Lift testing: Why, when, and how it will transform your business like it did for Custom Ink
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Custom Ink ran a lift test with Social Fulcrum to determine the real impact and incremental return on ad spend (ROAS) from its Facebook advertising campaigns. The test showed that Custom Ink's real ads generated $620K in incremental revenue over the control ads, resulting in a 15x incremental ROAS. This data provided Custom Ink the confidence to ask its board for funding to expand its Facebook advertising, which led to an 850% growth in Facebook revenue over the next two years.
Lift testing: Why, when, and how it will transform your business like it did for Custom Ink
- 1. SESSION: Lift testing: Why, when and how it will transform your business like it did for Custom Ink Chris Berejik, SVP, Marketing Custom Ink July 23, 2019
- 3. 2 The leader in custom apparel and products ● Founded in 1999 - as a website to make it easier to create & design custom t-shirts online ● Headquartered in Fairfax, VA, with offices in Dallas, Reno, Charlottesville, and LA ● Approximately $400M in annual revenue and over 1,600 employees ● Beyond t-shirts - Now offer business, performance, activewear apparel and promotional products ● Cont. growth through fundraising apparel platform, influencer- led apparel platform (Represent), stores, innovative design tools, and a focus on customer service
- 4. 3 When launching Facebook advertising, Custom Ink was looking first for profitability and then for scale Custom Ink Goal #1: Find self-funding paid marketing channels Facebook Goal: Prove that Facebook-only-attributed ROAS was greater than 3x Custom Ink Goal #2: Maximize scale of self-funded paid channels to inflection point of diminishing returns Facebook Goal: Ramp spend consistently while maintaining above a 2x marginal ROAS Profitability Scale
- 5. 4 The problem: Facebook was self-reporting attractive ROAS, but was not discounting for the portion of customers who would have made purchases anyway Campaign Audience Facebook Self-Reported ROAS Background Purchase Rate of Facebook Users Facebook Incremental ROAS Facebook Retargeting Site visitors who did not buy 30x ? ? Facebook Reactivation Past customers 45x ? ? So what was the real impact of Custom Ink Facebook ads?
- 6. 5 The solution: Custom Ink worked with Social Fulcrum to run a lift test and determine the real impact of its ads Some customers saw real Custom Ink ads Some users saw ads in a control group This tracks the background purchase behavior of Facebook users
- 7. 6 The results: The test showed that Facebook had a very attractive incremental ROAS in both retargeting and reactivation campaigns ● Real ads generated $880K in revenue ● Control ads generated $260K in revenue So, real ads generated $620K in incremental revenue, or 15x incremental ROAS
- 8. 7 This data helped us ask the board for the capital we needed to fund the expansion of Facebook Attribute Before Lift Test After Lift Test Facebook self-reported results ✓ ✓ Incrementality of other paid channels ✓ ✓ Understanding of background purchase behavior of Facebook users ✓ Incrementality of Facebook results ✓ Understanding of real impact of Custom Ink Facebook ads ✓ Confidence ✓
- 9. 8 In result, we grew Facebook revenue by 850% in 2 years
- 10. ● Lift testing helped Custom Ink understand the incremental impact of advertising on Facebook ● Custom Ink was able to scale spend on Facebook with the confidence that the channel was generating incremental revenue ● As a result of this process, we have grown revenue from Facebook by 850% in the past 2 years 9 What now?