What Does It Actually Take to Win BFCM? (Live from Q4 Summit, with Cody Plofker)

0:00Welcome back to Limited Supply, the podcast where we get deep into the tactical and strategic side of e-commerce, digital marketing, and building consumer brands. I'm your host, Nick Sharma. I've spent the last nine years building, scaling, and investing in brands, and through this show and my weekly newsletter at nip.co slash email. I'm here to share everything I've learned. The wins, the losses, the experiments, the tactics, and the insights. Also you can unlock your next $100,000 in revenue. This episode is a good one, but before we dive in, let me tell you about our chosen sponsor for this week's episode. If you're using AI to plan your ad spend, triple whales, Moby can make the budget changes for you in your connected ad accounts with your approval. Brands like Kitch use triple whale. Book a demo at triple whale.com slash limited supply. That's TRIPLEWHALE.COM slash limited supply. Welcome back to the first episode of the new limited supply season. We're on season 18 now, which is crazy to say it's been 17 full seasons already.

1:03We're starting season 18. We're starting it with a bang. One of my best friends in this industry, his name is Cody Ploughger. You know the name. You've heard it before. He's been on the pod a couple times. But he's one person that I probably talked to on a daily basis and just really enjoy nerding out with. Catching up, talking about what he's up to, sharing what I'm up to, and just really trading alpha. So, you know, I've talked about the Q4 summit multiple times on this podcast. And some of actually a lot of you guys have come to it, which is awesome. It's always fun meeting you guys in person. But I got Cody to come and share basically everything he's thinking about with Q4. So, you know, he's just started Winks, which is a new sleep supplement brand. He was just the CEO of Jones Road Beauty, where, you know, he led it from basically nothing to multi hundred million in revenue per year. And so I basically extracted everything on both sides. What is he doing as a new brand? What is he thinking about? How is he structuring creative and email and all these other things? But then also with a whole team at Jones Road Beauty and, you know, with much larger scale.

2:04Also, what are you doing for Q4? What didn't work last year? What did work? And what are you doing this year that's going to be different? So take a listen to this episode. It's a really fun one. And if you've got any questions, feel free to hit myself or Cody on Twitter. We're both pretty responsive and love just chatting with you. Enjoy the episode and yeah, I can't wait to hear what you think. Welcome back to Limited Supply. Welcome to the Q4 Summit, guys. I'm excited to bring Cody here. Cody is one of my longtime good friends in the industry. We've traded notes over the years and excited to have you here. So thanks for being here, Cody. Always happy to. So before we get started, Cody, can you give just a quick background on yourself? Obviously, everybody knows about Jones Road. The success you've had there. I think you recently left. You want to give everybody a quick update before we get started? Yeah. So until recently, until probably like three months ago, was CEO of Jones Road. Family company have been there for the beginning, just done various roles, all leading marketing, leading growth,

3:06leading marketing, and then was CEO for the last few years. I'm on the board now, so still involved, but not in the day to day. Doing a bunch of just other things now, a lot of consulting and podcasting and launching a new brand wanted to kind of just get back in the weeds again. But how to really get around and excited to share some of the, you know, some of the, and we said, I've seen a lot of mistakes. I've made a lot of mistakes as well. So hopefully I can share some of those and whatnot to do. Yeah. Cody went from running a nine-figure brand to trying to figure out how to get his first $500 a day and spend with the new company. So very true. Very humbling. Cody, can you walk us through a little bit about just before we talk tactics? Like mentality going into Black Friday, you know, is your goal that this is, I always call Black Friday like you're flushing the toilet at the end of the year. You're getting everybody who's been built up with demand and getting them through the funnel. But what's your mindset going into Black Friday and how do you think about approaching it? For sure. Yeah. Like I don't know what the recent stats are, but you guys have probably seen it. Like very few people that are going to buy from you on Black Friday or, you know, that period are seeing you for the first time. And so you're really trying to do everything to extract all of the value that you've created,

4:09but haven't really captured yet. And so hopefully you've done a lot of things throughout the year. And you know, all this stuff is cliche, but it's very true that like success on Black Friday really comes from everything you've done prior to that. And all of the, you know, the demand that you've created, all of the different things that you've done throughout the year. And so definitely thinking about that and not just thinking about what is our offer. Obviously, that's a extremely important part of it though. And when you're thinking about Black Friday, I'm curious how you think about the offers. So, you know, Jones Road for the last, I think maybe two or three years had one of the top-selling shopify products on Black Friday full stop. You know, how are you testing something like that? Because you came out with a unique skew going into Black Friday. I don't believe it's sold normally on the site. So how do you think about that before you get to that? Yeah, there are a few moments throughout the year where I think you can test and they're kind of like a warm up games for it. So yeah, my claim to fame, my probably like top, top moment of Jones Road, we had like a $6 million day one Black Friday. Harley, the president of Shopify, like shouted us out on all these different like TV networks. We were the top-selling skew on Shopify and not anything.

5:11I think I'll be able to top in my career ever. So that was really cool. But we didn't want to discount for years. And so we had our best-selling product, which is thing called Miracle Bomb, was full size. And there was a lot of demand for minis. And so we only did them twice a year. So it was a little bit of like a drop model. We did it on Memorial Day and we did it on Black Friday. And so for us Memorial Day was really our tune up. Where it's maybe it was, you know, 40% lower than Black Friday, but at least allowed us to iron out a lot of the kinks. You know, we would build a specific land or bundle builder for it. We would test offers, messaging, obviously, tons of creative. And so we never had to start scratch. So that's what I would say. Unless this is like your first promo that you've done as a brand or your first Black Friday, like nothing you should be doing should be from scratch. You should be obviously taking all of your learnings throughout the year, as well as, you know, from your evergreen periods, as well as any promos that you've done. What worked, what didn't, you know, on literally just every discipline. Hopefully you have just like a document that you just have rolling during these promos. Hey, I think we produced this much creative, you know, look at our motion reports.

6:13This was our best angle during this period. You know, this was our top lander, like all of that stuff. So you don't have to just start from the beginning. And is there anything you do in the prime day right before Black Friday to test or prep or do any final checks? Just like what you're checking and getting ready? Yeah, just like, you know, I think prime day's coming up here in a couple weeks. I know some brands use it as like a final, you know, let's check one more thing before Black Friday traffic hits. We weren't on Amazon. So we didn't. So we had different periods throughout it. And I do think it's good to have a few offers leading up to it because a lot of people will wait. And so your efficiency is going to look really poor if you have nothing until like end of November. Obviously, most brands are starting their Black Friday, like beginning of November now and it's, you know, that period. But we always had like holiday kits and different anniversary kits earlier. And so those were kind of our tune ups. And then allowed us, like we actually pushed spend more aggressively during those and accepted a little worse efficiency because we knew we would capture that. And I can talk through like some of the data and how to see that. But for us, it was that it was, you know, Labor Day is like a smaller one.

7:14So Memorial Day is like big one. Labor Day is a smaller one. And then we really start that like ramp up, call it like playoffs going into like October. So yeah, if you have a period highly recommended, but save your best offer for November. And the way you're talking about it seems like this is really treated like a season, right? Like you got the playoffs going into basically Black Friday. And then do you try to extend this up until New Year's or how do you think about the promo calendar? Yeah, I remember and you guys probably on it, but I remember in like high school going to the mall on, you know, probably Thanksgiving night or whatever to like get a pair of shoes and stuff. Like I don't think people do that anymore. Right? It's way less. So there's no like cyber Monday. There's no like one day Black Friday. And so you have to think about it's your Q4 and just, you know, for most brands, you're doing, you know, 40% of your revenue, Q4. And so you just have to figure out how you're going to do that. And for, you know, really it's like starting in September, like in beauty, at least like summers are very slow. So, you know, that's Q3 September slow average month, you start ramping up. We would do an anniversary kit in in October.

8:15That was like our big moment for there. We put like some exclusive in there. So that was a pretty big offer in late October. We'd have like holiday collections. So that's like another big one as well. Again, those are all discounted as part of it. But for us, we wanted to have a premium offer where we had like, it was more of like a drop model. And we would have kits with like stuff we haven't launched yet. And then, you know, getting into November, again, it just depends on the brand. And do you want to run one offer throughout the whole period? Do you want to have a few different ones? How long do you want to run your promo for? But you have to look at the whole thing. And then, you know, extending that into December, obviously, December is like peak gift giving. And so you have to be thinking about that. Are you extending the same offer? Are you going into a different offer? Some people will have the same offer and just call it something different just for some, you know, freshness. But yeah, really through, I mean, shipping cutoffs are usually mid-December. And then, you know, especially if you have any retail component, you're pushing to those. And then there's even a little blip of like, uh, didn't get what you want. Like we would see a little bit of like a spike after Christmas a little bit. Um, our messaging and our hypothesis was always like, all right.

9:19Like the woman were then mad. They didn't get what they wanted. So then they buy it further themselves. So yeah, I think you just need the whole calendar and know like, how what's your offer going to be? And then what's your messaging going to be relative to like that moment and where people are in their journeys? Now what, what's a cue for mistake you've made in the past that you'd advise people not to make in the future? I've overbought and I've underbought in both of them of them suck. As a marketer under buying inventory sucks, you feel like, you know, you're like a cage lion. You feel like you have stuff left in the tank. But obviously that's a much better scenario. And you know, you're not going to go out of business under buying inventory. Um, overbying can suck, especially if you're doing something seasonal, you know, if you are going to be more aggressive with buying inventory and, and want to set up for a great QVOR A, make sure you have the cash position. We'll do that. And it's a lot easier to do if it's evergreen inventory and you're just, and you could just sell that in Q1 or whatever. But, you know, we've, we've finished the periods with like 100,000 extra holiday kits. We just kind of didn't have the demand that we expected behind some of them.

10:20And, you know, that sucks. So that's definitely something to be really, really cautious about. Obviously under buying, you know, it's nothing you, you can do about it. Um, but you just got to be careful that. And then on the marketing side, um, you know, you never really get to spend quite right. Sometimes you overspend, sometimes you underspend. I would say the biggest mistake is like not, it's like, you can't expect to win early on. You have to be okay with being a little bit more aggressive. I think when I've made mistakes, it's looking for efficiency earlier and kind of getting spooked like early Q4, that things aren't looking good. It's not very efficient. And then that efficiency comes later. There's this big like surge of demand. And a lot of the, the spend that you've had in. October, early November, you can actually capture a lot of the value at, you know, during peak period. And so you have to put your foot on the gas a little bit harder. Be prepared for lower efficiency. But hopefully in your forecast and in your model, you have that, especially if you have prior years and periods. Like you should be able to look at your, your daily efficiencies.

11:22And hopefully you can forecast that a little bit. And like I know you do kind of a bootcamp like day of or week of during Black Friday and holidays. But you know, you do these daily check-ins with your team. I'm curious like, as you said, early on, these numbers look like they're too high or acquisition costs are climbing. What are you doing in those days to adjust? Are you changing a bunch of stuff? Do you just rely on what you have in the account and trust that it's going to work out? Are you coming up with new offers on the fly? Which period is this like week of? Yeah. Yeah, so we'll look at forecast. I mean, we do it daily like normally where we'll have literally a daily forecast for like every main metric like revenue, spend, deficiency, MER, AMER, CAC, all of those things. And so we'll have a target for where it should be. And if we're not on target, yeah, like we have to understand why, you know, is there less demand? We'll look at like, try to look at the whole funnel like sometimes what we'll do is look for signs to kind of like allow ourselves to spend into some of the inefficiency.

12:24And so if we're looking and maybe our CPA is higher than we want or OS is lower than we want, but we're finding a lot of add to carts, it's like, okay, people are starting to build their basket. And that's like a conversation that I feel like we have every year. It's like we should probably learn, but at a certain point, it's like, you know, every year we see it where like things are just not efficient or able to spend, but there's just like people aren't buying, but if we can find signs that it's high quality traffic and high intent traffic, we'll look at like time on site bounce rate, like as long as those things look good and people are building the carts, like I've kind of always tried to give, you know, the team the the permission to keep spending into that. If it's really bad and there's just like a completeness match, then it's like, I crap, what can we do? This is not landing. We need to change this offer. And if you have time to be able to pivot, like it can do it, but you have to, you have to decide because you can't get spooked. Sometimes it's you probably shouldn't make any changes and you should just keep going with a plan and knowing how the seasonality will change because maybe it's just people aren't ready yet. That's usually what it is. As long as you've planned your offer

13:26properly. Amazing. Now, I know this year, well, first of all, we've been Facebook boys for years, right? Facebook buyers and always relying on Facebook to get that next feedback loop or understand that next learning. But you've been spending a lot on TV. And I'm curious, like, one, when do you think a brand is ready to spend on TV and two, like what's your philosophy going into TV, knowing that, you know, Facebook has got very direct reporting and attribution and all that kind of stuff. Yeah, I mean, huge TV fanman. When we originally launched TV, we were we were probably like, I think we were like $100 million run rate. I forgot. Maybe, maybe I think it was like the year we did a hundred million. So we were actually like to it. Like one of my regrets and mistakes is I, I thought you had to be like a huge brand to do TV. I didn't realize how simple it was. You do have to invest. You have to have the right creative. And so, you know, we probably did like a $50,000 shoot. We like own our own studio and you know, don't need like hair and makeup. So we're able to do it for less. But, you know, I thought you had to spend like 200K on a shoot. And

14:28then I thought like, I thought you had to be a much bigger brand. I just like didn't know about it. I didn't realize how easy it was. Obviously, we launched with Tatar and, you know, they've been in great partner sense. But you could, there's definitely things that you can do on creative. And there's a lot of, you know, resources now like, like, there's like screen bridge or other ones like that where you can take like more of a social asset and kind of like recut that for TV. And you have to make sure you're doing enough where it is like a minimum viable product. And you're not like throwing something that's not going to be relevant on that on TV like creative was. But you can definitely adapt some stuff and test a lot cheaper than having to do a giant production. So that's something that's been really helpful. And then, you know, we gave it like a month. I think we were probably spending 150K for a month because also our total budgets were pretty high. We were spending a lot on meta and other channels. I think one benefit to launch in earlier is, you know, we could launch with a little less budget and still see an impact. I think the biggest challenge is understanding the measurement. And that was the biggest,

15:31you know, learning because you're not going to get any in-platform attribution. Tatarri has a really great attribution model that can be like very directionally helpful. But it's very different than looking in a meta account or something like that. But we saw it in total business performance. We kind of just took off and had some insane growth because we just were capped by, you know, reaching the same people over and over on digital channels. And today, how does your media mix look as a percentage between some of the main platforms? We, so meta is probably 50, 60%. Again, it'll change throughout the year. And we'll talk about that for Q4. You know, YouTube, Google are probably like, make up 10% total. Applovens, you know, small amount, TikTok, small amount, especially with shop. And then TV is probably 10% on average. We've had it at times, you know, 20%. And it's usually split between linear and streaming. We'll kind of fluctuate them back and forth. But I think 10% is where we normally are. So I think five to 10% for us is a sweet spot. We run it evergreen, but some brands will run it very, you know,

16:33seasonally. I think it's also a channel. It's like, I don't like to say it's like a brand versus performance channel. I'll call it like a top of funnel channel, which means that even when performance doesn't look great, like it's more of like a farming approach where to me, I just want it to be always on. I think there's some level and, you know, wear it. We always track performance. But I'm able to weather those storms through like the summer and stuff like that because I know our consideration cycle is often several months. And it is a great channel that has like great impacts with with other places. But, you know, leading into Q4 will will ramp budgets. And we'll go, you know, up to 20, 25% and just have it be kind of our top of funnel that feeds all of our other channels. And you mentioned streaming in linear. Is there an advantage to both versus just one or the other? Yeah, I definitely like being on both. We launched on linear because it can be like very cheap. You can get kind of like really good inventory, very cheap with those CPMs. But there's a lot of advantages of streaming. And I think just having, you know, what usually plateau is a business is just lack of reach, right? And having more places, more inventory where you

17:37can kind of put the same creative and the same offer is super beneficial. And then being able to fluctuate between both of them, you know, you really want people seeing you everywhere. And so, you know, you want to be as many places as you can be. So yeah, I think there's a lot of benefits of like working with one partner that can put you on both linear and streaming. Now, I know you're also cheap and you also took the bait of the free offer to test another TV platform guilty. Yep. You mentioned 10% of media is kind of where you started in terms of metadata or sorry, total budget to TV. What do you think of those free credit offers from other vendors? Like it seems like it derailed your testing plan for a bit versus kind of help to you figure out what you're trying to do. They can definitely be enticing, you know, people will talk about credits. I think last Q4, we got a lot of credits from different partners and providers. Listen, the channels that we're doing really well for us and knew they were doing well, they weren't offering credits because they didn't have to. So there's some level of like, you know, networks and channels are offering credits because they know they kind of need to to gain your business. You know, I saw recently like Snapchat was offering some huge credits like, yeah, they have to or like

18:42X has to as well, right? Like meta and Google are, you know, they're not doing a ton of that. So yeah, we definitely did. There were definitely some some convincing value problems. But you know, what I've told my team as well is like, even they've looked at fees and things like that is like, it's really the net performance at the end of the day that matters. And you know, if unless you think like the credits are only going to make like 1% of the actual cost of that channel, right? Were any fees and like unless you think that the performance between those channels or networks is like that little then then great. Take it. But like, you can't tolerate worse performance just because you're getting free credits. Like I think that's like a little bit shortsighted and I definitely made that mistake. So it's just evaluating all the factors and making sure you're with the right channel and the right network. That's kind of like have everything that you need for your business. And when you buy last question on this, when you buy are you buying more programmatically or saying, I'm going after this audience or are you saying, I want to align Jones road with these networks and these sports games and these, you know, kind of attend pull moments depends on if you're streaming or linear. So linear is obviously you're going

19:43by network. You can go like network and sometimes shows as well. But you're like, hey, I want to be on NBC. I want to be on this one. I want to be on ESPN. And then streaming is a little bit more, it's a little bit more programmatic where you're able to do it by demo because people are logged in whatever it is. Like a netflix or a hulu or anything like that. You're able to kind of target that a little bit more. So that's another advantage of like being on both of them. You can spend an hour working through your ad budget with AI and still have to make every change yourself. Triple whales Moby uses your business data to recommend exactly what changes you should make and then can go and make those changes for you with your approval. You can plan before any money moves. Book a demo at triple whale dot com slash limited supply. That's TRI PLE WHALE dot com slash limited supply. I want to talk a little bit about your creative supply chain and thinking around creative. The way I think about creative nowadays is like the back of a Costco warehouse where you got

20:46trucks loading into the loading dock and each truck is a different creative partner vendor or provider. How have you guys set up yourselves at jones road because I know I know how efficient you are with vendors with spend with you know budgets. And you guys have a ton of creative that's always coming out different styles of creative whether it's graphic whether it's video, UGC lifestyle, you know, behind the scenes. How do you how do you built out the creative team? What does that look like? And how do you make sure that going into queue for you know you're never running out of assets? That's a rare question. And it's I've definitely changed my stance a bunch on it even on the investment side. And I will I've under invested it in the past and it's obviously one of the most important things now. So I'm willing to spend a lot more on it now and like all make sacrifices other areas and places in the business because it's just that important. It's just impossible to scale and have good efficiency, especially if you're planning like millions of spend a month. But even at any level, obviously you need diversity, you need different, you know, styles, different angles,

21:46things like that. So it's not possible to do it all in house for production. But I do think that majority of the strategy should be internal. I haven't had as much success outsourcing that to agencies or external partners. And so I think your creative strategy team should be internally should have editors, designers, you know, you can get, you know, really great editors and designers overseas just because your budget can go so much further there. Obviously AI is doing a lot of crazy stuff like even for me with wings just new brand like I'm using codecs to edit videos. And it's like it's like pretty awesome. And then a lot like AI static stuff. And then outside of there like you you have to figure out what core styles work for you. Obviously you should test them. The biggest thing is you need diversity of messages and personas. But then you also want different formats. And you know, you want some more produced branded production stuff. You obviously want UGC. And that can come in a lot of other forms. Huge fan like we probably had 40% of our account on partnership ads. And those are more like traditional, you know, white listing with influencers. And then something that has been huge and I would say for almost any brand that's scaling now is

22:50some type of a creator supply chain. And so either like for Jones row, that's like TikTok shop. And you know, working with any of those creators and you know, getting rights to be able to run them as ads. You can just get a ton of volume. You can kind of as a little bit more of like a crap shoot. You don't have to force spend to it. You just throw a ton in the ad account and see what performs. And then for brands that aren't on TikTok shop or you know, just want to add something like tribe is obviously becoming really important. And you can just get a ton of footage. You have to do it correctly. Like you can't just ship slot. But if you're thoughtful and coaching creators and briefing them properly, it's probably the best way for most brands to do it. And you know, percentage of spend deals are becoming or percentage of sales are becoming much more common. So you can get a lot of creative without like big upfront costs. And when you think about your budget for creative, what are you spending as a percent of the media on actual just creative production? Yeah, to keep the account supplied. And second question on that, for every half a million dollars and monthly spend, how many creatives do you think need to be in the ad account? I'll answer with that one first. I don't know. I've never like

23:56determined us sickly like gotten the right numbers. It's kind of always been more of a feel thing. And I think every brand is different probably based on your hit rate and based on like how quickly things are fatiguing. So I don't know the answer. But you know, if you look at it's very I've tried to scale spend without as you know, enough creative and that doesn't work. And then I've probably gone too far in the volume direction and with like hit rate being too low. So one of the important things is you can't you can't create more creative without like growing your team behind it, right? Because if you ask the team to increase their output too much, like the quality does suffer. And so I think that's why things like tribe are great or whatever, because you can you can kind of scale much faster without you know, needing to like scale your team as much because you're using creators and you're just paying a percentage of spend. And so that's what I think the first part of the question remind me what it was. One was ad account creatives, one was percent of spend total. Yeah. So I would I like to look at them total. And in our like

24:58digital media bucket, paid advertising bucket, we'll have sub accounts and one of them is creative because like I don't necessarily care, right? Like to me, it's also it's a variable cost. Creative is a variable cost. And I don't necessarily care if we're spending 5% on creative or we're spending 10%. It's really the total efficiency. But generally, you're going to find that your total efficiency is better if you're investing more in creative. But usually it's like a 15% target. That's what I would say. And that's that's gone up. Like usually it used to be 10%. It used to be, you know, 5% years ago. So that's definitely gone up. But I liked at least budget 15%. And then you mentioned you've got the strategy for creative all done internally. What's the name of that role for the person or people doing that? Creative strategist. So like that role is ever evolving and changing. A, like even the growth role is changing. Like when you and I were actually running ad accounts and stuff, like, you know, creative was not as important. And there was obviously a lot more media buying. Like I do expect my growth team to be involved strategically with creative. They might not have to necessarily be making it. But like they are analyzing it, you know, they're giving insights back. So they're

26:02involved. I think with the AI, they can definitely be making some stuff. And then yeah, you should have a creative strategy team. And so often they're on the growth team. Sometimes they're on the creative team. It kind of just depends on the team in the org chart. But they are the people who are analyzing the account, doing, you know, the consumer research, analyzing competitors, all of stuff, deciding what to make. And then, you know, they're not often making it. They'll brief editors, designers. And then they're, you know, but they're at least strategizing it. And then sometimes they're also the people that are working directly with creators or they'll kind of ship that off to another team. But yeah, that's like one of the most important roles, definitely. And I'm curious to creative strategists. Like how much are they now using things like codex? Or are they building out a gentick, friendly, brand books and style guides? Like how is that process shifted with the introduction of AI? They're definitely using AI. They are definitely able to AI allows people who don't have some of the technical skill set to actually do stuff. Like I said, like I'm obviously for wings and new brand. Like I'm the only person. So

27:03I'm playing the role of creative strategist. Like I can actually, if I have an idea, I can create an ad. And I think that's one of the most important things is like, how can you go from like insight to actual ad as fast as possible? And so they can definitely do that with like a static or whatever. Like they don't have to be a designer to do that. So they can take their ideas and kind of have more leverage behind them. But also, I think a really great way for creative strategists is like using AI for all the manual stuff. Because like, you know, there's ad ops and naming conventions and stuff like that or uploading ads or writing briefs like and research, which takes a ton of time. How can you, I don't want to say automate, but leverage AI and all of that stuff so they can have more time to think. Because that's one of the important ones. And there's just creative strategists. It's a really wide scope and they have a lot of responsibilities. And I think like AI can be great for research. You can like have it crawl reddit and Instagram and like get you inside super fast. But you also can't. I've gone too much in that direction. And so I think also having some time set aside to like do manual research and like actually go through reddit

28:06yourself and go through forums like you can't replace that. Yeah, I've found that the like the gathering of research has become a lot easier, but the actual selection of what to then take from that and implement, you know, customer facing has gotten more challenging. Definitely. That's a whole like tasting and you can't, you can't, you know, delegate that. Yeah. So we've got a few minutes left here. I want to talk about going now into Q one. So we've got Q four coming up Black Friday holiday sale boxing New Year's. A lot of supplement brands might not see a huge kind of Q four or a Black Friday type of a sale, but they're definitely preparing for their Super Bowl, which is starting January 1st. Now that you've got links, how are you thinking about that? Yeah, definitely. Don't forget about Q five as well. Obviously, it's not like a real thing, but performance can definitely be pretty good, especially depending on what, you know, vertical you that you're in. You know, some people like to start it early and are kind of feeling like they want to get on their, you know, their resolutions a little bit early. Some people are still on holiday shopping mode. And so, you know, conversion rates intent can be very high still, but CPMs

29:11get lower, right? Most people are kind of dumping their budget and spending most of their budget, you know, prior to holidays. And so I would say don't forget about that. Like that's definitely a mistake that we made and, and, you know, positive change that we've had. But yeah, if you're in wellness running like that, Q one is really your Q four. And so, you know, you shouldn't overspend during Q four if you demand for your businesses and there, but you want to be as aggressive as possible. Obviously, it gets hyper competitive, right? Because everyone is going to be trying to spend. But it's probably, you know, not to scare anyone. It's probably like the most important customer acquisition time, you know, throughout the year. And for being a subscription brand, like, you really, really have to be. And so, you know, you have to be doing everything you can. And obviously have very specific messaging and offers as well that are going to be competitive and speak to people in that like Q one mindset, which is obviously the, you know, new year new me. Totally. Yep. Let's, let's jump into some Q and A. So we got five minutes to do some Q and A. And

30:12then we'll be around here. But raise your hand if you've got a question. We're going to bring a mic over to you and get your question answered right over there. Yeah. Well, I've got a lot of questions actually, but I'll try to keep it to one. I'm always having a debate with my co-founder about whether we buy more stock or less stock going into Q four and you touched on that just now. Your statement was you don't go out of business if you buy too little. And my co-founder saying, we need to buy more, more, more, we don't want to run out in Q one or Q two next year. Our manufacturing time is very slow. So I just want to hit you double click on that. How do you think about inventory and forecasting stock? It's a good question. I always try to do it. I hate saying this, but like from first principles and like actually trying to analyze what are the pros and cons that can happen in in either scenario, right? And like what happened? You can obviously forecast this, but what happens to your business if you buy extra stock, right? And I think be conservative

31:13worst case scenario and you don't sell it, right? Are there cash? Do you run out of cash? Are there serious considerations there? Do you even what do you even have the cash to support? Like you should you should be able to run a forecast where it's like, what if we buy the most that we think we can buy and like significantly underperform? What does that look like, you know, for our business? And all the downsides, worst case scenario, we run out of cash, right? When we, you know, we go out of business. Often what will happen is we buy a lot of inventory that we can't move, and we need to cash, we need cash, and we have to mark it down, right? And liquidate it to improve our cash position. And I think that's a, you know, it's a challenging thing, right? It hurts your gross margin, right? It hurts your profitability. And then you do that consistently and it hurts your ability to actually sell a full price. So I think that can be really challenging. And then if you go on, you know, the other side where it's like, all right, I buy too little. Well, all right, I, you know, I didn't hit my growth targets, right? Or I didn't get to spend as much as I wanted,

32:19or I was more efficient, like, you know, or maybe I upset some customers like that's probably the better scenario. And this is with like, you know, speaking from experience and stuff, it's frustrating, but it's a lot less stressful to do that. But again, it depends the position you're in. Like we had times at Jones Road where fortunate cash position. So we, you know, we could buy extra and we knew that even if we didn't sell it right away, it doesn't expire for two years. So there's really no downside. But if it, I would say cash is king, cash above all else. And that has to guide your decision the most. Thank you. All right. We'll get two more questions in right over there. What was your ideal MER at Jones Road annually in Q4? Good question. When things were extremely efficient, and I would say this was pre-endrometer, post-IOS and stuff, like we were able to be at a five, you know, and we were able to have, you know, 20% of marketing spend on marketing. And you know, I was like digital and like a little bit more.

33:25Most mature businesses are going to be higher. I think it's going to depend on the business, but you know, the reality is for a, it depends what your distribution is, right? If you're a Sephora business or target business, like you get a lot of distribution from wholesale. And so you can be more efficient with your marketing. If you're purely D to C business, you know, nine figures plus, you know, I think the model with how challenging cash are days, like you have to have a op-hack's pretty low and you have to have engineer your business to support a high MER. So I wouldn't just look at like how do I get MER better? But often like how do I change my business to actually continue to grow on a low MER that's like a more like anti-fragile business? I would say most brands, I mean, there's brands that I know that are doing well that are a two MER and are literally spending 50%. I mean, if you look at IMA obviously, their public company, like they're spending 80% of revenue on marketing, you know, that's not sustainable. So I think it depends, but I think like healthy business, 30% of revenue going to marketing is usually fine, but depends on your margins and your op-hacks as well. All right, last question. We got one over there.

34:32Hey, Matt, big fan of the brand. Just had a question around your mid-ibime strategy for this Q4, whether you're sort of pacing your budgets if you're using cost caps and bid caps, given all the new bidding settings that are out, are you exploring anything that's a little bit different for this year? That's a good question. I'm definitely a big fan. I try not to be dogmatic about like mid-ibying approaches and like do whatever works, but definitely if it works for your business, I would say don't implement anything for the first time during Black Friday, like test everything. And that's why these these moments where it's, you know, Memorial Day, earlier Q4 offers, if you can test some of them, like I really good tune ups. I am a big fan of cost caps or usually bid caps for that because, you know, sometimes you're 10 Xing spend with day over day, week over week or something like that. And it's just kind of de-risked sit quite a bit instead of like trying to put a million bucks into a lowest cost campaign. So if it works and you've had success with it, like definitely really, really like it, there's some like downsides to them as

35:35well where you can kind of still overspend and whatever. But yeah, if you found it, you know, to work, you know, it's hard to like measure this. I am a fan of running some like, like a early, not early access, but essentially like lead gen campaigns, running them to like a sign up page, like those always seem to kind of do pretty well. But yeah, definitely a fan of those as well. Awesome. Amazing guys. That's all the time we have. Thank you so much. Thank you Cody. Of course. Thanks for listening. We'll be back next time to cut through the noise on CPG retail and e-commerce. If you enjoyed this episode, why not share it with a friend and be sure to subscribe wherever you listen so you don't miss the next one.