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Lift testing: Why, when, and how it will transform your business like it did for Custom Ink

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NRF NXT 2019
July 23, 2019
Chris Berejik, Senior Vice President, Marketing, Custom Ink

Published in: Retail
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Lift testing: Why, when, and how it will transform your business like it did for Custom Ink

  1. 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
  2. 2. 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
  3. 3. 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
  4. 4. 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?
  5. 5. 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
  6. 6. 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
  7. 7. 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 ✓
  8. 8. 8 In result, we grew Facebook revenue by 850% in 2 years
  9. 9. ● 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?

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