~35% of DTC paid acquisitions will NEVER be profitable on a LTV:CAC basis.

This data point that was shared with me on a call this week by a massive data provider.

How is this possible?

Here’s 5 reasons…
1. The marketing team has no insight into unit economics.

COGS, return rates, transactions fees, shipping costs, fulfillment fees aren’t transparent making setting accurate targets impossible.
2. The single account ROAS target.

Not all orders are worth the same because not all products and not all customers are equal.

When you use a single ROAS target applied across every purchase type many of those purchases are net negative value even when you hit the target.
3. LTVs change.

Switch your merchandising, offer concept, product focus and your LTV can vary meaningfully. The past is not always like the future.
4. Using blended CAC or MER can mask negative paid acquisition with organic demand.

You need to hold ever $ of spend accountable to profit. Negative value paid efforts exist in almost every ad account.
5. Unit cost assumptions are often wrong.

Understanding your fully loaded cost of delivery on every order is challenging. There are many variables and the data is often not readily available.
I’m sure there are a million more ways this occurs but as brands face more and more margin pressure from rising CAC, supply chain constrains and labor costs the demand for clarity of how each dollar is performing is only going to increase

How have you seen this problem manifest?

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More from @TaylorHoliday

11 Nov
Introducing the largest publicly available (fact check?) eCommerce data set.

~230 brands totaling $2.3B+ in annual online revenue and over $250M in spend

Updated weekly at: commonthreadco.com/blogs/coachs-c…

Thread with benchmarks and YoY %-changes 🧵
*Notice before reading the thread*

Data doesn't give you answers it helps you discover the next questions to ask.

Benchmarks are generally useful and specifically useless.

Use this material to provide context to your journey, challenge your perceptions and then keep digging...

eCommerce MER (Jan.–Oct.)

- 2020 YTD: 5.71
- 2021 YTD: 5.02
- Change: -12.09%

iOS 14.5 Effect on MER

- Pre-iOS (Jan.–May): 4.88
- Post-iOS (June–Present): 5.16
- Pre vs Post Change: +5.67% Image
Read 8 tweets
28 Oct
What is Facebook's name change really about?

FB recognizes that their largest threat has come from losing the hardware battle (phone) that became the default access point to their business.

Think of it as a critical bridge or port in a physical war...
With control of the bridge (phone) Apple has been able to squeeze FB's revenue under the banner of "privacy restrictions".

Because FB needs apple (and Google) to access its users they are vulnerable to further constraints.

This dependency is a massive risk.
It also highlights why FB was so resistant to mobile applications in the first place.

Remember how hard they tried to make the mobile web a thing?

Read 6 tweets
13 Jul
1/ The eCommerce Growth Syllabus:

Read and master these 10 pieces of content and you'll be an unstoppable force of PROFITABLE growth

👍🏻Facebook Ads
🛍Google Shopping
📺YouTube Ads
🖼Ad Creative

Lets go...
2/ 👍🏻 Facebook Ads

"How to Scale Facebook Ads Profitably for Your Shopify Ecommerce Store: Cheat Sheet, Structure & 27 Examples"

Brought to you by @adrianne__v, the prodigal child, fresh off her return to CTC!

3/ 🛍Google Shopping

"Google Shopping Ads Guide: How to Setup, Sell & Scale Your Ecommerce Store’s Full Funnel from Top to Bottom"

The search legend @tonychopp went all the way in on this breakdown of the most powerful Google Ad product.

Read 12 tweets
14 May
If you have applied for a job with us and received an email from commonthread.us PLEASE DO NOT RESPOND.

Here's a story about a wild Linkedin scam going on...
Last night we received this email from the parent (a lawyer) of a new hire for a job at CTC.

He was wondering why we were requiring that he purchased $2000 worth of computer equipment before starting the job.

We see you "Jacob Hearnsberger" 👀... Image
We had never met this candidate and certainly hadn't sent them a job offer.

So we started to dig in...
Read 7 tweets
6 May
If you are interested in culture-building within a company,

I want to have a conversation...

To start I need you to read this article from @balajis


Then let's talk about a couple things... 👇🏼
I resonated DEEPLY with this idea of "Read-only Culture"
and producing it is one of my biggest concerns as a leader...

You can dive further into the concept in this thread:

I find that having ideas is probably the easiest part of leading an organization.

Communicating those ideas clearly and consistently enough such that they are understood by everyone is orders of magnitude more difficult.

But even that isn't enough...
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22 Apr
A Vision Of eCommerce Post COVID

The next phase of growth for many brands is going to be far more tempest than tidal wave.

Here is what I see on the horizon...

(warning it's darker than I hoped)
One year ago I wrote this piece:


Begging eCommerce brands to go ALL IN on what was proving to be a TIDAL WAVE of support for online shopping.

What followed was 12 months of hardship and pain for our species, but massive growth for our industry.
Now 1 year later as I survey the landscape I see a much more ominous future.

Here are 5 serious challenges facing us all on the other side of COVID...
Read 12 tweets

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