Every marketing decision is a bet.

Question is, do you know what you’re betting on?

🤑 Sean Frank shares why he spent ~$3M on mobile gaming ads at Ridge

📊 Michael Ting reveals how he 2x’d rev with no budget + no experience

🤖 David Baker gives away his AI Creator Pipeline that finds and recruits

Plus, the top five headlines in consumer.

Sean Frank CEO, Ridge

I spent $2,872,421 on mobile gaming (and you should, too)

AppLovin just opened to all advertisers.

It is the S&P 500 ad platform that runs in mobile games your target customers love to play.

- Full screen
- No skipping
- 30 seconds

For the last few years, you either had to know someone on their team … or you needed a referral code.

I knew someone. First year, saved Q4 when Meta tanked. Last year, spent 3m. This year, ramping up Q4 again.

I do not own the stock.
I do not trade the stock.
They are a sponsor.
I spend my own money on it.

This is the net amount that left my bank account. The ads work on par with Meta or Google.

10x more scalable than reddit. We spend more on Twitter, but my audience is mostly degens.

Connor told me he runs applovin with no exclusions and still sees majority new customer revenue. They are calld discovery campaigns.

If you are not advertising on applovin they have two bonuses for the Operators audience

-Spend $5k, get $5k in ad credits
-Launch within 24 hours, get $1k

You can have your ads live in under 60min.

Michael Ting GM of DTC, JAXXON

How I Let Go of Certainty + Started Placing Better Bets

Two and a half years ago, I was given an 8-figure budget with no marketing experience.

I felt fully unequipped.

JAXXON hired me to be a glorified dashboard-er. But within my first few months I found myself in a leadership role.

My saving grace was:

• Listening to MOps
• Scrappy A+ team
• Data science mindset

We’re now on-track to double the company.

I still have more to learn than to share. But there’s one lesson that has had an outsized impact on how I lead, think about risk, and make decisions.

I don’t see enough people talking about it …

 Growth Is About Risk Management 

I spent my first year in that new role obsessing over what advertising spend level would “maximize contribution margin.”

Now I know that’s the wrong question to ask.

There’s a debating technique called reductio ad absurdum. The premise is to take a statement to its absurd extreme to prove (or disprove) its validity.

Let’s do a thought experiment where we try to find the optimal ad spend which maximizes CM in two extreme scenarios.

1. Maximize CM For The Next 5 Min

I’d turn off all my ads ASAP and spend $0. At our AOV, almost no customers will buy within 5 minutes of seeing an ad.

JAXXON already has hundreds of customers mid-funnel. I’d run a flash sale and try to convert as many of those people as possible.

2. Maximize CM For The Next 50 Yrs

I’d spend whatever it takes to find product-market fit and become the category leader.

The Law of Duality holds that mature markets consolidate into a two-horse race. The leader typically ends up more than twice the size of the runner-up (think McDonalds vs. Burger King). So I’d expect the bulk of my value to be generated in years 40-50.

My year 1-5 costs will be a rounding error even if they feel aggressive at the moment.

Amazon is a good example of sinking cost into product-market fit, becoming the category leader, then realizing value at the end.

We’re stuck with equally strong arguments for both ridiculously low and ridiculously high advertising budgets.

• Low spend maximizes CM now
• High spend maximizes CM someday

 Why Does This Matter? 

Half the battle is defining your time horizon.

Furthermore, there’s a tradeoff between realizing value now (safer) and maximizing for the future (riskier).

The dissonance I felt, which drove me to anxiously obsess, was because I wanted to optimize for both today and next year.

But once I learned that “optimal” only means aligning my spend with my risk tolerance and time horizon, I was able to regain clarity, make difficult decisions, and grow the business.

There are three ways I apply this to my marketing.

1. No Strict Marketing Budget

I don’t believe in giving my marketing team a budget.

I believe in giving them short-term objectives which align with long-term goals. And then giving them full autonomy in allocating resources to achieve those objectives.

Therefore, what maximizes our business performance (and our collective sanity) is for me to put all my effort into defining the objective (“what”) so our media buyers can focus on choosing and allocating the budget (“how”).

2. Future Value + Current Value

In practice, that means my guidance might look something like:

• Future Value?Target a leading indicator
  ​Current Value?Target contribution margin

Most of the time, though, it’s a blend of the two. For example:

As long as cost-per-email stays below $X, prioritize future value. If it climbs above that, pull back spend and hold contribution margin above Y%.

Given our long decision-cycles, our main leading indicator is “cost per email sign-up” with a supporting cast of “cost per add-to-cart” + Northbeam’s platform ROAS.

Sometimes the decision is simple:

• BFCM = realize value
• Oct = generate future value

Sometimes it’s not simple.

For example, at one point our ads were printing because one of our models just went viral on a reality show. But our restocks were defective. That meant inventory was on life-support and restocks had an uncertain timeline.

Should we cut spend to avoid fully stocking-out? Or should we increase spend to capitalize on the viral moment, knowing we won’t realize value until after we restocked?

My answer below:

*PCM = contribution margin
*CPL = cost per email sign-up/lead

It’s about guardrails.

We defined how much present value we were willing to risk, and let the bet ride within that boundary. Every marketing decision hides a tradeoff between value now and value later.

3. Lower-Confidence Testing

The same risk-tolerance shows up in your testing program. But unlike ad spend, this is a place where taking on more risk is almost mathematically free.

The cost and effort to find a +0.04 percentage point CVR improvement for a $1M and $100M brand is about the same.

Yet the impact of a +0.04 pps improvement for a $100M brand is 100x greater than a $1M brand. And the majority of that impact goes straight to the bottom-line (EBITDA, FCF, etc.).

Almost nothing else (marketing, product, etc.) will scale proportionally with the size of the business without incurring incremental cost.

This is because a failing test will incur costs for <1 month while a successful test will pay off for 1yr+.

Even at an 80% failure rate, if I run 10 tests over 12 months which will each make or lose me $10k …

• 8 failures x ($10k) = ($80k)
• 2 winners x $10k/month = +$240k

That’s $160k net gain.

So how do we maximize the returns from a testing program?

Three things:

1️⃣ Idea quality
Number + size of winners

2️⃣ Test accuracy
Ability to diagnose wins vs losses

3️⃣ Cycle time
How long it takes to diagnose

Most of us already spend a lot of time focused on the quality of ideas. So let’s talk about how we can improve test accuracy and cycle time.

Which brings me to this question:

More importantly, what would happen if I went from 95% confidence to 80% confidence?

Assuming we want to detect +0.04 pps shift (+2%) in a 2% CVR at 100k sessions per day, I’d almost double the total tests implemented (~1.8x):

• Each positive test = +1
• Each negative test = -1

With 45% winners, 80% confidence will net you +31% more impact. However, with 22% winners, 80% confidence will net you -76% less impact. This accounts for the 20% of misreads.

In other words, it depends on the quality of your tests.

There’s no universally correct confidence threshold. We can see above that the same move that adds 31% impact for one team destroys 76% for another.

The key is knowing which team you are. Your confidence threshold is a bet on your own hit rate.
​
​ Good Marketing is Good Betting ​
​
I came into this job looking for the right number. The lesson I learned is that there isn’t one.

Each time I went looking for the optimal answer, I found the same thing instead: a roll of the dice that made me answer the same questions over and over again.

• What is my risk tolerance?
• What is my time horizon?
• What is my certainty?

Growth comes from good risk management.

Once you see it that way, the anxiety of chasing a “right” answer falls away and what’s left is just the work of deliberately choosing what kind of bet you want to make next.

Michael Ting is GM of DTC at JAXXON. He’s obsessed with the crossroads between marketing + data science. You can connect with him on Twitter or LinkedIn.

THE FEED

​100% Revenue Growth for 8 Years: Will Nitze & Jess Greenwood, IQBAR​

​The Right Way to A/B Test Landing Pages on Meta Ads for Ecommerce​

​Opening Retail Stores vs. Going Wholesale: What the Numbers Say​

The Trends

Curated by the editor of CPG Wire, the five top stories in commerce and DTC.

1. Vitamin Well Merges with EMPWR: LinkedIn​

Vitamin Well Group, the fast-growing owner of Barebells and NOCCO, is merging with EMPWR, a Belgian nutrition bar manufacturer and longtime partner. EMPWR currently operates four manufacturing facilities across Europe and North America, employing over 1,500 people on 15 production lines.

The deal brings Barebells’ primary manufacturer in-house, unlocking significant capacity and innovation opportunities. Vitamin Well was valued north of $3B when Cinven purchased a majority stake in 2022.

2. So Good So You Hires CEO: Business Wire​

So Good So You, one of the country’s top-selling functional wellness shot brands, just hired CPG veteran Jennifer Jorgensen as CEO. Jorgensen spent over two decades at General Mills but is best known for rebuilding Back to Nature, a legacy snack brand that Barilla acquired in 2022.

She led Back to Nature’s post-acquisition turnaround, turning it into one of the fastest-growing brands in the cookie & cracker category. Bansk Group acquired a majority stake in So Good So You earlier this year.

3. Nutrabolt Hires Bankers: Fitt Insider​

Austin-based Nutrabolt has tapped J.P. Morgan, Goldman Sachs, and Bank of America to spearhead its U.S. IPO. Best known for its energy drink portfolio which includes C4 Energy and Bloom Sparkling Energy, Nutrabolt reportedly surpassed $1B in revenue last year. The company was valued around $2.8B in 2022 when beverage giant Keurig Dr Pepper purchased a 30% stake.

4. Frozen One Raises $5.75M: Instagram​

High-protein ice cream brand Frozen One secured $5.75M in equity funding. Brand Foundry Ventures (BFV), an investor in Graza and OLIPOP, led the round.

Existing investor Supernatural Ventures also participated alongside Abe Burns and Ryan Tedder, the lead singer of OneRepublic. Frozen One launched last year and quickly secured distribution at Target, Wegmans, Raley’s, and several other regional chains.

5. Apothékary Secures Growth Funding: Athletech News​

Japanese-inspired herbal wellness brand Apothékary raised $16M in debt and equity funding. Shiseido’s LIFT Ventures, NextLevel Management, and several angel investors and family offices provided the equity funding, while RSF Social Finance provided $6M in debt financing.

Wall Street veteran Shizu Okusa launched Apothékary in 2019 and the company expects $40M in revenue this year.

The Resource

AI Creator Pipeline

During our New DTC Playbook event, David Baker, who’s building a new beauty brand, revealed his AI Creator Pipeline.

Basically, it scrapes creator profiles based on his target keywords (GLP-1, skin, wellness), scores each one against a 30-point rubric, then routes them by score.

The top 10% get an auto-drafted personalized outreach email, the middle tier goes to David for review, and the rejects feed a loop that teaches the scrape what to stop pulling.

Want to build your own?

​Get his flowchart here!

Then make sure you have access to all the recordings and resources from the event.

With thanks and anticipation,
Aaron Orendorff
🤓 Chief Executive Officer

P.S. (Disclaimer): Special thanks to AppLovin for sponsoring today’s newsletter.

​Read online | Unsubscribe​