The Compounding Metrics Play
đ€ Build Growth That Doesnât Break, Reddit launches Max Campaigns to automate performance, and more!
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In this newsletter, youâll find:
đ€The Compounding Metrics Play
đ Reddit launches Max Campaigns to automate performance
đ Ad of the Day
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đ€The Compounding Metrics Play
The mistake most teams make isnât focusing on the wrong metric. Itâs assuming growth comes from improving one thing at a time.
Conversion rate gets attention because itâs visible. Ad performance gets optimized because itâs noisy. But real scale doesnât come from isolated wins. It comes from stacking improvements in the right order so each one amplifies the next.
Thatâs the Compounding Stack.
Hereâs the core shift.
A 10% lift in conversion rate helps one campaign.
A 10% lift in AOV helps one transaction.
A 10% lift in LTV helps one customer cohort.
When these improvements are layered deliberately, they stop behaving like linear gains. They multiply. The issue is that theyâre usually attacked randomly.
The first mistake is starting with the conversion rate.
Improving CVR before changing what customers are buying often caps growth. You end up converting more people into the same low-value behavior. Scale becomes fragile because every additional dollar depends on perfect traffic quality.
Start one layer deeper. Improve AOV first.
Bundles, better defaults, add-ons, and clearer value framing change the economics of every order. Once AOV improves, the business can afford more experimentation upstream. Traffic that was previously unprofitable becomes viable.
Thatâs when conversion rate optimization actually compounds instead of just looking good in reports.
The second mistake is treating LTV as a retention problem instead of a design problem.
LTV improves fastest when the first purchase sets up the second. That means intentional product sequencing, post-purchase education, and clear âwhatâs nextâ behavior. Not loyalty points. Not generic email flows.
When early cohorts show higher 60â90 day value, the stack starts feeding itself. Acquisition can spend more. Conversion improvements pay off harder. AOV gains donât stall out.
The final mistake is optimizing these layers in isolation.
Running CRO tests without knowing whether AOV or LTV is the constraint creates diminishing returns. Improving retention without adjusting acquisition spend ceilings leaves growth artificially capped. Momentum slows not because opportunity is gone, but because leverage isnât aligned.
The Compounding Stack only works when each layer informs the next.
AOV sets the floor. CVR accelerates throughput. LTV expands headroom.
This is why growth stabilizes when improvements change the math of the system instead of chasing spikes.
Scaling stops feeling risky. Performance becomes resilient. And results donât collapse when one channel gets noisy.
Thatâs the difference between optimizing metrics and building a growth machine. Not more campaigns. Better stacking.
đ Reddit launches Max Campaigns to automate performance
Reddit has introduced Max Campaigns, a new AI-driven campaign type designed to simplify setup and improve results. It automates delivery decisions while keeping audience and performance insight visible. The launch builds on Redditâs growing advertiser momentum.
The Breakdown:
1. Redditâs take on AI automation - Max Campaigns automate targeting, creative rotation, placements, and budget allocation in one system. The goal is to reduce manual work while continuously adjusting delivery as performance signals shift.
The system runs on Reddit Community Intelligence, trained on more than 23 billion posts and comments, allowing optimization based on real conversations and context, not just modeled interests.
2. Proven early performance - In a Max campaign promoting the launch of Brooks Runningâs Ghost 17 shoe, the brand saw a 37% drop in CPC and 27% more clicks. Across alpha tests, advertisers averaged 17% lower CPA and 27% more conversions.
Top Audience Personas reveal which types of users engage with ads and what they care about. Reddit positions this as automation that explains decisions instead of hiding them.
Max Campaigns are live in beta for traffic and conversion objectives with a simplified setup flow inside Ads Manager. Advertisers should test alongside existing campaigns to learn where Redditâs automation boosts efficiency, how creative and community signals influence results, and how it fits next to Performance Max or Advantage+.
đ Ad of the Day
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2. Hook / Headline: âIs Mushroom Coffee Legit?â invites skepticism instead of fighting it. It disarms doubt, sparks curiosity, and feels editorial, not salesy.
3. Visual Structure: Clean top-down flow. Question first, empathy second, product last. Warm tones and natural textures slow the scroll and signal calm energy, not caffeine chaos.
Donât sell the product first. Sell the internal conflict your customer already feels, then position your product as the grown-up resolution.
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Strong framework for thinking about growth stack sequencing. The insight that LTV should be treated as a design problem rather than just retention is underrated, most teams bolt on lifecycle stuff after acquisition is already running instead of building the second purchase into the first transaction. I've noticed that when AOV improves first it changes the unit economics enough to make previously marginal channels viable, which creates a second order effect on what testing becomes posible. The Reddit Max Campaigns automaton looks promising but wonder how much control trade-off there is vs manual.