The Ad Pro Who Wants You to Produce Fewer Creatives
"Do you care enough about new customer acquisition? What you care about shows up based off of your actions, not your thoughts or your words."
Meta's Andromeda update broke everyone's brain and most brands still haven't recovered. Nehal Kazim, CEO of Ad Pros, argues that the industry overcorrected by wildly overproducing content, burning through budgets on concepts that never receive meaningful spend. His math: you're paying $250-500 per asset for creatives that never get tested. Kazim has spent 13 years running campaigns for brands like Canada Goose and DTC companies doing $10-16 million a month. His solution is a profitability-first framework that tracks new customer contribution margin daily and calibrates creative output to what your budget can actually support. Also discussed: why Meta told him to stop hook testing, and the $25K Cardi B ad he hated that completely crushed.
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The Unofficial Shopify Podcast is hosted by Kurt Elster and explores the stories behind successful Shopify stores. Get actionable insights, practical strategies, and proven tactics from entrepreneurs who've built thriving ecommerce businesses.
Kurt Elster • 00:00.001
This episode is sponsored in part by Swim. Okay, here's a depressing stat. 70% of shoppers who want your products never actually buy them. They browse, they consider, then they forget. That's revenue walking out the door. Swim Wishless Plus turns browsers into buyers. Customers save products they want, get notified when prices drop, or items restock. You can also engage them in personalized fashion through your marketing or sales outreach. It's like having a personal shopper reminding them to come back and buy from you instead of your competitors. And 45,000 stores already use it, and it only takes five minutes to install. You could try it free today for 14 days. Go to get swim. com slash curt. That's swimwithay. com slash curt. Turn those maybe later into sales today. Get swim. com Today on the show, we're gonna hear from Nahal Kazim from AdPros, who I think is just a very honest, candid, and excellent marketer. I heard him speak at uh Smart Marketer Live in Denver this year. I really enjoyed what he had to say. He had, you know, a lot of great advice. And then when we were talking after the fact on it, also, you know I was really, really impressed by his approach and his candor. Uh and I think so much B2B content out there, especially, you know, marketer-wise, is when it's successful, it's often superficial. And like that's we were just discussing that is a a fine line forced to walk. And so we're we're gonna pick his brain on what's working with meta ads and dramata performance marketing. But really the thing we should know about are some of his claims. He ad pros says that they drive unreasonable growth. And he's built this uh very, you know, I think narrow focus on adding one million dollars to a business. Okay, that's interesting. It's tough to make claims like that. You gotta really know what you're doing. So let's dive into it. Nahal, uh, thanks for joining me. How are you doing?
Nehal Kazim • 02:20.220
Doing great, man. Thanks for having me on.
Kurt Elster • 02:22.780
So, all right, on on your side, on ad pros, you say that you you seek unreasonable growth What what do we mean by that? Define it.
Nehal Kazim • 02:33.180
Unreasonable growth comes down to the size of a company at a smaller revenue amount, unreasonable, maybe growing 10% month on month. For a hundred million dollar company, that might be 20% annually, you know? Um, so it just depends of like the the size of that business and what level of profitability they want to do it at. When companies are smaller, it's very easy to double very quickly. Um, but at at different stages of a company, that same number, just numbers get bigger, it's way harder to add new customers. uh and the percentages fundamentally decrease. And so uh for us when we come into a brand, the goal is usually five to ten percent month-on-month growth uh for companies that are already doing a million to two a million to five million dollars a month on average and so Um that's our starting point.
Kurt Elster • 03:21.019
A million to five million a month.
Nehal Kazim • 03:23.500
A month. And our responsibility and the the goal that I'm coming in with is that How do we add your next million dollars a month? And so at a million dollars a month, to go to two million dollars a month, you have to double your company. It's very significant. But we've been in situations where they're already doing $10 million a month. Or 16 million in some cases and our next million a month is still very hard. It's just a lower percentage of their total revenue.
Kurt Elster • 03:46.840
It's a wonderful promise. How, right?
Nehal Kazim • 03:49.880
Like what is It's very hard.
Kurt Elster • 03:52.760
I imagine.
Nehal Kazim • 03:53.880
Yeah.
Kurt Elster • 03:54.360
So you know uh typically uh marketing agencies, you know, are focus on Especially like with claims like that, they're like, well, it's omnichannel. You know, they're really trying to plug in an entire new channel uh to a business, which on the marketer's end, maybe that's easy, you know, and the actual fulfillment and operations for the brand, much harder.
Nehal Kazim • 04:12.660
Very hard.
Kurt Elster • 04:13.380
You have constrained yourself where you know you look for this very like focused, uh, efficient execution. Talk to me about that approach.
Nehal Kazim • 04:22.760
It's come from a lot of pain and struggle of inefficient, unproductive execution over and over again. And the reason, you know, when I I've been running my company for 13 years or so, um, when I first started, I didn't have a goal of how much revenue can we add. to a business because I didn't do it before. I didn't have confidence. With volume, with repetition, we started making claims of we can add $100,000 a month to your coaching business, to your info product business, because we accomplished that a few times. And so as we've got more experience and more results, the goal is is like how can we actually add a million dollars a month to your business ideally of network net new business, new customer revenue. And um the way that we normally do that, you know, when you're saying of like adding a new channel, you can do that. And we've done that where we've spent two million a month on a new channel on native ads and we're able to add a lot of revenue, but it's very hard to crack a new channel. And we've also failed at it a lot. And so usually when we're adding the the significant amount of revenue, it's with existing channels and then channel expansion happens after, depending on how we're involved.
Kurt Elster • 05:25.580
Which yeah, I think that approach makes more sense. In your you you've been doing this 13 years. At what point did it occur to you that you have a repeatable system?
Nehal Kazim • 05:36.600
I think it started when we were introduced to an e-commerce company, the first time we were ever introduced to an e-commerce company, and they said we have to spend $60,000 a month in advertising. Like we need you to figure it out for us or we cannotgether and i've never been in that situation because most people are like here's 10 000 a month or 30 000 a month that we are managing primarily like make it better Like, okay, but these guys were different because they had a supplement company. They had to get new net new customers and increase the velocity of the growth of their business, or they are gonna die based off of churn. Like there's only so much LTV. And so they had a new acquisit customer acquisition problem and we were able to fix that. But once we fixed it, we realized that this is a completely different game from info products or coaching at that time because there's so much limitation in terms of market demand um or based off the market the offers that we were working on or uh client delivery which is a massive challenge in the coaching business and so That first time something clicked. And then as we did multiple lower ticket, high volume mass market opportunities, we're like, whoa, this is this is real. And um I think where really clicked is when we first started tracking of like, wait, how far are we from managing a million dollars a month? And that became a goal, and that's where it became like more of a game. Because before that, I was just trying to figure it out.
Kurt Elster • 07:00.120
And yeah tell me about achieving profitability with this. Like certainly I can I could come up with ways to spend ads and lose money doing it, right? That's always the fear, but you you want to do it profitably. Tell me tell me about that approach or your thoughts there.
Nehal Kazim • 07:15.180
Yes. So this is very important because everyone talks about growth, but no one talks about profitability or there's all this like shame, guilt, fear around profit, and it's not cool because like not everyone has the financing. um or the means or the stomach to do that. And so one of the consultant clients I just got off a call with yesterday, she's like, we went and added over a hundred thousand dollars a month of new customers, but I didn't have the money I had to get a loan because most of our revenue were was new customer and we didn't have a cap of how many new customers we can actually afford. And so there was no measure to decide of how much how much new customers should we get because there needs to be a balance. And so we have clients right now that we operate based off of what is the business-wide profitability. What is the max number of new customers you can get in your business based off of current new customer ROAS or contribution margin? And then we try to max that out as the business has more recurring revenue for a subscription business, for example. We have the ability to acquire more customers. That's one side of it. The other side is people are saying we've had this situation. Their monthly burn was like $50,000 a month. Their um revenue was forty thousand a month. They have cogs and appertising, which was another thirty thousand a month just on appetising. And so they were losing money. The way that we went about it is we set benchmarks of what is the business-wide profitability we want, what is the new customer profitability we want. And as subscription revenue added up, we were able to increase our business-wide profitability targets. because it was like 100% at the initial. We spend $40,000, we make $40,000. But in order to create that subscription business work, we need to get new customers. get them to stick and then we went from 100% ROAS to 120, 140 all the way up to like 250 over time. And then they can decide how profitable they want to be. That's that's when it gets fun. Um but we whenever we make a any kind of claim, the whole point is We will not we will not and cannot spend if we're not at this level of profitability on new customer acquisition specifically and ideally business-wide profitability.
Kurt Elster • 09:19.300
Well I was talking to a client yesterday who really had seen incredible growth after, you know, in the in the last year, after you we rebuilt their website and then they hired, you know, new marketing company and they're running meta ads to this thing. And the traffic doubled, conversion rate went up 4x, like they're really, really doing well selling a consumable good, you know, uh, you know, like supplement, uh beauty, that type of space, skincare. And the issue they then said is like, okay, now how do we move to retention? How do we keep these customers? And like they've done everything right. loyalty program and uh uh using rebuy or recharge for subscriptions um and email marketing automation and we're still uh struggling to convert customers to second, third, fourth purchases. A lot of you know what you mentioned now sounded like new customer acquisition, top of funnel. Are there, you know, approaches, levers to pull strategies for someone in this position where it's like, hey, we're getting these customers. We just need them to buy again.
Nehal Kazim • 10:22.040
I think the acquisition strategy comes from retention. So most people do it the other way around, which is what is the highest ROAS I can get with this messaging, with this offer, with this bundle, with this funnel? I think that's backwards because what usually happens is that that person doesn't reorder. And so what we look at is where is the lifetime gross profit coming from, not lifetime revenue because different Products have different cogs and different cost structures that don't tell the full story. And so we had a client that had 62% cogs, for example, around that range. And so that lifetime revenue is not meaningful because we have to decide of like what is the true lifetime revenue and what is the gross profit from those orders over three years, for example. And then how much is that worth? And then how do we connect that to acquisition? And so if you're, especially for more established businesses, they have an advantage where they can analyze and understand who is that high value, high LTV customer. um and lifetime gross profit customer and then work backwards to what is the offer, messaging, landing pages, even ad channel that we can acquire that high quality customer for. And now The mechanics change because you're not just optimizing for day one ROAS in a subscription company environment. You're looking at what is my lifetime gross profit and then reversing it back into it.
Kurt Elster • 11:39.779
Based on the depth of that answer, I after this call, I'm I'm gonna pitch you on introducing you to this particular client. I'm thinking you may be able to solve some issues for them. Um so I'm excited to have uh solve that problem potentially for a client.
Nehal Kazim • 11:55.840
Yeah, you know, and one of the things that what we've uh done analysis on is we use a platform to connect customer Shopify data um to uh like census data as well as like overall demographic data of the US population from a oh my gosh how quantitative standpoint we use a platform called Faraday And so we're we connect that and then we define personas based off of data instead of just our perception, right?
Kurt Elster • 12:18.940
Like instead of vibes, which is how like Pretty much everybody does it.
Nehal Kazim • 12:22.459
Exactly. And I got frustrated at one point of like, we're just guessing. And so we need to figure out like who are these people. And it's not perfect, but it's way more accurate. And we got exposed Because we were doing this free plus shipping funnel and we found out that the people who are actually buying this free plus shipping funnel, the way it was structured and messaging and offer, they were incredibly financially um Broke and they didn't have money. And we are optimizing for a high average order value, high LTV dog business. And It was attracting the wrong person. And we could see our new customer CPAs and ROAS and all that kind of stuff. The mechanics are okay, but people weren't ordering. And then we found out because of how we were doing advertising, we're simply marketing to the wrong person. And so those are very eye-opening elements. And with the same data, what we're able to do is look at who is the highest LTV cohort and is that different than the general makeup of the customer base. based off of data. And so now we can see household in age demographic like gender, um, where they're located, um, household income uh and homework, things like that, um, that we can connect to then take that over to additional persona and copy messaging, et cetera.
Kurt Elster • 13:34.500
That's really clever. Like being able to get that that quantifiable data. What's that tool?
Nehal Kazim • 13:38.900
Veriday.
Kurt Elster • 13:40.400
Okay. I think I've heard of it. I gotta check that out. I've heard you talk about the the Ted Levers framework and that you know you limit yourself to three levers. For me as a a Shopify online store expert, that's where you know we spend all our time. For me the three level levers, maybe a little broad are uh store sessions, conversion rate, and average order value. Right. You know, ultimately it's a formula and I'm tweaking one of those three to improve revenue. What, you know, what what do the levers mean to you? What are your levers?
Nehal Kazim • 14:09.880
That is the best part of what we do. We choose our adventure based off of the client. And so the purpose of the 10 levers that I've outlined is that Here are the options based off of the strategic objectives this client has at this stage of the company. What are the right levers to pull right now? And so for a company like we've worked with Canada Goose, with Canada Goose, it for our involvement, it was specifically we need to optimize uh France. from advertising from an advertising standpoint. In the context of Canada Goose at a you know billion dollars in revenue and all the different things we can optimize, the levers would be so radically different compared to France. And so within France, we did a series of things of like changing our account structure on Meta. That was a major like lever. Meta was like the major opportunity. There wasn't that much that we were doing on the on the Google side, but there were specific promotions that uh helped. There were like uh catalogs and and uh product launches that was uh a major opportunity. Uh and then there was also like who we're marketing to um was was an opportun opportunity from a persona standpoint and so those levers are very different to when we got a challenge to add a million dollars a month of new revenue as quickly as possible to a business who's already doing $4 million a month of net new customers already. And so that those levers are very different. And so it's very dependent. At the end of the day, the responsibility is based off of what you're working on right now or what your purview is. uh as a growth marketer if it's across everything or individual channels um you get to decide of what levers to focus on at the cycle
Kurt Elster • 15:45.160
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Nehal Kazim • 17:04.040
Some of the people that I that the conference that we met at, the conversation was why are we not spending more money? And for some people, it was because the last time we spent money, it broke. And so I don't want to risk it again. And so that's a conversation that I'm currently having with someone. But in terms of just spending more money, that is directly only applicable for people who are already successful in the platform. And the question becomes, what is your definition of success? And is it based off of business-wide or new customers? We look at new customer success primarily. Um and business wide, there's a lot more factors. And so if you're successful, yes, you can increase your budget, and there's like multiple ways to do that. Um usually As soon as you do, or there's a breaking point of when you increase it 50% or 100%, something's going to break because you're not creating enough creatives or you're not testing enough or your account structure was not correct. as it is or your messaging and avatar is too narrow uh and it doesn't allow if you're spending 100,000 a month and you go to 500,000 a month, but all your messaging avatar uh and offers for people who are very, very aware of the solution and not problem level um from like five stages of awareness, it will break. It's not because your ads suck or your it sucks or your company isn't good or your product doesn't work. It's that the messaging doesn't align because now you have to educate at a different level to people at a higher step uh level of the funnel. And so um that's why I don't think there there are situations that yes you can increase your budget. I wish it was that easy. You must move to the next lever that's right for the problem of your business at that time. And usually in ads, it's account structure, creatives, copy, funnel.
Kurt Elster • 18:39.140
We one thing I've I've never understood, you know, revealing my ignorance here is With meta ads, when people talk about your creative and targeting, all that makes sense to me. When they talk about ad structure and seemingly how important it is, that baffles me. Like, wait, how it's arranged in the the Facebook business manager?
Nehal Kazim • 19:01.679
It's really simple actually. It's because Meta is an algorithm, right? It optimizes based off of an auction system. And the goal here is that you want to provide the highest quality signal and data. to meta in order for it to optimize and get what you want. And so if your data is segmented or incomplete or structured in a way that you're actually getting fragments throughout to train. the algorithm your pixel to optimize for the right customer, it's just you're not doing yourself the favor. And so uh it's a very important question that you're asking and I think a lot of brands owners especially don't ask this question. I was very anti uh ad consolidation. uh except until I started seeing things work. And so we've had accounts we're spending $10,000, $20,000 a day or more on one campaign And so that is because that one campaign, based off of the data that Meta wants to see, is getting the highest quality data. We're able to have a lot of stability in that structure. We're able Meta's able to optimize and learn based off of that. And we're getting the results we want. And so this the right structure does change uh a lot.
Kurt Elster • 20:08.500
Yeah, it it sounds like what Meta wants now is Consolidation? Yeah.
Nehal Kazim • 20:13.480
It's a big part of it.
Kurt Elster • 20:14.440
Fewer campaigns?
Nehal Kazim • 20:15.560
Yeah, they've been pushing that for years. Um, the issue has been is that once once media buyers actually followed a lot of the consolidation advice, it didn't work. And so that's where people start hating their meta-reps because they're like, well, meta-reps have a quota of how many people use a new feature and function. um from an adoption rate standpoint, but media buyers care about performance. And so now you have conflicting uh goals as well as you know what what the intentions are behind uh recommendations. And so it's very tricky. Um but Now it's they're they're catching up, you know.
Kurt Elster • 20:51.679
Do you like your meta rep? How much weight should I put in what my meta rep says?
Nehal Kazim • 20:56.480
I think the quality of reps that we have right now across multiple clients is like the highest it's ever been because I think generally advertising like platforms are serving m uh advertisers way more than they did like five, seven years ago. They respect advertisers generally more based off of their actions. I don't value the words of of a rep or an app platform more than I value their actions. The quality of recommendations, the quality of support across a lot of m bigger clients because they they're they spend more or they have like a cachet, you know, in terms of how much revenue they do. they get more quality support, that's for sure. But the the implementation is from my perspective, it has been increasing um over the years instead of like kind of decaying or Um, you know, there's been years that people are very frustrated with meta of like lack of support or lack of transparency or making a series of changes. And so mostly just depends on who you follow on on X. But
Kurt Elster • 21:56.080
Good point, uh, for sure. With respect to ads, a phrase I heard over and over. at this this conference we're at Smart Marketer was creative diversity. What do we mean by creative diversity? Why was this why did this become a buzzword in relation to meta-ads this year?
Nehal Kazim • 22:17.960
It's because uh Meta started it. So Meta wants creative diversity and they're penalizing creative similarity. That's the important takeaway. So the what is creative similarity, Meta has not been very clear on their communication. Um, we have reps, you know, that we've got data from, but it's been inconsistent in terms and not like very operational of what is creative similarity exactly. So creative diversity has started because of Andromeda. Andromeda came out earlier in the year, but you know, at the time of this recording in terms of November. Um, people really started feeling it in August and September of the of performance, whether that was Andromeda or not, that's TVD. But you know, the the the actual narrative started with meta. And so I I can explain more from my perspective of what I think creative diversity is.
Kurt Elster • 23:08.500
Please do.
Nehal Kazim • 23:09.460
Yeah. So my perspective is that from a a creative, there are a series of variables. The variables are what is the copy in the ad outside of the actual image, right? Then the inside of image or video or carousel or any of the ad formats, what is these content inside of the creative as well in terms of visuals, as well as the copy, as well as the script? And so I like to separate it by variables just so I can understand like what are we actually like talking about? So I've broken down from for my team and how we're looking at it is based off of three different elements of creative similarity. One is what is the creative type? And so is this an ad from a like video sales letter? That is a different creative type than like a get ready with me video or an ASMR video or, you know, um a uh UGC like day in the life video, like all of these are are different styles. Um and so that is one component of what is the creative type. Then it is the ad type. How does that uh you know the uh post-it note uh ad, for example, that type of creative That ad type can appear in an image, it can appear in a video, it can appear in a carousel. So now you can combine creative type with your ad type. And then the last component from my perspective is messaging. Messaging is based off of what is the script inside of your video, for example, or the messaging you're using in your image. um in terms of what the ad actually says as an example of what is inside of that post-it note. Is that inside of that post-it note a pain point? Is it a solution? Is it a benefit? Like what are you actually using in that And so what we're going to like learn from Meta is what is their definition of creative similarity from their algorithmic standpoint, because what they're saying is that we are consuming and reading all of your ads to decide what is the definition of or how similar are they to each other. And my understanding it's more on a spectrum of similarity instead of black and white, this is similar.
Kurt Elster • 25:16.640
And so we want we want these very different ad types for its testing. Like we are trying to appease the algorithm here. And then it it sounds like the thing they don't want is what we used to do with ad split testing, where it's like, all right, I have one ad that works reasonably well. Now let's take that ad and the only thing that changes is the headline, is the hook. And we're just going to try that 10 different ways until we get the best one. Okay, that works. Now we're going to try and pair that working hook with different. photo. It sounds like they don't want that like real incremental testing.
Nehal Kazim • 25:48.539
Yeah, and we're gonna find out what happens with variations, right? Like what is You know, there's our our meta rep, for example, told us don't do hook testing anymore. And so that changes how many assets we produce significantly. And a lot of people have stopped testing hooks, for example. We're in the mindset that we're actually optimizing for stages of awareness. And then inside of that, what is the transformation that they're looking for? And so if they're looking for a specific component of a health transformation, example like three, how we mark talk to uh a person at different stages of those awareness changes and then that goes into the types of creative diversity that we were talking about. And so it's meant to be more expansive. Uh and you know historically last year or two, the com the value of iterations, like true iterations in the sense of like this template works, I'm gonna make more iterations using the same template. That has been a lot of people have been struggling with that, most brands, I would say, uh, from a performance standpoint, because it doesn't work like it used to. And we call these marginal versus radical concepts. And so the marginal concepts are the iterations. You just keep doing more what's working and Is generally marginal in the sense of like, cool, same script, give it to a different creator. And so we're still going, um, it's it's still, you know, marginal in that sense versus like, let's do completely something different. in terms of uh an animation ad or a puppet ad or AI UGC creator or whatever.
Kurt Elster • 27:16.780
And Uh another thing that we have uh f wrestled with this year is the actual implementation of pixels on online stores. You know, as uh privacy requirements are changing at you know a regulatory level, we have to answer that with uh various compliance features. Has that you know and meta as far as its Shopify integration goes, really it kind of sidesteps that process by having an official integration with Shopify that plugs into customer events and you know makes life easier. Um, has that, you know, that attribution, that pixel reporting, you know, that compliance, has that uh thrown a monkey wrench in the works? Has it changed things? Like Yeah, is it another iOS 14, really, I think is my fear.
Nehal Kazim • 28:01.300
No, thank God. Um, so I I definitely don't think it's that. Um I think there's a couple of components. One is that if You are in health and wellness and got categorized in health of wellness health and wellness, that is a very different series of implementation and considerations that people have to do because they can't optimize for traditional purchase events.
Kurt Elster • 28:20.540
Why?
Nehal Kazim • 28:27.420
To categorize businesses as health and wellness. um companies uh and uh uh subbuckets of those uh of that categorization as well. We've had clients who've got hit by that and uh we couldn't optimize for purchase. We still can optimize for purchase for some of them. So how someone operates from that perspective is very different from like everyone else. Server-side pixel, there's still a lot of brands who don't have server-side pixels set up or server side um uh conversions API set up. So I think that's like a no-brainer in terms of setting it up just with Shopify or any of the other uh solutions that are out there. We use additional solutions for uh you know testing predictive LTV or um optimizing for a higher uh event match quality scores in meta, uh, etc. And so that's something that we're uh always testing. But I think the biggest opportunity that I wasn't expecting from Meta is uh incremental attribution that
Kurt Elster • 29:22.560
I've heard about this.
Nehal Kazim • 29:23.600
Yeah, so is tell me about it. What is it? Yeah, so incremental attribution, the whole point is that Meta can see all of the purchases that are coming in through Shopify, right? And so they can see is this a net new conversion of someone who has fired or completed the purchase essentially. And so what we've done, one of the our best campaigns on across all of our clients, we've switched most of our clients to this, is that we're actually optimizing for incremental attribution. What we're seeing is that we're seeing bigger gaps of like First time customers to returning customers, which we want. We don't want like the clicks and the purchases to be like 50-50. You know what I mean? For every hundred purchases. We don't want 50 to be new and 50 to be returning of latent attribution platforms, etc. We want as many of those customers to be new. so that we can optimize for net new customers and as and make sure we're hitting our our targets. And so we have seen a very significant correlation to um that campaign and um we've changed uh like transitioned over uh a lot of uh our our clients to that And again, the priority for us and the way that we're measuring that, especially for people listening who are using attribution platforms, we're looking at what is our new visitor rate. So a lot of our clients, the new visitor rate at volumes drops to like 60%, 40%. We had one that was like at 25% and that was hit by health and wellness. And so if you're spending a dollar and you know 75% of of that spend is for people who already went to your website, like it's a problem. It's it's and we're not running retargeting. Like that's not retargeting campaigns. Those are supposed to be prospecting campaigns. That's with all the exclusions. And so We started uh optimizing for for this further with additional more aggressive exclusions and for incremental, and we've got back up to 50-60%. um new visitor rates, which is which is what we want, while hitting new customer ROAS targets. And so the reason I'm bringing that up is because most people aren't optimizing or looking at All right, I have all these purchases in platform, how many of them are incremental according to Meta? It is not gospel, it's not like perfect, but it's definitely directionally more correct of why someone won't, shouldn't Pick up an attribution platform earlier on in their journey because it's good enough. It's more than good enough, which is very surprising for me because I've always had challenges with uh meta-purchase fires and validity of them.
Kurt Elster • 31:46.120
Yeah, if I'm not relying on incremental attribution, you know, what are some of the what's a good attribution platform you would use today with Shopify?
Nehal Kazim • 31:53.960
I mean for most people it's going to be something like Triple Wheel. I think that's what most people go to. I think at the end of the day, most even within the attribution platform, like They they just look at the dashboard in terms of like how is my overall business doing instead of like how it are individual campaigns doing. I didn't know that. I spoke to a bunch of triple whale users and they're like, oh, I don't actually look at the ads channels breakdown. I just look at uh what's my new customer row as today. So that was interesting. Um, but I don't think it's really necessary until you're maybe at like a hundred thousand a month in spend or more. Uh even then I don't think it's In insanely as valuable as it used to be at the initial stages. It's valuable in other ways, um, but from an attribution and decision-making standpoint, um, it's you know with what I've seen with incremental, it's is directionally correct and actually helps with decision making uh in a significant way. So triple will uh in terms of like smaller businesses, I prefer Northbeam for um like businesses above five million a year.
Kurt Elster • 32:54.179
Okay. Good to know. Both both good platforms. Man, those order change emails suck. They're always like, I ordered the wrong size. I meant to change the shipping address. Oops, I was drunk. Instead of making customers email you that stuff, let them fix it themselves with Cleverific. Cleverific is a self-service portal that lets customers edit their orders without bugging you. That means you get fewer headaches, customers get faster fulfillment, and there's fewer returns overall. Everybody wins. Peter Manning, New York Cut their support tickets by 99% with Cleverific. You want in on that? Get 50% off the Pro Plan, just $49 a month. exclusively for listeners of the unofficial Shopify podcast. Go to Cleverific. com slash unofficial and use promo code Kurt50. Done. Problem solved. That's Cleverific. Talk to me about scaling. You know, you have you've got a scaling ladder, thresholds, you know, ideas. Let's hear it.
Nehal Kazim • 33:57.220
I like to start with what is the level of profitability you want to scale at? That's an important decision because some people's uh threshold is Way higher, way higher than I expect. They're willing to go negative, uh, or they have funding, um, whatever the case is, or they're specifically mandated to grow at a specific percentage because they have uh optics that they need to optimize for, right? And so those are very important considerations versus just what is my CPA or like I want a four X CPA or four X ROAS. Why? Because I want it. Like that's very different than I need to show 10% month-on-month growth to my board in order to show that, you know, we're hitting targets and we get our next round of funding or whatever the case is. So I think that's like one part. We do financial modeling based off of what is your growth target in terms of in order to go from you're at a million a month, you want to go to two million, here are the different scenarios at what happens if you grow 5% a month. 10, 7% a month, 10% a month, etc. And based off of that growth and how much new customer revenue is required for that growth, here's how much you have to spend and what the CPA would be like. Um, obviously. forecasting and and doing scenario planning. And so we do that. We also do, depending on what level of access they provide us on the financial statement side and COGS, we can see what the contribution margin will be because fixed expenses are more dependent on things that are outside of our control. But we just want to be able to see net contribution margin, those variable costs that happen. for the the actual products don't change that much. And so we're able to predict that. And then based off of that, we decide on what ad channels to go after what funnels and products to go after, etc. And so it's a series of steps that we look at, which is what do you want business wide? What do you if if especially if the business is Very complex and has multiple sales channels from our sales channel if it's just D2C, what is the goal there? Um and most businesses don't have PLs or Reporting on how profitable each channel is. We had a challenge like this for a $25 million business where we had to decide where do we put our next dollar in Amazon or in Shopify? And so to do that analysis, we would need the profitability numbers. And so, but one feeds into the other, like D2C feeds into Amazon, but Amazon doesn't feed to Shopify. And so um Those are important decisions. And then once we decide all of these things, we have ongoing pacing and cadence that we look at of like how much are we pacing on a daily basis to new customer revenue, new customer orders, new customer. profitability this month and the the commitment we made or or the target that we made of how much revenue we want this month, are we on track or off track? And did we overestimate or did we get the did we do the calculation right or not? And so those are um always humbling uh because you're you either find find out you're you're crushing it or you missed a major variable.
Kurt Elster • 36:45.160
Yeah, that's something you want to figure out the hard way later, uh, but uh certainly it's gonna happen. As uh at some point, you know, I exhaust the the market I'm targeting. At that point, it what it what's the playbook? Do I find Try and find new audiences, different hook, or do I move I go international, which that you know seems quite intimidating?
Nehal Kazim • 37:07.799
Yeah. I I don't believe in exhausting markets. I think like the The like markets become um like less profitable, but you know, it's it's wild how many businesses are spending over a million a month that you and I have never heard of.
Kurt Elster • 37:23.420
Yeah.
Nehal Kazim • 37:24.060
And so if you look at their impression counts and and how many people they're reaching, um, for whatever reason, it doesn't reach me, doesn't reach you, or a lot of people we know in our circles, but they're reaching so many people out there. So My perspective on like market penetration and like market domination has like changed a lot over the years uh because I think markets are way bigger and I think um the evolution of What happens in market saturation in the US is um there's many different ways to go after segments of the market, and then it's a matter of profitability. But I think there if you're going after growth, there's a point where it becomes more expensive to acquire that customer in the US. And then it's way easier and more profitable to get that growth elsewhere. And so I I also think that from a market growth standpoint, a lot of the times the limiting factor is how much can you pay for a customer and the amount of uh that that is directly correlated to your LTV. Right. So the more profitable your customers are, the more that you can spend to acquire them. The amount of effort that people spend on acquisition is not one to one or even like five to one to on retention and lifecycle marketing usually. It's just not the same effort, resources, time, energy. uh any of that. And so before I think like market expansion is cool. I think there's a lot of opportunity. But I think usually What we really push for is what is the one offer ideally that we can get to a million to three million a month in spend? Um, and depending on kind of revenue targets and recurring, et cetera, um, how much can we s acquire How many new customers can we acquire on a offer instead of 10 offers at the same time and trying to spend $3 million a month on 10 offers? Out of all the businesses I've analyzed and worked with and seen in the market, very few. are doing a lot of spend in our our circles in D2C um that have like more than three offers. It's usually one to three.
Kurt Elster • 39:19.580
Hmm. Yeah, a little counterintuitive that surprises me. I want to talk to you about ad creative. Do you have any experience using celebrities in in ad creative? You know, is that I suspect it doesn't perform as well as people think. But I'd have to think it, you know, it certainly does well when you have someone recognizable.
Nehal Kazim • 39:40.579
Yeah. I I think it definitely helps. Um we had a client who paid uh Cardi B like $25,000 for a video. Imagine kind of like walking into your house and just sitting down, recording a quick video for 20 seconds and getting paid $25,000. That was like the amount of effort that was put into that video. We did a whitelisting.
Kurt Elster • 40:01.700
It was like a cameo, but it cost 25,000?
Nehal Kazim • 40:04.100
Basically. It was it was absurd. And uh it crushed. It did incredibly well. I hated the video profoundly deeply and it was so bad but because it was cardb because we had access to our audience because we it was whitelisting did amazing and so Um, I think there's a lot to be said about like using those um sponsorships and and working with celebrities. I just don't have like a a lot of experience doing it.
Kurt Elster • 40:28.580
But all right, whitelisting. So with either You had the you got the ad, but then you also got to remarket to that to Cardu B's audience.
Nehal Kazim • 40:37.559
Even better, they had custom audiences of her audience that she they could market directly to.
Kurt Elster • 40:44.060
So that's what the 25,000 paid for.
Nehal Kazim • 40:46.940
Yeah, no kidding. No kidding. Like the the numbers were incredible. So um Okay. Yeah. Interesting. I uh just on the on that topic of whitelisting, I think there's a lot of opportunity with whitelisting and partnership ads right now. I think most most brands aren't optimizing for either in the sense of like getting people to post publicly and then getting permission to use that ad versus whitelisting, which you can create hundreds of ad that never go on any profiles. You know, it's just an ad. And so um I think that's still like very underrated right now uh and not enough brands are doing it.
Kurt Elster • 41:20.000
I agree. It's it It's just not something you hear enough about, which you know generally indicates like, okay, people just aren't trying it, you know, or or maybe unaware that that's an option. So you said you know you had this video that performed very well that you profoundly hated. Uh are there did you get any favorite ads or maybe formats?
Nehal Kazim • 41:41.299
Yeah, so we have uh like news article styles that like we test for every single client. It looks like a news um article uh in in the organic feed. That works very well for many of our clients. We've seen that videos that are above two minutes also, it doesn't have to be like 20 minutes, but Um a lot of our videos previously were like 60 seconds and we were optimizing for that, but uh longer videos do better, especially from an education standpoint, because you have more Okay, counterintuitive. Yeah, yeah. So Highly recommend that. The partnership side, and if you're going to be working with UGC people, get three different quotes for them, which is what is the cost for a video? What is the cost for using your page for an ad, which is whitelisting? And what is the cost to get a post on your profile? And so most people don't know how to price that and it's very tricky because, like, you know, is does a post on your profile have like is it worth ten thousand dollars or what is it based off of? No one knows. And so it's all all made up. So I I would just um I l really value and love whitelisting and partnership ads. We're seeing crazy lifts there. And you know, there were moments that we had success with AI UGC and AI uh centric creatives, but um we're we're not like really deep. uh in that right now.
Kurt Elster • 43:02.140
Um the I was yeah, that was gonna be Yeah, my next one's gonna be AI ad creative. We see it. Sometimes you could spot it. Sometimes it's intentionally obvious. Other times you're like, there's something not quite right about this person. And you're like, I think they're AI, but I you can't, you don't know. Kind of a it sounds like uh avoiding it.
Nehal Kazim • 43:21.799
My perspective is that lean into it when it's exaggerated and people know that it's obviously AI so that you can communicate the pain or or the the pleasure, the the end goal, you know. i in an exaggerated way. I think there's value there. I think um we have some AI assets that look very accurate and like is they're really good. And I think there's an opportunity to do it with like founder ads. So I'm actually rolling out a like workflow where founders don't want to create do photo shoots or do ads, you know, but founder ads do perform very well at times. And so um there are situations that it can work, but most of our clients like it it's not our core strategy.
Kurt Elster • 44:02.339
Okay. And that makes sense. And that, you know, seems to line up with how other people are are creating AI ads. Yeah, you want the ones that are like very obviously AI. Like that seems to be the good use case. Yeah. Or I heard someone else say, like, oh, you know, we Had an ad, but like one part of the ad needed to be replaced. And so they just used AI to just like fix that one section. And then when it's part of a larger real thing, it's it's much less obvious. Or jarring on your your ad pros website, so you do meta ads and Google ads, and you also do taboo. I've seen, you know, like yeah, buy taboo. uh for years. I've never actually bothered to figure out what it is. What the heck is Tabula?
Nehal Kazim • 44:41.980
Yeah, so Tabula is so when you go to a blog and at the bottom of a blog there's like recommended articles. That is Tabula. So someone already has intent to read and they're about to click the next thing that they're about to read. And so that is a taboo ad.
Kurt Elster • 44:58.580
And are they running like a so it's specific to you know publishers?
Nehal Kazim • 45:04.420
Yes, it's based off of uh like limited publishers based off of the kind of the platform that you're using. So Taboo is one, Outbrain is another, there's a bunch of them. And so um based off of the relationships they have, there's some overlap. But the goal is is that you have specific publishers you want to go after or specific publishers may perform better for you. And you can control devices in terms of mobile and desktop. And so there's a lot of flexibility in terms of what you can do and and what uh you show someone uh generally within the limits of compliance. But uh I think it's a phenomenal platform. I think there's a lot of opportunity for for scale for uh D2C brands, but it's very difficult to crack. Um and um, you know, we've we've had the privilege to crack it a few times, but um I I think the goal of those creatives is that if you have difficult, like mass market, difficult to understand or unique mechanisms that you're trying to communicate to someone, Tabula or native ads generally are really good to educate them through listicles in terms of like five reasons why, ten reasons why, that kind of stuff, as well as stories.
Kurt Elster • 46:09.140
Yeah, listicles, advertorials, I think that's probably one of the biggest missed opportunities for for online stores uh in terms of advertising. Just uh when we have had clients use them, they seem to work really well. Yeah, there's that idea that like no one reads. I don't think it's true, right? Like they scam until you get them interested and then they'll read. And so for You know, that type of ad really separates the wheat from the chaff. You know, the person who is not going to buy is also not going to read it. Right. The person who reads it becomes that much more likely to buy.
Nehal Kazim • 46:38.060
Yeah, and what's your definition of reading? Right. Because like if you're skimming, you still are consuming. It's just more so comprehension. Like what are they remembering? And so that's where the you know the time on site you can see and you can see user journeys of like what they're reading. and where they stop and what they scroll past, all of that. Um, I think there's a lot to be said there. And one of our clients, we they they um mass developed a bunch of landing pages. We tested like seven of them. and five of them are hitting uh or exceeding targets by 50% to 100% based off of their business as usual campaigns because they're all listicles and uh advertorials. So uh older demographic but did incredibly well.
Kurt Elster • 47:15.860
What what's your spiciest take on meta ads? You're like, man, this is the thing I wish they would quit doing, they would change, this is where everybody else is wrong.
Nehal Kazim • 47:24.059
Right now what I'm thinking a lot about is like people went from underproducing creatives to now with Andromeda are overproducing like crazy Like it's so wild. It's like if for uh creative agencies only, like we we do creative, but we're not a traditional like creative agency. I think it's awesome for retainers because people want more creatives. But I think that is by far the most expensive and one of the worst use of cash right now because what happens is that you are produced, there's a cost per asset. Cost for concept, right? For a lot of brands, it's $250 to $500 for one concept. Creative.
Kurt Elster • 47:59.099
Expensive.
Nehal Kazim • 47:59.600
It's expensive. I mean, it depends on the size of your business, whatever, but it's still expensive. And then based off of that, you have to test it. And so now there's ad budget that goes beyond that. And so there are um you know media buyers that the way they structure it is that if it doesn't get spent, it's not a good ad. So the issue is is that now you spent $500 on a creative and it never got spent. And so you just threw away 500 times number of concepts that never got spent. Or the other thing is that now you have a bunch of creatives that you created. And because you've tested so much at the same time, you don't have enough dollars to test so that you can break through with the creatives that actually deserve your spend. And so it's way better to find like the Goldilocks range of how much creative should I test at different revenue levels or spend levels as well as account status. And that way is way easier. We put together a calculator to do exactly that. And that way you can see, okay, right now I can only test seven concepts a week. If I produce 14, I'm burning money.
Kurt Elster • 48:58.820
That's yeah. And it you're right. I mean that is a lot of what I've heard since that Andromeda update is people just like desperate for quantity of content. And like get really excited about like oh I get 150 pieces of content. Go, holy crap, what do you do with it?
Nehal Kazim • 49:15.560
Yeah. And a lot of the times it's just like I'm just gonna Put it in an ad set and see what works. It's like that's fine. But the flip-flopping that happens from again the signal component that we're talking about, some days the signal is good on a couple of ads, but then it doesn't have enough time to really optimize and break through and keep breaking through. Um, it flip-flops and so it restarts that process. And so I think that is one of the things as I'm going through sales calls and audits and all this stuff, I'm like, everyone just went from like not producing enough to like going insane.
Kurt Elster • 49:46.980
So with i if someone's listening and they're thinking like, wow, you this approach is so rigorous in its its thinking. And they manage their own ads. Before they go out and spend the money on an agency retainer, what's one thing they could do on their own in their own ad campaigns? Yeah, to add like the the Nahal level of rigor to their ad platform.
Nehal Kazim • 50:08.240
I don't think every business needs Nahal level of rigor. I have been humbled enough times to know that if your system is working, don't break it. Right. So um there's a lot of ways to add your next million a month in revenue. If your method is working, great. Do more of that. Right. Because like Doesn't matter what I think. If it's not, then I think it starts going down the process of like how do I make sense of the chaos? That's more so my approach, which is if I don't understand the variables, if I don't know what the levers are. If I don't know where to like how to make decisions or where to make decisions or where to coach my team, that's where the starting point comes in. And the most important thing from my perspective, where I look at where I always start is Profitability of what happens on business wide and new customer. If you do not have a dashboard on tracking daily profitability on new customer acquisition of your volume, of how many orders you're getting, what your net contribution margin is in terms of just like what is your revenue minus your cogs and delivery payment processing minus your ad spend on a daily basis. If you just start tracking that, it's like looking at your bank account every day, you get exposed and now you start asking higher quality questions. So it's higher quality clues that you're looking for. And so I've done this for many businesses over and over again. And the first thing that happens is like you get exposed and you're like overwhelmed and sometimes freak out of like, I didn't know my numbers were that bad or that good. Um, usually it's bad. And then they're like, okay, now I can kind of see the matrix. Now let me figure out what do I do next? Because before you no one knew. They were just looking at what does meta say about my CPA is today? It's not real. That's not your business wide new customer CPA. That's just your meta CPA or that's just your Google CPA. And so the immediate thing that you can do, even if you track it manually, because you don't need uh you know, supermetrics or all these connectors. You don't need any of that. In the beginning, whether it's you or someone on your team on a daily basis at the start of every day, just put in What is my new customer profitability metrics? You can do it with total customers too, but minimum of new new customers, how much did I spend? How many new customer orders did I get? How much new customer revenue did I get? Based off of what people bought, what is what do I think the margin or the cogs are and the margin on that? And then you can say, did I do better or worse than yesterday? That is like will be life-changing as a starting point.
Kurt Elster • 52:26.280
That is, you know, that makes it so accessible and practical. I love that advice. And the, you know, hey, you check your bank account every day. You probably do. You maybe should. That like hearing that like, uh oh, you know, it's like the things you check daily are you know what you get good at and you start to get a a real Real sense of.
Nehal Kazim • 52:44.720
Yeah. Do you do you care enough about new customer acquisition? That is the real question underneath that, you know, because again, it's not based off of what you care about, you're like What you care about shows up based off of your actions, not your thoughts or your your you know words or any anything like that. I think it is directly correlated to your actions. Because I I have this in different parts of my life where I'm like, I really value that, but my actions aren't aligned sometimes. And so um and I see that when I'm coming in and auditing uh different businesses where I'm looking at this new customers are so valuable to me. It's like, cool, show me a dashboard. Don't have one. And so uh how are how are you deciding how many creatives to test? How much do you want to spend? What is your new customer like goal or growth rate? What do you want? Can't answer those questions. So it's like it's not because you don't value it, it's you don't know how to value it based off of actions. And so that's that's the really hard part. And that's just part of, you know, personal development as a leader, as a growth marketer, um, and and it's ongoing.
Kurt Elster • 53:41.560
Absolut yeah. Wow. I gotta go. They gotta build I need a dashboard with some KPIs in it that I can check daily. That, hmm, I like these ideas. Now Hall, I'm willing to bet you have resources for us. Where can we go learn more about you?
Nehal Kazim • 53:57.920
Yeah, so um if you have show notes, I'll I'll send you links so that you can uh add those. Um but Uh the easiest way to get a hold of me is uh on Instagram and uh LinkedIn. And so uh just Nahal Kazim and uh mention Kurt and I'll send you a couple of resources on specifically how much you should be testing. That is a very important part. We have a calculator for that. So it relieves a lot of stress and anxiety of like how what should I do? What should I tell my team? Every like creative teams And growth teams overall just want to know how much creative should I test and how much should I launch? And so I have a solution on that. So I'll send that over. And then second is that When you're looking at ad creative, when it comes to creative diversity, there's not really a formula out there. And so I created one when it comes to uh what happens from a creative ad type and Sorry, creative type and add types so that you can have 34 different ideas so that you can share it with your team and say how many of these have we actually tested? because we're all very used to comfort naturally, which is we keep doing type of creatives that have worked historically, but that is the opposite of diverse. It's similar. And so here's a bunch of ideas so that you can get creative diversity.
Kurt Elster • 55:04.900
Beautiful. Yeah, uh we'll include that stuff in the show notes. Nahal Kazim, ad pros. Thank you so much.
Nehal Kazim • 55:11.460
Thanks, Rappi.
Kurt Elster • 55:13.820
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