Creative Forecasting Masterclass: How to Calculate Your Exact Creative Volume for Any Spend Target

0:00Welcome back to another episode of DC Diaries here with a shorter masterclass today following up on Lucas's Claude session from last week and I'm going to be diving into creative forecasting. Many of you watching will be operating in brands that have a real level of sophistication across their top level forecasting, so revenue expectations, ad spend expectations, new customer, channel mix, targets that really anchor resourcing and planning within the business. However, the top 1 % of brands are bringing this level of rigor, this level of intention to their creative forecast and resourcing process.

0:44We're not seeing that across the board. I'm hoping that this session is going to be very actionable for everybody watching. Hopefully you can go away from this session and run this process to create a view of how many ads do I need per month for the rest of this year to hit my targets. quick one from our sponsors if you've been in the game for any amount of time you know that your gross margin lives and dies by two things what you're paying for your product and how you reliably get it to your customers and for most founders that back end the sourcing the manufacturing the fulfillment is where margin quietly bleeds out bad suppliers relationships ballooning landed costs shipments that miss the windows it all adds up fast that's exactly what commersive is built to fix.

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2:06That's C-O-M-M-E-R-C-I-V-E.co. Let the experts handle the backend so you can focus on actually building your brand. Commersive, go check it out. So after auditing hundreds of ad accounts, I think we've, we've, We've conducted around about 30 audits in the last 45 days. Brands from a million a month in revenue up to 5 million a month in revenue. Brands that are at an earlier point in their journey. I think we're seeing the same trends, the same challenges, the same gaps, same missed opportunities across the whole spectrum of spend levels and growth phases. Firstly, brands are not creating enough ads.

2:50There's a lot of debate around volume and quality and which is the right mix. Ads is an outlier game. It's very rare for hit rate, our measure of quality, to exceed 15 % as an outstanding metric. We've seen pressure on that KPI over the last six months with Meta's changes and the churn rate we're seeing through ad libraries. and if we are retaining our quality, our hit rate, the only other variable to allow us to drive more spend for an ad account when creative is the main lever is to increase the volume and not enough brand, most brands are not making enough ads for their spend targets over time.

3:34Secondly, off the back of that volume forecast and that volume expectation, when we're turning that into strategy, the majority of brands are just throwing ads in the ad account, just making that more output and hoping something sticks, not mapping our volume target into our strategy with real intention to ensure that we're getting diversity and to ensure that we're creating the same level of impact with every incremental ad that we create. So the current state of play, As we all know, the landscape over the last 18 months has fundamentally changed. We've seen, like rolling back a bit further, we're seeing this continued CPM increase, especially if you're growing spend on the channel.

4:23We've seen a massive leap in the creative volume requirement. I think 10x is a conservative estimate. We're seeing 100x more for those at the top end, making thousands of ads a month to support the performance goals that they have on the channel. And we've also seen this rise in churn of ad inventory. As Meta is getting more specific with its delivery on an individual level, on a persona level, based on preference, we're actually seeing ads die relatively quicker. And this requires us to replace our ad inventory more frequently in an ad account. So the era of set and forget creative is over. This process is integral to growth.

5:13It needs to be improving every month. And it needs to be a massive focus for brands that want to be best in class in 2026. As we know, creative is the new targeting. The algorithm decides who sees your ads. The creative decides if they convert. So the old way of audience targeting one to three hero creatives, AAB testing, small micro changes, and creative being a cost center is over. And we've moved into this new world of broad advantage plus. The algorithm delivers the ad inventory, higher fatigue rates, higher creative requirement, but that creative engine being the core growth lever in brands.

5:59So we don't just need to be making more ads. So we need a system that tells us exactly how many to create per month based on the targets that we have. And then a process that connects that volume expectation to a strategy that delivers diversity so that we can continue to get in front of new audience and drive higher volume of new customer conversions each and every month. This obviously has given rise to this concept of soulmate theory. and we like to think of this as like the end state of the algorithm. We believe that there's a perfect ad for every single user. We just need to supply the inventory to deliver on that outcome.

6:43This may be a bit idealistic, but I think it's a great mental model to have in mind when thinking about this process and thinking about continuing to build more volume, more diversity to maximize the channel. So I just wanted to zoom out to a couple of audits and show a couple of need states that we're encountering very frequently. So this is a map of ad inventory for a brand that we audited over the last 30 days. And we're generally seeing brands fall into two buckets. One, like this one on screen, they're not creating enough volume. So for this brand over the last 90 days, they'd launched 461 ads.

7:26They had a really strong win rate of 51 across that period, so just over 11%. But they weren't effectively mapping how that volume was going to increase every 30 days to support their spend targets and goals. On the flip side of that, this is another snapshot over 30 and 90 days. As you can see on that 30-day snapshot, 409 ads launched, seven winners. This is an example of a brand that's not creating enough quality. So they're creating a high volume of creative, but we've seen a diminishing view of hit rate over 90 days from 65 winners across 1 ,303 ads launched to just seven winners over 409 launched.

8:15So what this tells us is we need a better alignment between creative and data. We need a better strategy that's connecting the creative process to the research, to the personas, to the execution. And this is the two states we're encountering. The first one needs more volume, but we need to ensure that as we increase volume, we retain that hit rate. The second one needs more quality and more intention. We need to raise hit rate before we then scale volume. So the one golden question, how many new creatives do I need to produce each month to meet our target ad spend? That's the one we're trying to answer.

8:56Creative is inventory. I like to think of it as a portfolio of assets. Within that, you've got ads that fatigue. You've got ads that are decaying, actively decaying and need replacing. and we've built a model that breaks that portfolio, those assets in your ad account, down into different subsets that then allow us to build a picture of how we expect our creative requirement to increase over time. So how do we do this? Firstly, pull out the last 90 days of ad inventory. We want to be pulling a three-month window to give us enough data to work with when building this out. And I'll attach a cheat sheet to the description of this video, sorry, that can allow you to follow this process in your own time.

9:48And we've actually built a tool, a piece of software, where we ingest your ad account data and it builds this expectation for you. After we've pulled that data, we want to classify ads. We want to classify a hit, something that is performing, something that is in testing. We then want to look at survival analysis. So cohort tracking across those windows. We then look at computing rates for churn, win rate, and half-life. And then we turn that into a forecast that we can look at different scenarios and look at the spend levels that we think we can unlock at different volumes of output. So we validated this process across a brand spending from 100k per month all the way up to 5 million a month on Meta.

10:39And we found that it obviously creates a bit of a pessimistic view. So we want to over forecast volume so that we never find ourselves in a position where we're not able to hit ad spend targets. We'd rather have slightly more inventory than we need at a buffer rather than fall short of commercial goals. But we have a really high level of conviction that this model produces an accurate view of creative requirements over time.

11:13so looking at a works example of that say you've got a brand with a spend goal of 100k per month we've cohorted out and mapped out the ad inventory we've isolated winners and across those winners we're seeing an average of 4k spend per winning asset so if we take that 100k and divide it by our average spend per winning ad. It gives us a view of to achieve that target, we need to produce 25 winners in that period. We then need to look at survival rate. So say we've got 20 winners today and from looking at our ad portfolio, we see that over a 30-day period, we have a 40 % churn rate across our winning assets.

12:05We take our 20 winners today, we times by that 40 % churn rate, and it gives us a view of our survival ratio. So how many winners in period A is still going to be present in period B. And that gives us a view of 12 winners in that timeframe that will be sustained across the two periods. So from there, we can take a view of what is the new winner requirement given that drop-off rate or churn rate. So we take the 25 winners needed, we take the 12 surviving assets away from that, it produces a view of 13 new winners being required to hit our target spend over that period. We then take the 13 winners and we divide that, sorry, by our average win rate across the account.

12:56So the success rate across our creative process, which for this example is 15. And that gives us a total volume or launch target for that period from an asset perspective at 87 ads. We then like to apply around about a 10 to 20 % buffer ratio. If you're in this sort of spend level, that buffer can decrease as a percentage over time and it can decrease as you get more confidence into this process. And that gives us a requirement of 104 launches over that 30-day period to deliver that 100K per month spend goal based on the metrics we have across our creative process today. It's also then possible to create a view of wasted tests and our cost of learnings from an asset perspective.

13:45So how many ads, what's the cost of the ads, and what's the return on capital across this process given the wastage rate? as a final KPI to produce. So we can do this on a forward-looking basis, taking our spend levels required for, say, a 6-12-month period, assuming that our hit rate stays constant, our half-life is consistent, and our churn rate is relatively consistent, to produce an expectation of how many ads are we going to need in each 30-day period to deliver our spend target for that brand. The only consideration on top of this is a view around scenario planning. So it's important to map out your marketing calendar.

14:36Have you got any offer moments? Have you got any new products? And do some scenario planning around how do we anticipate that is going to impact the creative volume we require in that 30-day period. For example, if we're doing a big offer, we may see average spend per asset or win rate increase as our discount supports better volume or better conversion rate, which increases our spend level per ad. And that may change our creative requirement. Likewise, we may launch a new product. that new product may take a few months for the creative process to bed in to generate learnings and therefore our win rate on average may decrease over that the next couple of months whilst we build some consistency and some predictability into that new product's creative process.

15:27I think the rigour, applying this level of rigour really avoids any situations where you're caught short with asset volume. I think that's really important because creating more content, especially in certain asset formats or funnel stages, takes time. It's not easy to go from 100 to 200 ads in a very short time period. We need to be making resourcing decisions ahead of time to avoid getting caught short on asset volume ahead of our spend targets. So looking at a couple of examples, this is a creative forecast on screen that we produced for a brand when conducting an audit using the data that was present in their ad account at the time of producing this model.

16:20So what this basically paints a picture of is spend level on the Y-axis, launches per month on the X-axis. And you'll notice that the launches per month quickly accelerate relative to the growth in spend. This is due to hit rate across this account at the time of conduct in this audit. So we noticed that and we codified that ads above£1 ,089 in spend with a positive ROAS, so above their ROAS target, was codified as a winner for this business relative to their historical data. I would say that that spend level is quite low. We then looked at half-life, so days until 50 % of current winners fatigues.

17:10and what this looked like across 90 days of data was about 27 days, which is within our benchmark. However, when we looked at win rates, we noticed that only 1.1 % of ads produced for this business across the 91 ads, across the portfolio, sorry, was turning into a winner. So one in 91 ads launched was driving significant impact. We also saw that monthly churn rate at 53 % was showing that a high volume of the winners produced were lost each month. And perhaps even more worryingly, the test tax, so the percentage of spend absorbed by non-winners was nearly 50%. So this business was spending nearly 50 % of their ad spend on testing assets that weren't turning into value drivers for the business.

18:06This is a very common example of when the creative strategy and the intention across the process is flawed. And we need to go back and review the data, the customer data, the personas, the gaps in the account from a vehicle format perspective. and we need to do better before we then do more. What we could then model out is our desired state. So if we were to go back to the drawing board, we were to improve our hit rate to 10%, what's our expectation about how many assets would then be needed to achieve significant spend growth over time? And you can see between the two of these that firstly, the spend growth accelerates at a much faster rate, but the assets needed to deliver the significant jumps in spend decreased.

18:56We still need more assets every month in order to deliver on our lofty spend targets and hit the eventual 1.2 million a month in spend that this brand required. But we have clarity, we have quality in that hit rate KPI, and now we can create a resource plan that allows us to reach our spend objectives. A couple of comments on how different metrics outside of the creative process or different factors outside of the creative process may impact the data points within this. So firstly, we see that when we're operating at a tighter CPA target, brands struggle to produce winners, especially as spend increases over time, our win rate will decrease.

19:43I think it's important that for every brand that there's a plan to increase average order value or increase customer value over a given time frame that a brand measures return on investment over to allow us to increase our CPA target over time as we scale spend to ensure that we're not hitting a ceiling on a channel. So offer testing, et cetera, is super important. When we're seeing high churn rates, we're losing assets faster, which requires higher volume. We often see things like category or awareness phase. So if a brand is making maybe too much of its volume in product solution or most aware, due to that creative being more narrow in who it's going after, it will fatigue more frequently.

20:37And we often find that just pulling more of our volume up the funnel so it appeals to more people due to a greater volume of the market being unaware and problem aware, our churn rate decreases, our assets go further, our return on investment in this process is greater. it. And finally, obviously that low win rate. I think there's that narrative of like, do we need more volume or do we need more quality? Brands need more volume over time, providing that they're ensuring that they've got a strong baseline of win rate, hit rate, success rate across this creative process first. They've got a strong creative strategy that then ensures that that win rate stays constant as a minimum whilst we increase volume, but we're never going to get above sort of 20 % hit rate across this process at scale.

21:28And it's easier to just do more than it is to do better above that level. What we're trying to avoid and what we see too many cases of is this view here where we've got creative volume increasing over time. We've got customer acquisition cost incrementally increasing or staying flat, but we're not translating this creative volume into growth in new customer revenue. It's becoming a cost center. We've got a lot of wasted investment in this process because there's not enough intention. Many brands are slipping into that negative spiral, so increased asset volume, increased creative costs, declining incremental reach, and therefore rising CAC.

22:10So most brands aren't running 100 ads, they're running the same ad 100 times rather. You've got an example on the left of low diversity, similar personas, limiting time. You've got an example on the right, significant diversity, multiple personas, and that's contributing to our ability to spend more and more on a channel over time for this business. How do we ensure that? We do that through AI-led creative growth. So we start with personas, We ingest a book's worth of content into these personas. Each of these personas represents a building block of our creative strategy. As we layer in more of these over time, the volume of creative we can get live in an ad account increases without us seeing a decrease in impact and our ability to spend increases with it.

23:02We want to pair those personas with the gaps in the ad account. So when we're auditing a business, which personas are they tapping into? Which are they not? Do we have some new creative formats that haven't been tested? Are we over leveraged into UGC and we haven't done any high prod? We haven't tapped into founder stories. We haven't tapped into podcasts. It's building up a picture of where we are today, what the customer data tells us, what we know is true about creative execution in the market, and how we start to fill those gaps up. in a prioritized approach to cover more creative territory over time that allow us to reach greater and greater spend levels on meta.

23:48We believe in turning a book's worth of intelligence into each persona. So Reddit threads, Quora's, we've got a really good agentic creative engine that helps us do this. We get really clear on what a persona looks like for every brand, how that breaks down into micro personas, and then we create a prioritized plan about how we create output to deliver scaled spend across these and the formats that sit below them. We really do believe that the persona is the foundation. So for one persona, we've got the three micro personas. We've then got the high volume of angles or messages that appeal to that persona.

24:28And then we've got the vehicles that we can deliver those messages through. And it's easy to see how across three to four of these in an ad account, we can consistently increase volume over time to grow spend for any business that we work with. And starting with that persona and layering down across the things that we've talked through in this episode, but also previous masterclasses such as the persona masterclass from Lucas, the episode on valence zones we did a few months ago. So if you've got that macro persona as a starting point, you can apply a multiplier effect as we layer the different elements of creative diversity on top of that persona to give us a huge volume of unique combinations to drive this creative diversity through an ad account.

25:19It's just then about making sure that the strategy, the execution that stems from this is intentional and high quality. we like to take a 30 000 foot view of an ad account and this is just some some i've pulled out of them heights ad library who i think are doing this uh very well and apply what's called the squint test so map out your creative squints see if you can see a lot of differentiation in message format angle diversity and use that as a starting point for for how to build a picture of what the next steps look like for your brand over time. But yeah, we're helping many of our partners with this process.

26:02We're helping them with the creative forecasting. We're helping build that persona strategy that turns that forecast into a plan for execution. And then for many of our partners, we're seeing that through end-to-end and creating a high volume of distinctly different assets for them every month to help them reach their spend targets. So if you'd like some support with the strategic aspects, the forecasting aspect, hit the link below. If you want to see things that you want, you want us to help with the full end to end execution, I'm sure we can find some, some room for that as well. I appreciate everybody who's stuck with me to the end here.

26:40Check out the resource in the description, confident this will deliver some value and make sure that you can hit your spend targets through the end of 2026 and beyond. And yeah, we'll catch you on the next episode. Thank you for listening.