eComm Chats Happy Hour

Mike & Nevin dig into what eCommerce brands should be doing NOW to get ready for the Black Friday/Cyber Monday (12) rush. 2023 trends and macroeconomics have made Q4 very important for brand looking to make up lost ground.

What we talk about:

The guys delve into the topic of promotional strategy, discounts, deals, and margins. Nevin emphasizes the importance of this topic, particularly for brands that have faced challenges throughout the year. They suggest that Black Friday presents a great opportunity for brands to make up for any losses or achieve their targets.

During the episode, the guys stress the significance of preparing for the Black Friday, Saturday, and Monday rush for marketers and brand owners. They emphasize that this year, more than ever, it is crucial to nail the Q4 Black Friday plans. The host advises e-commerce brands to start preparing early and generate interest and anticipation among consumers by promoting their deals and discounts ahead of time.

Additionally, they highlight the importance of identifying the best deals within the product library. They recommend that brand owners determine which products will be offered at the most competitive discounts. By focusing on these specific products, brands can attract more customers and drive sales during the Black Friday rush.

Furthermore, effective communication across all channels is emphasized. Nevin suggests that brands utilize their owned media, social media, and display advertising to communicate their Black Friday offers and promotions. Whether brands are selling their own products or retailing others', it is crucial to let customers know that they will find the best deals from their brand. The host emphasizes the need for a comprehensive effort in communicating early and effectively to capture the attention of shoppers.

Overall, the episode underscores the importance of preparing for the Black Friday, Saturday, and Monday rush for marketers and brand owners. It emphasizes the need to start planning early, identify the best deals, and communicate effectively to maximize sales and take advantage of the opportunities during this critical period.

In the episode, the host emphasizes the crucial role of effective communication and preparation for Black Friday, particularly for new e-commerce brands. They stress the importance of starting early and implementing a comprehensive strategy across all channels, including owned media, social media, and display. This ensures that brands are visible and potential customers are aware of their offerings when shopping on Black Friday.

For new eCommerce brands or those with limited experience in Black Friday preparation, the host provides advice. They suggest starting by identifying the best deals within their product library to offer on Black Friday. This involves researching the market and ensuring that the deals they offer are competitive. The host also mentions the growing trend of site-wide Black Friday promotions but highlights the option of focusing on specific products.

Overall, the episode highlights the importance of effective communication and preparation for Black Friday, especially for new e-commerce brands. It emphasizes the need to start early, identify the best deals, and ensure brand visibility across all channels.

Former Google Campaign Specialist and current Finch Global Director of Paid Search Mathias Falkenberg joins the crew to share his thoughts on the future of Google Ads. He has a decidedly positive outlook for the market, but we'll have to change how we think about the channel a bit.

What you'll hear:

According to Nevin & Mike, one of the prominent trends in the industry is the black-boxing of campaigns. This refers to the use of automated and simplified campaign settings that require minimal customization or manual optimization. The episode highlights two specific examples of this trend: smart shopping and the transition from ECPC (Enhanced Cost Per Click) to Target ROAS (Return on Ad Spend).

Smart shopping is described as a "super Fisher priced black box campaign" that allows anyone to easily pick it up and use it. It is an automated campaign type that utilizes machine learning to optimize bids and placements across various Google advertising channels, including Search, Display, YouTube, and Gmail. This campaign type aims to simplify the advertising process for advertisers who may lack advanced knowledge or experience with Google Ads.

The shift from ECPC to Target ROAS is another example of the blackboxing trend. ECPC is a bidding strategy that automatically adjusts bids based on the likelihood of conversion, while Target ROAS focuses on achieving a specific return on ad spend. This shift indicates a move towards more automated and goal-oriented bidding strategies.

The episode also highlights the lack of an intermediate option for power users of the Google Ads platform. Power users are described as advertisers who possess a deeper understanding of the platform and may desire more control and customization options without sacrificing the benefits of automated campaigns. This suggests that while the trend leans towards blackboxing campaigns, there remains a need for increased flexibility and customization for advanced users.

In the episode, the speaker emphasizes the importance of customization in feed management. They argue that relying solely on default options like the Shopify hookup to Google Merchant Center is no longer sufficient. It is necessary to have control over the data sent to Google and the products included in the feed. To achieve this level of customization, they suggest utilizing feed management tools such as feednomics or data feed watch. The speaker warns that without customization, Google may misinterpret the data, potentially impacting ad performance and overall business success. Therefore, they urge listeners to prioritize shifting their focus and investing in feed management programs to ensure controlled and optimized data for better results.

The hosts express a positive outlook on the future and emphasize the importance of focusing on the bigger picture rather than getting caught up in unnecessary details. They acknowledge that their conversations often delve into unnecessary aspects and question their actual accomplishments. They agree that it is crucial to shift priorities to meet the current demands and avoid getting too immersed in the minutiae. Additionally, they suggest looking beyond Google ads and considering the broader context. This indicates their belief in adopting a more comprehensive perspective and evaluating the overall impact and effectiveness of their strategies.

Liz Roquet - Owner/Founder of Lizzy's Fresh Coffee and (full disclosure, wife of Finch CEO Lee) - joins Mike and Nevin and reveals how she runs a successful eCommerce brand with a strategy that leans heavily on vibes.

What we talk about:

Liz, who has been running her coffee roastery business for 15 years, is now considering potential growth opportunities. Despite starting the company with no prior knowledge of e-commerce and coming from an operations background in the outdoor eyewear and clothing industry, Liz has successfully created the business she envisioned.

Her business operates as a mixed model, similar to a winery or tasting room, and Liz emphasizes the power of e-commerce in allowing small, locally focused businesses like hers to expand and reach customers nationwide. She has effectively utilized the online space to grow her business.

However, Liz acknowledges that one of the biggest challenges in e-commerce is the inability to provide the same in-person experience that customers receive when visiting her physical store. The personal interactions and warm smiles that define the "Lizzie's experience" are difficult to replicate online.

Despite these challenges, Liz remains open to exploring potential growth opportunities. The podcast host expresses interest in having Liz return to discuss her journey into the next phase of growth or other ventures she may pursue. This suggests that Liz is considering expanding her business or exploring new opportunities beyond her current e-commerce model.

Overall, Liz has successfully built her coffee roastery business through e-commerce and is now contemplating potential growth opportunities. The host also expresses interest in learning more about Liz's YouTube videos and how she determines which topics work best, as they find this topic fascinating. However, they acknowledge that this discussion will have to be saved for another time.

As the episode comes to a close, both the host and Liz express gratitude for each other's time and participation. The host concludes by saying, "Thanks, you guys. Cheers, buddy. Thanks for joining us, Liz. It's been awesome." Liz responds, "Yep, you're welcome. Thank you so much. Have a good one. Bye-bye." This exchange signifies the end of the conversation and their appreciation for each other's involvement in the episode.

Finch CEO Lee Roquet brings his deep knowledge of Customer Success to the podcast as Mike and Nevin talk a little too much about Apple.

In this episode, the guys emphasize the core principle of "people helping people" as the key to success in business. They believe that organizations should prioritize assisting individuals in achieving their objectives, as this focus can lead to both success and a positive impact. The speakers note that organizations sometimes get caught up in the personalities or strengths of those in leadership positions, but what truly matters is how the organization can help people. Many clients and prospects reach out to them seeking guidance on what to do next and assistance in achieving their goals. Therefore, the speakers suggest that organizations should prioritize understanding and meeting the needs of their customers, helping them grow and succeed through services or technology. By putting the customer first and ensuring a positive customer experience, organizations can build brand loyalty and stand out in their field.

Finch CEO Lee Roquet shares that starting and ending the day with the mindset of "people helping people" is crucial to them. They firmly believe that if a business stays true to this principle, it will be successful. They emphasize that the focus should be on what the business does for the customer and how it helps them grow and succeed.

Mike that organizations often focus too much on the personalities at the top and their strengths. Instead, they suggest that the focus should be on helping people. They highlight the role of leaders in assisting individuals and mention that a top-down approach centered around helping people is an excellent way to guide decision-making when unsure of what to do next.Prioritizing the needs and objectives of customers and focusing on how the business can assist them in achieving success. By putting the customer first and ensuring a positive customer experience, businesses can build brand loyalty and create a strong foundation for success. Additionally, leaders play a crucial role in guiding the organization towards this principle and making decisions that align with it.

Treating the customer right and prioritizing their experience is crucial for building brand loyalty and achieving success. Companies that put the customer first and ensure a positive customer experience tend to outperform their competitors significantly. The nature of the product or service a brand offers is not as important as the follow-through and effort put into creating a positive customer experience.

Creating a great product is a starting point, but it is not enough. Customers need to feel proud to be associated with a brand, both as consumers and employees. The focus on the customer experience has become increasingly important in the last 25 years, particularly in the last five years. Companies now recognize the value of having a dedicated team focused on customer success and experience.

In the past, resources for customer success were limited, and companies had to fight for them. However, it is now widely acknowledged that organizations cannot grow and scale without a strong focus on the customer. Investing in the customer experience, loyalty programs, and effective communication strategies is essential for retaining and activating returning customers.

Understanding the profitability of different customer segments is also crucial. By analyzing the cost of acquisition and the value of returning customers, brands can tailor their marketing and engagement strategies accordingly. This back-end approach, often overlooked in favor of acquisition-focused strategies, can significantly increase revenue and lower costs for brands with product or brand loyalty.

Finch CRO Michael Hollenbeck joins Mike and Nevin for Happy Hour. In the age of automation and AI - when any Joe or Jane can spin up a solid PMax campaign - are ad agencies even necessary anymore in eCommerce? The team discusses over a cold one as they wind the week to a close. Plus, we learn a little more about Michael's personal dating life than we bargained for.

Marketing and advertising agencies continue to play a crucial role in the eCommerce space, contributing to profitability. Agencies are essential in focusing on business outcomes and advocating for their interests. While ad platforms may have representatives who appear to support business owners, it is important to remember that these representatives are ultimately paid by the platform and may not prioritize the business's best interests.

Furthermore, agencies consistently analyze data and possess the expertise and capacity to examine overall strategy. They offer insights beyond just optimizing return on ad spend (ROAS) and may suggest focusing on other areas, such as margins, to enhance profitability.

Agencies bring value to e-commerce businesses by providing specialized expertise, strategic thinking, and advocacy, making them a vital component in driving profitability.

Agencies also play a crucial role in educating and providing clarity on the metrics used in advertising. Many prospects they encounter at Finch have a fundamental misunderstanding or lack of clarity regarding which metrics they should be using. This lack of understanding can result in ineffective ad campaigns and wasted resources.

Agencies invest significant time in sharing best practices and educating their clients on the most relevant and valuable metrics for their specific business goals. By doing so, agencies help their clients make informed decisions and optimize their advertising strategies.

Without the guidance of an agency, brands may miss out on this education and clarity, leading to negative consequences for their advertising efforts. The speaker believes that agencies are important because they bridge this knowledge gap and ensure that brands use the right metrics to measure the effectiveness of their ad campaigns.

Agencies should have pricing models that align with the individual needs and goals of each client. This means that not all clients will require the same services, and agencies should tailor their pricing accordingly. For example, some clients may already have a feed management system in place, while others may require extensive search engine optimization. By offering pricing models specific to each client's needs, agencies can ensure they provide value and avoid charging for unnecessary services.

In addition to reflecting the individual needs of the client, the episode emphasizes the importance of building a relationship based on accountability and mutual trust. Trust is identified as a crucial metric that can make or break client relationships, especially in the context of performance agencies. Since every client has different goals, it is important for agencies to establish trust by delivering on their promises and consistently meeting client expectations.

The episode also acknowledges that agencies do not have control over certain aspects, such as product development or the competitive landscape. However, agencies can still strive to make their pricing models fair by considering factors such as a base fee and a reduced percentage of ad spend. The goal is to find a pricing model that suits both parties, ensuring the agency is compensated fairly while providing value to the client.

Overall, the episode highlights the importance of having flexible and responsive pricing models that cater to the individual needs and goals of clients. By building relationships based on accountability and mutual trust, agencies can establish long-term partnerships and deliver value to their clients.

Mike and Nevin are back at it again sharing a cold one and talking about eCommerce agencies. Has automation made them less important? Will AI be the final blow? They don't know, but they'll speculate wildly.

The guys emphasize the crucial role of experienced professionals who possess deep knowledge of the ecosystem and the ability to execute effectively. They acknowledge that working with a big brand can be intimidating, especially for recent college graduates who are still learning. However, they highlight the fact that mistakes are inevitable in the learning process, and having experienced professionals can help mitigate these mistakes and ensure success.

They also emphasize the importance of agencies in providing this expertise and experience. They highlight that agencies have a support team of smart and experienced individuals who know what they're doing. They emphasize that agencies can offer creative and innovative solutions, help reach target audiences, save time and money, and stay up to date on the latest trends. Additionally, agencies have a team of experienced professionals who can provide valuable insights and guidance.

Overall, the episode underscores the value of experience and expertise in achieving success and avoiding mistakes. It emphasizes the importance of working with professionals who possess a wide range of talents and can navigate the ecosystem effectively.

The episode also discusses the significance of agencies being open to feedback and willing to pivot and improve based on client input. It is mentioned that when an agency encounters failure, they should analyze the reasons behind it and develop a hypothesis. They should then take action to test whether their hypothesis is correct or not. This process of continuous improvement and pivoting is seen as necessary to eventually reach a profitable range of ad spend and achieve optimal results.

However, the episode also raises a concern about agencies that constantly pivot based on client feedback. While this may initially please the client, it is suggested that it may not always be a positive sign. The host mentions that constant pivoting by the agency may indicate a focus on retaining clients rather than actually making them profitable. This suggests that the agency may prioritize client satisfaction over achieving successful outcomes.

Overall, the episode highlights the importance of agencies being open to feedback and willing to pivot and improve, but also raises the caution that constant pivoting may not always be a positive sign and could indicate a lack of focus on profitability.

In this episode, it is repeatedly mentioned that agencies are likely to continue to exist and provide value in the industry, despite the belief that they are becoming obsolete. The speaker states that agencies will probably be around until they are "long gone." They emphasize that agencies provide a second opinion, which is crucial in forming an expert opinion. This suggests that agencies offer a unique perspective and expertise that individuals may not possess on their own.

Additionally, the speaker mentions that as long as agencies can outperform an average PMAX campaign, there will always be a reason to hire them. This implies that agencies have the ability to deliver results and achieve better performance than individuals or other alternatives.

Furthermore, the episode highlights the importance of the talent that agencies possess. The speaker emphasizes that agencies thrive on the talent they maintain and retain. This suggests that agencies have a pool of experienced professionals who bring valuable skills and knowledge to the table.

Overall, the episode suggests that agencies will continue to be relevant and provide value in the industry due to their expertise, ability to deliver results, and the talent they possess. Despite the belief that agencies are becoming obsolete, they are likely to remain an important part of the industry.

Mike and Nevin grab a cold beverage and talk about avoiding the ROAS Trap. As capital has become more expensive, eCommerce brands should look to get smarter about the metrics they use to gauge success. ROAS leaves us wanting.

They delve into the significance of capital efficiency in the eCommerce industry, particularly during periods when capital is not readily available. They explain that businesses in this sector have been fortunate to experience a time of abundant and inexpensive capital, with investors eagerly supporting software, online e-tailers, and e-commerce companies. However, this trend has begun to slow down, compelling the industry to confront the necessity of capital efficiency.

Capital efficiency entails making wise use of the funds a business is able to acquire. It involves maximizing the impact of every dollar to effectively grow the business. The guys note that there was once a time when growth at any cost was the norm, but now it is crucial for businesses to be as efficient as possible with their capital.

They also stress the importance of stretching every dollar as far as it can go, given the current scarcity of inexpensive capital. They emphasize the need to maximize the impact of advertising on the business, rather than solely focusing on brand building. They mention specific metrics, such as return on advertising spend (ROAS), that can help gauge the effectiveness of advertising efforts, requiring mathematical calculations or the use of partner platforms.

Overall, the episode underscores the significance of capital efficiency in the eCommerce industry, particularly during periods when capital is not readily available. It encourages businesses to be strategic with their financial resources and to make every dollar count in order to effectively grow their business.

Digital marketing is an iterative process and that there is no one-size-fits-all strategy. Marketers cannot risk their entire marketing budget on a single hunch or expect every campaign to be successful. Experimentation and A/B testing is important in social media, display advertising, search campaigns, and Amazon campaigns. Some campaigns may not yield desired results. You need to continuously try different approaches to find successful strategies. It's important that you're able to pivot and adjust strategies based on the obtained results. Avoid agencies that claim all their campaigns will be profitable, poppycock. Instead, focus on the overall health and sustainability of the business, rather than getting caught up in individual metrics.

Capital efficiency refers to maximizing the impact of every dollar in a business. The guys mention that in the past, there was a time when growth at any cost was the priority, but now it is crucial to be as efficient as possible with financial resources. Make every dollar go as far as it can in order to effectively grow a business.

The hosts also highlight that the current economy may not provide as many emergency resources, so it is crucial to ensure that a business is in a healthy position before investing more money. They stress the importance of analyzing the market, the overall efficiency of the brand, and the potential for profitability before scaling up operations. Rushing forward without considering these factors can lead to disastrous financial losses.

The eCommerce and online industry has experienced a significant influx of capital in the past, with investments pouring into software and eCommerce companies. However, this trend has started to slow down, prompting businesses in this industry to prioritize capital efficiency.

Overall, the episode underscores the importance of making every dollar work as hard as possible to effectively grow a business. It emphasizes the need to consider profitability, efficiency, and the overall financial health of the brand before scaling up operations.

Mike and Nevin sit down at the end of the week for a Happy Hour chat about the ROAS trap that many eCommerce brands could be falling for. What is the ROAS trap anyway and how did the eCommerce market get to a place where it's possible?

The episode delves into the shifting focus within the eCommerce industry, transitioning from a mindset of unlimited growth to one that prioritizes capital efficiency and profitability. In the past, during the "golden days of tech and eCommerce," there was a prevailing belief that the industry would continue to experience exponential growth and that access to easy capital would always be readily available. However, as the economy began to decline in 2022 and 2023, money became scarcer and interest rates started to rise, making it more challenging to obtain easy capital.

This change in the economic landscape has prompted a shift in mindset within the eCommerce industry. Instead of solely pursuing rapid growth and embracing the "move fast, break things" mentality, businesses are now placing greater emphasis on capital efficiency and profitability. The episode underscores the significance of maximizing the value of a business's resources and generating profits from them. This shift towards profitability is seen as a response to the evolving economic conditions and the necessity for businesses to operate in a more sustainable and efficient manner.

The episode also touches upon the expansion of the online money-making economy, encompassing eCommerce, ad platforms, and other online revenue streams. This ecosystem has been growing since the tech boom of the 90s. However, it is suggested that there may be limitations to the continued growth of this economy, potentially leading to challenges or reaching a point of saturation. Rather than experiencing a complete burst of the bubble, the industry may have reached its peak and is now encountering a slowdown or deflation.

Overall, the episode highlights the eCommerce industry's shift towards capital efficiency and profitability, as businesses adapt to changing economic conditions and strive for sustainable growth.

It's worth noting that there is no mention of a blog post about the "ROAS trap" in the episode transcript.

The episode serves as the inaugural episode of Ecom Chats Happy Hour, hosted by Nevin and Mike, who respectively work in marketing and as an eCommerce specialist at Finch. They begin by introducing themselves and their roles at Finch. Nevin mentions that he manages the marketplace program for their North American clientele and also handles the data feed and back-end aspects of Google Shopping and Performance Max campaigns.

They explain that Ecomm Chats Happy Hour is a podcast where they gather on Fridays to discuss their week and the topic of the day. They emphasize that the podcast aims to foster a casual and relaxed conversation, hence the happy hour theme. In this first episode, they delve into a topic they refer to as the "ROAS trap," which pertains to return on ad spend. Nevin mentions that he has written a follow-up blog post on this topic, which will be released in the future.

Concluding the episode, Nevin and Mike express their gratitude to the listeners for joining them and extend their wishes for a happy weekend. They conclude by stating that this is the inaugural episode of Ecom Chats Happy Hour.