The (not so secret) way DTC’s are optimizing their growth campaigns on Facebook

I’m sure your news feeds are full of articles on how DTC brands need to diversify their media strategies. To be honest, it’s true. But do you wanna know what else is true? Old is gold—which is why ad networks such as Facebook remain a darling for DTC growth and marketing teams.

While many of the largest DTC brands choose to lean towards Facebook for business growth, it’s not for nothing. In most cases, it’s because they have a few optimization tricks up their sleeve.

How DTC’s use Facebook to facilitate business growth

It goes without saying that DTC’s are heavily active on Facebook as part of a greater effort to consistently build up on brand awareness by establishing a strong presence. 

When it comes down to growth strategy, there are additional goals that are factored by DTC marketing teams when using Facebook, which I’m sure your team does as well:

• Increase online sales: Business goals that fall under this vertical include selling more merchandise on your website and directly through Facebook apps, by reaching people where they’re already discovering the things they love. Customer relationships are built with Facebook tools.
• Re-Engage: Remarketing to existing customers, as well as people who have visited your website, app, store or Facebook Page. All in an effort to help increase engagement and find new customers, in addition to inspiring people to take action or make a purchase.
  

Offhand, it all seems elementary, doesn’t it? I mean, why aren’t all brands raking in big numbers after filling in the necessary fields while setting up their campaigns?

You guessed it: strategy. And there are quite a few technicalities that need to be factored as well, especially for DTC brands. 

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How top DTC’s optimized their FB campaigns

As I mentioned earlier, there are lots of variables to consider for brands when it comes to the Facebook growth campaign experience. All campaigns are not created equal. The business size matters. The industry matters. 

Here’s how some renowned DTC’s strategized to achieve business goals on FB:

Rothy’s: Attracted more shoe shoppers with Facebook video ads

This major US-based shoe company wanted a more efficient Facebook ad account setup that would help to increase sales and grow its business. They opted to automate ad placements, to automatically push ads depending on which placement is likely to drive the best results at the lowest cost at any given time. The ads themselves included videos, and ads in Stories.

In turn, they eliminated segmentations, selected a broader audience, followed mobile-first best practices and allowed Facebook to automatically select the placements for each ad. The results were quite favorable, including 37% lift in brand awareness, and ​​44% lift in ad recall.

Free People: Increased online sales with Facebook dynamic ads for broad audiences

This women’s apparel company wanted to run a more cost-efficient digital ad campaign to attract new shoppers and increase sales, because they were eager to find an even more efficient way to scale up its marketing efforts by increasing its investment. They tested a new campaign setup: dynamic ads for broad audiences. 

They designed a test campaign to measure the effectiveness of Facebook dynamic ads for broad audiences, in addition to the carousel feature, and photo ads. The results included an increase in their weekly average revenue by 84% compared to the same period the previous month. They also saw a 92% increase in weekly average return on ad spend, and 41% increase in weekly average conversion rate.

Joom: Won back previous customers with a new Facebook ad strategy

This ​​European online marketplace wanted to drive an incremental increase in sales conversions by reaching out to previous customers across all the countries it operates in. The new ad text referred to the number of months that had passed since these customers had last visited Joom. Then, it invited them to return to the platform and enjoy discounts for the products in their favorite categories.

To measure the effectiveness of this loyalty-focused campaign, Joom conducted a conversion lift test. The results included 2.3X incremental lift in sales conversions—not bad!

LTV-optimized predictive UA for even greater optimization

Then there are DTC’s that are opting to add an advanced tool into their arsenal to exponentially amplify their growth efforts by tapping into their datasets: Predictive UA. 

Predictive UA is a beast in its own right for brands that have the infrastructure set in place to collect, analyze and activate their data. It plays a major role in easing the burden on growth teams that are looking to optimize ad campaigns to maximize LTV. 

This was seen in the case of the powerhouse that is BoxyCharm (owned by Ipsy).

BoxyCharm: Improved ROAS by 30% with Predictive User Acquisition

BoxyCharm wanted to conduct an LTV-based campaign, instead of only focusing on CPA. It especially made sense for them, considering that their highest 30% of LTV users generate 70% of the company revenues. So this is where we stepped in. 

The BoxyCharm team optimized their user acquisition campaigns based on Voyantis’ prediction model. The prediction model itself was enriched by BoxyCharm’s zero-party data, as well as their historical retention data. 

The results from their internal reporting system, which you can read more about in Facebook’s official case study, were amazing across the board:

• CPA for new users was similar between the test and control cells
• Retention (actual) of 4 months: 23%+ higher for the “high LTV” optimization cell
• Retention (predicted) of 6 months: 35%+ higher for the “high LTV” optimization cell
• Retention (predicted) of 12 months: 81%+ higher for the “high LTV” optimization cell
• ROAS (12 months view): 30%+ higher for the “high LTV” optimization cell
  

Such numbers are only made possible with LTV-based predictive UA, because let’s face it, if you take on growth marketing without optimizing on data, you’re betting on luck.

For DTC’s there are many benefits in predictive optimization, as it can help win back churned customers, encourage upsells before finalizing purchases, and build on the interest of your most valued customers.

Top DTC’s know the importance of staying above the fierce competition across all the ad networks. There are plenty of smart growth teams out there, intelligently capitalizing on all the bells and whistles that ad networks have to offer. The utilization of predictive UA is essentially like putting down the ace of spades. You know the game and its winnings are yours.

There are multiple ways for D2C brands to achieve ROI-positive growth, which is crucial for long term success. Sure, there are plenty of variables to consider, and countless ways that campaigns can pan out. However, there is some common ground in the initial stages to efficiently achieve ROI-positive growth. Here are helpful pointers to help you get started.

• Define your business goals - What is the main KPI your team is looking to focus on? Are you looking to increase ROI, or increase scalability? Perhaps it would be wiser to focus on retention. If you have a strong community, increased engagement may be your best bet.
• Find the best tools and tech - The best tools and tech are the ones that directly support your goals while providing marketing value for growth teams. You should also ensure that it integrates with the rest of your martech stack.
• Define the goal - What are the specific improvements you would like to see? In many cases, you would see that optimization technologies that help brands target high LTV users will help your team reach those goals sooner.
• Test and evaluate the solution - Check, check, and recheck. The best results often aren’t instantaneous. As we stated in a previous post, ad networks such as Facebook have a learning period for each campaign, so bear that in mind as you keep a lookout for steadily increasing ROI.
  

It’s safe to say that for DTC’s, Facebook ad campaigns these days are a far cry from the walk in the park that they used to be. The reason largely has to do with changes in regulations with ad networks, and partially also ties into changes in customer tastes and preferences in the post-pandemic world. This is exactly why DTC brands must include LTV-based predictive UA into their arsenal and growth strategy, to ensure optimal results in the long term.