Hey everyone,

Welcome back for another bite to chew on.

I (Ash) recently wrapped up a fireside strategy session on Meta ads with DigiCom, and the chat section absolutely exploded with questions during the event. 

Like, way more than we could answer live. So today, I'm tackling the top Q’s that came in. This isn’t everything, but I tried to get to as many as possible without the newsletter becoming 5,000 words.

So if you want to know “why cost caps” or “how to scale to $100k to $10k per month”, this one’s for you. 

On the Menu:

• Cost Cap Strategy (and why we learned into it)

• Campaign Structure for Multi-Product Brands

• New vs. Returning Customer Acquisition

• Testing Budgets & Timelines That Work

• Practical Scaling: $10K to $100K+ Monthly Spend

• Meta to Amazon vs. Shopify

Your Margins Aren’t What You Think. They're Worse.

Hey, quick question...

Do you actually know your true costs? (Not just what your supplier invoice says.)

Most founders are making crucial decisions without understanding their actual margins. We know because we’ve been there. 

Let's be honest → your costs aren’t just what you pay your manufacturer. 

They’re…

• Those surprise freight charges

• Customs duties that keep changing

• Storage fees and fulfillment costs

• Every other little fee that nobody ever warned you about

And these costs are probably living in 5 different places right now, right?

That's exactly why brands like Arrae, Dagne Dover, and Pat McGrath use Settle to get clarity on their true costs.

Here's what makes Settle a difference maker→

• 📊 One platform for inventory, payments, and procurement (goodbye spreadsheet hell)

• 🛬 Real-time landed cost tracking as expenses roll in (no more end-of-month surprises)

• 🤖 AI-powered forecasting that gets smarter over time (because who has time for manual calculations?)

 📉 Real results: Flakes reduced their COGS by 60% after switching to Settle. Not by magic, but by finally seeing where their money was actually going.

🔥 SPECIAL OFFER (LIMITED TIME) 🔥 

Settle just announced they're offering their Launch Plan (bill pay + inventory capabilities + landed costs) for FREE until June (previously $149/month), with bigger discounts on their Accelerate & Elevate plans too.

Why now? Tariffs are up and certainty is way down. The folks at Settle know small business operators could use a break right now. 

UNCOVER YOUR TRUE MARGINS → GET SETTLE FREE UNTIL JUNE

The Cost Cap Strategy (And why we leaned into it)

The most common question we got was straight to the point:

"Ash, why do you love cost cap so much?"

Fair question. 

It’s because cost caps let us spend efficiently instead of burning cash. Simple as that.

But the magic is in how we leverage it. At Obvi, cost caps are central to our creative testing and powered our scaling campaigns last year too (we’re switching things up this year. More on this soon!). 

The big advantage is control. In a world where Meta algorithms can go rogue, cost caps let us set clear boundaries on what we're willing to pay.

So how do you find the perfect cost cap bid? One that doesn't limit delivery but keeps your CAC in check?

Start with the cost of acquisition that allows you to break even. That's your line in the sand.

Then watch delivery carefully. If it's too limited, bump your bid up by 10% to 20%. Too expensive? Bring it down by 10%. Incremental adjustments are key here.

For most brands we work with, landing on the right cost cap takes 2 to 3 rounds of adjustments over a week or so. 

But once you nail it, you've got a powerful lever to pull.

Quick tip → Cost caps perform best when your creative is dialed in. If your ads are underspending across the board, fix your creative first before worrying about the perfect bid.

Multi-Product Campaign Structure (Without the Chaos)

"What would be the 4-5 campaigns you suggest for a brand with 4-5 product categories? And how do you ensure each category grows rather than one product eating the entire budget?"

Don't overcomplicate this. 

I see too many brands trying to run 15+ campaigns simultaneously, creating a management nightmare.

Here's our simplified approach:

1. Start with ONE product category. Get it dialed in before expanding.

2. For that category, run just two campaigns:

   • A testing campaign (for new creative)

   • An ASC scaling campaign (for proven winners)

3. Once those are performing, rinse and repeat for additional categories.

Meta likes to push budget toward what's already working. If one product naturally converts better, the algorithm will favor it.

Rather than fighting this, use it strategically. Your best-converting product should get the lion's share of budget initially.

Use the learnings and data from this success to inform your expansion to other categories.

Warning → If you try to force equal budget distribution across categories with vastly different performance metrics, you'll end up with mediocre results across the board.

New vs. Returning Customers (The Strategy Shift)

"How do you weight more toward new customer acquisition with ASC campaigns? Especially with META removing the ability to dictate audience percentage?"

This one's tricky because Meta is actively changing how this works.

Right now, in some accounts, you can still allocate a certain percentage of spend toward existing customers. If that's available to you, set it to 0% when focused on acquisition.

But Meta is rolling out changes, and this option is disappearing for many.

Here's how we're adapting → 

• First, make peace with some unavoidable returning customer traffic. It's just how the algorithm works now.

• Focus on your blended CAC (the average of new and returning).

• Set your cost caps based on what makes sense for this blended number, understanding that:

  • New customers will cost more than this average

  • Returning customers will cost less

Most importantly → Track the ratio of new:returning over time. If it starts skewing too heavily toward returning, that's your signal to refresh creative or adjust targeting.

🧠 The big mindset shift → It may become impossible to completely separate new and returning customers soon. Instead, you’ll need to manage the blend and optimize for overall business health.

Testing Budgets & Timelines That Work

"What's a reasonable testing budget per day, and how many days should you run a test if your AOV is $50? When should you expect to break even?"

Let's start with the goal: getting out of the learning phase.

Meta needs about 50 conversions in a 7-day window for reliable data. So the ideal daily testing budget is:

[Your target CAC] × 50 conversions ÷ 7 days

For a $50 AOV product targeting a $30 CAC, that's:

$30 × 50 ÷ 7 = ~$215 daily test budget

This is the "perfect world" number. But what if that's not feasible?

Cut it in half, but be ready to bump budgets by 20% if you see early promisoing results. The key is getting to those 50 conversions as quickly as possible without completely blowing your budget.

As for breaking even... that's not the right goal for testing. The goal is learning.

If you're obsessed with breaking even during testing, you'll kill promising creative too early. 

Instead, look for early signals that indicate scaling potential:

• CTRs above 1%

• Initial conversion rates that show promise

• Engagement metrics that outperform your baseline

Your test has done its job when you can confidently answer: "Do we scale this or kill it?"

Practical Scaling: $10K to $100K Monthly Spend

"Any thoughts on scaling up FB ads from $10K to over $100K in 1-2 months for DTC brands?"

This is the question everyone wants answered. And there's no magic bullet, but there is a framework:

1. Creative Volume & Diversity

   • New ads to test weekly (non-negotiable)

   • Mix static and video

   • Messaging that targets all funnel stages

   • Test "ugly" UGC alongside polished content

2. Landing Page & CRO Testing

   • As you scale, CPA will naturally rise

   • Counter this with landing page improvements

   • Focus on conversion rate and revenue per session

3. Tactical Budget Management

   • Launch new creative weekly

   • Bump budgets by 20% when performance is good

   • Never scale by more than 20% daily (no matter how good things look)

The dirty secret about scaling from $10k to $100K/month is that your CAC will almost certainly increase.

🔑 The key is not to focus on maintaining the same CAC while scaling (nearly impossible). Instead, improve their funnel, AOV, and LTV faster than their CAC rises.

Meta traffic to Amazon vs. Shopify 

This question comes up constantly, especially as more brands establish a DTC and Amazon presence:

"Would you recommend driving traffic from Meta to Amazon and get the brand referral bonus? Or is it better to go to Shopify directly?"

The short answer is: Drive from Meta to your own website.

Here's why →

Sending Meta traffic to Amazon means you can't optimize properly. Your pixel sits on your site, not Amazon's, so you lose all that valuable conversion data.

But there's something else powerful at work here.

😇 The halo effect.

When you ramp up Meta spend to your website, your Amazon sales will increase too. We've seen this pattern with dozens of brands, including Obvi. 

The degree to which this happens varies from brand to brand. This is something you can test by turning off or decreasing Meta advertising for a period and then observing the change in sales.

Don’t want to turn off all Meta ads? Picks some regions instead. Amazon records where in the country your sales are coming from.

Related - it is absolutely essential to understand that Amazon will naturally capture some of the demand you’re generating with your ads. Consider this when you are evaluating your marketing efficiency. Sales made on Amazon don’t show up in in-platform on Meta.

🔑 Now - If you still want that Amazon Brand Referral bonus (typically 10%), here's the hack:

Place an Amazon buy button directly on your product detail page. Link it to your Amazon ASIN with the relevant tracking tag.

This way you get:

• Custom event pixel data for optimization

• Higher conversions (giving customers choice)

• The referral bonus when customers choose Amazon

• The full margin when customers choose your site

This gives customers options, and many shoppers who prefer the security and familiarity of Amazon will convert when they might not have otherwise.

Quick tip → With the tracking pixel in place for the Brand Bonus, Amazon will report your referral clicks and conversions. Integrate this information when evaluating your conversion rates and Meta CPA.