“We're getting people to watch two minutes of content for like half a cent on average, which is crazy cheap for that level of engagement. We're getting people to become a customer for $3 to $4. … At that margin level, I would spend as much as I possibly could as long as I had the supply chain to fulfill it. So I wouldn't even think about that as a marketing budget, right? I would think of that as a sales machine.”
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Guy Raz asked how much Dr. Squatch spent promoting its breakout ad video. Founder Jack Haldrup explains that because each new customer was profitable after ad costs, he scaled spend until supply ran out rather than working to a fixed budget.
Yeah, I think it's easy to call it a viral video, but we knew that it would be an ad. And so I would say it's viral because the ad was so efficient at acquiring customers like cheaply and profitably that that's what drove the virality as along with like some of the sharing behind it. Well,
…Like you had originally talked to somebody who said, well, we'll make it for a quarter million and then we'll put a quarter million dollars of marketing behind it. You spent $15,000 on producing the video. And then what did you have to spend to actually market it to get it out there into the world?
Yeah, that's a good question because when I think about marketing, I think more incrementally. So when we put it out there, you know, let's say we're getting people to watch two minutes of content for like half a cent on average, which is crazy cheap for that level of engagement. We're getting people to become a customer for $3 to $4. So at that level of profitability, because I make, let's say, I make $25 on that order. And then after my margins, I'm getting, let's say, $10 per customer. At that margin level, I would spend as much as I possibly could as long as I had the supply chain to fulfill it. So I wouldn't even think about that as a marketing budget, right? I would think of that as a sales machine. And so I would say the video was kind of like this sales machine for probably like a three to four month period of time where it was just like going crazy on both Facebook and YouTube in terms of like how good the advertising was against it before it started to slow down. So cumulatively to date, I don't know exactly how much we've spent on that. But I would say that we basically would spend on it to the extent that it was profitable in terms of acquiring customers.
So you put it out into the world with some little bit of ad spend. And what did it do to sales for sales?
Yeah, I mean, sales were crazy. And then, like I said, is also they were profitable. So we probably spent, you know, relatively like as much as we could on the video. Like we probably were supply chain constrained more than anything else. And we probably did 5 million, a little over 5 million in…
Wow. So you went, I mean, so that, and, and how much of that 5 million in sales would you attribute to that video?