Why "Bad Genetics" Brands Are Still Growing 50% a Year ft. Taylor Holiday

Full conversation

Check, check, check. Corey, we good? Thank you. Nick put me first, so the entire schedule depends on me today, so we're gonna jump right into this. in August, about a month ago, this story... What is going on? We're going too fast. There we go. a news story came out about a former MLB player named Jesus Montero that died two weeks following a motorcycle accident in Venezuela.

And for most of you, this was probably nothing more than an ESPN notification that showed up on your phone and disappeared because Jesus was not a superstar, was not LeBron James by any means. But for me, he was actually my friend. I knew Jesus from the time that he was 18 years old. the tragic accident came with his wife, one week away from giving birth to their first daughter.

And I knew this guy from the time that he was a child, and he was the most joyful, happy human I've ever met in my life. An 18-year-old who came to the US from Venezuela, and signed with the Yankees at 16 years old. we got to play together for the same season in Charleston, South Carolina. and I can tell you, the only people that loved Jesus more than I did were the women of Charleston, South Carolina.

They were big fans of Jesus. He was an absolute golden child. I don't know how familiar you are with baseball, but baseball works... prospects get rated on this 20 to 80 scale. 20 is like a very below average player, and 80 would be like a once in a generation talent. And every prospect gets graded on these across five different characteristics, your arm, your power, how you can hit for average, defense.

and Jesus was, by all accounts, a generational talent. He was the golden child of the Yankees organization. He was 6'4", 240, had an 80 grade bat, and every attribute you would design into a ball player, he had. He was incredible to watch. You would watch this kid take batting practice, and you were just certain that he was destined to play for the New York Yankees for a very long time.

to translate this for you, because most of you don't know baseball, Jesus was the Grunes of baseball prospects. If you take 80 grade power and you translate it to massive LTV, that's what he had. If you take his 80 grade hit tool, that's equivalent to huge gross margin. And the $1.6 million he signed for at age 16, back in 2005, which is like $100 million in inflation-adjusted dollars today, translates to being able to afford any CAC that you could possibly need.

That was who he was. But the problem for me playing with Jesus was that all he did was make me acutely aware of how not Jesus I was. I was 24 years old, playing on the same team as an 18-year-old. I was 5'9", he was 6'4". When he hit the b- hit the ball, it went a lot further than when I did. And so studying Jesus only did one thing for me.

It made me realize that I didn't have what it takes. And my fear is, as we start this conference, is that our industry right now is doing the same thing to some of you. We're propagated by a lot of stories. I even heard Nick say it on the stage. We can't help but elicit the names of Grunes and IM8 and all these brands right now because supplements are so in vogue.

It's as if it's the only way you could ever possibly win the game, is to be running with a huge LTV and being able to pay whatever the CAC is that Meta wants from you and scaling to the moon. And every case study you're fed is a genetic outlier that only does one thing for you. And that's that if the players you study are golden children, the lesson is you don't have it.

That you might as well pack it up, take your stuff with you right now and head home. Or come run an agency, right? I even, you know, Sean Frank's tweet yesterday was, felt like he was throwing in the towel at Ridge, and it's like, "If you can't win there, whatever could we do?" So I thought about this, and I thought, you know My job as I open this conference is to give you all the most powerful thing an entrepreneur has as they go through their journey.

It's hope. It's the sense of possibility that we just might be able to do it. We just might be able to win. So if you leave with that, then I've done my job, and the way I'm gonna do it is actually to lower the bar. I'm gonna convince you that you can win with mediocre genetics, Taylor genetics, five-nine white kids that are a little too old genetics.

That's what we're gonna try and win with today. It's not gonna be a pep talk, it's gonna be a data set. I'm gonna give you three brands, and here's the rules. They're all growing fifty percent a year at north of eight figures, but they have to have bad genetics. They have terrible LTV. They have mediocre gross margins, and they have to be first-order profitable with their meta ad spend or they're dead.

No CAC at point two and an LTV that pays back four years. No billion-dollar, debt vehicles from General Catalyst. I'm talking about old school, you pay it, you get it back right from the start, and they're growing and winning. How? Well, if these three can do it, any of you can. That's my promise. And I know you're probably thinking, "Wait a second, Taylor.

I've heard of some of these." You feel like maybe you're getting a little bit of head start, but trust me as I go through these stories. But the goal is, if these three can do it, any of you can. So what you can take away from their journey is something that you can put in your pocket, write down on your piece of paper, and use to help your brand today.

So I'm gonna start with Skullcandy. Now, this is the one that you're going, "Well, hold on, Taylor. Wait a second. That's a global brand. You can't start with them as the thing I'm supposed to reference to as a startup founder." But let me tell you something about Skullcandy. Skullcandy was founded in two thousand and three.

so they've been around a long time, but they've gone through a tumultuous journey. And the most recent iteration of Skullcandy was one that was taken over by an entirely new leadership team coming off of massive decline where they had gone very much out of vogue. And when they came to CTC three years ago, their online revenue was smaller than yours, I promise.

They had built a business or a distribution system that no longer applied. and if we were to grade them on a twenty to eighty scale, they have some of the worst LTV you could ever imagine. People don't need a hundred pairs of headphones. Their gross margin in consumer electronics with warranties and everything that exists is very poor.

AOV is normal and the brand heat had died. If you were to write a report, you'd say they're an organizational player, non-prospect. Don't invest a high pick in these guys. But what they didn't know is that they have Brian Garofalo. And Brian Garofalo here on our shops card took over as CEO of Skullcandy.

and Brian understands maybe more than any leader I've ever interacted with about what is happening today and how product gets moved, and he's unconcerned with the genetic attributes of the business. He believes that his ability to influence demand and to influence culture can win regardless And just to prove the point, this is an illustration of all the stores that are currently in our, Statlist database.

And you can see this is Skullcandy's LTV. It's bad. You are not going to win the game off of lifetime customer value. It's not how you're gonna win the game. You're gonna have to do it with new customer acquisition efficiency over and over. and that's what they did. They stopped playing any genetics game, and they deployed what I call the modern distribution playbook.

For me, really, they wrote it. They wrote the modern distribution playbook in a way that opened my eyes to what was possible for a consumer brand pursuing distribution in many places to build a motor. Now, Nick talked about that thing where you take out your phones and you take a screenshot. If you're gonna do it, this next slide I think is the most impactful, 'cause to me, it illustrates today what is the modern distribution playbook in two core areas: your media and your sales channel distribution.

And this... Luke, raise your hand. Luke's the president of CTC. This is his creation. I don't take credit for it. But what I believe that it illustrates so perfectly, okay, is the relationship between demand creation and demand capture that happens in both media channels and sales channels. And what I really want you to focus on is I want you to look at this section here, where we talk about each of these sales channels.

So these are sales channels, these are media channels, and I wanna think about the relationship between how much happens in demand creation and how much happens in demand capture. Okay, we have to un- understand some things about consumer purchasing generally. E-commerce is still a very small percentage of overall transactions that occur.

Around seventeen-ish percent based on the latest data. That means the vast majority of demand capture for almost every category on earth will happen in retail. For almost every category. Then from there, about forty percent of all the transactions online happen on Amazon. Then you have Shopify, which is growing its GMV very quickly, and then the fastest-growing of all the channels is TikTok Shops.

But the amount of demand capture that occurs in these places is disproportionately small relative to the other locations Now, what I watch brands do when they try to disassociate these channels, they build silos, is they maybe start DTC, and then all of a sudden Target comes knocking, and they're like, "Oh, wow."

I have a friend right now that's running a supplement company, and he just got an offer for store-wide in Target. And I said, "Don't you dare do that. Don't you dare. You do not have the demand creation to support that demand capture. You will die. And your job is ultimately to sell to not the buyer at Target, but the end consumer.

You have to move units, and if you don't have the engine, you can't support that distribution." And so the relationship between these things is the critical thing that Skullcandy understood. And what they were unafraid of is what most large legacy brands are afraid of, which is to understand that right now, today, the core motor for demand creation across all of these channels is TikTok Shops.

And I don't mean it in the way that you're hearing it framed often right now, which is this idea that TikTok Shops is exclusively about generating ad creative for Meta. No, that's not the point. They each play a role in driving value across all of them. Now, the problem with this as a demand creation engine is that if you work exclusively there, if you try and isolate to TikTok Shops only, it is very difficult to capture as much of the demand as you create.

Why? Because a lot of the demand is impression-based, okay? And when you think about the relationship between an impression and the direct path to purchase, why does Meta work so effectively on such a short attribution window like a seven-day click? It's because every ad is optimized and driven towards a click-based conversion

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Link in the show description. Now back to your replay. Okay? And so what happens when you have that tight of a funnel is that the halo effects are actually de minimis, meaning that you can still drive halo effects with meta advertising, but the purchase realization of those ads is so high that you actually diminish the value.

Whereas when you move into these items, connected TV, even TikTok ads or impression-based organic content, the satiation of that demand happens much more broadly. So as you grow your TikTok pinsh- TikTok impression base, the value captures happens at Amazon and retail. And right now, TikTok shops grew 12 to 20X faster than the total US e-commerce in twenty twenty-five and is still growing about nine times faster in twenty twenty-six, even as overall e-commerce has rebounded.

So it's the fastest-growing channel within all of e-commerce, which continues to grow, but it's growing at a faster pace. The shelf is very much now the feed. And for Skullcandy, this is true, and I'm gonna tease a little bit of data that, I shared with my friend, who I'm gonna explain in a little bit in a second, about the growth and success that Skullcandy's had.

But you can see that if we normalize their TikTok shops for January, the growth that they've had to August, about four point three X. Their e-commerce business has followed on top, growing two point seven times from January to August of this year, and the year-over-year growth has followed directly related to that spillover And this all comes from a massive amount of impression volume.

I'm gonna let, set you up to tell more about that story later. But what Brian and Evan and the team at Skullcandy did so well is they understood that these tropes that we've been given, TikTok is for cheap widgets and not established brands, you have to have a low AOV, TikTok is for consumables, the channel can't be profitable, are all tropes that don't have to be true.

Those may be the natural genetic realities of the baseline expectation, but it doesn't have to be true for you. Now, I'm not gonna go too much more into this because I'm not gonna steal the spotlight from one of the smartest people in the world, and that's Evan Catlett. Evan is gonna be speaking later this afternoon.

She's the Global VP of E-commerce and Marketing at Skullcandy, and she's gonna give you a detailed playbook on exactly how they pulled this off and how it's affecting their retail business and the overall business in entirety. So if you have your schedule out, highlight that because I think that the job that Evan and the Skullcandy team have done is without a doubt the single best marketing effort I've seen from any brand in the space in the last twenty-four months, in part because of the genetic attributes that they're dealing with as a business.

So you do not want to miss her telling that story. And for me, when I watch this play out, I realize, like, there is no way the future of what we're building as an agency, as a provider, can happen without this capability That the need to drive this engine is gonna be so central to the process of everything that we're doing going forward, that to ha- to not be able to deliver that scope to our customers would be a failure.

So this is a announcement that as of today, CTC has acquired TBar Partners, a TikTok shops agency. Alex, Tyler, where are you? You guys here? There you are. Hey, come here. Walk in so they can see you. Bring your short shorts. Wave. That's Alex right there. Where's Tyler? Somewhere. Oh, just selling. He's selling.

He's doing a great job. These guys are the group that is behind building the TikTok shops playbook for most of the industry. Gruns, Ridge, Hex Cloud, David, Vita Coco, Create. And if we go back, they're everything you could imagine. Twenty-year-olds with the broccoli hair. They made this image for me. That's me as a twenty-one-year-old with a textured fringe.

they're everything you could want in TikTok shops. Dropped out of their college baseball team to run it out of their college dorm. They work nine thousand hours a day, and all they want to do is help you grow your TikTok shops business. okay. Second, the stuck brand. So one, TikTok shops playbook, you're gonna get more of that from Evan later today.

The second one is the stuck brand, and this is an experience that I know somebody here is having right now. It's the brand that is DTC only exclusively, has matured to the point of stalling out on growth. Somewhere between twenty and seventy million, depending on the TAM of your product, every brand experiences the situation where their next incremental dollar into whatever primary acquisition channel they're running suddenly becomes unprofitable, and they ram their head into that wall and cannot figure out the threshold.

And for these guys, these are the Sansoni brothers. They're a family out of Missouri that run this incredible brand. Again, mediocre LTV, menswear, we don't buy clothes quite as often as the women do. Gross margin's okay. AOV's all right. Category heat is incredibly difficult. Wildly saturated, complex category.

They're a nice org guy, maybe a fourth outfielder. The category eats prospects like this for breakfast, though. And this was true for them. At the end of this quarter, they were stuck. You could see that January, year-over-year spend had stalled. February, it stalled. March, we d- we reached this dilemma, which is what every brand reaches, where you have a choice.

Do I s- keep my CAC profitable and watch the business slowly decline in acquisition? Or do I try and increase my CAC to maintain growth and watch profits decrease? This tension exists everywhere in every brand that comes to us. And so March, we went for it. We said, "We're gonna try and produce scale." And what happened was our efficiency declined.

Every scale attempt broke first-order profitability

It wasn't for a lack of trying though. These guys and our team d- they were throwing everything they could at it. One thousand one hundred and ninety-nine new ads in a quarter, 400 in January, 240 in February, 524 as we scaled up in March. We could not figure out how to produce it. And then the real problem, and where we got into tension with the customer, is that as you're trying to do this and you're increasing your creative output, the problem is you're also increasing your production cost because every ad is paid for upfront, and it was getting expensive.

There was a growing frustration paying for a pile of ads that weren't getting them where they wanted to go Specifically, every ad that we launched, we looked at their 60-day value to the business, and we define that value as the conversion value times the incrementality factor times the 60-day LTV times the gross margin minus ad spend.

So in other words, every time you launch an ad, how many contribution dollars does it generate for the business in sixty days? Every ad, you put it in the ad account, what happens? And for them, the median ad was worth about negative two dollars, and the average ad was twenty-four dollars. So the typical ad lost money, eighty-five percent of them did, and a few winners carried the average.

Now, if you think to yourself right now, what does it cost me to make an ad? Just think about it for a second. Are you clear? Do you know how much does it cost you to make an ad? I'd be willing to bet it's more than twenty-four bucks. So before we get to the production cost of producing the asset, they were already losing money on the median ad, and the average ad was only producing twenty-four bucks.

That is a negative return on invested capital over and over and over. So it wasn't just frustration, it was logical management of capital to turn around and go, "Guys, we can't keep doing this. This isn't working." And before, we get into this, I wanted to give some context that this is not just a normal brand anomaly.

These metrics are the reality for most brands. I'm gonna show you a study. So we looked at and analyzed one point three three nine million ads that we launched over the last two years. Okay? And we said, we wanna understand what is the median value of those ads to the brands that created them over that time period.

It's a huge sample of ads. Here's what we found. The median ad launched by a brand is worth negative three dollars and twenty cents. That means you launch it, the return on investment, incrementality adjusted, minus the ad spend times the gross margin is negative. It's negative. You build an ad, you spend all this time and money, and you're creating negative value for the business.

And this isn't just true at a median. This is true for a hundred and thirty-three of the hundred and fifty-eight brands we looked at in the sample. So not just on a one measure of central tendency, but for most brands it is true. And go do this math. Write a note to yourself. Go check this math. Is Taylor lying?

You will find that the ads that you are producing to create, create negative value. But here's where the hope exists. The average, though, is worth about five hundred and seven dollars. So if the median is negative, but the average is five oh seven, math people, what does it mean?

It means that the tail of disproportionate value creation of ads lifts the average value to a place that works. and here's some numbers. So of the one point three three nine million ads that we've created, six hundred and thirty-one thousand of them lost money, two hundred and forty-six thousand of them made money, and eleven thousand of the one point three million made big money.

But here's the beauty of this, is that Meta is actually a system that optimizes for this reality. It kills your losers for free. And this is where a game that is probably amongst the most controversial opinions that we possess, that lots of people love to argue with us about it. but the reality is, is that Meta is incredibly good at isolating spend on a per ad level to understand where to allocate your budget.

And the graph of this looks like this. So if we take those ads and we were to map them, and we say, "Okay, what do all the ads look like that we launch?" This is a scatter plot looking back across those two years. And you can see the vast majority of ads accumulate around basically zero, but the median is negative.

But here's why the system still works. It's because the outliers of distribution are capped on the downside because most of us will kill things or the system itself will kill things. But the upside is disproportionately, it's right skewed, if you were to look at a distribution sample, to massive outlier value creation.

The tail feeds the species. The top one percent of ads produce forty-one percent of all the value. The next four percent produce thirty-two percent of the value. Everything else is twenty-seven percent. So that means the top five percent of ads produce seventy-three percent of all the value of every ad you will ever run Across one point three million ads, hundred and sixty brands, five percent of the ads produce almost all of the value.

And here's what I want you to internalize, and again, you can wrestle with this. I'd love to... Tonight we can have a drink and we can sit at the bar and we can scream at each other about this principle if you want, but you cannot alter the odds of this lottery. I've never seen anyone do it. I've never seen anyone do it.

I've never seen any brand that comes to us that can consistently and repeatedly alter this reality. The system is designed for it. Meta is incredibly good at allocation towards the highest likelihood production of return. But what you can do, and what brands are evolving to understand today, is that you can change the price of the ticket When you're thinking about an expected value calculation, there's two sides.

There's the numerator and there's the denominator. If the numerator is the value that we're gonna create, and we know that it's $500 on average, negative $3 on a median basis, then the cost that we pay to create that asset is everything. It's everything. It's the whole game. And this is intuitive to you all.

You care a lot about your supply chain and the cost of goods that you produce. Your cost of creative production is the hidden number that is destroying your ad economics. But this is what's happening right now. And our business is so good. Last year, I talked about evolution, the way that I watch brands naturally evolve in a capitalistic system towards the attributes that allow them to drive profit, and it's happening again with this.

This became the hidden thing where everyone talked about creative volume, and all of a sudden it became too expensive to produce creative volume, and so the industry, rah, morphed and metamorphosized into a solution to the problem. And this is what it looks like. It looks like Tribe, right? How many of you are on Tribe?

Lucas, where are you? Are you here? There he is. Where are you? I don't know if I can see him. When you find Lucas... And what cr- what Tribe has done, and what people are doing with TikTok shops, is they're inverting the cash conversion cycle. And that's what it does. It just allows you to play the game, to bet at the casino with no risk.

And that mechanism completely inverts the dynamics of possibility. So, as an example, if we were to take the assumption of this data, which is that one, $10,0000 winner, one of those outliers, happens every 80 launches. And we're looking at an old model. we, we did some analysis about the average cost that we're paying for video ads or ads.

It's around $300 an ad. And you would assume that, okay, in order to produce one winner worth $10,000, you would have to generate $26,400 of sunk cost. It doesn't work. It doesn't pencil. You can't pay that price and make money. The vast majority of you will never make money paying that much for creative production.

I'm sorry, it's just the math. It doesn't work. But if you invert it, the creative supply chain, and you make the channel that produces the assets pay for the assets, then all of a sudden you're only paying for the winners. You're not paying up front for the cost of the asset. And this is what has been unlocked in this mechanism that Tribe and others like them, Refunnel and others, have created.

It's the ability to defer the risk to someone else What has happened is just the creator started absorbing your risk. And their risk and their cost on it is actually lower than yours. It's just their own time, and they get really efficient at doing it really, really fast. And this idea that you only pay for the winners is the way that the economics get inverted.

It's like selling, your product on, being able to put it in the store and only paying, having the store owner only pay if it sells. Consignment, that's the word I'm looking for. So the old cash conversion cycle is you pay cash up front for production, you pay the cash out for media, and then maybe ninety days later you get some cash back.

In a cash-intensive business, that's a really bad model. All day long, you listen to guys like Roman Kahn and Maytab talk about negotiating with your suppliers, just ruthlessly refusing to pay them up front for cash and negotiating it. It's the same thing. You're paying up front for production, then you're paying up front to Meta, and then maybe you will realize the revenue.

This inverts the economics. The inverted cycle is the creator submits, the cash comes in, the ad sells on Meta, then you pay the commission out to the founder. So you seed the product, you take the asset, you pay for the revenue. Pretty straightforward. Creators join the program, creators make the video, you push the meta ads, whitelisted, commission on attributed sales.

You guys get it. It's pretty straightforward. But understanding why it's happening is the key because what's gonna happen, right, is that all we've done is we've switched the exploitation of the economics to the creator. And I was reading today even, and you know what? Creators wise up to this. They suddenly start going, "Well, wait a second.

I, I'm not getting anything, and I only get it if it works?" And they're, they're... Eventually, the market will move to what I call the terminal price of creative. It'll move to this point at which both sides are absorbing an appropriate amount of risk relative to their upside, and it'll concentrate down to this.

This happens in every service that we provide in-including creative. And so this will happen. It'll normalize. But for the moment, if you can get people to absorb all the risk to your own benefit, it is an absolute arbitrage that is a wonder of the world. It is perfectly capitalistic. Every party is paid from the value it creates.

The engine funds its own execution. And here's what it did to the Normal brand, going back to them. So they did this. We came to them, we said, "Okay, we get it. You're tired of paying us up front for ads. There's this thing called Tribe. We'll manage and grow your program there and see what we can do." This was the result three months later.

April, a hundred and twenty-six percent spend year over year at the same ROAS. May, a hundred and forty percent increase in spend. June, a hundred percent increase in spend. It absolutely exploded. And here's why. Okay, this is really important. This is really, really important. The number of new ads that we were able to launch went from an average of like, let's call it three hundred and eighty to an average of almost twelve hundred.

So we were able to double our shots on goal at no production cost to ourselves. And so what began to happen is that the ads that we launched from Tribe began to consume the ad account. And you, so you can see how many ads were from Tribe in each of the subsequent months and how much increase in impact that happened as we went and how much of the spend the account began to absorb over time.

78% of the live ads, 81 and a half percent of the spend in June During that time, we doubled the spend at the same IRAS. This is the same incremental return on ad spend, and that's the dream, right? That we're all after. And you can see this incremental return on ad spend. It's not 0.6, it's not 0.4. This is real efficiency at scale suddenly and consequentially as the result of a change in creative volume So here we sit, sixty-two percent year-over-year, a hundred percent in June.

iRoss is holding as we go. The ceiling wasn't demand, it was creative supply. And here's what I wanna illustrate to you. During that time, the average ad got five point four X more profitable. So for them specifically, June through March, every ad was generating twenty-four dollars. Again, paying almost three hundred for it, very negative.

Then all of a sudden, the average ad in these time periods increases dramatically. But again, it doesn't clear that three hundred dollar threshold. So if the cost was still the same, the economics still wouldn't work. But it works because the cost went to zero. That's the only reason. The denominator matters.

But here's the other thing, the median didn't change. 'Cause I know there's the quality people out there, and I love you. I love you, quality people. The ones that tell me, "Yeah, but they... I- it's not creative volume, it's quality." I love you. I appreciate your craftsmanship. But here's the reality, the median outcome didn't change.

The ads weren't better generally. But when you have more ads, what you do is you unlock the upper tails of the distribution. By having more ads, we simply covered a broader spectrum of the same distribution, which means you get more winners. It's a hits business. Every eighty ads produces a ten thousand dollar winner.

Launch more ads. And in doing so, we unlocked massive upside. You can see the distribution of the Tribe ads and how many of them reached that threshold in each period. If you just use the ten thousand dollar threshold, and I'll show you specifically. Did the typical ad change? No. The median first sixty-day spend bet- in each of these periods, January through March, nine twenty.

April through June, ten fifty-three. April through June, Tribe ad, nine twenty-four. Almost exactly the same median result. The difference, though? The ninety-nine percentile increased from thirty-three hundred to sixty-eight hundred. The distribution moves slightly up the tail. Ads clearing ten K, we didn't have five, we had sixteen, and Tribe made twelve of them.

That's it. That's the whole game. How many hits can you find? That's the game, and the answer, you can, you can try and brief th- them better, you can do da da da da and all those things. And I'm not saying to not try. By all means, if you are, if you are in the business of making better ads all the time, please, whatever your definition of quality is, I concede to it.

Just hold that constant and scale the volume up against your bar. Because if you make more ads work more often, the economics are even better in your favor. Then you should increase volume even more because you make better ads, you'll hit the distribution tail more anyways. And today, so when I gave this speech, I was like, "Look," I said, "I'm gonna go up there and I'm gonna tell them that this is what's happening.

We gotta give the people something." So if you find him today and you're at Commerce Roundtable and you sign up, your first thousand dollars of platform credits, they're on me, okay? Completely free That'll get you about $70,000 in GMV if you're tried. Okay? So find Lucas here, bring him this offer, say, "Hey, it's on Taylor's slide.

You said I'd get it." And alter those economics. Third example, the zero employee brand, Spiral Bible. This is a business with literally zero employees. They're a publisher. A Bible's not a subscription. You don't need to buy hundreds of them These are their genetic attributes. Terrible LTV, very low gross margin or, very low AOV, better gross margin, no employees.

There's no roster spot for a team with no players. But Alex, here featured in our, shops edition of the baseball card, one of the... another one of these just sneaky entrepreneurs that just gets it. He just understands the game that he is playing and how to do it, and he had a wild experience. about a year ago, Charlie Kirk was assassinated.

and one of the cool things about being in an agency is that you get to see how commerce and culture come together in these really wild ways. we work with Sunday Red, and every time Tiger Woods gets into a car accident, for some reason, people love to shop. It's just a dr- big driver for shopping. and so was this.

This was crazy that during that time, there was a massive, massive spike in Bible sales, in any religious-related items when Charlie Kirk was assassinated. And it caused this business to go through the roof, in particular on TikTok. and so suddenly this business that had been plodding along had this moment where the demand went through the roof.

I mean, just an insane volume as a result of this. So again, just this fascinating way in which these cultural elements drive demand changes in the market. but the problem is the surge, didn't last long. Now, it didn't fully recede. The new baseline was seventy percent higher for a brand that was ready to spend into it, but it did fade.

The religious enthusiasm, time, like it does with most things, calmed it And the TikTok shops took off, and then it took them for a ride, and then you try and build your business around it, and then it drops off. They were down about 93% from the peak trying to figure out what to do. And if, when a channel collapses, if you don't restructure, you have to evolve.

You have to figure out how to change. And so Alex was at this point where he couldn't remanufacture that moment. He couldn't inject into all of culture a sudden increase in demand for the Bible. That's really hard as a marketing agency, I'll tell you, we don't got that in our playbook either. But what we did say is, "Okay, what was the idea though?

What's the principle there?" It's the idea that there are in culture these moments that if we tap into, our product can find a place that allows us to ride the tailwind of demand And so this idea that the calendar holds the key to creative volume and, demand became obvious to Spiral Bible. And so what we were able to do is to take this principle, and I'm gonna start with the end here.

We got to four point four X the spend from May to August. This is again, these are sudden acute changes in mature businesses where we both massively increase the media spend and the performance, and I'm gonna explain how we did it So that spend growth, three hundred and thirty-nine percent. Platform ROAS went from one six three at the bottom to one nine one.

Scaling is supposed to break efficiency. It didn't. We did that holy grail of combining both volume and efficiency. and at CTC, we have this thing, it's called the Canon, and it is our attempt at b- building sort of an internal soul and directory of our methodology that is infused into our LLMs and informs all of our method.

And in the Canon, our meta-specific Canon, we have this principle, which is that your best ROAS day is never an evergreen ad. It's a moment of urgent purchase demand. So if you were to just think like, what's the most efficient day that you have all year? I think pretty easily we would all identify it as Black Friday.

And then from that principle, you could back out to maybe it's your once a year annual sale or it's your new product launch. It's the moment when you drive an imperative for purchase now. Okay? so when we talk to people about building demand and growth into the ad account, we talk about starting with your marketing calendar.

If I could offer you anything about meta creative strategy, it would be to please build your creative strategy around offer design and evergreen testing ideation, all of that as an organization collectively at the marketing calendar level, not at the ad level. Please, please, please unify the efforts that your marketing organization makes towards the impact on the ad account.

And we do this by every account. This is our default meta account structure. We have four campaigns that start every ad account. There's evergreen acquisition. It's volume optimized on ROAS goal with seven-day click. We have evergreen retention. We have a marketing moments acquisition campaign, value optimized ROAS goal on a one-day click, a marketing moments retention campaign.

That's it. Four campaigns. Every ad set, ads are just numbered one through one fifty. If we have, some campaigns can hold more than that, we'll do that. DAB is included. And the idea of the distinction between these two things is simple. Marketing moments have a start and end date. They have a beginning, they have an end.

They have a beginning, they have an end. And that's the distinction. Evergreen runs all the time. Marketing moments have a beginning and an end. And what I'll say is that I believe in our industry, ninety-eight percent of the energy of scaling your ad account lives in this bucket, but almost the vast majority of unlocked potential lies in that one.

It's to ask the question, what is the story that we could tell that fits into the zeitgeist of culture, that overlaps with the organization where the whole brand could pull together on the same end of the rope to create incremental demand? And this is what we did for Spiral Bible. We learned from the lesson of Charlie Kirk, and we went and said, "Okay, what could we do?"

And this is what we watched happen. We combined the Tribe playbook, the one we already talked about, with this idea of marketing moments, and we said, "Okay, how much incremental spend could we get out of those opportunities?" And you'll see that it actually was more impactful even than Tribe. In this case, the planned marketing moments by August have absorbed over thirty-four percent of the spend in the ad account that has grown four point four X.

So by taking a step back and going, "What stories could we tell collectively as a business?" We altered the dynamics of the ad account. And then what it also allows you to do is now when I go to the creators, I can say, "Hey, back to school this week. Here's the bundle. Here's what I want you to talk about."

Email team, we're gonna launch this. Landing page team, we've got this. Organic social, we're gonna do this. Hey, influencer friend, talk about this. And the whole organization pulls on the rope at the same time. And because it's time-bound, you create an imperative for purchase now. Not, "Oh, that's a cool product.

I'll save it and maybe come back." This is scarcity. It is novelty. It is the opportunity to drive incremental demand. So the moments campaign, thirty-four percent. The moments ROAS in comparison to the evergreen ROAS was about twenty-six percent more efficient, so you're getting more spend at a better efficiency than what the moment buys you.

And so when we do this, we think about the entire year. You f- may have seen me c- talk about the idea of four peaks content, the idea that your marketing calendar should have four critical built-in moments to it. But more than that, really what I want you to do is that if you right now don't have... What is it today?

It's the middle of September. Ask yourself, "Do I have, for the month of October, every single email, every single SMS, every single website change, every single organic social post on a calendar somewhere?" I'm willing to bet that ninety-five percent of you do not, because I am your agency partner, and I know you do not.

You don't have one month from now an idea of what you're gonna say as an organization, but you are ramming e- endless amounts of hours into this idea of, like, what new evergreen ad could we create? Meanwhile, all around you, the world is happening There are things in culture that are being talked about that your brand could relate and connect to and drive imperative for purchase.

I'll give you an example. This is September for Spiral Bible, okay? So we go, "All right. Well, we're gonna build a media plan. We're gonna design the marketing moments for every section of the campaign. What are we gonna say?" Well, you know what's happening this week? I don't know if s- any of you grew up in Christian culture, but See You at the Pole.

Kid- people go pray at school early in the morning. It's the week of seven- September 17th to the 23rd. So I said, "Alex, get on the phone. Call the founder of See You at the Pole. See if they'll take donations if we drive demand for them." It's just some kid. "Hey, yeah. Oh, oh, what do you wanna do? Yeah, man, that sounds cool.

Here's, here's our 501[c][3]. You're cool if we use your logo and talk about it and donate a portion of the proceeds to you?" "Yeah, man, that'd be really cool. It's kinda faded over the years, but we're doing what we can. Thanks." Click. Cool. Go. 17th through the 23rd, there's the promotion. We're gonna give 10% back to this thing.

We're gonna talk about it, blah, blah, blah. Now we have a campaign. It's a structure. It's an email. It's a website change. We're gonna plan 29 emails throughout the month. This is a brand with no LTV. The heck are we sending so many emails for? Because email is not a retention channel. Because you know how many people sign up on the email pop-up and are waiting for a reason to buy?

They're waiting for an imperative to purchase something that is their reason for participating. We have multiple Labor Day sales. We have a flash sale. We have the Brave Faith Week. We created this whole story about how much courage it takes to show up and how we wanna encourage these people that are showing up to pray, whatever it is.

And so these are all the SMS, email, every one of them planned. Every email has an expectation of revenue. Every campaign has an expectation of efficiency and dollars, and the end result is that it works. And it doesn't just work on the ad account. When we started moving into the strategy, we went from sending 20...

Or 18 email campaigns in June to 27 in August. We generated 2.8x time the campaign revenue, 3x the campaign conversions, and 28% of the revenue in September for a brand with no LTV, no LTV, on a very narrow seven-day click attributed Klaviyo number, is gonna be 28% of their overall revenue. Nearly half as many sends as previously, nearly three times more revenue, every send tied to a moment in the calendar.

And we're just gonna build these over and over. In July, this is a Bible in a year, is the main product. How the hell do you sell Bible in a year in July? It's like, it's very much a January New Year commitment product. So we just made some shit up. It's the halftime sale. You don't need 52 weeks, you need 90 days.

Here's a plan to accelerate getting back on path, blah, blah, blah. Just make it up. It's July, though. The story's different. The narrative of your product matters relative to the calendar. It matters what's happening in culture. It matters in a way that your brands need to connect into a story that has a window with an imperative

These are three normal brands, borrow the pun, that are struggling in many ways just like you all. They don't have the genetic attributes of Grunes. They don't have the LTV of IM8. They don't have the funding. They have to drive profitable CAC. They don't have the capacity to do it, but they're all winning because great brands aren't just born, they're built.

They're built through finding ways to evolve and win the game None of these are genetic. Every single one of them is learned, and your brand is not disqualified. You are here today to Commerce Roundtable that I hope you pick up something, you put it in your pocket, and you have somewhere to go that allows you to go back with some hope, some encouragement, some possibility of what might be, and to go and make it happen.

Thank you, and thanks for letting me share about my friend Jesus. He was an awesome guy. I don't think he ever thought he was gonna be at an e-commerce event, but appreciate you all.