Podcast: Download (Duration: 53:30 — 61.5MB)
The question that determines whether a brand can advertise profitably is not the product, it is whether net margins clear 25% and average order value clears $50 to $60. Nick Shackelford asks those two things before anything else, because a brand needs to reinvest roughly 30% of gross revenue into marketing to keep growing.
In this episode I spoke with Nick Shackelford of Structured Social, who has spent over $85 million on Facebook, pioneered the fidget spinner category, and once cleared over $10 million in sales in 35 days for a client.
Below is everything: the qualification criteria, how he structures top, middle, and bottom of funnel, why he optimizes for conversions immediately, and how he finds ad angles for mundane products.
Get My Free Mini Course On How To Start A Successful Ecommerce Store
If you are interested in starting an ecommerce business, I put together a comprehensive package of resources that will help you launch your own online store from complete scratch. Be sure to grab it before you leave!
Table of Contents
Key takeaways
- Net margins of at least 25% and AOV of $50 to $60 are the qualification bar.
- Growing brands reinvest roughly 30% of gross revenue into marketing.
- Optimize for conversions from day one. Seasoning the pixel with add-to-cart does not pay off.
- Target roughly 30% three-second view rate against impressions on video creative.
- Broad targeting beats stacked audiences. He has moved far away from micro-targeting.
- Amazon reviews reveal your next product. Repeated questions about a comforter became a product.
- Middle of funnel is social proof across the demographics you actually care about.
- Nothing in paid social is absolute, which is why every asset gets tested at every stage.
The two numbers that determine whether ads can work
Nick’s first question to a prospective client is about margins rather than budget.
His framing on budget is deliberate too. He asks how much someone is willing to invest in marketing rather than what their advertising budget is, because early spend buys learning about direction.
The thresholds are specific. Net margins of at least 25%, and average order value of at least $50 to $60.
The reason those numbers matter connects to a third figure. A brand looking to grow needs to reinvest roughly 30% of gross revenue into marketing.
At 25% to 30% net margin, that reinvestment is roughly a wash, which is sustainable if the product is good enough to generate repeat purchases.
Why repeat purchase determines everything downstream
Nick’s favorite categories are ones where the product runs out.
Baby products, beauty, consumables, and pet products all have consumption built in, which means acquisition cost gets recovered without reacquiring the customer.
His counter-example is a bedding brand he invests in. Sheets and towels have a repurchase cycle of six months to a year, because nobody refreshes towels frequently.
That creates a genuine tension. Average order value around $100 to $200 with a bundle near $170, and a repurchase window long enough that lifetime value cannot be counted on quickly.
The workaround is measurement discipline. They track repurchase rate within the first 60 to 90 days, which tells them how much more they can spend or how much to pull back.
How repurchase timing changes your remarketing
A hair and skin serum brand illustrates the practical application.
Customers go through the product in 30 to 45 days, which is a known window.
That timing determines when remarketing budget deploys across Facebook, Instagram, Twitter, or Pinterest, roughly 30 to 40 days out.
The alternative is choosing not to remarket at all on paid, letting Facebook function purely as acquisition and email handle the nurturing.
Nick’s reasoning for that split is cost. Paying again to reach a customer you already acquired, and giving up margin on a discount, is a different economic decision than sending them an email.
He would run different discounts on paid channels than on email for exactly that reason.
How to find an angle for a mundane product
The bedding brand had no obvious hook, which is common.
The value propositions were antimicrobial silver technology, washing less frequently, and staying fresher longer.
The angle they took was humor built on the contrast. High-end pricing between roughly $79 and several hundred dollars, communicated through a character embodying luxury while the actual subject is unglamorous.
Nick’s general position is that humor is the easiest route when a product lacks a major differentiator. You are going to buy this anyway, so buy it from us and enjoy the process.
His caveat is that humor has to fit what the brand wants to be, and he will not prescribe it universally.
The other route is partnership. A sock brand works by partnering with athletes rather than by being funny.
Why the simplest ad often wins
The campaign that produced over $10 million in 35 days was a static image.
The product was custom socks printed with a customer’s dog.
The ad was a photograph of a dog with an arrow pointing to a sock, and red text reading your pup on socks.
Nick describes it as neither clever nor cute, and extremely direct.
The conversion rate ran above 4%, because the landing page required uploading a photo the buyer already had strong feelings about.
How Amazon reviews produce your next product
Reading reviews and comments is Nick’s primary method for finding angles and product opportunities.
The bedding brand’s most frequent question was where to buy the comforter shown in their ads.
They had never sold a comforter. The frequently-bought-with data pointed at comforters and pillowcases too.
That feedback directly shaped the next product they developed and launched.
The same principle applies to ad copy. Comments on your ads reveal how people actually think about the product, including from people who think they are being funny.
How Nick Shackelford structures a Facebook funnel
Top of funnel starts with the long-form creative running in two forms simultaneously.
The same post gets duplicated into a conversion campaign and a page post engagement campaign.
The engagement campaign exists purely to accumulate likes and comments on the ad, at a nominal five to ten dollars a day.
Both launch the same day. Nick does not wait to build social proof before running conversions, because he wants purchases from day one.
His caution on engagement campaigns is important. Telling Facebook you want engagement produces engagement rather than conversions, so it is not a conversion strategy for a product over $100.
The benefit is secondary. Accumulated engagement improves how Facebook views the content, which can produce cheaper delivery and CPMs, plus opportunities for customer support to respond.
What middle of funnel looks like
Middle of funnel is user-generated content across the demographics that matter.
For the bedding brand that means a single man, a single mother, a mother with a large family, and an older relative figure.
Every one of them communicates the same value propositions with a different delivery.
Nick notes that adding men talking about the product with humor was an inflection point, because it addressed something that needed saying and had not been.
How bottom of funnel and dynamic product ads work
Dynamic product ads should route to the cart rather than back to a product page.
Nick’s segmentation runs by depth of action. Someone who viewed a product and added to cart goes back to the cart, and someone who added to cart and initiated checkout also goes back to the cart.
His objection to sending product page viewers back to the same product page is that it accomplishes nothing new. They need the cart, a collection, or possibly a discount.
Budget determines how deep the segmentation goes. Separating homepage visitors from collection visitors from product page visitors from cart abandoners requires spend that many brands do not have.
The overlooked upgrade to dynamic product ads is creative. Setting up your product feed properly lets you pull lifestyle images rather than product-on-white, and a baby brand he works with sees lifestyle DPA as their best performing creative.
Why he moved away from micro-targeting
Nick has moved significantly toward broad targeting.
He no longer stacks three, four, or twelve audiences to construct a narrow segment, or hunts for obscure interests.
The changes he does make are to bidding rather than to audiences, using cost cap campaigns bid against average order value.
His reasoning is that Facebook performs better the more freedom it has to choose recipients.
Interest testing continues at modest budget, primarily to see what surfaces rather than as a core strategy.
The brands that suit this best are ones needing no explanation. Wide appeal with the segmentation handled by branding, price point, and who appears in the content.
Why to optimize for conversions immediately
Nick never optimizes for add to cart, and considers pixel seasoning a myth.
The tactic he is rejecting is the advice to warm up a new pixel with cheaper conversion events before switching to purchases.
His team has run that test directly. Optimizing for add to cart produces cheaper add to carts and does not back out to purchases.
The exception would be a brand with an exceptional abandoned cart or SMS follow-up sequence, and even then he is skeptical.
Which metrics Nick Shackelford actually watches
He does not report on likes or follows, because no client has ever asked about them.
The primary metrics are cost per add to cart at prospecting and cost per add to cart at checkout.
The method for using them is establishing a baseline. Run cold traffic, find your average cost per add to cart at profitability, and map it against your required return.
His example: needing a 2x return with a $13 average cart means that cart cost needs to be roughly half your cost per purchase.
The funnel should stay consistent. Roughly 25% variance from cart value to initiate checkout to purchase, and larger swings usually mean cold and warm traffic are mixed together and need separating.
For video specifically, his benchmark is three-second video views divided by impressions, targeting roughly 30%.
What content actually costs
The bedding brand’s humor campaign was a $15,000 shoot producing roughly 15 to 25 assets.
The structure of a content shoot matters more than the raw video. A longer 35-second to one-minute piece, plus cuts usable at top, middle, and bottom of funnel.
Aspect ratios are part of the deliverable. Square for feed and 9:16 for vertical placements, which requires framing the subject so both crops work.
Still images come from a second shooter during the same production.
His more recent scope was 45 assets for $29,000, which gives a sense of the per-asset economics at scale.
How much to spend before you know if it works
Nick’s figure is roughly $15,000 excluding creative production.
The structure is $5,000 across each of three clear angles.
That budget covers writing specific ads tied to each angle and running them, without building separate landing pages for each.
What it buys is directional information. Whether the mother angle works, whether the bachelor angle works, or whether the college angle works.
From there you develop more content around whichever direction showed signal.
When influencers make sense
Nick identifies three situations where influencers are the right move.
The first is audience access. Your brand is genuinely congruent with an influencer’s audience and you have no way into it.
The second is a product launch where you want authority from someone with credibility in the space, rather than the brand talking about itself.
The third is simply content production when you are struggling to generate enough assets.
The scale he means is not celebrity. His example is a mommy blogger in Utah with 50,000 followers whose audience genuinely listens to her.
The brief should specify value propositions rather than placement. Give them the two or three things customers actually ask about, and let each piece address one.
Where the resulting content lives is a testing question rather than a decision. Nick’s position is that nothing in paid social is absolute, so anything working at bottom of funnel gets tested at top of funnel too.
Frequently asked questions
What margins do you need to advertise on Facebook?
Nick Shackelford’s threshold is net margins of at least 25% with average order value of $50 to $60. A growing brand reinvests roughly 30% of gross revenue into marketing, so lower margins make that reinvestment unsustainable.
Should you optimize for add to cart before conversions?
No. Nick never does, and considers pixel seasoning a myth. His team has tested it directly, and optimizing for add to cart produces cheaper add to carts that do not back out to purchases.
How do you find an ad angle for a boring product?
Humor is the easiest route when a product lacks a differentiator. The other source is customer feedback, since Amazon reviews and ad comments reveal how people actually think about the product.
What metrics matter most for Facebook ads?
Cost per add to cart at prospecting and at checkout. Establish a baseline on cold traffic at profitability, then check that variance from cart to checkout to purchase stays around 25% across the funnel.
Should you use broad targeting or interest stacking?
Broad. Nick has moved far away from micro-targeting and no longer stacks audiences, because Facebook performs better with more freedom. Interest testing continues at modest budget as exploration rather than strategy.
Where should dynamic product ads send people?
To the cart rather than back to the product page they already viewed. Someone who added to cart needs the cart, a collection, or a discount, and returning them to the same product page accomplishes nothing.
How much should you spend to test whether ads work?
Roughly $15,000 excluding creative, split as $5,000 across three distinct angles. That buys directional information about which angle works, without needing separate landing pages for each.
When should you work with influencers?
When you need access to a congruent audience you cannot reach, when a launch benefits from third-party authority, or when you simply need more content. The useful scale is often a 50,000 follower niche creator rather than a celebrity.
