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Jure Knehtl | eCommerce Growth Hacker | WeScale Agency
August 10th, 2020

UGC = One of the biggest secrets of seven- and eight-figure brands

Automation, optimisation rules, account simplifications, remarketing, hacks to 10x your business, creative templates for cold audiences to achieve a 2.5+ ROAS…

Do these topics sound familiar to you?

Yes, we’ve read these kinds of claims in Facebook groups and online articles, too.

But let’s just stop for a minute and think about what we are missing when we talk about how to build a fast-growing seven- or eight-figure eCommerce company.

Is it the targeting, offer, copy, landing page, more products or something else that contributes most to success?

While all of the above are great and can be effective ways to scale your revenue, something very important is still missing.

After working on more than 100 different projects, selling products ranging from €15 to products that sell for €10,000, running thousands and thousands of tests, talking to other eCommerce owners who are doing eight+ figures and analysing millions of ads, we’ve finally found the secret:


It’s the number of creatives you are able to test, iterate and scale.

We also love to say that …


Automation and optimisation are kings, but content creation is King Kong.

Sounds interesting, but what does it really mean?


How doubling the velocity of testing different ad creatives enabled a merchant to scale from seven to eight figures

Let’s dive into an example so you can fully understand the power of testing different creatives in an eCommerce growth engine.


PROBLEM: Stuck at a certain level and running out of ideas for what to test.

An eCommerce client based in Europe was growing super fast, going from 0 to high seven figures in less than two years. The team was expanding, they moved to new offices, they were highly profitable, and it looked like they had everything figured out.

They were living their dreams…

But suddenly, the growth stopped.


They were opening new markets, adding new products, testing different targetings, creating structured remarketing funnels, and following all the guidelines from Facebook’s Power5, but the growth just wasn’t there anymore.

The founders reached out to us and told us about their challenges.

After analysing their ad accounts and analytics, our first question was:

“How many creatives do you test on a weekly basis?”

Their answer was “5-10”.


This was a huge shock for us because we were talking to the founders of a company that was spending more than €10k per day on Facebook ads, yet they only tested up to 10 creatives per week?!

We also need to tell you that we have huge respect for this client and that everything else on their side was done amazingly well:

  1. They really understood their target customers—demographics, pain points, what kind of copy grabs their attention, what kind of upsells and cross-sells they are attracted to, and much more;
  2. They had a conversion rate of 4.5%;
  3. They knew their competitors really well;
  4. They were testing different offers to increase their average order value;
  5. They followed the glocal approach—going global with localised markets; and
  6. They were receiving great reviews on their products and much more.
 

Their reaction to our advice that they needed 3x, 5x or even 10x the number of creatives they were testing on a weekly basis was: “No, we can’t afford that.” We were confused. They were testing ideas that were really difficult to execute on new products, new markets and so on—but the low-hanging fruit of simply changing the creatives had not yet been utilised.

Their reasoning was that they were outsourcing to a video agency that specialised in TV commercials, which cost them more than €1000 for a single video ad. As such, it would be far too expensive to increase the number of creatives they tested each week.


SOLUTION: Build your creative engine to roll out 50 (10x) creatives to test a week.

To fix the content creation problems with cost and quantity, we analysed different possibilities based on cost, speed, control and diversity. Here are our top three possible solutions:

  1. Find a new, more cost-efficient content agency – The company had actually done this in the past, but they had encountered a lot of problems with self-proclaimed experts with no proven experience. They lost control of the communication of their briefs to the actors, video team and marketing team, they didn’t create any iterations of the creative, and the delivery was slow. So, based on the goal of creating 100+ creatives per month, we didn’t even try this option out. We knew there had to be a better way.
  2. Create an in-house studio – This is a very attractive solution because of the speed with which you are able to execute ideas as a result of having all the knowledge and communication you need in-house. But on the other hand, the company would need to invest a lot of money into setting up the studio (rent a building, buy furniture, lights, cameras, etc.), and they would need to hire and lead people who know how to create engaging and high-converting content. Last but not least, they would definitely face challenges with content diversity. So, the second option was better than the first, but it was still not what we were looking for.
  3. Create user-generated content (UGC) – Keeping in mind that Facebook, Instagram, YouTube, TikTok and other social media platforms are human platforms and that people are using them because they want to know what is going on with other people, user-generated content became our go-to solution.
 

Why did we choose UGC?

  • Cost-efficient without any huge investment to start creating the content
  • Fast briefing, shipping and content delivery
  • We could find larger numbers of content creators and get multiple pieces of content from their side = It’s scalable
  • Simple briefs, content can be uploaded via Google Drive or Dropbox, and the results are easy to share
  • Native content for our platforms
  • Diversity of content with different people and different content styles, backgrounds and product usage
  • People make purchase decisions based on recommendations from other people
  • It is a proven strategy that a lot of bigger companies use to scale their content and sales
 

RESULTS: UGC improved the client’s ROAS by 50%+ and beat all the other creatives

In eCommerce, results have to be demonstrated quickly and reliably. This is why we built an easy-to-execute experimentation program with UGC and took it out into the wild to see what would stick.


Our test: Compare UGC with professional, studio-created ads

The company’s original investment in content creation was €25,000 per month for 25 videos, so we agreed on an extra €5000 that we could spend to generate content with the help of influencers and content creators to see if we could get some traction.

So, first, we analysed what was already working on the client’s ad account and looked for inspiration inside their competitors’ ads libraries.

Based on that, we developed a brief for our content creators, defined the deliverables and reached out to our selected creators.

The results blew us away and fueled the growth of the company.


One week of testing: UGC ads were the ultimate winner

We received 130 videos and 400 photos from our content creators, and our editors used those to create more than 200 iterations for videos. In addition, we tested around 100 different images, as well as thumbnails, Instagram Stories, dark posts and Facebook Link ads.

After seven days of testing both types of creatives across various levels of the funnel, the ROAS on the original creatives was 2.5 and the ROAS on user-generated content was 3.8 = +50% improvement. Keeping in mind that the company’s target ROAS was 3, we were able to increase their spending on user-generated creatives and, by the end of that month, those creatives generated more than 70% of their total sales.

So, the first question that probably pops-up in your mind is:

“How is it possible to achieve better results with an 80% lower investment?”

Yeah, that’s the power of UGC.


Why Did It Work?

The people who were creating the content were using those platforms on a daily basis. They post a lot of content and have a good read on what will catch the attention of other users.

So, on our side, we found the right influencers and creators who would identify with the brand, create content and also generate sales directly from their followers.

By getting more platform-native content for a lower price, you have a lot more room to play with different iterations of videos, test more, learn more and sell more.

But there is even more…

UGC is one of the best growth engines for eCommerce in 2020/2021. 

It will transform the way you do digital marketing.


Based on our experience of scaling multiple international brands to seven and eight figures, as well as generating more than €100MM in revenue with a +3.5 ROAS, using UGC is one of the most effective ways to scale your eCommerce sales and grow your profits.

Some of the world’s best companies—Nike, Apple, Madewell, Glossier, GoPro and many others—are using UGC to create impactful relationships with their clients.


At WeScale, we help our selected partners to build their UGC generation and creation systems to help them 5-10x the number of creatives that they can test on a weekly basis.

We support business by:

  • Analysing the current state of creative performance;
  • Finding the right people to work with;
  • Negotiating the pricing for content creation deals;
  • Creating moodboards and briefs for new content;
  • Setting up naming conventions and UTMs for tracking;
  • Creating multiple streams of content;
  • Creating different iterations for different platforms and stages of the funnel;
  • Building automation for reviews and content creation from their customers;
  • Setting up systems to measure performance; and
  • Scaling the production of user-generated content.
Our aim is to create campaigns with the best native content for platforms, as well as build brand affinity and scalability for clients to help them grow their business in their existing markets and enter new markets.

Do you want to collaborate with us on scaling up your eCommerce business and taking it to the next level?