Improving Efficiency While Scaling New Customer Revenue Year-Over-Year

The Challenge: Scale Q4 New Customer Revenue YoY While Increasing ROAS

• PAKA, a DTC apparel brand, came to DTCo to improve media spend efficiency In September of 2023. While PAKA scaled new customer revenue in Q1 - Q3 of 2023, return on ad spend struggled to reach profitability.

• PAKA sells outdoor apparel crafted from alpaca fiber, renowned for its sustainability compared to conventional materials. Their Peruvian Alpaca Fiber offers an exceptional blend of softness and thermoregulation.

• PAKA aimed to increase new customer revenue by 30% year-over-year while concurrently improving new customer return on ad spend.

The Solution: Restructure Campaigns And Optimize Creatives

• After identifying the lack of incremental gain from remarketing efforts on paid search and social, DTCo reduced remarketing investment from 60% of overall ad spend to 15%.

• DTCo reduced interest targeting on Meta from 64% to 24% by shifting to broad targeting that allowed Meta to use the creative itself to capture a diverse group of high converting users.

• DTCo established creative content pillars centered on themes and user intent, emphasizing the prioritization of unlocking audiences through creative strategies.

The Year-Over-Year Results: Scaled New Customer Revenue 48%, Increased New Customer ROAS 38%

• After reducing inefficient remarketing spend, DTCo was able to streamline prospecting efforts with a more tactical campaign structure that improved ROAS and new customer acquisition.

• PAKA is on track to increase ROAS another 15% while increasing spend and scaling revenue another 30% in Q1 of 2024.

• With strong new customer performance in tandem with improved return performance driven by email marketing efforts, PAKA improved MER 36%.

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