Hey, Deividas here!

In today’s newsletter, I want to help you simplify your decision-making process when it comes to optimizing your creative tests.

Managing ad accounts can get overwhelming, especially when you’re spending large budgets.

The key is to focus on what truly matters and streamline your approach so you can make quicker, more effective decisions.

Here’s how to approach creative testing and optimization without drowning in data:

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1. Simplify Your Decision-Making

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As a media buyer, you're likely managing multiple ad accounts, spending significant amounts on ads, and running several campaigns. It’s impossible to micromanage every little detail, so you need to focus on the bigger picture.

My philosophy is simple: focus on the macro level. Use high-level decision metrics as your main KPI. Over time, you’ll learn to rely on a few key metrics that help you make faster and more confident decisions.

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2. Key Metrics for Decision-Making

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When deciding whether to keep or kill a creative, I use ROAS (Return on Ad Spend) and Cost Per Result (CPA). These two metrics are my decision-making anchors.

For example:

If you’re spending 1x your CPA (let’s say $50) on a creative and you don’t see any sales, kill it. Don’t get attached to the creative—it's all about the numbers.

Other metrics are just contextual metrics. They help you get the bigger picture, but never rely on them to make a decision unless the brand is not purely performance based.

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3. Creative Performance Metrics That Matter

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Here are the three key creative metrics I look at:

• Hook Rate: How well your hook (the first few seconds of your video) captures attention.
• Hold Rate: How well your ad holds attention after the initial hook.
• Average Video Watch Time: How long people are engaging with your video. The longer they watch, the better the creative.

These three metrics tell you 80% of the story when it comes to your creative performance.

For static creatives, focus on the storytelling and contextual metrics. These are secondary but essential for understanding why your ad is performing the way it is. For instance:

• CTR (Click-Through Rate): This tells you how well people are engaging with your ad.
• CPC (Cost Per Click): This metric helps you evaluate the cost of engaging with your audience.

Tip: Look at CTR link and CTR all together to gauge overall engagement. I aim for a 5% CTR all and 1.5% CTR link at a minimum.

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4. Contextual Metrics That Provide Insight

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Let’s say your ROAS is lower than expected. Why is that happening? Here’s where contextual metrics like CTR, CPC, and CPM (Cost Per Thousand Impressions) come into play:

• High CPM with a high CPC? It could indicate that competition in the auction is fierce.
• Low CTR but good conversion rates? Maybe you’re targeting a very niche audience that converts better than the broader one.

Tip: Always compare CPC with CPM to get a better understanding of what's going on. If your CPC is high but CPM is low, you might be targeting a less competitive audience.

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5. Business Metrics You Can’t Ignore

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While creative performance is important, never forget to keep an eye on the business metrics that affect profitability:

• Average Order Value (AOV): This impacts how much you’re earning from each sale. Boost your AOV by offering bundles, upsells, or cross-sells.
• Conversion Rate: The synergy between your ads and landing pages will directly affect this. Aim for a minimum of 3% conversion rate.
• Profit Margin: Ultimately, profit margin is the most important metric. It’s what the business owner truly cares about. Focus on scaling profitably, not just increasing revenue.

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6. Troubleshooting and Optimization

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Sometimes, performance starts to dip, and it’s crucial to figure out why. Here's a quick troubleshooting guide:

• Conversion rate drop? Is it because your average order value has increased? Or maybe your website needs some optimization.
• CTR and CPC changes? Could be due to ad fatigue or audience overlap. If this happens, add exclusions or refresh your creative.

Tip: Always start with the auction overlap. Too many similar ads running on the same audience can lead to audience fatigue. Consolidate your campaigns and audiences to avoid wasting spend.

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P.S. Keep track of funnel metrics like cost per landing page view, cost per add-to-cart, and cost per checkout. If these metrics are high, it’s time to troubleshoot your landing page or creative to increase quality of traffic.

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