“I believe very strongly in meeting the customer wherever they want to shop.”
What you’ll learn:
Our guest today is a marketing maverick. Aaron Zagha, CMO of Newton Baby, has his finger on the pulse when it comes to the latest trends in marketing—an industry we all know is being rocked by COVID-19. Aaron reminds us of the importance of adapting to consumer behavior and understanding your product market. Plus, you will gain new ROI strategies and top tools to help run your Omnichannel business.
About our guest:
Aaron Zagha is currently the CMO of Newton Baby, a leading crib mattress and baby brand. He was formerly Head of International eCommerce for Teleflora.
Key takeaways from this episode:
- Newton Baby’s unique selling proposition—1:25
- How to hit sales numbers with new ROI strategies—2:30
- The influence of coronavirus on customer behavior, sales, and marketing changes for Newton Baby—5:51
- Newton Baby stats (employee count, company footprint, etc.)—7:18
- Aaron’s top news sources and tool recommendations to help you run your CPG business—8:25
- How to acquire Influencers and negotiate rates—10:00
- Top ways to generate UGC through YouTube and Instagram—12:08
- Optimize your affiliate marketing channel with this platform—14:10
- An affiliate marketing strategy that finally makes sense—15:20
- How to leverage partner marketing as a single-product company—20:15
- Tactics and new ways to grow your email list—21:20
- Newton Baby’s content marketing strategy and unique approach to blogging —25:50
- Why Newton Baby decided to self-fund and opt out of VC Funds—28:35
- The downside and upside of running a self-funded company—29:20
- How important is it to grow social? Aaron’s take—31:30
“There’s nothing more scalable in this day and age than social. It’s where, certainly given the coronavirus, everyone is spending all of their time.”
Speaker 1: Welcome to the Page One Podcast. A twice weekly podcast, featuring a variety of guests and thought leaders, on topics ranging from channel strategies, to tariffs, influencer marketing, best in class product launches, and all the details about how to accelerate your eCommerce sales with the big box retailers. Or what we call R-Commerce. Now, here’s your host, Luke Peters.
Luke Peters: Thanks for joining us on the Page One Podcast. I’m your host, Luke Peters. CEO of NewAir Appliances, and Retail Band Digital Strategy Agency. We’re now in a coronavirus world, and I know that’s on everyone’s mind. So I’m going to adapt all of the interviews, to ensure that you listeners are getting the most out of this podcast. We’re going to get right down to some key wins that you guys can implement right now, in the middle of the pandemic.
Luke Peters: In this episode, you’re going to learn from Aaron Zagha, CMO of Newton Baby. How they’re succeeding as a self funded company in this world of venture backed lunacy. Aaron, thanks again for joining us on the Page One Podcast. Please give us a quick introduction.
Aaron Zagha: Sure. I am the CMO of Newton Baby. Newton was launched about five years ago, to create the safest crib mattress on the market. It’s a really innovative design. Babies can literally breathe straight through the mattress. It’s unlike any other mattress on the market. Since then, we’ve been continually in hyper-growth mode, growing over 100 percent a year, every year. Now growing a lot faster than that even, and have since launched ancillary baby related sleep products. Sheets, swaddles, mattress pads. Those kinds of things, and plan on continuing to expand our product lineup going forward.
Luke Peters: Thanks for that, Aaron. For the audience, I actually talked to Aaron previously, and I had some audio issues on my end. But Aaron is literally one of the smartest marketers that I’ve interviewed, so I think it’s going to be a really impactful podcast here. Why don’t we just dive right into it, and talk about coronavirus? That’s what everyone’s thinking about. We’re all dealing with it. Some sales are up with D to C brands. Some of them are down for various reasons.
Luke Peters: I guess just starting with this question. If folks have to hit numbers, and they’re behind numbers, what are changes that they can make if they had a shorter term? Say, 90 day ROI focus. These changes more specifically would be on their direct to consumer website sales.
Aaron Zagha: Yeah, so I think the first thing obviously to do is lean into any channels that are working, have always worked. Anything you can do that is a proven, known channel or tactic. Lean into that, obviously is the thing.
Aaron Zagha: More interestingly perhaps, we’ve seen quite a bit of fluctuation in advertising rates on all of the big channels. Both on Google and Facebook, and perhaps more interestingly, even on influencers and newspaper ads. All kinds of traditional, old school channels, is what I’ll call them. Which, as a digitally native D to C company, we have never even considered, just because I need to see directly attributable, measurable ROI. I don’t have a $100 million brand building budget.
Aaron Zagha: But some of those channels are getting so cheap, due to the coronavirus, that we’re actually starting to consider them. Now, it would be a bit of a test still. I don’t think that that’s necessarily where you want to throw 80 percent of your budget going forward, is to start doing TV all of a sudden. But things like influencers, even influencers which have performed well in the past for us, have started cutting rates.
Aaron Zagha: I think it’s definitely worth revisiting, either channels or your scale in those channels. Where you’re seeing declining of PPMs, PVCs, and seeing if you can negotiate down rates to a level, that it would really help you materially scale the channel, and to some degree take advantage of depressed advertising costs.
Luke Peters: That’s awesome. Now, have you seen, I guess on Facebook, I’ve heard that advertising rates for different terms or campaigns has reduced about 15 percent or so. Are you seeing things along that line? Or even more? What are you seeing?
Aaron Zagha: Yeah, it’s interesting. I’ve read all of the industry trackers. Pretty much every big agency in any of the channels is publishing one these days. There’s no question that costs to advertise to get an eyeball have fallen. I’ve seen estimates, anywhere from zero in some, to 50 percent, maybe at the peak about two, three weeks ago.
Aaron Zagha: We’ve seen more in the 10 to 20 percent range. But most of the industry is saying that that’s also kind of offset by a declining conversion rate. We haven’t necessarily seen that. But we are very nimble, and we’re constantly iterating and adjusting everything. We are not ever set it and forget it. Even down to the QR level.
Aaron Zagha: We’re always optimizing for conversions. We haven’t seen huge conversion hits. But we’re also not exactly a purely discretionary item. If you have a baby, you have to have a crib and a mattress for them to sleep in. We’re probably a little less volatile than other, more discretionary items.
Luke Peters: Yeah, for the audience, take a look at the Newton Baby website. It’s cool. I like all your call to actions, and social proof is really strong. You guys, you’re super fortunate that you have a product that is, it’s really differentiated. You’ve got a really great opportunity, and you definitely have taken advantage of that. Like you said, you guys have grown massively.
Luke Peters: You’re right. People are having babies. They still want or need a product, and then you offer a really great option for them. Still though, what changes have you seen, say in the last month or so, that are different than before? Maybe on the marketing, or sales, or just customer behavior side?
Aaron Zagha: Yeah, so I mean, I think it’s interesting. Because we’ve seen a huge shift in conversation rates of some channels. Historically, we sold to one big brick and mortar retailer. Then we are seller central on Amazon, and then our direct consumer site. What we have seen is a very significant change in conversation rate mix among those channels. Where for somewhat obvious reasons, the brick and mortar channel has basically gone to zero. Both our direct site and Amazon are seeing big surges in conversion rate.
Aaron Zagha: Those channels are actually up in conversion rate. But again, it’s really just change in channel mix, due to the virus. Where people do and don’t want to shop. Further, that’s one of the reasons we’ve always been to some degree omnichannel. I believe very strongly in meeting the customer wherever they want to shop. But this really calls out why you really sort of have to be. Because if you’re wholesale only, and all the stores that carry you shut, you’re out of business.
Luke Peters: Yeah, exactly. I mean, this is going to speed up the transition to online. A lot of people, just customer behaviors are going to get used to this. It just makes it more important now than ever. It’s funny. I mean, I’ve been going to eTail, the conference over in Palm Desert, forever. Omnichannel was a buzzword, probably almost 10 years. At least seven or eight years ago. But some people haven’t made the move. You’re absolutely right. You’ve got to be there. You’ve got to be where the customer is. That’s a great point.
Luke Peters: Aaron, go ahead, and if you don’t mind, quickly break down a little bit about the company. I’m sure the audience is interested in hearing size, number of employees, any footprint you guys might have. Just to give a little scale, or some context on the company.
Aaron Zagha: Yeah, we don’t really disclose sales. But in terms of employees, it’s about 15 full time people, or the equivalent of that. We use a lot of agencies and outside people, and a couple part time people as well. But it’s pretty much about 15 of us full time, focused on the Newton Baby business.
Luke Peters: Got it. Where’s the HQ located? I think it was back east?
Aaron Zagha: Yeah, headquarters is actually in New York. I work remotely in LA, but I’m back there often, and right now there is no headquarters.
Luke Peters: Yeah, everybody’s remote.
Aaron Zagha: Yeah.
Luke Peters: Cool. Then why don’t we talk about, I guess before we move on, because we’ll dive into more on D to C, and how you can succeed there. But why don’t we start with tools and publications? Just bringing it up, because earlier you were talking about, you stay up to date on the most recent information. It would be interesting to find out where you like to get that good information, and also maybe what tools you use. Like SEMrush, or anything like that, that helps you run your business?
Aaron Zagha: Yeah, the most important tools for us are obviously analytics. We use a combination of good old Google Analytics, and Rockerbox, which is a multi-touch attribution vendor. Rockerbox is awesome. I really like them. They are 1/5th the price of most of the big attribution companies. They’re young and nimble, and really helpful and smart. Those are the two that I use constantly, in terms of monitoring our own business.
Aaron Zagha: In terms of industry wide stuff, I’m on the email distribution list of every single agency and vendor on Earth, as a result of having gone to eTail many years.
Luke Peters: That’s funny.
Aaron Zagha: I think they share details. But you know, some are better than others. Some vendors publish really good thought pieces. Almost all of the big agencies right now are publishing what they’re seeing on an aggregate basis, with respect to trends due to COVID. That data has been pretty interesting, even though it doesn’t really apply to us. Even at the category level, we haven’t found the data to be highly correlated with our own experience.
Aaron Zagha: But knowing what’s going on in the industry certainly helps inform, say how we’re going to negotiate with a big influencer. The fact that influencer spend has gone down, well, to zero in a lot of brands’ cases. But probably 50 percent on average. We’ve been able to negotiate down influencer rates pretty successfully.
Luke Peters: Wow, and how are you acquiring those influencers? Are you using some sort of marketplace tool? Or is it a different way to acquire them, or get ahold of them?
Aaron Zagha: Yeah, it’s interesting. When I first started, the company was using a platform. We found pretty quickly that it wasn’t working well. I think there’s a lot of different reasons why. I don’t think we were using it all that well, and we weren’t very sophisticated in who we were accepting or reaching out to. It’s such a nebulous, murky industry to start with, and there’s very, very little good data. There’s really no data whatsoever on any platform, with respect to how effective any given influencer is at driving actual sales.
Aaron Zagha: We shifted quite a bit, and now influencer is, it’s one of our top channels from a traffic perspective. Not from a sales perspective. But it’s more top of funnel for us. We deploy it four different ways, I think. We work closely with an agency who handles our larger influencers, that get paid, and paid pretty well. They’re a really awesome, interesting agency. They only work with influencers who have been proven, for their other brands that they represent, to drive real sales on an ROI positive basis.
Aaron Zagha: They really run it like a performance channel. They’re the only ones I’ve ever heard of that really works that way. When they stop seeing an influencer perform, they’ll just cut them from their ranks. That’s how we handle the larger influencers.
Aaron Zagha: Any influencer that reaches out to us directly, we handle in house. We do handle some influencers through Share A Sale, and the affiliate channel. If an influencer is willing, and perhaps even eager to work on a rev-share basis, I am more than happy to do that always.
Aaron Zagha: Then the last way, that we’re about to launch is, we’re going to actually hire another agency to do micro influencers at scale. The goal is, that won’t necessarily be as much directly performance related, but more of a content play, so we can get some more UGC for use in our ads and other things. Four channels to handle, one meta channel, which we’ll call influencer.
Luke Peters: Yeah, and you talk about UGC. Are these going to be mainly Instagram influencers? Or using YouTube? What’s the main channel, and what type of content are you getting out of it?
Aaron Zagha: Yeah, so historically it’s been mostly Instagram. We have been doing more and more YouTube. We’re looking into Pinterest influencers, which is kind of interesting. We’ll see how that goes. It’s going to be a new one for us.
Aaron Zagha: One of the channels that is directly being affected by COVID is podcasts. People are not listening to podcasts, because they are not driving. So podcast rates have gone down significantly, and so I think we’re going to give it a pass.
Luke Peters: Yeah, okay. Yeah, definitely, and have seen that trend. Exactly. There’s so many changes that happen when people work at home. Obviously on the macro, you have less oil and gas usage. But yeah, there you go. Less podcasts, less time in the car. There’s so many other effects. It’s going to be so interesting a couple years from now, when all these studies are done. What happened during this time period. I’m sure there’s things we’re not even thinking about.
Luke Peters: But very interesting on your influencer side. I think you talked about Share A Sale. Can you tell me more about that, and what that website’s about?
Aaron Zagha: Yeah. It’s just an affiliate platform, much like Rakuten or Commission Junction, or Impact Radius. All they do is help track revenue share deals. A publisher signs up on there, and brands sign up. Brands make offers, and they say, “If you write about us, or drive traffic to our site, we’ll pay you a commission”.
Aaron Zagha: A third party like Share A Sale, or Commission Junction, tracks all of that, and makes sure that there’s no abuse in there. It’s really just a platform to help find people to publicize your site.
Luke Peters: Got it. I mean, is it any different –
Aaron Zagha: And then pay them.
Luke Peters: Is it any different, or better, or more specialized than Commission Junction, or CJ? I mean, that’s usually the one that we’ve had a lot of experience with in the past with affiliates. But this sounds a little different. Or is it kind of the same thing?
Aaron Zagha: No, they’re all the same, pretty much. I mean, there’s ins and outs, and some are better at some publishers, or some different kinds of verticals than others. Share A Sale is really easy and user friendly, although it’s probably less suited for giant programs. Our programs are pretty small. We don’t work with coupon sites, which tend to be the vast majority of publishers on all these affiliate channels. We just, it’s not as big of a deal for us.
Luke Peters: By the way, on that note. Because you are the king of attribution. Maybe you could answer.
Aaron Zagha: Thank-you.
Luke Peters: Yeah. How do I form this question? This is the question that nobody can seem to really answer, and that is about affiliates. Why don’t we dive down that rabbit hole? Because maybe you have the answer. But I’ll pose the question like this. A lot of companies have no clue if these affiliates are actually profitable, and sometimes they can’t even believe the data that’s coming to them. Because GA will show one thing. The affiliates will say one thing. Maybe another analytics tool actually say they actually contributed less dollars.
Luke Peters: There’s been this mistrust, at least in folks that I’ve talked to. Is that one of the reasons you’ve pulled away from … Well, there’s other reasons to pull away from the coupon sites, I bet. But what are your, I’m curious, your overall thoughts just on affiliates in general. It definitely is a murky area.
Aaron Zagha: Yeah. You know, I think you need to really split it out into the coupon sites, and the content sites. Depending on your vertical, and whether you sell wholesale or direct to consumer, the coupon sites may or may not add value.
Aaron Zagha: I think I was at a conference, and someone from one of the sporting goods companies was, and this is a sporting good retailer. They didn’t have their own brands. They sold the same sporting goods brands that everyone else does. They were saying that they did a really expensive lift test. That’s I think the only real way to tell if there’s value add.
Aaron Zagha: They did a lift test, and they shut off all the coupon sites for a month, and they turned them back on. What they saw was that they definitely did drive significant incremental business. I think short of doing a massive lift test, or having a multi-touch attribution vendor that’s really good, it’s very hard to tell whether or not these guys are driving value.
Aaron Zagha: Now for us, it’s a little different. Because we are the only ones selling our product. No one else sells our product. It’s not like, if you don’t like the price on our site, you’re going to go look for a coupon code and then buy it from Walmart. Coupons just aren’t nearly as relevant. We do still use coupon codes sometimes, where they get on the coupon sites. That’s annoying, but we don’t pay for those, so it’s not the end of the world.
Aaron Zagha: We’re much more interested in using the affiliate networks to find publishers who will write real content that’s actually helpful and useful. Things comparing us to other products. Long form analysis of why we’re differentiated, and other crib mattresses, or whatever it happens to be. That’s real content, and that has value. There’s no question that that’s educating customers.
Aaron Zagha: We actually did a poll recently to ask people why they purchased our crib mattress. A surprisingly high number said that they turned to online review sites. That, we had Amazon reviews as a whole separate choice. What we found, at least, this is self reported. That people said they turned to those, “Top 10 mattresses available right now”, those kinds of content sites, slightly more often than Amazon reviews. Which was interesting. Those sites are all affiliates.
Aaron Zagha: There’s no question that people are actually using those kinds of content publishers in their decision process, and therefore driving value. So long as you get well reviewed. But those guys were happy to pay a commission.
Luke Peters: Well, and actually, I’ve got a couple questions in there. You do a great job of differentiating the options. For brands that sell direct to consumer, but then also wholesale, your comment’s interesting. You’re saying there may be some value on the coupon sites, because they’ll go to the brand, then they may go to a large retailer. But then they may also coupon shop, and come back to the brand. That’s where the brand can win more sales than they would have had without a coupon. It sounds like that’s the logic on that one?
Aaron Zagha: I think so. Like I said, I’ve never really been in that position. I have, in a previous like I worked at Teleflora, the big online flower company. For us, the coupon affiliates were really important. Because people don’t care where they buy flowers from. It’s unbranded. It’s more or less a commodity. They just want the best deal. If you weren’t there on the coupon sites, you would lose meaningful business. There was no question that they drove incremental value. So it really just depends.
Luke Peters: Yeah, and then back to the content sites. I 100 percent agree with you, some of those online review sites are really powerful. Some of them are moving to YouTube, by the way. They’re creating content all over. What’s been your typical way that those deals have been negotiated? Is it a rev-share? Or have they sometimes even had to be one time payments? Or a combination of both?
Aaron Zagha: Yeah. You know, the ones that we work with are all rev-share. But if you want preferred … Almost all of them also, in addition to creating the content, have paid placement too. Those paid placements are, they’ll feature your review in an email to all their subscribers. Or they’ll run banners on the site. Or they’ll feature you in a giveaway. Or they’ll post social about a review of you. Those things often are paid placements.
Aaron Zagha: We don’t typically do a ton of them, unless we know that they’re going to work, and I guess you never know something’s going to work. But I’m always talking to other CMOs at related companies, in the baby space. Networking, and talking to affiliate managers. If we hear that one site’s Mother’s Day giveaway performs insanely well always, then we’ll go ahead and do that.
Aaron Zagha: But typically, we don’t do a ton of those. Just because we haven’t seen or heard about them ROI-ing typically.
Luke Peters: Great. I mean this is really tangible, useful affiliate information and stuff that I’ve taken notes on, and definitely will take a look at. Let’s talk about partner marketing. Do you guys, are you involved in any partner marketing?
Aaron Zagha: Yeah, we do some. We love, as a single product company really. I mean, that’s starting to change as we extend our lineup. But we only have one thing to sell to a customer. The question is, A, are there ways to partner with other companies who sell complimentary products, and create a better customer experience? So that they can find the safest baby monitor, in addition to the safest crib mattress? We do often do different kinds of partnership with other companies.
Aaron Zagha: Then at some point in time, we’d love to figure out a way to better help our customers find all kinds of products. Down the road, I think there will be even more opportunities for partnerships. But we do the typical things. We’ll do giveaways with other brands. We’ll do cross promotion. Things like that mostly. Beyond that, we don’t do a ton of partnerships.
Luke Peters: Yeah. Then for sure for NewAir, and a lot of brands, for me email marketing is important. Just growing that email list. It’s still a very highly engaged audience, opt-in. They’re interested as long as the messaging is done correctly, and you’re providing valuable content. But also, it’s definitely a powerful tool for a brand to have. Talk to us about email. What have you found works? How or what is the best way to grow, and acquire more emails?
Aaron Zagha: Yeah, even before I joined the company, email and getting an email signup was almost the top priority. As a company, we’ve always been focused on it. The reason why is because there’s only so much you can convey in a Google ad, or display ad, or whatever channel. We don’t operate in an impulse purchase industry. It’s a considered product. You want to make sure you’re getting the best for your baby. You’re going to read some reviews. You’re going to come back.
Aaron Zagha: Making sure that you have the email addresses is the best way to do that. Making sure you have a robust welcome email series is the best way to convert. We’ve always prioritized email selection. We do it all kinds of different ways, and we’re constantly looking for new ways to grow our email list. Giveaway has always worked pretty well. But it really varies on the quality of the other brands you’re working with, if you’re working with other brands. Or which channel.
Aaron Zagha: Instagram giveaways, where you just have to follow a brand, don’t result in great lifts in your email list, for example. Then we do partnerships with other brands, where we’ll do a best product of the month, and hopefully get people to sign up.
Aaron Zagha: We’ve experimented and continue to experiment with all kinds of other lead-gen types of details with content sites. Where effectively, we’re offering something in return for a sign-up on their site. If it’s a content site all about pregnancy, we’ll offer a deal to the readers from that site. Some of these content sites basically have a user sign up right then and there to get a deal.
Aaron Zagha: There are deals like that that we’ll do. Then even things like basic lead ads, where you’ve experimented with. They haven’t worked all that well. But they’re another good, easy way of scaling up your list. It really just depends on how big a prize you’re offering, and how well you execute a giveaway. Or how big a discount you offer. Whatever kind of value you’re offering to the customer.
Luke Peters: Right, and a couple questions around that. Those content sites, are those other affiliate sites? Or is this a whole other category of sites that you’re partnering with, and somehow acquiring their users as well?
Aaron Zagha: Yeah, I mean effectively they’re affiliate sites. But most of them do straight B to B, lead gen deals. Most of these content sites are often portals, or big publishing sites. Some of them are pretty category focused. Some of them will have several different lifestyle brands, or health brands. When you sign up for those sites, they’ll often guide you through a process, where you can sign up for other offers. Things like that.
Aaron Zagha: But most of these deals are done directly with these other content site owners. So we’ll pay, typically more on a cost per email basis that we pay them.
Luke Peters: Great. How do you find those? Is this just Googling content sites that show up for strong keywords in your industry? Or are you finding these another way?
Aaron Zagha: Some of them are fairly obvious, because we’ve crossed paths with them in a bunch of different ways. But most of them I think reach out to us, I would say. If we don’t know about them already, we’ve never gone and searched proactively for those. They’ve always come to us. We’ll test just about anything. Some of them work. Some of them don’t even come close to working. You just have to test.
Luke Peters: Yeah. Then on the giveaways, that was interesting. The Instagram lists, apparently they’re not as good. What other giveaways? Are you talking about an on site giveaway to acquire emails? Or is it giveaway more with partnerships, and acquiring other lists?
Aaron Zagha: Yeah, it’s more partnerships. I mean, you can only get so many new emails when you’re publicizing at your own customers. Pretty much, you already have their emails.
Luke Peters: That’s true.
Aaron Zagha: You have to find some new source. Whether that’s Facebook ads, or Instagram ads, or wherever you’re promoting it. Pinterest ads, whatever. Or partnerships, where they’re promoting to their lists. Those are typically the biggest ways.
Aaron Zagha: If your giveaway is good enough, it will get picked up by the contest sites. There are whole websites devoted purely to just letting people know what the best giveaways are. Those obviously don’t tend to convert insanely well, in terms of creating lifetime value. But they’re effectively free, because they’re just adding publicity to what you’re already doing yourself.
Luke Peters: Yeah. Then how about, are you able to talk about your content strategy? Curious from, if you guys have a content calendar, and if you have found success in blogging? Then, after you invested time in that, how do you repurpose that content, if you do in fact do that, into other mediums? Whether they be infographics, or just shorter blog posts that go out on social. How do you guys do in your content?
Aaron Zagha: Yeah, our blog strategy is maybe a bit peculiar. We only blog about things that we know we can rank for. I don’t really want to write a blog post about how healthy formula is, versus breast milk, because there are giant formula companies that do a much better job of that, and I’ll never rank for it. Even though I’m sure our followers would be interested in it, we typically won’t do that. Just because we do have limited resources, and we can’t be writing articles about everything.
Aaron Zagha: We’re always focused on things that we’re pretty sure we can rank for. We use the blog and content as very, very, very top of funnel. Even pre-funnel. The topics that we focus on a little more are earlier in the process of someone who might eventually become a customer. More pregnancy, or even marriage. That’s for various reasons.
Aaron Zagha: But I think it’s very cost effective that way, versus someone who’s currently in market, they probably aren’t going to necessarily, or someone who already knows about your brand certainly, they’re not going to go read a 10 page blog about your brand if they already know about it. They’re going to Google, and then go buy. We use it really top of funnel, and in a very resource focused way, to ensure that we’re not just wasting time writing blog posts and trying to get links.
Luke Peters: That’s awesome.
Aaron Zagha: In terms of the content, we don’t reuse it that much. Especially as the advertising world, and especially the click based ad world, goes shorter and shorter. Five second videos are what’s converting on Facebook these days. There’s really not an opportunity to use all that much content in there. We will incorporate stuff into our email series. That’s kind of the one place that will show up.
Luke Peters: Would that be the one place it gets promoted? So the content’s written. It’ll live on the site. It’ll hopefully show up, because the domain’s got some strength, and it starts ranking. Then as far as external promotion, that’s going to happen on email? Or also are you posting this on, say LinkedIn, or Pinterest, or Instagram, or anywhere else, to drive any other eyeballs to it?
Aaron Zagha: Yeah, we don’t really do a ton of that. If I’m going to spend money driving someone to the site, I want to drive them to our shopping.
Luke Peters: Very smart. That’s smart. Yeah, you’ve got to look at what’s actually converting. What’s making more dollars, or has a higher ROI. I haven’t thought of it that way. That’s a simple way to think about it though, and probably the right way to think about it.
Luke Peters: Talk to us quickly about, Newton chose to self fund. That’s what we led off this podcast with. You guys have done an amazing job, by growing quickly, many years in a row here. Talk to us about that decision. Why it was important, and how it probably has especially helped you right now, in this crisis we’re in.
Aaron Zagha: Yeah. The founder of the company has started and sold other businesses in the past. I think he’s very financially savvy, and very savvy in general. He never really wanted to give up a big chunk of the company to a VC fund, and he didn’t want to lose control, I think to some degree also. Frankly, from almost day one, Newton had enough success that there was an option to bootstrap and self fund. That’s kind of just the way that it’s always been run.
Aaron Zagha: We do receive inbound offers pretty often. We’ve turned all of them down. There are definitely times when I wish we raised $10 million that I could throw into TV ads, and not really care about the ROAS. But it’s certainly not the way that we’ve gone. Maybe that will change in the future, maybe not.
Aaron Zagha: The downside of all that is, that we do typically have to run the business profitably. In this day and age, I think that’s become a great thing. Especially given the blowouts of some of the other VC backed companies, who are nowhere near profitability and may never be. We’ve gotten somewhat lucky, in that we have a sustainable business model at this point time.
Aaron Zagha: But it definitely does put pressure on the things we can and can’t do, and frankly how fast we can grow. My task is always growing as fast as possible, while maintaining, relative to most of our competitors, a ridiculously high return on ad spend. Through pure iteration and force of will, and paying a lot of attention to things like multi-touch attribution, we’ve been able to succeed. Hopefully we’ll continue doing so. But yeah, that’s the big downside of not seeing outside money, is being profitable. You have to be profitable.
Luke Peters: Yeah, well it’s also an upside. I can hear all the CEOs and founders and owners listening. They’re excited to hear that one, and they’re saying, “It can be done”. They’ll pass that comment on to their marketing team and say, “Let’s improve our attribution”, or something like that. That’s funny.
Aaron Zagha: Yeah, but frankly it also does hurt us. Because there are all kinds of vendors and agencies that I would love to work with. When I tell them our realized constraints, they’re like, “Absolutely not”. It’s great that we can achieve them, and we’ve been able to, and continue growing triple digits. But it definitely precludes us from doing all kinds of things, and working with all kinds of really good, talented agencies and vendors.
Luke Peters: Yeah, and I know exactly what you mean. With a high ROAS, it’s very hard to scale that, oftentimes. To get to that ROAS.
Aaron Zagha: That’s right.
Luke Peters: Yeah. I definitely understand that. Well listen, this has been an awesome podcast. A lot of learning. I took a bunch of notes. But before I let you go, I wanted to finish up quickly on social. Is there a specific channel, maybe it’s Instagram? You guys are working with these influencers. I’m curious on how important it is for the brand to grow social. You guys are obviously ROI focused, and social doesn’t always contribute to ROI directly, or easily measurably. How do you guys see it?
Aaron Zagha: The great bane of I think every big marketer’s life these days, is the lack of any kind of third party verification of what Facebook Pixels are reporting, right? There’s just no way to really figure it out, besides looking only at clicks, or doing lift studies. A lift study is great, but I don’t want to turn off my biggest channel for a month, and see what happens to my business.
Aaron Zagha: There’s nothing more important … Let me rephrase that. There’s nothing more scalable in this day and age than social. It’s where, certainly given the coronavirus, everyone is spending all of their time. It’s also just the best channel from a format perspective, to educate people. Because people do watch videos on social. They do interact more. They talk to their friends about your product.
Aaron Zagha: I think it’s the most scalable. The challenge I think is that it’s also the hardest to scale, just because it’s so complicated. Specifically Facebook and Instagram, there’s so many different levers, ad types, attributes, audiences, ways of targeting, lookalikes. I’m sure someone’s done an analysis of how many different ways you can run an ad. I’m sure it’s hundreds of thousands, if not millions.
Aaron Zagha: It’s incredibly difficult to scale, but it is the most scalable. It just requires the most effort and knowledge, and testing, and iteration. But there’s no question that, I think for us especially, social probably still has the most upside. Even though we’ve been growing it really quickly.
Luke Peters: That’s a great way to finish this podcast up. Listen, really appreciated you coming on the show today, Aaron. Before I let you go, why don’t you let listeners know how they can find you, if they choose to, or learn more about your business?
Aaron Zagha: Yeah. Go to newtonbaby.com to see everything about the world’s safest crib mattress. I think now is a great time to have a couple extra drinks tonight, and maybe make a new baby that you need a mattress for in 10 months.
Luke Peters: There you go.
Aaron Zagha: I greatly appreciate it. You can find me on LinkedIn, Aaron Zagha, Z-A-G-H-A.
Luke Peters: Awesome. We’ll have all of this in the show notes for the listeners. Again, I want to thank everybody for listening to this episode of the Page One Podcast, sponsored by Retail Band. Hope you all stay safe. I truly appreciate your reviews on iTunes, and hope you join us for the next episode. Thank-you.
Speaker 1: Thanks for listening to the Page One Podcast, with Luke Peters. If you like our show and want to know more, check out our other segments. Also, please help us out by leaving us a rating on iTunes. Want to learn more about R-Commerce? Check our www.retailband.com, to get more great tips and tricks on how to accelerate your eCommerce sales, with the big box retailers.
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Contact Aaron Zagha: LinkedIn