Michael Stelzner

Before we get started, I want to ask you something. Are you tired of feeling like AI is moving faster than you can keep up? Because I know what that feels like and I hear it all the time. Marketers keep telling me they're drowning in all the new tools and updates and features and must try frameworks and, and they got to do all this while they're also doing their job and trying to run their business. And that's why the AI Business Society was created. It's your personal curation team for AI. We tell you what deserves your attention and what you can safely ignore. And inside, you get live trainings from leading AI practitioners and interactive skill building sessions, bite sized learning libraries, when you just have a few minutes, and a community of incredible marketers who are just like you. Hundreds of them are on the inside. And you can join right now and lock in an incredible special sale we've got going on. Visit socialmediaexaminer.com AI give it a shot. You got a 30 day money back guarantee, so you've got nothing to lose. Go to socialmediaexaminer.com AI and let's now jump back into today's show.

Sam Pallaro

Welcome to the Social Media Marketing Podcast, helping you navigate the social media jungle. And now, here is your host, Michael Stelzner. Hello, hello, hello.

Michael Stelzner

Thank you so much for joining me for the Social Media Marketing podcast brought to you by Social Media Examiner. I'm your host, Michael Stelzner, and this is the podcast for marketers and business owners who want more exposure, more leads and more sales. Today we're gonna explore how to blow up your e commerce business with Facebook ads. And I'm gonna be joined by Sam Pallaro. By the way, whether you sell B2C or B2B, I still think you're gonna find a lot of value in today's episode. Also, if you're new to this podcast, be sure to follow us so you don't miss any of our future content. Let's now transition over to this week's interview with Sam Pall, helping you to

Sam Pallaro

simplify your social safari. Here is this week's expert guide.

Michael Stelzner

There's only four things you need to know to win with Facebook ads, and today we're going to explore all of them. My special guest is a growth strategist who helps direct consumer e commerce brands grow with paid ads. His agency is called the Moonlighters. His course is the Facebook Ads Blueprint. Sam Pallaro, welcome to the show. How you doing today?

Sam Pallaro

Thanks, Michael. I'm very happy to be here. Having A good day.

Michael Stelzner

Awesome. Well, let's start with a little bit of your journey. How'd you get into paid ads?

Sam Pallaro

I was dropshipping like many, many other people. I started a Shopify store for the very first time in 2014 and one thing led to the next. I joined VaynerMedia, so Gary Vaynerchuk's agency. And I was on an early e Comm team there. I was there for about two years. Learned so much there. That was like my full dive into everything. After those two years I went over to Barkbox and when I was at Bark that's where things really started to accelerate for myself and my career. And over the three years there they're around $150 million business and they became around a billion dol dollar business at peak publicly traded on New York Stock Exchange. And that was a big fast like 5 to 7 years of crash course on E Comm. Truly the quickest you could possibly learn. Facebook, Google and growth from different experiences at the same time. And I had really good mentors along the way from those jobs. That's kind of how it all started to flow.

Michael Stelzner

And tell us a little bit more about what you're doing now.

Sam Pallaro

So after three years at Bark New York Stock Exchange and everything gets a little red tapey. No more fun anymore. We were breaking things, we were having a for quite a period of time. And I started a agency on the side. It was a paid ads agency, Facebook ads and Google Ads primarily. And I was moonlighting. And after two years of moonlighting when I was still working a full time job, I realized that I should make this moonlighting thing a full time thing. And that's where the name comes from now. So the agency that I run is called the Moonlighters. We're a group of around 25 people. We work with around 100 brands, give or take. And we specifically work on direct to consumer e commerce brands that are in the to $10 million range. So that's been the focus for what are we looking at? 4, five years now. And it's been a tremendous journey. Learned a lot, got to move myself out of the day to day of ad accounts and into growth. Operating an entire business machine. Very, very different. And then we also do an info side where we educate in a community school.com Facebook right now we're the fastest growing Facebook ads. Community on school and that's way more accessible. Anyone could join where the Moonlighters is quite gatekept. You know we have a little bit of a wait list. We only work with larger brands. So that's kind of what we're up to right now. And it's. I'll tell you why. It's fun. I'm having a ball.

Michael Stelzner

Love it. So what do you see as some of the big misconceptions that are going on when it comes to digital ads? I know meta is kind of your platform, but I would imagine whatever we're about to talk about is just as applicable to probably any kind of online ad.

Sam Pallaro

100%. I think there's two things. First, people get really obsessed with efficiency metrics, which are very important for making sure you're not hemorrhaging the business, you're not losing money. But the ultimate goal of every business is to make as much money as possible any given day. Profit is the goal. And a lot of the times we get really, really caught into how can I get a super, super high return on ad spend or really low cpa? And the reality is, yes, those are good metrics to understand, like can I spend more money or can I pull back, or how healthy is the business? But those are not good metrics to understand what's into your pocket at the end of the month, the end of the day, et cetera. So I think more businesses should continue to focus on profit as their core metric contribution margin, if you will, and less on the efficiency metrics. What we see with the businesses we work with is generally if you could run in like a 10 to 20% margin in profit on the business, meaning, let's say you make $1,000, if you could take home 100 to 200 of that thousand dollars in profit, you are golden in terms of E Comm. And Instead of chasing a 10 return on ad spend, if you chase to 2.2, you might be able to scale a lot more, build an army of customers and actually have lifetime value for these customers that keep coming back over and over and over again. And then the one very speakable, unmeasurable is word of mouth, which compounds massively as you build that army of customers. I think that's probably the biggest misconception when it comes to advertising in general, and especially like digital like Facebook and Google. And then there's one more thing that I'll chime in here, which is a lot of people try to either take way too much control of their ad accounts or the exact opposite and give too much control to the algorithms. We find that there's a sweet spot. I'm sure we'll get into it at some point, but what we generally see is way too complicated. Dozens of campaigns, dozens of different strategies all running at the same time. None of it's actually working together. Or hey, let me just give my 10 pieces of creative to Facebook, cross my fingers and pray to Zuckerberg that it's all going to work out and there's obviously a strike that needs to go in between there.

Michael Stelzner

Love it. Okay, well, I love this a lot actually. So when people pay close attention to what we're about to talk about today, said another way, when digital ads are deployed properly, what's some of the upside? What's some of the benefits that maybe not everybody's thinking about?

Sam Pallaro

Yeah. So I think that when I share this, know that I'm coming from a position of like, I see it all the time. Right. We work with a lot of brands. I see businesses that grow. The upside of really, really dialing in your ads are that you can scale to an extreme that you would not be able to scale organically and you could put fuel on the fire at your will. Right. So a couple examples here. Like we are, we have five businesses that are at an elite level of, of total ad spend and total revenue. Right. So most of the businesses we work with are in the 1 to 10 million dollars range. These business now in the 50 plus million dollar range and this group of five in particular were all businesses that about a year ago, actually they all came in around the summer of last year. All five of these businesses were sub $30,000 per month spenders making less than a hundred thousand dollars per month in revenue.

Michael Stelzner

Overall or just from ads you mean?

Sam Pallaro

Overall.

Michael Stelzner

I see. Okay.

Sam Pallaro

Total shopify, they just met the threshold of being able to work with us, which is around a million dollar business annually.

Michael Stelzner

Got it. Okay.

Sam Pallaro

Four different categories, two in the same ca. And of these businesses, the reason I bring them up is because they took the shot on continuing to produce creative, continuing to invest in paid media, focusing on the lifetime value of customers. They went all in on the upside and now they are substantially large businesses. These are, to be clear, results are not typical. Like these are serious wins. But the upside of really nailing your digital ads is that you can scale with a dialogue. And as long as you keep your inputs flowing, you can continue to dial that scale.

Michael Stelzner

Love it. All right, well, let's unravel a little bit of your method. Where do we start? What's the first thing we need to be thinking about?

Sam Pallaro

Oh, boy. So back in 2018, when I was at VaynerMedia, I worked with this great group and we kind of came up with this baseline structure of how we'd run advertising. I was just looking through some photos to see if I could find the original whiteboard that we had when I was over there. And long story short, parts of that structure are even more applicable today. Facebook and Google have gone through an arc of complexity. They were super simple, then they were super complex, and now they're more simple than they were just a few years ago. So the system that we follow, we call it the M4 method. It's four stages that we take every business through. Some of these stages kind of overlap, if I'm honest about it, and they generally apply to every single kind of business. So whether you're watching this and you're, you're an E comm, you're a small business, you're a large business, you're a lead gen business, service based business. The same principles here, I applied them to my own business to grow. I mean that's the super big overview on it, but I'm happy to jump into something more, more specific.

Michael Stelzner

Yeah, let's begin at the beginning. I mean we're going to get into each of these four stages, but let's start with the, the first part of your process.

Sam Pallaro

So I think everything starts with a good foundation. We call this like foundation or structure. And ad account structure is literally the foundation of the home. So you could have beautiful creatives, you could have a good offer, you could have a good product. But if you're just throwing these inputs into Facebook ads or into Google Ads, you're often going to not get the desired result that you want. Sometimes you will. Don't get me wrong, a really good product, a really good offer, but you can make it happen. But if you want like sustainable scale in a system that actually is building upon itself, you're not going to get there. So when it comes to account structure, we basically just do a few things. We have at the top of our account, the core of our entire account is a prospecting campaign, budget optimization campaign that is basically one single prospecting campaign that hosts all of our, we call them packs, but they're ad sets. Each round of creative is a new package. It's going to sound a little advanced quickly, but it's not that complicated. Prospecting campaign, multiple packs. Second, we have a retention campaign. This is so critical. We need to make sure that when we increase our spend on Facebook ads or decrease, we know where that spend is going. We know, is it going to new customers, is it going to existing customers, is it going to people mid funnel? Where is it actually Driving Facebook will tell you, consolidate, consolidate, consolidate. The problem with that is as you increase your spend, especially if you try to increase substantially, you're likely to hit roadblocks that feel like when I scale my ROAS declines, if you break things out properly, you will know for sure. I'm spending more on new customers, I'm spending more on engage, I'm spending more on existing customers. So back to the structure, prospecting, cbo. Then we have a retention campaign that's all of our existing customers. And then we have two optional campaigns. The first optional campaign is a retargeting campaign. This is just people who are down the funnel on your website. Maybe they're engaging with your content, but they have not purchased, no money's been transacted. And then we have an optional scaling campaign. This is like your real, just one spot for your top three to five ads. That forces more spend against those ads. It does nothing special, it just forces spend against them. And what we find in this structure is we have a good balance of control and a good balance of letting the algorithm do its thing. So the algorithm can do its thing mostly in the prospecting campaign because it could spend freely across the number of ad sets and packs that you have. That's extremely valuable because we need the algorithm to spend its money where it's most likely to make money back. That's kind of the core of all of this second hand, the control we have, which I think is critical because many people will hear what I just said and they'll say, yeah, I'm just going to throw it all into one campaign and just, you know, I'll just pause the bad ads down. Problem is that's all you can do. The only thing you can do when you have one single campaign or you just group everything together, the only lever you have to pull is pausing ads. I really don't like this when you have multiple packs, multiple ad sets, and you have a system like what I've just laid out. Instead you could use value rules, you could use ad set budgets and minimums, minimums and maximums. So you could effectively float cash to new performers or to new ads to guarantee that they get tested at the same time that you're maxing out on certain ad sets that are potentially fatiguing. One of the biggest problems advertisers run into is they'll have an ad that they've been running for many, many months, right? It's a killer ad for themselves and that ad starts to decline. In a normal setup, all you can do because that ad's still hogging the budget. It's still getting so much of the spent. All you can do is pause that ad down and just pray that Facebook distributes your cash properly. If you have multiple packs, multiple ad sets in the structure I just outlined, you could actually set a maximum on that specific ad set and ad that will allow the budget to cap so it can only spend a certain amount. It's a much more easier system for them, the money to be redistributed. Overall, again, that balance of control and giving a little bit of freedom is kind of what we looked for in the structure, and that's the foundation that really drives. Again, these next three steps that we'll. We'll probably get into in a second here.

Michael Stelzner

Okay, so I'm going to try to reiterate what I heard you say. First of all, you got this prospecting campaign, budget optimization, and this is where you allow the algorithm to do its thing. And then you have ad sets or packs underneath them. Right. And you referred to retention campaigns, retargeting and scaling. Where do these live? And if there's an example, like with a hypothetical customer or whatever. So you can help me wrap my brain around this. I mean, I know retention is about obviously retaining people and trying to sell them more of the same product. Right. Retargeting is getting people that have visited your site but have not purchased. And scaling obviously is taking what works and putting a lot of cash behind it. But am I missing anything? Like, help me connect all the dots here a little bit?

Sam Pallaro

No, you basically outlined it pretty well. It is something that is much easier to see than it is to say.

Michael Stelzner

Yeah.

Sam Pallaro

And if it helps at all. I don't know if I'm breaking the rules here, Michael, but we have a. I have an outline for it. We can send it to everybody at

Michael Stelzner

the end, you can explain how it all works. Okay, so. So once this account structure is in place and properly set up, what's next?

Sam Pallaro

Creative. Creative is the bullet right now. It's the most important piece, I believe once you've established your account structure. Again, we could use a house as an analogy here. You can't build the house, you can't build the beautiful rooms inside the house without the foundation being set. Car example is even better. Right. It's like the creative is the body of the car. The foundation's the engine. Right. Or vice versa. You need to have both in place to sustain each other, essentially. Creative changed massively about a year ago now, but really most notably around six months ago. Give or take with the Andromeda updates that came around, just about everybody has only been able to say andromeda, Andromeda, Andromeda. And blame Andromeda for everything. Effectively, what Andromeda has done is it's condense down the ability for Facebook to serve the correct ad to the correct person at the correct time. Just like how easy way I think about is like when you scroll on TikTok or Instagram Reels, if I watch like one extra second of a carnivore diet video, all of a sudden my feed is just, I, I am a carnivore all of a sudden, like I, I can't get away from it.

Michael Stelzner

Right.

Sam Pallaro

And that's kind of how the ad algorithm has worked now. And what that means is that what you say in your ad directly results in who sees your ad. So we like to build what we call like a creative engine or a creative flywheel on our side. And it's effectively just making sure that we're constantly producing creative. Not to say you need a thousand ads, but to. To really showcase that if you did and were able to produce a thousand ads, you would naturally have a hit more often than if you only produce 10 ads. Right. Other thing to note here is when it comes to Andromeda, the way that I think about is really easy for everybody to understand. You need to have an avatar that you target. You need to talk to that avatar's problems, you need to explain that there is a solution, and then you need to showcase your product or offer as the unique solution to that avatar's problems. So what doesn't work these days is broad, broad, broad, creative period images, videos. It doesn't. It does not function as well as specific. I always use the example of like a construction worker. I think it's a really easy avatar for everybody to wrap their head around. Construction workers probably have some back pain disproportionate to the rest of the population, right? They're smashing things, they're bending over, they're lifting heavy things, whatever. So if you drill down, if a construction worker is one of your avatars because you sell a back brace, if instead of just saying back brace for back pain, you instead said construction workers that have back pain. We have a unique solution for you because not only does it wrap around your back, but it has these tighteners here and here, just like the pain points that you have to deal with when you wear your belt or when you wear the back. Whatever.

Michael Stelzner

Suspenders. Whatever the heck they call suspenders.

Sam Pallaro

Yes. Thank you. If you Drill in to the unique problem and position as the unique solution. You get outsized results in both Facebook and Google right now.

Michael Stelzner

Okay, so I just want to make sure I'm clear on this. Yeah. Your ads should. Especially if they're spoken video ads. Right. They should specifically call out like you, you said. Right. Like, hey, you're a construction worker and you're dealing with back pain. Right. Something along those lines. Or somehow for construction workers who are dealing with chronic pain in your back. I mean, is this important that those words be in the ads? Talk to me about that.

Sam Pallaro

I think yes and no. Like, yes, that is one angle. We're creating a lot of creative. Right. So that is one of the creatives you should definitely try. I mean, for my own creative, I say if you run Facebook ads, then X. Yeah, but also there's other ways to get to that same thing. By not necessarily saying the name or saying the exact.

Michael Stelzner

Showing the construction worker saying, if you

Sam Pallaro

have back pain, people who are similar to that. Right. What the construction worker isn't going to relate to is the guy who's running on the track in a tracksuit.

Michael Stelzner

Yeah.

Sam Pallaro

That does not work together. That targets people that are running track and field. So yes, to an extent, call it out. But also just making sure that you call the problem and the solution up. Most good ads are problem solution ads these days.

Michael Stelzner

Hey, before we get back to the show, I want to talk to you about something I've been thinking a lot about lately. You already use AI. And if you're like me, every single day you're using it. And you're not someone who needs to be convinced that it matters. But here's what I've learned from working with hundreds of marketers inside our AI business society over the last two years. The problem is almost never AI. It's trying to do it all on your own. You're testing tools that you're likely not using again. You're rewriting prompts because they don't sound right. You're probably watching tutorials that give you lots of ideas, but you have no idea what to do with it. And you're working harder with AI, not smarter. And that's exactly why I built the AI Business Society. Every live training is led by an expert practitioner who uses AI in their marketing all the time. And I'm personally there on every single one of these training sessions to make sure that nothing gets too crazy or abstract and you leave with something you can implement that very day. Plus, you're surrounded by a community of marketers who are just like you and they're all there to support each other and you get to be part of this awesome community. The investment is $497 for the full year, and if within the first 30 days you decide it's not for you and you join, then just ask for a refund. We're not going to ask any questions, but at least you gave it a shot. Head over to social media examiner.com AI that's socialmediaexaminer.com AI and now let's get back to the show, the Andromeda update. I mean, I've interviewed quite a few people on the show about that. They want a lot more creative than most people are used to making. Any tips on, like, how people can effectively do this without just giving it all over to meta AI or whatever? I don't even know if meta. Yeah. What are your thoughts on this?

Sam Pallaro

So the Andromeda algorithm doesn't need more creative. Right. All it needs is creatives that are good and it's better at matching those creatives. The reason why everybody says more, more, more, more, more is because inevitably your hit rate on creative is not that high. Most people's hit rates are not that good. Anyone claiming they have an incredible hit rate. Good, good on you. Just keep making the ads that hit. For most of us, doing things more eliminates the possibility of not getting that hit. Not getting that good ad. And when I say hit, I generally mean an ad that performs above your target roas and has the capability to take a 10% or more of your total ad spend. That's a hit by my book. So we want to manufacture hits. Some of the easy ways to manufacture hits are first book I love, which is over there, is called steal like an artist. Got it on my first day at Vaynermedia. It very simply states that everything is stolen in some way. And it is your job as an artist, which we all are, to put your spin on it unique to your brand or whatever. So look at what your competitors are running and take those ads as inspiration. The Facebook ads library or tools like magic brief or whatever you use, they all do generally the same thing and they allow you to see how long ads have been running. Look for the ads that have been running the longest and have high impression counts. If your tool shares that, steal those ads. Make more like that.

Michael Stelzner

Okay, what are you seeing as working these days? I mean, any general. Yeah, let's talk about that a little bit.

Sam Pallaro

So videos for top of funnel tend to work the best.

Michael Stelzner

Okay.

Sam Pallaro

And then everything mixed middle Bottom funnel, the more that you could think of your top of funnel ad as the way to grab the most attention but still be very relevant to the problem and solution. And then having everything middle and bottom funnel just be like solution, solution, solution, solution, solution. That is killer. That could, that solution, solution, solution could be done with images and videos but that tends to work really well. I think just everybody if about their product or their service as problem and solution. Even brands like people always refute to me and they say like, oh, if you're a fashion brand, like I'm not solving a problem. Of course you are. You're solving a confidence problem. You're solving a problem of people looking good, feeling good. You could position your product as the solution to that. And the more you do that in your ads, generally speaking, the better results you get.

Michael Stelzner

Now you and I both know that there is a whole world under the category of kinds of ads, right? There's faceless ads with just, you know, stuff happening on the screen and audio. There's AI stuff, There's professional actors that you can hire. There's the influencer kind of, with the selfie kind of thing. I mean like any sense of kind of. Generally speaking, you're going to say all of the above

Sam Pallaro

or caveat like they all could definitely work. The thing that we're seeing work the best right now is semi professional user generated content.

Michael Stelzner

Okay?

Sam Pallaro

So really good scripts that are sent to UGC influencers, like people who make content for a living. We're looking at like micro influencers. They could have somewhere around like a thousand to twenty thousand followers on Instagram, for example, but they know how to produce reels. You'll get outsized returns when you do work with bigger influencers because they're better at making content. But for a couple hundred bucks, 500 bucks, thousand bucks, you could work with a moderate influencer and get a package from them. Your job as the brand, at least how I see it, is to tell them your key points and score scripts like exactly key phrases they should use and let them color the rest. They're a content creator. You're paying them not to say your word by word, but to fill in the gaps of what your product needs to be shared or what needs to be shared about your product and then their unique experience with your product or service as well. That I think is the hot, the hot thing right now. It's working tremendously well.

Michael Stelzner

Okay, we're talking about your M4 method and the first M, which M stands for, I'm assuming your brand right which is the moonlighters. The first M is the account structure, and if I've got that right, and the second M is the creative. Anything else on creative before we move on to the third M?

Sam Pallaro

I think the one thing I just want to put in here is that iterations are not dead. A lot of people have this misconception, I believe right now that iterations, ad iterations are not doable.

Michael Stelzner

Explain what you mean by that.

Sam Pallaro

Just so everybody understands, people think creative diversity is needed, meaning every ad needs to look completely, completely different. We've been kind of told this in the Andromeda era by Facebook that, hey, you need to have different creative. But really what we have seen. I don't. I won't argue with Facebook. What we have seen is that creating similar iterations of ads, meaning very similar videos or very similar images of high performing ads, that it extends the life of the ad unit. So if you made like one image, that was a shot of me going like this. Right. Thumbs up and put a headline on that image. If that was my best ad, the first thing I should do is make a second one exactly like that with a slight different change to it.

Michael Stelzner

Different setting, different change of clothes, that kind of stuff.

Sam Pallaro

Yeah, I think like different headlines, different change of clothes, different product. Potentially on me, if I was selling this hat that's on my head right now, changing the hat would be a completely different unit that I'm selling. But we know that something about that image would works. Or video, right? We know maybe a hook works really well. Something we do all the time is we repeat the exact same hook in a different ad and change the body. Or we keep the body and change the hook.

Michael Stelzner

Or different influencer, same script.

Sam Pallaro

Or different influencers saying something extremely similar. Yep, those are all iterations that I think people forget how critical they are. They work really well.

Michael Stelzner

Love it. Okay, what's the next part of the process?

Sam Pallaro

M3, we call this deep dives. So I'll tell a quick story here, if you don't mind. During my days at Barkbox, every single day, I would walk into this office. Beautiful office in the city, tons of dogs running around. And I'd walk into the office on Monday mornings. I'd say to my team, wow, guys, great weekend again. Wow, guys, great weekend. Great weekend. Great weekend. About eight weeks went by somewhere around that. And I think the coffee just hit a little bit better that day.

Michael Stelzner

Explain what you mean by great weekend, because everybody listening doesn't know what you mean by that.

Sam Pallaro

I'm sorry. Performance was great. Every weekend yeah. We would walk in, we were above our target. We made a ton of money on the weekends. Long story short.

Michael Stelzner

Yeah.

Sam Pallaro

And I'd come in on, you know, we were very accountable to our specific goals. And I just. It just kept saying great weekend in the sense of we were killing it. Yeah. From a business perspective, not from a. I had a great weekend perspective. After a few weeks of this and really, like. Like two months of this, sadly, I was like, oh, my gosh, it's a trend. And I wish I had identified. This is probably my biggest win and loss at the same time for how long it took me to realize this. What we realized that consumer behavior changed for that brand on the weekends. They. We were able to spend way more money and drive way more revenue on the weekends compared to the weekdays for that business. And as some things stick with you, this stuck with me a lot. And as we started to work with more and more brands at the Moonlighters, we realized that this was very common for most businesses. Most businesses have a shape. They have something about them that is not just unique to their individual business, but often shared with their category. So sometimes what we see is like, pet tends to perform on the weekends because people are with their pets on the weekends. We tend to see that anything related to, like, gifting a significant other tends to work really good on Mondays and Tuesdays in preparation for the weekend.

Michael Stelzner

Oh, okay.

Sam Pallaro

There's a lot of these weird trends that we see, and to be honest, it doesn't matter. I will never be like, make an assumption based on that. We're always just looking at the historical data. And what we tend to see is that certain days or groupings of days of the week perform better than others. But we all spend the same amount of money on our ads every single day. If you ask 9 out of 10 advertisers how much they're spending, they'll tell you either the full month amount or they'll tell you the amount they're spending per day. They'll say, we spent about a thousand dollars a day. We spent around $10,000 a day. Very rarely will someone say we spend around a thousand. Monday through Friday and Saturday, we spend around 2. Right. But if you ask old school marketers like you, Michael, you've been in this game, right. You get. I can guarantee you day parted stuff back in the day, because I did.

Michael Stelzner

Oh, yeah.

Sam Pallaro

I day parted all the time. Yeah. And then it just disappeared.

Michael Stelzner

We even time parted too, because we realized that certain times of the day were better.

Sam Pallaro

Yeah, exactly. And that's I won't, I won't get to that. But we do push some accounts halfway through the day that need an afternoon boost.

Michael Stelzner

Right.

Sam Pallaro

But what we've realized is that just spending more money on better performing days of the week can lead to massive efficiencies in the overall business. And there's a lot of volume available instead of continuing to do the same dollar amount every single day.

Michael Stelzner

Well, and real quick, before we go too much deeper, yeah, folks, these things that Sam is talking about are probably human behavior things. And this is like not necessarily true for all brands. Right. Like Saturday and Sunday might work for pets, but it's probably not going to work for other kind of categories. And I would imagine where you're going with this, Sam, is this is highly dependent upon each particular company and their products, right?

Sam Pallaro

Certainly, certainly. We try to break this down. We call it the fastest horse. You would never go to a horse race and bet on every single horse. Right, right. And this philosophy, it doesn't necessarily mean that everyone's going to go in here and look at their day of week analysis and immediately find a win. Some people will. But if you just take this mindset and apply it to every breakdown, like your placement analysis. So being able to look at like, am I running better on feeds versus reels versus stories? Right. Same on Google. Am I Running better on YouTube versus discovery versus versus search? Where's my PMAX spend going? Things like that. See the same thing on age, see the same thing on gender. Right. We just want to make sure that most of the spend is going to the highest performing places. And then we can place in either value rules or straight up exclusions if things are not working as well. We tend to attribute around 20% improvements in efficiencies, meaning 20% improvement in ROAS or 20% reduction, reduction in cost per acquisition. From this section of our process, I want to be clear. This could work without number two, which is creative. This does not function without number one, which is the foundation. If you try to go into your ad accounts and you try to rip a hundred things apart and try to make a hundred different manipulations and your ad accounts already really clunky or too simple, you could really take away from your potential to scale the business. And that, that, that is definitely a concern. So I want to put a red flag in that.

Michael Stelzner

Okay, well, let's dive into this a little bit because I would imagine this brings up a whole bunch of things. First of all, it's important to make sure that you know your winners are winning because it Might look like your winners are losing depending on when you look at your data. Right?

Sam Pallaro

Yeah.

Michael Stelzner

So like how, how do we go about doing this? Talk to me a little bit about this.

Sam Pallaro

How we look on the broad strokes things is we always just want to look at a rough period of like 90 to 180 days depending on how big the business is. Right. Don't you don't want to look back on like just a 30 day period. This is not analysis you do in like 10 seconds. You pull this by day. You break down either male, female or whatever country you're breaking down or whatever day of week you're breaking down. All these breakdowns are done over long periods of time. So you're getting rid of some of the noise. The second thing that we tend to do in this is we tend to get rid of any outliers possible. I don't care what happened on Black Friday. I don't care what happened in Memorial Day weekend. What I care about is what's the evergreen period? What are the, the 260 or so days of the year that are non sale periods for the business?

Michael Stelzner

Okay.

Sam Pallaro

That's going to help the most.

Michael Stelzner

Right.

Sam Pallaro

Because look, when it's Black Friday, I don't care what day of week I'm spending my money. Run it, you know, so that's kind of where it starts. And that gives us the broad strokes when we get to a more tactical level as, as I think you were, you were kind of alluding to here. Yeah, we, we want to then use again the same mindset for even breaking down things on the ad level. You know, when we look at an ad and we say hey, this ad's not doing well or hey, this ad has a really low CPM out of nowhere and it's not converting what's going on. Look at the breakdowns. Quick story. We had a creative recently with a brand of ours, they're a bikini brand to keep it simple and 99% of their advertising goes to females. And then there was one ad that got into some guys and some guys had some not so appropriate comments to say about this ad. What happened with that is the algorithm picked that up as a positive signal and they started to serve more to men. For this one ad we noticed, my gosh, the engagement rate's incredible. CPMs are so low, but no one's purchasing. We look at the breakdowns, okay. 900 of the thousand dollars is spent on men. Get rid of men. Accident. Right. We were okay with that 1% in the past because there's gifting, you know, there's, there's people buying for each other. That's totally normal, totally fine. Not when you have a situation like this because that could overspend massively on the wrong thing. And those, that's why those breakdowns, those deep dives as I call them, I think are so critical for everybody to understand.

Michael Stelzner

Okay, so let's focus in on this day of week thing because I think that there's some big upside there. Let's say we've got 90 days of data. What exactly are we looking for? What kind of a variance from what you will say the average, you know what I mean? Are we looking for in order to know that, that there's a signal there? How do we separate the signal from the noise? I guess is what I'm asking.

Sam Pallaro

I generally, rule of thumb look for around 20 to 30% of a difference in whatever your core efficiency metric is. Or if you don't know exactly what core efficiency metric you want to use, just use conversion rate for this. Okay, the second rule of thumb, please. These are not rule of laws, these are rules of thumb. The second thing I look at is, or rule of thumb that I follow is I want my conversion rate to generally be the same every single day of the week. You're trying to run your business into a conversion rate or a roas or a CPA that is sustainable for the business. Right? So if you need a 2 return on ad spend to be profitable, then you should make sure you try to achieve that on all days of the week, not just Friday, Saturday, Sunday. And when you're at a three on Saturday and Sunday, that's actually a miss. You're leaving a lot of money on the table. So the way that we like to approach it is we like to spend aggressively into old higher performing days. Like if Saturdays and Sundays are way higher in return on ad spend, that usually means that we could spend more significantly more work that row as number maybe down a little bit, which I know sounds crazy to many people, but we can generate way more profit because we could acquire so many more customers on Saturdays and Sundays as opposed to the just maintaining the business on Monday through Friday. Keep in mind the days that I'm mentioning here are just made up days. Every business will have a different shape.

Michael Stelzner

Okay, I got a couple thoughts on this.

Sam Pallaro

Yeah.

Michael Stelzner

What if we didn't want to spend more money, but we wanted to stop spending money on the low performing days and reallocate that budget to the high performing days just so we can get a higher return on the same ad spend. Is that even an option?

Sam Pallaro

I mean, of course it's an option. There's two caveats with that. Two. Two issues with that. First is the simple issue of you might not have the funnel sustained properly. We'll just keep using the weekends. Or better example, if you just eliminated Monday through Thursday, then your Friday, Saturday, Sunday just might not convert as well anymore because there was possibly impressions that were just taking time to convert.

Michael Stelzner

What about just lowering those budgets instead of eliminating them?

Sam Pallaro

We do that often.

Michael Stelzner

Yeah.

Sam Pallaro

The way that I like to think about it is just like every ad or every ad account or every day, you just want each unit to be profitable, right? So you would not run Google Ads at a. Let's say Your business needs a 2 to be profitable, 2 row ads to be profitable and your goal is 2.2. You would not run Google Ads at a 0.5 return on ad spend and run Meta at a 4 return on ad spend. No, you would reduce the spend on Google until it gets to the two or try to find efficiencies in the platform till it gets to the two that you need. And you'd probably keep spending more and more and more on meta to get as much profit out of it. Even if the ROAS dropped from a 4 to a 3 to a 2.2. As long as it's above your goal. The way that I think about this simply is that you want to spend as much into your goal as possible. Because then again you're acquiring as many customers as possible that are going to come back over and over and over again assuming you have a good product. If your business is demand constraint, right? Or rather supply constraint. Excuse me, supply constraint, and you literally can't fulfill all those orders, then that changes things up. Maybe you have to raise your prices, maybe do some other stuff, but when it comes to ads, then yes, you are not going to keep spending more and more. You're just going to try to get as efficient as possible, which is a very different game. In that game we have someone in our school community. It's fantastic guy joins every call and he is a demand supply constrained business. He doesn't have enough. He sells dog treats, he can't produce as many of them as possible. So his goal is like I want the highest ridiculous return on ad spend possible, but everybody else on the call is like, we just want to drive as much profit as possible, meaning as many customers as possible coming back again and again and again.

Michael Stelzner

Love it. Okay, let's move on to your last stage. What's the last part of your process.

Sam Pallaro

Scale.

Michael Stelzner

And we've talked about this a little bit, but I'm assuming we've set some of this in motion. But let's talk some more about this.

Sam Pallaro

A hundred percent we have. And that's kind of why I said at the beginning, like some of these intertwine. Yeah. Scale is the most simple and most complicated at the same time because it relies on the condition that things are going well. You don't scale into a poor return on ad spend. You don't scale into a dysfunctional business. You scale into the good times and you strike while the iron's really hot. We think of scaling in three ways. First, there is vertical scaling. This is really simple. Everybody knows this. Even if you don't know the terminology for it. This is literally when you just increase your spend spend. You take your existing campaign and you increase spend on it because it's working.

Michael Stelzner

How much can you increase the spend in any given season without it creating any problems?

Sam Pallaro

So I am not a big fan of the learning phase. I think it's a little bit of baloney, but that's maybe another conversation. I like to think of things in triggers of anywhere from 10 to 30% most of the time.

Michael Stelzner

Okay.

Sam Pallaro

30%'s the upper threshold and 10% would be my bottom threshold.

Michael Stelzner

Over what period of time?

Sam Pallaro

Time like that would be a single day change.

Michael Stelzner

Okay.

Sam Pallaro

And I would generally not make another adjustment for probably two to three days.

Michael Stelzner

Okay.

Sam Pallaro

Unless you're a business that has a very short time to purchase.

Michael Stelzner

Like you've got an event coming up or something. Right.

Sam Pallaro

Like you got an event to come up. Or if you're like selling something. Like if you're selling phone cases. Right. If you sell phone cases, they're probably like 25 average order value. That's probably one day. Impulse purchases. You don't need a seven day window to consider if you're doing well.

Michael Stelzner

Right. Okay.

Sam Pallaro

Second piece is horizontal scaling. Most people know this is like duplicating campaigns or building more systems throughout. We don't like to have very cluttered ad accounts these days. But in 90% of cases, the horizontal scaling that we use is from sale events or anything connected to a promotion. This would be a really easy time to just create a new campaign, give it its own budget. It's maybe only going to run for three days, seven days, ten days, and then when it's over, it's over. This keeps nice separation. It doesn't like mess too much algorithmically with things.

Michael Stelzner

Is that worth it for an Experiment too. I mean, is that worth it for experimental creative as well, or do you not recommend that?

Sam Pallaro

I don't do that. I like to have most of my almost all experimental creative inside of the prospecting cbo. Because if it works, Facebook's quickly going to distribute budget to that experiment. Okay, so we could actually just test better from letting the algorithm breathe a little bit and setting maybe a minimum budget on that instead of forcing so much cash to it. Last part of this is just called. We call it the twin engine for scaling. This is when you take vertical and you take horizontal, you put them together. So what that really looks like is you are increasing the spend at the same time that you are pulling apart your creatives inside of that prospecting CBO campaign. When I say pulling apart, it's like duplicating, iterating, building more of what's working. Just like we talked about iterations before, one of the things that we're looking to do all the time is whatever ad is working in the account, that's a hit, 10% of the total account spend and above our target, create iterations of the ad again and again and again. We then inject those into the account. And at the same time, as long as we're over target, we're increasing vertically with spend. When we do that, what tends to happen, if done properly, is the account's efficiency, meaning the return on ad spend stays stable so we don't fatigue the account and efficiency stays stable, so roas stays stable and spend goes up, meaning we acquire more customers at a similar cost than we were prior while spending more, which is incredible for the health of the business.

Michael Stelzner

When we were prepping, you mentioned something called a king goal. I don't know if there's. If that's got a relevancy. If you want to bring that up, go forward.

Sam Pallaro

It's my favorite. It's my favorite. Back to Barkbox. It always comes back to barkbox. We had this saying, it was called cac. So CAC cost per acquisition is king. CAC is king. And this stuck with me so much. I think every business should have one goal that is the most important goal for themselves. This means that if you think you need CPCS to be something, CPMs to be something, add to carts to be something, whatever. The only thing you need to come back to is this one king goal. It's usually an efficiency metric. Let's say again, it's. It's ROAS of 2. If your ROAS is 2, what this should mean for your business. If this Is your king efficiency metric or king goal? Is that even if all those other things I just named are so off, as long as we're over that roas target or right at that roas target, thumbs up. We're looking good. Like, shut out the noise. Focus on the one thing that really matters. Those are all proxy metrics to the one thing.

Michael Stelzner

Sam Palero, thank you first of all for sharing your insights with us. If people want to connect with you on the socials, where do you want to send them? And if they're interested in checking out your group, where should they go?

Sam Pallaro

Thank you. First off, I'm basically everywhere at my full name, Sam Palero. YouTube is the place where I give the most free content away. So if you just want to, like dive in, learn more about everything I just talked about, it's basically 80 to 90% free available. Otherwise, if you want to join over our community where you can learn from me, I have live Q&As every week, 45 training modules, I think, and I ask and answer all questions every single day. That's skooled.com Facebook or you can just DM me on Instagram and I'll probably get back to you. That's it.

Michael Stelzner

Well, and you also mentioned that you were going to provide some visual Is that something we're going to put in the show notes or is that something you want them to reach out to you to get?

Sam Pallaro

I'm happy to throw in the show notes. We don't gatekeep anything.

Michael Stelzner

Okay, cool. Sam, thank you so much for coming, coming on and sharing your insights with us.

Sam Pallaro

Thanks, Michael. I appreciate your time.

Michael Stelzner

Hey, if you missed anything, we took all the notes for you over@social mediaexaminer.com 7:2:3 if you're new to the show, be sure to follow us. If you've been a listener for a while, give us a review on whatever platform you're listening on. And do check out my other show, the AI Explored Podcast. This brings us to the end of the Social Media Marketing Podcast. I'm your host, Michael Stelzner. I'll be back with you next week. I hope you make the best out of your day and may your marketing keep evolving.

Sam Pallaro

The Social Media Marketing Podcast is a

Michael Stelzner

production of Social Media Examiner. Before you go. If you're tired of figuring out AI all on your own and testing tools that don't seem to work the way you want them to work and constantly rewriting scripts and prompts because they don't sound like you, the AI Business society was built for you Every week, we cut through all the noise. Every training is led by expert practitioners, and you're surrounded by marketers who are just like you. And right now, you can join for $497, which is our special sale price. And your rate is locked in for life. And you got 30 days to ask for a refund if it's not for you. So what have you got to lose? Check it out@socialmediaexaminer.com AI and I'll catch you on the next episode.