💀 Liquid Death’s Meta advertising strategy

Here’s a quick rundown of this $1.4 billion business for context:

What is Liquid Death: It’s a canned water brand founded by Mike Cessario in 2019. The idea originated from Cessario's observation of the rock and heavy metal culture's affinity for extreme branding. He aimed to make water "cool" by marketing it similarly to beer and energy drinks.

Their high-level marketing strategy: Centers on rebellious and unconventional branding. The company uses provocative and humorous campaigns to appeal to younger, counter-culture audiences.

Here’s what (I think) their Meta campaign structure looks like:

Note: This is based on my personal experience and analysis of Ads Library. Some assumptions are made.

I believe Liquid Death uses a structure that looks like this:

• Campaign budget optimization (CBO);

• 3 ad sets, each targeting either a different location or different interests;

• 12 ads per ad set;

• 1 ad copy across all ads; and

• 12 different creatives (mostly statics).

Here are some of the active ads for their “Slaughter Bottle” product as well as when the ads were launched:

Here’s a closer look at a couple:

Conversion objective: I suspect they use a Conversion marketing objective, optimized for Purchases. They might also choose “Maximize value of conversions” as the perfomance goal to maximize ROAS.

Ad optimization process: The reason there are fewer active ads from April & May is likely because they slowly turn off ads, one-by-one, as after they collect enough data and determine they’re unprofitable.

As of writing, it has been 10 days since they’ve launched their July 18 ads and there are still 12 active. This is pretty normal as, in my experience, it takes 10-14 days to collect enough spend to determine if an ad is worth killing. Sometimes you can kill an ad sooner if it receives a higher percentage of the budget.

However, ad sets with 12 ads take longer than ad sets with 3 ads because the spend is spread across more ads.

Lesson: Creative testing is crucial.

Ad set strategy

When you see “3 ads use this creative and text” in Ads Library, that means the ad is active in either multiple ad sets or multiple campaigns. I suspect ad sets in this case.

The next question would be “what is each ad set targeting?”

They might be targeting different locations, but a mass-appeal product like this probably wouldn’t benefit as much from segmented location targeting. Plus, the ads do not use any geographically revelant visuals or copy (i.e. state callouts, local landmarks).

My money is on simple, large-size interest targeting. Possibly single interests or perhaps a stack of interests, such as the following:

• Energy drinks (36.2 million in USA)

• Red Bull (70.0 million in USA)

• Sports drink (2.4 million in USA)

• Carbonated water (9.6 million in USA)

• Mineral water (22.6 million in USA)

• Bottled water (4.0 million in USA)

Each of these interests are large enough to support an ad set. These are just the obvious choices too. You could easily test a variety of niche interests as well.

Funnel economics

Note: Again, this is just speculation.

Strategy: I believe this $62 watter bottle is simply a tripwire offer to get customers into the funnel and increase brand awareness. The recurring water sales on the backend are where the money is really made.

Here’s some hypothetical math, made with some educated guesses:

• ¹ $30-40 CPM is what I experience on average. This is for lead generation advertising though.

• ² This would be a healthy CTR.

• ³ I’m not an e-com guy, but my understanding is that a 2% CVR is a reasonable for a healthy, high-performing funnel.

• ⁴ I’m simply adding an extra $10 per customer to account for sales of their other products, such as flasks, tees and other merchandise (not even including the water itself).

• ⁵ Calculated by estimating 2 cases per month (36 cans) / 15% churn rate x $2.50 per can = $600 average lifetime revenue per customer.

Obviously, a lot of assumptions but there’s an important takeaway:

A funnel like this might appear to be unprofitable on the frontend ($100,000 spend with only $48,000 in revenue). But the backend recurring sales of these newly acquired customers will produce long-term profitability for the business.

This is crucial for advertisers to understand because it significantly affects your understanding of profitability and will affect your CPA tolerance when managing Meta ads.

Alright, here are some rapid fire ads to wrap up this week:

And this:

🧠 Clever ad of the week

🏆 Placement of the week

🗣️ Quote of the week