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Don’t Advertise to Existing Customers, Says Serial Ecommerce Entrepreneur




Taylor Holiday runs three successful ecommerce businesses, a thriving, ecommerce-focused ad agency, and a membership community for advertising matters. He’s developed definitive views on acquiring customers and ad performance, among other insights.

“Lifetime value is subjective. I prefer the term ‘cash multiplier.’”

“Attribution is not important to us. It’s not why an ad unit exists.”

We don’t believe in using ad dollars to market to existing customers.”

He’s an authority on ecommerce advertising, in other words. I recently spoke with Holiday about his ventures, the state of ecommerce, and advertising dos and don’ts. What follows is our entire audio conversation and a transcript, edited for clarity and length.

Eric Bandholz: Please tell us about yourself.

Taylor Holiday: Our agency, Common Thread, is focused on helping folks grow their ecommerce business. We operate in the consumer-product ecommerce world, especially at the early stage of companies, from zero in annual revenue to about $30 million. Our work includes paid customer acquisition, conversion rate optimization, and creative production — anything to help businesses navigate that early stage.

We then use what we’ve learned with our own ecommerce brands, which are Fielder’s Choice Goods, Bambu Earth, and Slick Products. We understand what goes into growing an ecommerce business because we’re doing it every day alongside our clients. It’s a fun journey.

Bandholz: There are so many things I want to ask. You have three ecommerce sites, an agency, and an online community. You’re running multiple businesses.

Holiday: Well, the good news is I’m not. The key as a leader is to build an ecosystem. I have no day-to-day responsibilities inside of 4×400, which is our ecommerce group. Andrew Faris is the CEO of that company. I’m more or less the chairman of the board, to collaborate. Our member community site, ADmission, is run by Grant Zanini and Adrianne Verheyen. My day-to-day responsibility now is the agency. I rely on awesome people to help build the rest.

Bandholz: Are the companies independent? Is there a parent?

Holiday: They’re all owned by a holding company called Dream Labs, which is the overall parent. Dream Labs also includes commercial real estate holdings and a culture development agency called Tell Me Your Dreams and a small influencer marketing agency. They’re all owned by Dream Labs. My partner Josh is the sole employee. He handles all of our legal and mergers and acquisitions — those sorts of things.

Bandholz: One of my mistakes in building Beardbrand was Facebook advertising. Five years ago, we were getting an obscene return on ad spend, something like five-times. I didn’t think that was good enough, and we pulled from Facebook altogether. In hindsight, I wish we would have pushed a bit harder. What other advertising mistakes do you see from ecommerce sellers?

Holiday: I hear that sentiment from many entrepreneurs who were running businesses in 2016 and ’17. When I was running QALO, our wedding-ring site, my partner and I had that same feeling. Everyday items were generating returns of five-to-one, six-to-one, whatever it was. And we didn’t have this sense of the moment. It’s hard to be present in that and figure out what the opportunity represents. In some ways, that’s the situation we find ourselves in again now — the world is sort of collapsing around us during the pandemic. Ecommerce is experiencing this massive growth.

For us, as an agency, across all of our clients in virtually every category, April was a crazy record month of revenue. And so as we think about that. We ask ourselves, “What are the mistakes that people will make?” These windows, such as now, they open and shut. There certainly indications, at least while we’re in quarantine, there are some big opportunities in the ecommerce world.

What we’re seeing for ecommerce right now is around demand creation, capture rate, and volume — not necessarily profitability. We’re seeing an influx of consumers that are suddenly using ecommerce. For a while there, in the early days of the pandemic, CPMs were very low. We saw some incredible efficiencies. In a lot of ways, that window is already closed. Prices on ads are going back up.

So if you’re a business with a strong lifetime value, strongly consider deferring some of the short term profitability and capture customers right now, as consumers come online.

For some of our businesses, we see both efficiency and volume. It’s not via a specific ad format or even channel. We’re seeing people get more profitable volume through YouTube and search than before. We see more profitable ad dollars during Covid-19 than previously.

Bandholz: I can echo those sentiments. We’ve seen a massive boost on the Beardbrand site as well. You mentioned LTV — lifetime value. For folks new to commerce, it’s the total that a customer will spend. How do you calculate lifetime value? Is it one year, two years, or the entire lifetime of the company?

Holiday: It’s a great question. I hate words that have subjective meaning. “Lifetime value” is a good example. The industry defines LTV in many different ways. I prefer the phrase “cash multiplier,” which for us is a 60-day LTV. Ecommerce owners have this joke that we’ll all die waiting for our LTV to show up. The reality is that we should recognize the payback periods that we can afford because cash flow is king.

And so we help our clients focus primarily on 30, 60, and 90-day windows with the emphasis on that 60-day period. For most ecommerce businesses, second purchases from customers happen within 60 days of the initial one, regardless of product category. That’s why we focus on that 60-day window. We apply a general rule that we call the 30/100 principle, which is the idea that you want to see your LTV increase 30 percent within 60 days and 100 percent within a year. If you have reached both of those markers, it’s an indication that you’ve found an ongoing relationship with your customers that reflects a good product-market fit.

Bandholz: What about attribution? The challenge we’ve had is we buy ads on Facebook, and then the customers come in through Google or whatever. How does a merchant know that advertising is performing?

Holiday: It’s the biggest question, right? With the most complicated answer. The less diverse your media mix, the easier the problem is to solve. It gets difficult with a broad media usage — podcasts, radio, TV, billboards, print, everything else. The key is to understand what each position in the funnel of your advertising serves, and ensuring that you’re not convoluting the waters.

Here’s an example. Our company Fielder’s Choice Goods sells leather wallets. Our media mix is fairly simple: Facebook, Google, and YouTube. We define each stage very clearly. We know that Facebook ads reach people who have not been to our website — pure customer acquisition.

If you look just on at clicks, then what we know for sure is that somebody who has never been to our website, or at least hasn’t been in the last 30 days and has never bought a product from us, clicked on my ad and went to the website. I can feel secure about that as an indication of demand generation. I don’t care if the purchase ends up getting assigned in Google Analytics to organic search or direct or paid search. In terms of attribution, I am less concerned about where demand capture happens and more concerned with demand generation. Where did the initial impetus for the purchase begin?

So attribution is not important to us. It’s not why an ad unit exists for us. It’s a hole that plugs up our funnel and ensures that we are capturing as much of the demand creation that we possibly can. So you have to think about what each ad unit intends to serve. And as you move down the funnel, it’s prospecting.

As we get to remarketing on Facebook, we’ll tighten the attribution window — from a 28-day click to seven days. And then at the bottom of the funnel, when you get to abandoned cart orders, we’ll look only on a one-day click basis. Because where it gets noisy is when you start allowing attribution to be cross-pollinating between your different ad channels.

We don’t believe in using ad dollars to market to existing customers, primarily because the whole point of Facebook is to create an audience that you own and control. When customers are in an active window — the average time for a repeat purchase of, say, 70 days — we will exclude that group from any paid media dollars and communicate exclusively with them in email, chat, organic, social, anywhere where it’s free to advertise. We don’t want to pay for that second purchase, especially when we’re using LTV calculations.

And that’s also where you’ll see the most noise in Facebook advertising. You’ll see merchants that advertise to existing customers. They’ll see a massive return on ad spend. But it almost always comes from the combination of their email. Advertising is creating a mess.

Bandholz: What’s the ad budget for your clients? I would imagine it’s significant.

Holiday: It’s more about revenue. A growth client is usually somewhere north of $2 million a year in revenue. That calculates to somewhere around $30,000 to $50,000 a month in ad spend. So that’s sort of the entry point into the agency system. But to help folks in an earlier stage, we created, again, ADMission, our community. It’s intended to be a coaching, training, and teaching platform. Because hiring an agency or even a freelancer doesn’t make sense when you are spending less than $15,000 a month. So if you think about a percentage of ad spend, which is how a lot of agencies charge, the big businesses create economies of scale and can get an agency to charge 4 percent of ad spend.

But if you’re spending $10,000 a month and you’re paying somebody $2,500 a month — a 25-percent markup — it’s going to be hard to be profitable. The best thing we can offer people in the early stage is coaching to do it themselves.

Bandholz: I could talk to you another three or four hours. But we’ve got to wrap it up. Where can people get more information? Where can they follow you?

Holiday: I’m @TaylorHoliday on Twitter. My wife would say I’m there too much. Otherwise, feel free to say howdy at Common Thread.



Amazon will pay $135,000 to settle alleged US sanction violations




In a statement issued this week, the U.S. Treasury Department notes that Amazon has agreed to pay $134,523 to settle potential liability over alleged sanctions violations. The charges specifically pertain to goods and services sent to people located in Crimea, Iran and Syria, which are covered by Office of Foreign Assets Control (OFAC) sanctions, between November 2011 and October 2018.

The Treasury Department also states that the retail giant failed to report “several hundred” transactions in a timely manner. The department adds:

Amazon also accepted and processed orders on its websites for persons located in or employed by the foreign missions of Cuba, Iran, North Korea, Sudan, and Syria. Additionally, Amazon accepted and processed orders from persons listed on OFAC’s List of Specially Designated Nationals and Blocked Persons (the “SDN List”) who were blocked pursuant to the Narcotics Trafficking Sanctions Regulations, the Weapons of Mass Destruction Proliferators Sanctions Regulations, the Transnational Criminal Organizations Sanctions Regulations, the Democratic Republic of the Congo Sanctions Regulations, the Venezuela Sanctions Regulations, the Zimbabwe Sanctions Regulations, the Global Terrorism Sanctions Regulations, and the Foreign Narcotics Kingpin Sanctions Regulations.

The settlement is, of course, fairly insubstantial, compared to the massive market cap of the online retail giant. The transactions, were, however, for fairly low-level retail goods and services. In all, the violations only amounted to around double the settlement price of $134,523. 

The department doesn’t believe there was anything malicious going on, rather an issue with Amazon’s system, which failed to flag shipments to sanctioned areas. There appear to be a number of reasons this occurred. One example involves the site failing to note when product was shipped to the Iranian embassy in a different country.

Amazon opted not to offer a comment on the story, though the company notably self-disclosed what it believed to be potential violations of the aforementioned laws back in July of 2016. As The Wall Street Journal notes, a number of other tech giants have been hit with similar issues. Last year, Apple agreed to a $467,000 settlement for similar violations.


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Digital Fraud Flourishing During Pandemic: Report




By Jack M. Germain
Jul 9, 2020 10:44 AM PT

If you conducted e-commerce transactions since the pandemic struck, you have probably been the target, or even a victim, of online fraud.

Fraud prevention solutions firm Sift yesterday released a report focusing on a 109 percent increase in content abuse and growth of the fraud economy from January through May 2020.

The report, titled “Q2 2020 Digital Trust & Safety Index,” concludes that this increase is likely connected to the global disruption caused by the coronavirus pandemic. The study shows how fraudsters have used content to deceive and exploit consumers on e-commerce sites and within online communities.

Counterfeit content has played a role in e-commerce for as long as digital businesses have existed. Scams, spam, fake reviews, and misinformation have evolved in tandem with online shopping, discussion forums, and social networks, the report acknowledges.

Sift’s analysis of abuse types shows that most of this fraud is financially motivated. Scams make up 46.8 percent of the content abuse that Sift’s technology blocked.

One of the most jarring findings includes the discovery of a fraud ring based in Russia where criminals executed a credit and debit card testing scheme through fake listings on an e-commerce marketplace.

This increase in e-commerce fraud is representative of a concerning upward trend that both e-commerce providers and their customers must navigate, according to Hank Schless, Senior Manager, Security Solutions at Lookout.

“Malicious actors are taking advantage of an increasingly complex risk landscape, and now more than ever it’s important to evaluate and secure every potential risk vector across all channels,” he told the E-Commerce Times.

Pandemic Profitable for Fraudsters

The revelations come from Sift’s global network of 34,000 sites and apps. Researchers also surveyed over 1,000 consumers in June 2020. The report also details how content abuse is a critical part of the fraud supply chain, the interconnected ecosystem of fraud.

Findings show from January to May 2020 digital e-commerce (subscriptions, apps) was hit by fraud at an exceptionally high rate. In the first five months of 2020, fraud — scams, spams, and fake reviews — occurred 123 percent more than in all of 2019.

Coronavirus has affected virtually every business, and cybercrime is no different as it is a business — a big one, according to Brendan O’Connor, CEO and co-founder of AppOmni.

“It is estimated that global cybercrime revenues exceed US$1 trillion annually. In challenging times like these, businesses must adapt,” O’Connor told the E-Commerce Times.

Cybercriminals are capable of adapting quickly, and that is what they have done with coronavirus, he added. With people around the world staying home and maintaining social distance, there has been a huge increase in both remote work and e-commerce.

“It should come as no surprise to see malicious actors investing in attacks that target these trends,” he said.

Opportunity Mongers

Since the majority of the population has shifted to working from home, malicious actors have been taking advantage of a massive increase in remote shopping, banking, and work. Their job is to scam unsuspecting victims, O’Connor explained. Looking at e-commerce specifically, fraudsters can take advantage of both mobile and web channels to successfully carry out an attack.

The situation is growing on two fronts. Cloud storage for business and online shopping for consumers.

“As critical business operations and data move to the cloud at record speed, attackers are targeting cloud applications like never before. With consumers everywhere increasing the amount of shopping they do online, attackers have naturally gone after online shoppers with sophisticated fraud campaigns,” noted O’Connor.

These trends are unlikely to slow anytime soon, he observed. He predicts that we will continue to see more attacks targeting cloud applications for businesses and e-commerce sites for consumers.

On mobile, global phishing encounters increased 37 percent during the first quarter of 2020. Many of these were attempts to steal personal data as consumers adjusted to a new normal of shopping exclusively from the web via their mobile devices, added Schless.

“On web platforms, there’s been an increase in activities like Magecart that skim customers’ credit card data from the checkout page of a website by injecting malicious code into the page,” he offered as another form of online fraud separate from the Sift research.

Content Abuse Leads to Fraud Supply Chain

Content abuse is not merely a standalone threat but a type of cybercriminal behavior that acts as a springboard for, and a bridge between, account takeover and payment fraud, contributing to what Sift calls the “Fraud Supply Chain” in its report.

“Fraud doesn’t happen in a vacuum,” said Jason Tan, CEO of Sift. “Our latest report illustrates how cybercriminals use different attack vectors to steal from consumers and businesses, often through more complex ways than merely buying stolen credit cards to make large purchases.”

Merchants must adopt a digital trust and safety strategy to protect across the entire user journey. That will combat the fraud supply chain. In turn, it will also help them protect and grow revenue, Tan explained.

Sift Q2 2020 digital Trust & Safety Index: Fraud Supply Chain

The fraud network involves three action patterns: Payment Fraud, Content Abuse, and Account Takeover.

Content abuse is a means to an end. Fraudsters use it to commit payment fraud.

They create a post, comment, email, or text message to disguise a malicious link or drive consumers to unsecured sites and media. The attack only works when people engage with that content and link by sharing it or by clicking on it themselves, the Sift report detailed.

That produces two calculated results. The first action widens the pool of potential victims. The other action directly impacts the person who clicked.

Cybercriminals make money by selling the data they steal on the Dark Web. The report describes this market as a “fraudster flea market” which is essentially an illicit mirror image of digital e-commerce.

Card-Testing Fraud Ring Uncovered

Sift’s Data Science team identified a key card-testing scheme in early June 2020. It’s one of the more covert ways content abuse fits back into the fraud supply chain. It occurs after login information, gift card details, or payment data has been stolen or bought.

A group of 15 fraudsters in Russia with identical IP addresses (a fraud ring), who Sift named “Bargain Bear,” worked together to test dozens of credit cards and digital wallets by posting fraudulent content listings on an e-commerce marketplace.

Sift Q2 2020 digital Trust & Safety Index: Content Fraud in Action

Sift’s Data Science team uncovered sinister behavior on an e-commerce marketplace: a fraud ring using fake content listings to execute a classic card-testing scheme.

Using these fake listings, they sold items to each other in order to vet stolen data, “negotiating” the costs of those items down so that the exchanges appeared more legitimate. This allowed Bargain Bear to test payment information in order to make much larger purchases thereafter.

The attempted scam also sought to bolster the fraud ring’s legitimacy on the marketplace by having the “buyer” post positive, yet fake, reviews.

Brand Loyalty Threatened

The Digital Trust & Safety Index reveals the true cost of content fraud as brand abandonment.

Content fraud decimates brand loyalty. Content abuse is typically financially motivated. The content is designed to facilitate scams making up nearly half of the attacks that were blocked.

Slightly more than half (56 percent) of consumers surveyed reported that if they discovered that their personal information had been exposed as a result of a scam on a website, they would stop using the site or service and choose a different provider.

Using the pandemic as cover, content scammers focused on ticketing sites. The ticketing and events space was hit the hardest by attempted content abuse since the start of 2020.

Those sites also experienced record drops in event volume (down 84 percent from April 2019) as large gatherings of any kind became impossible. Research shows that fraudsters have maintained their focus on businesses struggling amid the pandemic.

Caught in the Act

Sift’s research showed that a significant percentage of consumers recognized fake content and its consequences. Sift’s survey showed that 67 percent of those polled believe they come across some type of fraudulent content or false information on a daily, weekly, or monthly basis.

That survey also showed that 94 percent of the responding consumers deem content to be suspicious based on conspicuous factors. These include pie-in-the-sky promises, multiple typos or grammatical errors, outlandish claims, or a lack of identity information from the person posting it.

The Sift Digital Trust & Safety Index gives online merchants visibility into the covert economics that injure businesses. It also provides merchants with industry expertise to help businesses protect their customers without losing money or momentum.

More COVID-19 Fraud Tactics

Sift has tracked how fraud rates and event volumes are changing each week across multiple e-commerce verticals in response to the pandemic since March of 2020. The pandemic is causing acute effects within the economy that fraudsters are monetizing, according to Sift’s research. These ploys directly victimize merchants as well as consumers.

Criminal tactics include using text messages to encourage stockpiling of products and sowing fear about quarantine restrictions. Other tactics include emails sent to consumers to trick them into believing a vaccine exists and is being withheld, proffering fake treatments, and offering refunds to people whose plans were disrupted by travel bans.

The fraud does not end there. Fraudsters manipulate social media posts to pose as medical representatives with access to tests and antiviral medications for a fee.

Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open source technologies. He has written numerous reviews of Linux distros and other open source software.
Email Jack.


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3 Ways to Scale Ecommerce with Data




Scaling an ecommerce business requires insights into the market, consumers, and products. In this post, I’ll address each aspect and how data can help.

The Market

An understanding of selling platforms, consumer trends, and competition is critical.

For platforms, can you expand your products and brand by selling on marketplaces such as Amazon, Walmart, or Etsy? An easy way to test is by searching for products that are similar to yours on those marketplaces to understand the competition and the potential profit margin. Another key data point is the size of the marketplace. Larger sites such as Amazon may provide more traffic but with a smaller profit margin. Also, foreign marketplaces can open new geographic regions.

Consumer trends can identify new products for your existing clients as well as new marketing opportunities. To generate new ideas, consider Google Trends. For example, “home office” is a popular term worldwide. Merchants could offer products related to a home office. Social media posts, product reviews, and competitor’s initiatives can also identify trends.

Google Trends can indicate product and marketing ideas. For example, the term “home office” is popular worldwide on Google Search in the previous 90 days.

Google Trends can indicate product and marketing ideas. For example, the term “home office” is popular worldwide on Google Search in the previous 90 days.

For new marketing, conduct a small test on promising channels.

Finally, competitive analysis quarterly or even monthly can help you scale and save on marketing costs. Large competitors with huge marketing and store-optimization budgets are sources of inspiration. Marketing channels, creative, calls-to-action, personalization ideas — all have been tested by these competitors. Use those tests for your own purposes. Monitoring competitors’ product changes and discounts can indicate what is selling.

Key competitive metrics to track include marketing strategy, the number of times a company posts on Facebook, the number of emails deployed, a welcome promotion, discounted products, and site traffic. Competitor tools such as SimilarWeb (website stats), Google’s Ads for impression share of your competitors, and SpyFu for organic search rankings and ad spend. There are many such tools, but none are perfect in my experience.


Understanding your target audience’s demographics, psychographics (opinions, values), and preferences is critical in finding new customers and expanding your product line. Obtain demographic and psychographic info from (i) third-party providers such as Experian and Melissa, (ii) marketing channels such as Google Ads or Facebook, (iii) Google Analytics, and (iv) qualitative analyses from social media or surveys. For data on preferences, customer-service interactions and reviews are a gold mine. Larger sites may require automated text mining for this.

Identifying high-value customers can help scale, too. Customer scoring — assigning a value to each buyer — can help. Examples are Recency, Frequency, and Monetary model or, also, lifetime value. Identifying even a few high-value customers can help define a perfect prospect for product testing or for lookalike marketing on Facebook and other platforms.

To expand geographically, consider Google Ads’ Keyword Planner to identify your products’ potential in new locations. This may require using Google Translate for keywords in non-English-speaking regions. Remember, too, that Google is not the primary search engine in all countries. For example, Yandex and Baidu are dominant in Russia and China, respectively.

Acquiring new customers may require a different marketing strategy. Online promotions may perform for consumers under age 45. But traditional channels, such as direct mail, could be better for the 65-plus age group. Prominently displaying a phone number and using larger text could help with older shoppers, too.


Offering more products can help scale a business. Product ideas can be challenging as trends change and competitors surface. However, data can help.

First, look at Google’s auto-suggest options when searching for a category or item. The drop-down menu in Google’s search box contains the most common related phrases.

Google's auto-suggest search options contain the most common related phrases, such as for “baby teething” in this example.

Google’s auto-suggest search options contain the most common related phrases, such as for “baby teething” in this example.

Another source of product ideas is your own site search. Look for items that visitors have searched for that you don’t carry. Reviews and customer support calls can also generate new-product ideas. Other sources include social media, trade magazines, feedback from suppliers, competitors’ products, and customer surveys.

Once you’ve listed product ideas, the next step is to understand the potential. Google’s Keyword Planner can indicate the competition (and cost) for keywords. Amazon, Walmart, and other marketplaces can show existing availability. Finally, understanding a potential selling price and profit margin is essential.

Finally, test new products before rolling them out across all channels. Test them on your site and on marketplaces. Test unique goods on Etsy. Offering pre-orders can generate capital and provide a test of an item’s viability.


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