How I’d *hypothetically* Scale Onyx Coffee Lab Through Podcast Ads

If you don’t know Onyx Coffee Lab, you haven’t hung around me enough. Collectively, I think I have an LTV to them well over $500… and I only learned of them in October of 2020.

Onyx is a small batch roaster at scale. They have developed the capacity to remain highly intimate with their suppliers and roasting process while scaling to serve a wide market. Plus their coffee is to die for, and I love their merch (wearing a hat and sweater of theirs as I type this).

I don’t know their numbers, so I can only speculate, but I believe they were one of a few coffee brands that took advantage of Covid-19 and the bullish e-commerce space. My hunch is they’re past the 1M/Year revenue mark, which is what I think is the minimum you should be doing before touching podcast ads (generally speaking).

At a base functionality, Onyx is a coffee roaster — and they’re damn good at it. They’ve expanded into artisan cafes, e-commerce, wholesale, and even consulting for up-and-coming coffee shops.

Though they have a wide variety of revenue-generating activities, here’s what I assume are the highest revenue generators:

• Wholesale
• Ecommerce (DTC)
• Retail through their cafes

Onyx is already a reasonably sized brand with what seems to be an effective funnel — the perfect setup.

Onyx is perfectly positioned for Podcast Ads, IMO.

The Math

Based on my own experience as a customer, I assume they have a great LTV and a reasonably strong AOV on first-time orders. These are two metrics you gotta be strong in to make podcast ads work well.

I’m going to make an assumption that will serve as my “rubric” for this breakdown.

$50 AOV on First Time Order with a $150 LTV in the first year.

Onyx is quite transparent with their costs as well, so we can begin to get an idea of profit margin:

A $16 bag (top-seller) has a rough cost to them of $9. For simplicity’s sake, let’s say their profit margin is around 50%. Other bags are more than 50%, some less. Larger bags = higher margins etc.

On an LTV of $150, they may bank $75. That $75 is our room to play for advertising.

This is all soooo hypothetical and I understand there are operating costs etc. So don’t come at me.

Let’s say we aim for a 3 ROAS on marketing efforts, which means we are aiming for a $50 or less cost per acquisition (CPA). This is super doable on podcasts.

How I’d Run Their Podcast Ads:

Psycho/Demographics

Before reaching out to networks, I want to get a good understanding of who their audience is. When you know who, you can better find who they might be listening to.

Coffee is competitive. Most American households drink it, and most prefer to pick it up locally — sadly, they often choose tasteless, cheaply produced, and ethically ambiguous brands.

Onyx has carved out a path that separates them from the competition. When I think of coffee brands outside of the American staples (Dunkin/Starbs, or up here in Canada, Tim’s), I think of Death Wish Coffee and Black Rifle Coffee. They made purchasing their coffee less about the coffee and more about what it means to join their community. They’ve both utilized podcasts as a strategy to target their customers.

Black Rifle seems to have an extensive partnership with the Blaze Podcast Network. This speaks to me that podcasting can work for DTC coffee brands (because this list alone is hundreds of thousands of dollars in ad spend).

I think Onyx has that capability as well but in a different vein.

In their words, Onyx is “Dedicated to the art and science of coffee. Join our pilgrimage seeking quality, truth, and accountability in coffee.”

They are keen on finding people who care about more than just the caffeine buzz of their coffee. Their customers want comfort knowing where it was sourced, the team behind it, and the prestige of quality they adhere to (they have several world-class baristas/roasters in-house — excuse my fanboying).

I imagine, there are a few psychographics that could work well for tests:

1. Millenial, Minamilstic, and Casually Bougie (the influencer type)
2. Music Culture (they’ve had several collabs with hip-hop artists)
3. Millennial Business/Entrepreneurs i.e. “Hustlers” (they care how others see them, and we know they live and die on caffeine and the ability to flex on others with their buying choices)

I would generally shy away from coffee podcasts for the same reason health and wellness products stay off health and wellness podcasts. Those shows are already over-saturated with content around other products in your niche it’s hard to break through the noise.

I personally really like the idea of running on millennial-focused news/political shows. Generally, higher-income, possibly Work-From-Homer’s that are invested in the future of the world. They have a bias toward making ethical decisions — which aligns well with Onyx.

I’d probably hit up Crooked Media and Slate Podcasts to start, as they both have great shows in the news/politics space. I’d also look to follow in the footsteps of Magic Spoon Cereal, as they tend to target more affluent, health-conscious, millennials. I use Podscribe to track where other brands are advertising. Here’s a quick snapshot of Magic Spoon’s most bought shows:

Circled in red are # of episodes bought, this indicates high renewal rates as most tests are 3–4 episodes.

I’d start somewhere in this vein of thought.

My Strategy: Months One to Three

Prior to month one of the Ads airing:

I’d curate a list of 50–75 shows in the 10k-200k download range.

Create a Google Sheets doc for managing: Show name, hosts, socials, and network+ contact.

1. Reach out to the networks. Start the relationships, introduce yourself and your desire to advertise. Typically, you’ll get sent a rate deck/more info on the shows.
2. Add rates, demos, and other applicable info to your excel sheet.
3. Nail down 10–20 shows to test that have a diversity of genre, reach, and networks. Typically, at least try to do three shows per network (this helps in negotiating test rates).
4. Set ‘em up, and knock ‘em down. Plan to do three ads per show, for a total of 30–60 ad spots. I like running bi-weekly for a total of 6 weeks. But it depends on budget timelines.
5. PLEASE SEND PRODUCTS TO HOSTS. Onyx would be rad to let the hosts choose 2–3 bags of coffee off the site to be sent out. Let the host experience the site, the product etc. This is going to help with ad copy.
6. Work on Ad Copy. I will write a future article on podcast ad Copy, but for now, I’ll reference my old article with some notes on ad copy. Use what works, don’t try to reinvent your site/FB Ads copy that works. You can adjust copy points for Months 2/3 and onwards.
7. Set up your tracking:

• Coupon Code, UTM link, Enquire Post-Purchase Survey, and Pixel (optional when starting)

At this point, you’re good to go for ads. This process can feel long, but it’s usually 1–2 weeks of setup before a campaign can run (depending on shipping times).

Month 1: Ads are live, baby!

Your ads are running, coupon code sales are trickling in, and you gotta start making decisions on what shows to keep:

1. Disclaimer: Podcasts don’t drive all their value in one day, one week, or even one month. They have a long tale of value.
2. I am looking for signs of life: Coupon code usage, post-purchase survey results. I’m trying to find if there are specific genres/shows that seem to do better generally than others.
3. Hopefully, of the 20 shows you’re on, 5+ are keepers. ROAS/CAC is hard to define, and it’s super brand specific. Some brands have a 2–3x lift, so a 1 ROAS on coupon code sales is more like a 2 or 3 on all those pesky customers who don’t click links/use codes.
4. Repeat this same process for month two, but allow yourself to keep any performers. And carry forward. Every month, you can be looking to add 5–10 shows to your long-term line-up with long contracts on better terms.

Expectations:

Depending on budget and CAC goals, I really think Onyx could crush the podcast space. In part, I know this to be true because I promoted them on my podcast with Acron Links. I did 4–6 mock ad reads on my show that did around 1,000 per ep. And generated them 5k in attributable revenue through my link and code.

I love this brand and am drinking their Tanzanian roast like there is no tomorrow.

If you find the right shows, this is super replicable. And I think Onyx is perfectly positioned to rock the space.

It’s really hard to speculate results as I don’t know their conversion rates on Ecomm sales or their goals/CAC needs, but from my LTV of over $500 I can only assume this is a great opportunity.

Plus, who doesn’t drink coffee while interviewing people on their show? It’s such an organic integration that it would for sure pop up in organic mentions throughout shows.

Get podcasting, and have fun! It’s a wonderful space with amazing humans.