ROAS - How To Control Your Ad Spend While Growing Your E-Commerce Store

What keeps an E-Commerce Entrepreneur up at night?

Customers.

Finding them. Getting them. Keeping them.

Brick-and-mortar advertising is easy. Walk-by traffic. Billboards. Fliers. Word-of-mouth.

An online store… not so much.

You need to cut through the digital clutter and a potential customer’s rapid doom scrolling to catch the eye of your target DTC customers. We all want to go viral but the reality is you’re relying on costly clicks and sporadic shares.

Without knowing what your actual ROAS (Return on Ad Spend) is, across all of your channels, it is like throwing money in the air and hoping for the best.

It takes time to see the results of your online spend. Meanwhile, you are competing with everyone on the planet who has the same business idea as you - it can feel like your advertising efforts are a money pit.

“But wait!”, you say. “I have that free Excel template I downloaded two years ago - that is ridiculously complicated and that I never use...”

There are simply too many different combinations of ways you can use your ad budget. Multiple channels. Promoting sales. Hiring consultants. Influencer marketing. New packaging. Podcast shoutouts.

Cold Plunge Craziness?

Meet Adam.

Adam sells portable cloth ice baths DTC with a focus on travellers or apartment dwellers. He’s found some success selling online, both through his online store and Amazon, but with so many competitors in the market, he’s finding it difficult to differentiate himself and claim major market share.

He initially gained a large portion of his market share with a viral TikTok that made his brand trendy, but since then growth has slowed, and his attempts at marketing - viral and conventional - haven’t been overly successful. Right now, his biggest pain point is that spending money on advertising feels like treading (ice) water, rather than going anywhere.

Adam has a whack of “whatifi” questions.

“Facebook seems the priciest but I’m gaining some traction there. whatifi increase my ad spend and go all in on FB and Instagram?”

“whatifi skip paid ad space entirely and go all in on influencer paid promotions?”

“Some competitors are offering a referral program. whatifi offer the same? What kind of discount can I offer without giving away my margin?”

“Ice baths are gaining popularity through the fitness podcast community. whatifi pay for sponsorship on some of those podcasts?”

“Marketing isn’t exactly my strong suit. whatifi hire some consultants to help with me the heavy lifting? Would they even be worth the cost?”

“I think I am chasing too many channels. whatifi focus on only a few and which ones should I target?”

He knows some of his marketing is working.

Growth is still happening - but he’s operating in so many channels he can’t easily tell which ones are effective. He knows the basics of  calculating ROAS and CAC but he can’t clearly sift through all of the data to optimize his campaigns.

The question is not only WHAT to do, but also WHEN to do it.

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What would Rob do?

Meet Rob.

Rob te Braake is someone who knows CPG and DTC “what ifs”.

Rob is a fractional CFO, founder of Insight Matters, and one of whatifi’s earliest adopters.

His area of expertise is DTC E-Commerce, having built companies in the industry all over the world. Now, he has combined his talent for finance and his passion for helping others to supercharge their businesses.

So what would Rob do in this situation?

He would first ask Adam for his data and analytics figures showing which customers landed on which distribution channel through which funnel.

If Adam didn’t have those, he would have him immediately set up trackers like Google Tag and Facebook Pixel. Once he got those numbers, he’d figure out how much each channel earned, then divide it by the ad spend, to find out what the ROAS per channel was.

This would give Adam insight into which channels he could invest in, and which ones he should cut. He’d also calculate the number of customers each channel brought in, divided by the cost of each channel, so he’d know how much it costs to get a customer in different ways. This lets him know if the channels are even worth running, and help determine other things like pricing and profit margins.

Using these metrics, and his years of experience, he’d tell Adam what’s working, what’s not, and what he needs to do to boost his reach, customer count, and profit.

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When it comes to solving a financial problem in DTC E-Commerce, Insight Matters is the team you want. Not only are they financial experts, but they are one of the only firms with global service that have exclusive experience in the large scale DTC E-Commerce field. They bring skill, experience, and knowledge to their work in a way few others can match. And they have another trick up their sleeve.

Got “what ifs”? Ask Rob on our June 18th Webinar.

CLICK TO SAVE YOUR SPOT

Insight Matters has partnered with whatifi - a financial modelling and scenario planning platform designed to help entrepreneurs quickly ask, and answer, their biggest business “what if” questions - all without messy formulas or 18 tab spreadsheets.

Users can compare the customer, revenue & profit impact of multiple options - in seconds - with click of a button.

Rob also uses whatifi with many of his E-Commerce clients to answer similar top of mind questions that are near impossible to wrangle in a cryptic spreadsheet.

Want to ask Rob question about how to optimize your DTC brand and learn how to better plan your ad spend?

We’re hosting a whatifi for CPG/DTC webinar on June 18th, 2024 at 10AM PST.

If, like Adam, you are struggling to optimize your ad spend, unsure where your dollars are best spent, or are just tech savvy enough to want to build out your own financial models, be sure to join Rob for this free webinar on June 18th.

CLICK TO SAVE YOUR SPOT

Spots are limited. Sign up now to get your spot.

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