To illustrate this, I’m going to dig into the market dynamics of two categories that couldn’t be more different: fashion and supplements. I’ll also talk about the middle ground between the two.
Context: Meta Ads Prospecting
When most agencies and DTC Twitter folks talk about scaling brands with Meta ads, they’re talking about running campaigns with the sales/conversion objective. These are campaigns where Meta targets folks who have signaled interest in a specific product or category.
The expectation is that the brand will spend $100 on Monday and win back $200-300 in sales by Sunday (if not on Monday itself). The ability to do this effectively depends on the size of your in-market audience, how “locked in” their brand preferences are, and the quality of your product and offer.
There are other ways to use Meta where the payback window is longer and harder to measure, but that’s not what we’ll be talking about here. Meta Ads prospecting is how most small, founder-funded brands fuel their initial growth without bleeding cash.
Selling Fashion With Meta Ads
Fashion is a category where it’s easy to grab a piece of the in-market audience, but the size of the in-market audience is almost entirely outside your control. Your growth potential via Meta prospecting is capped by macro factors unless you are able to generate your own demand OUTSIDE of Meta.
If you shoot compelling (ideally “raw”) photos and videos of your best selling product and link them to your best sellers page, you should start to see conversions come in on day one. Some caveats: your product must be good, it must be on trend, it must have a compelling price:value ratio, and it must be mostly in stock (to start).
The reason? The market for fashion is very fragmented. Switching costs are low, and people are willing to try new brands with the expectation that the fit might be off (as long as they can return it). If you’re offering a compelling, on-trend product, Meta is good at finding you a buyer.
That’s great, but growth is capped by a few factors. The trendiest or most compelling ~20% of your assortment will drive ~80% of your sales. It will be nearly impossible to sell the ~80% of the assortment profitably unless you mark it down.
It’s also hard to scale beyond the boundaries of a trend. You’ll scale up spend until you find the top of the market for, say, silver ballet flat customers. Creative iteration won’t do much to help you unlock new customers at your desired price.
Once you’ve hit the boundaries of the trend across the assortment, your only option for scaling further is to create more hype and desirability around your brand. You have to progress from meeting the need for a product to meeting a psychological need for belonging or status.
The reason? Fashion choices are a matter of personal taste. You can use the direct response playbook to convince someone that the sky is falling and they should invest in gold. You can’t use a VSL to convince someone that platform boots are cool. Influencing taste is more complex than influencing other types of purchases.
Selling Supplements With Meta Ads
Supplements, as a category, are basically the inverse of fashion in terms of consumer perception.
Most people are highly wary of supplements. If it “doesn’t work”, the consequences can be much worse than a pair of jeans that doesn’t fit–you could die. You need a lot more proof and credibility to close the sale.
When people do find a supplement they like, they’re unlikely to switch. So individuals get “locked in” to a category (ex. a favorite protein powder, a favorite probiotic). They often arrive at their choices via a kind of ideology (ex. “I’m Paleo”, “no seed oils”) or via an influencer or guru type (who could be a friend or workout buddy).
Additional challenge: most supplement brands cannot legally claim to address a medical condition, so in many cases you’re blocked from making your most powerful claims. Notice how Head-On never said it was made to treat headaches.
Of course, tons of black hat brands and marketers ignore these laws, running an illegal playbook until they’re fined and/or shut down. This doesn’t help consumer perception of the category.
This is why you can’t assume a supplement is a bust after a few rounds of static ads testing on Meta. If you believe in the product (or found traction on other platforms), you’ll probably have to tweak the full funnel multiple times to get it right.
You might have to build out distinct campaigns for different stages of the funnel to qualify your audience. For example:
- Building a qualified audience pool via lower cost Meta objectives or through other, lower cost platforms
- Further educating and qualifying via Meta conversion campaigns
- Using an email welcome series to close incremental sales so that your CAC makes sense
The lower the switching costs in your category, the easier it will be to get traditional conversion campaigns working BUT this will lead to higher churn rates. Most Americans want to lose weight, but the people who impulse buy weight loss powders from Meta ads are the same people most likely to churn if they don’t see it working in 10 days.
Another major difference between supplements and fashion is retention rate and customer LTV. In fashion, you’ll be lucky if you retain 30 of every 100 new customers. Most repeat buyers won’t make it past a second purchase.
In supplements, you’ll retain a slightly higher percentage of your new customers, but a decent percentage of repeat buyers will reorder every 30-45 days for at least 6-12 months (if your product works and you qualify the audience).
A lot of fashion brands need to achieve a ROAS of 2.5-3x to be contribution margin profitable on the year (return rates are also a big part of this). Many supplement companies set CAC and ROAS targets based on projected 30-90 day LTV because retention is more predictable.
What Products Are “In Between”?
There are a lot of products that sit in the middle of this spectrum. Meta ads gurus love these products because they combine natural product-channel fit with favorable unit economics.
What are these products? If you could imagine an item being sold in the checkout line of a retail store, you’ll get the idea–they’re impulse buys. Some examples that are widely discussed on DTC Twitter: BlendJet, JavaSok, True Classic.
These are products that exist in categories where the average consumer doesn’t have particularly strong feelings or affinity. So they’re willing to try something new if it looks like the product could improve their lives and the price is reasonable.
Although it is technically “fashion” or “apparel”, a lot of underwear and performance apparel/ “athleisure” sit in this zone because it’s less about taste and more about fit/functionality. Once you find a bra you like, you’ll probably buy multiples, and they require more frequent “replenishment” than a pair of jeans.
You can sell these products using some kind of problem/solution narrative, so they’re more scalable within Meta than a fashion product (which solves no problem). But the average consumer doesn’t have their guard up, so it’s easier to close with a simple 30 second story told via a conversion campaign.
That said, it’s harder to build an impulse buy into a sustainable brand. You can scale up sales of the hero product with relative ease, but eventually you’ll reach everyone in America who would ever buy a portable blender off a Meta ad.
These brands need to be really thoughtful about assortment expansion because a lot of the products don’t lend themselves naturally to upsells or cross sells. This is even harder if the original hero product is kind of crappy…just good enough to keep folks from returning it, or vocally complaining.
What To Do With This Info
Determine what category your brand/product is in. If you’re a fashion brand, you probably know it. But take some time to consider the relative skepticism, sophistication and switching costs of your category.
Once you’ve done that, try to work with partners who have experience in your category, or who understand its dynamics. When you evaluate tactics, only test/implement tactics that have worked for brands in categories with similar dynamics.
If you’re launching a brand via Meta ads, set expectations based on the category. Supplements will require more iteration, and probably more investment to see traction. Fashion iteration should be focused on the product more so than the ads–don’t sink too much into inventory before validating with ads.
A good approach: set a hard limit on what you’re willing to invest to validate a launch. For example: “I’m willing to spend $10k on media, inventory & ad creative to validate this idea”. Then run the most effective playbook you can for that $10k and walk away if you don’t find traction.
Finally: don’t listen to anyone who claims there is only one way to run Meta ads, or that some tactic or account structure is “superior”. Don’t be afraid to try different things and ask around.