---
title: "Optimization Beyond Ads"
date_published: "2024-01-22"
date_modified: "2024-01-22"
permalink: "https://www.samtomlinson.me/insights/optimization-beyond-ads/"
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  Tags:
    - "Analytics"
    - "Data"
    - "Testing"
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  title: "Optimization Beyond Ads"
  description: "A recurring theme in many of my conversations and meetings over the past few weeks has been creative testing – whether that’s new ad structures on Meta, ad copy testing on Google,"
  canonical_url: "https://www.samtomlinson.me/insights/optimization-beyond-ads/"
---

A recurring theme in many of my conversations and meetings over the past few weeks has been creative testing - whether that's new ad structures on Meta, ad copy testing on Google, different creative formats on TikTok, whatever.

For many of these brands, the issue is almost irrelevant:

Need To Get More Leads? New creative time

Poor Lead Quality? Ad copy testing, baby!

Meta Ad Account Performance Hitting a Wall? Load up 25 new creatives!

Poor/Declining Conversion Rate? Let's try video

Shrinking Contribution Margin? I bet carousels fix this.

Over-Reliance on Discounts? Have we tried UGC? Let's test.

Poor Email Performance? Neil Patel said to use emojis in the post-header. Give it a shot.

SQLs Not Signing? Have we tried new search ad copy again?

It's gotten to the point where creative testing is an obsession. The need to test creative has overshadowed the reason why we test it in the first place (namely, to improve the incremental profitability of our ad accounts).

Before anyone jumps to conclusions, I'm not claiming creative testing is bad. Rather, I'm saying that somewhere along the way, creative testing went from one of many tools marketers had to improve advertising profitability to the one-size-smashes-all hammer on which far too many of us rely. Creative testing has a place in every marketer's process + toolbox - and that place isn't the entire toolbox.

So, for this week's issue, I want to talk about four oft-forgotten other tools in the optimization toolbox.

## 1. Offer

Offer testing is something that so few brands do ̵1; or have even thought about doing ̵1; that it makes me want to pull my hair out.

The best marketing in the world can not save a bad product or a poor offer. We've found that the offer is 30% to 50% of the purchase driver in most industries; the ad creative is 5% to 10%. The remaining 40% to 65% is the moment, the experience, the lander & the perceptions of the brand itself. Creative testing without offer testing is the proverbial tail wagging the dog.

This is doubly true in verticals/industries with a high degree of commodity perception among the target audience - home services, food delivery, office supplies, electronics, professional services (legal, marketing, accounting, etc.), SaaS, you get the idea.

As a clear example, I audited a brand in the home services space. They had a long-term agency partner. The CEO called after observing a significant decline in marketing performance over the last year, while his competitors were posting strong (20%+) growth.

Unlike most audits, the accounts were not in objectively bad shape ̵1; structure was acceptable, there was some evidence of proactive management, offer-specific creatives for promotions were added + removed on-schedule, and they were even running a few experiments. Nothing earth-shatteringly good, but nothing horrific, either. But, despite that, performance was tanking. Not declining. Tanking.

This was the ad account version of the 2023 Philadelphia Eagles.

I figured I had missed something, so I redoubled my efforts. I dug in further. Still nothing in the account to justify this level of bad.

Then I started searching, just as a potential customer would. And I found the issue in minutes: competitors were dominating this brand's offers:

Audit BrandCompetitorOffer #120% Off Installation25% Off Entire Package (Installation + Materials)Offer #2Buy 3 Get 1 FreeBuy 1 Get 1 FreeOffer #310% Off Everything + No Payments for 1 Year20% Off Everything + 0% Interest + 0 Payments For 3 Years

This is straight-up offer annihilation.

If you're a potential customer, you're going with the competitor every day of the week and twice on Sundays. You're not even contacting the audit brand, because the competitor looks so much better + more compelling. It doesn't matter how pretty the audit brand's ad is, or how witty their ad copy is in this context. They're going to lose the vast majority of the time.

The sales team didn't catch it because they were never getting the call. The agency didn't catch it because they weren't looking for it ̵1; they were so focused on the account that they didn't bother to step back and look at the bigger picture. But the impact was massive, regardless: the audit brand was spending hundreds of thousands of dollars promoting offers that were dead in the water. All of the creative + structural optimization in the world was not going to overcome these chasms in perceived value.

This client's industry is commoditized + discount-heavy, which is why each of these offers focuses on savings, but I've observed the same trends in spaces that do not rely on discounts - this can include feature domination (a competitor offers staggeringly more in terms of features/functionality at a comparable price point), benefit domination (concierge service), even perceptual domination (for the same price, you can work with a proven brand vs. those risky upstarts).

The common denominator in all of them: no-one in marketing (in-house or agency) bothered to pay attention to how their offer was positioned in the marketplace, and even if they did, they didn't have the ability to pivot to an answer in a timely manner.

Here's the simple reality: every minute that your ad is in-market and promoting a dominated offer is a minute that you're losing money. Successfully managing ad accounts is all about diagnosing the actual issue + getting to the right answer as quickly as possible. You never, ever want to be in a position where you can't get to an answer and are forced to plow spend into a dominated offer. That's a recipe for disaster.

This is why we develop Beaters.

This is my (affectionate) term for counters to your competition's in-market offers. These should be evergreen + they should either (a) supersede a dominant offer and/or (b) change the angle of attack to one where your brand can effectively dominate the competition.

In the above example, one beater was a "Get A 2nd Opinion Before You Sign // We'll Beat Their Offer No Matter What." It doesn't matter what discount our competitor is running ̵1; 25% off, buy one, get one, free install, whatever ̵1; that beater is going to resonate with an information-deficient and price-sensitive homeowner audience. If we see that our competition is rolling a promo that dominates ours, we can get into this.

It's pre-approved. The messaging and landers are on the website. We have the creative to support it loaded up in the ad account. We know we can pivot everything to that messaging and immediately re-establish our proverbial footing.

As an aside: the "beater" doesn't have to be a discount, either ̵1; you could pivot completely away from savings + focus on premium messaging ("You Get What You Pay For ̵1; One, Fair Price All Year Long") or reviews (5,000+ 5* Ratings For A Reason).

The easiest way to design those beaters is to document all of your competition's core offers, alongside a clear-eyed comparison between your brand + each individual competitor/alternative (and no, "we're just better!" isn't a clear-eyed comparison). From those two data points, you should be able to identify 2-3 different angles of attack. Those are your beaters.

Here's How To Employ This In Your Ad Account:

Schedule time every 1-2 weeks to review your competition's ads + the search landscape. Click on your competitor's ads. Document everything in a shared Google Sheet. Each time you run across an offer/message that you don't have a good answer for, flag it and develop options for a response.

Create all of the assets you need to support your "beater" offers before you need them - have them pre-approved, create images/messaging points, search ads, etc. Have it all ready to go.

Pivot to "Beaters" when you observe that a competitor has deployed a superior offer, pivot all of your ads to the appropriate "beater".

Use surveys to understand shifting audience preferences, fears, challenges + hesitations. I'll never understand why brands are happy to deploy $100k a month to support an offer, but aren't willing to spend $1,000 on a 750 person online survey to validate it beforehand. If you're that averse to spending money, conduct a focus group with 20-30 current customers to ask if that would be compelling to them.

Craft offers that attack those customer pain points / preferences. If my main hesitation is buying the wrong product, 10% off isn't changing that. An expert virtual consultation on orders over $100, on the other hand, just might.

The offer is the most critical and powerful component of your marketing strategy. It will (quite literally) make-or-break your ad account's performance. If there's one thing you spend time on, make it this.

## 2. Unit Economics

There are exactly three ways to make money in any business:

Find more new customers

Sell more to current customers

Increase the margins on what you sell

99% of marketers ignore the third one. That's a mistake that costs brands millions (probably billions) every year. Please don't make it.

And before you tell me that you can't control your COGS or processing fees or wholesale costs or whatever, allow me to ask a simple question:

When did we collectively decide that 10% off was the going rate for the privilege of sending potential customers emails until the end of time? Who did that math? What analysis validated it? (if you're curious, the earliest example of 10% off for an email I can find is 2012, and it was far from scientific).

For many brands, that 10% off represents 20% to 35% of their total contribution dollars on a transaction. That's a staggering chunk of the total margin on a sale given away by a random pop-up, the incrementality and impact of which the brand has likely never tested.

Even if you do like your "WELCOME10" discount code (and are still living under the delusion that it is net/net incremental), when was the last time you pulled a discount codes report in GA4 to see if only your new customers were using it? When's the last time you ran an analysis to see if other discount codes (FRIENDSANDFAMILY20, anyone?) are being used by a staggering number of people who are neither friends nor family?

In most cases, the answer is "never" - and that's a huge problem. Sure, it's not technically marketing's problem, but the core, fundamental objective of every marketing team is to produce a measurable return on invested capital. Marketing is a profit center, not a cost center. Treat it like such.

And yes, that means understanding how every dollar flows through your (or your client's) organization. It means leaving no discount code stone unturned. It means critically assessing where every dollar goes, finding the points of leverage where you can have an impact through targeted marketing communications activities, then communicating that to senior-level stakeholders.

It isn't easy. But it's what the marketers that succeed tomorrow will do brilliantly well.

And sometimes ̵1; like with that discount thing above ̵1; you'll run into skeptics. They won't believe you. But they'll believe in math. Let's walk through an example:

Brand X:

$100,000/month in Meta Spend

$100 AOV

70% of Meta Transactions are 1st Time Customers

$40 Cost of Delivery (COGS + Processing Costs + Shipping Costs)

3.3 ROAS // $30 CPA on Meta Spend

15% Off Discount Code ("WELCOME15")

So, for that $100,000, the brand gets ~3,330 transactions per month, about 2,330 of which are new-to-brand customers (pretty standard for Meta post-iOS14.5/15). From a big-picture perspective, this is already above-average Meta performance (the platform average is a ROAS of ~1.7).

Assuming the "WELCOME15" code ONLY is applied to new customers (it isn't, because it is auto-applied by Honey + Capital One Shopping, among others, but that's another thing), using this code costs the brand $34,950 per month. In reality (and what you learn from those GA4 reports), that code costs the brand upwards of $90,000 per month, because it is auto-applied to existing customers, along with direct/organic/referral traffic, not to mention email + SMS traffic. Yeah, you read that right. Subscribe once, get 10% off forever. Somebody made an oops.

This brand would need to improve their Meta Ads efficiency by ~30% on the $100k ad budget to simply overcome the contribution dollars lost to this one discount code. I don't like the odds of finding a piece of creative that does that, especially for a brand that's already tested hundreds of different creatives.

This is a classic example ̵1; but far from the only one ̵1; of brands tripping over dollars to pick up dimes.

In order for this brand ̵1; or any brand in a similar position ̵1; to succeed, they need to optimize beyond ad creative, with the assumption that their creative performance will revert to the mean over time. That means digging in to the business economics and finding the places where optimization can have a real, material, bottom-line impact.

Here's Where I'd Start:

Deactivate every generic code you have + move to dynamic codes. I guarantee you the cost of a dynamic code platform is less than what you're losing to Honey, Capital One Shopping + Affiliate sites.

Create GA4 events for every discount code ([here is the documentation](https://support.google.com/analytics/answer/12931362?hl=en&co=GENIE.Platform%3DAndroid) on how to do it). Check it religiously.

Test your discounts (or better yet, test REMOVING them entirely)

Experiment with other offers ̵1; free shipping, free gift with purchase, we'll plant a tree on orders over $100, whatever.

Repeat this with other components of your offers + service/product.

Spending 12% of your AOV on packaging? Can we save here? Getting crushed by fulfillment costs? Recommend alternatives + price-shop. Appointments no-showing to calls with the sales team, resulting in massive time-wastes? Implement a deposit to schedule a consult, or automate the process for lower-tier prospects. Inundated on returns? Actively work with Customer Support to understand *why* people are returning the product, then build functionality to address it.

As a concrete example, both Victoria's Secret + Patagonia did this with sizing. The #1 cause of returns was incorrect fit. Their PDPs now mention ("SIZE" about 25 times, along with providing detailed charts, videos showing how to measure yourself, etc.). Both brands pioneered multi-modal (text, video, infographic, interactive) ways to make at-home sizing easier. Amazon co-opted the concept for furniture using the Amazon app, and now Ikea, Lowes + Home Depot all provide variants of an AR sizer for appliances/furniture/rugs as well.

This isn't just an eCommerce/DTC thing, either.

A B2B client (a MLS provider) of ours was being inundated by complaints from clients following a system migration - realtors LOVE to pick up the phone and call. The client was being forced to bring in additional customer support just to handle basic requests. We queried their support database, identified the 20 most common issues, and made short (