Kaena Miller’s Insights on Maximizing Profitability for DTC Brands
Why It Matters
Most brands know their ROAS or MER, but far fewer know whether their ad spend is actually maximizing the cash left after variable costs. Kaena Miller’s core point is that more spend doesn’t automatically mean more profit: efficiency drops as budgets rise, and the sweet spot is wherever total contribution margin peaks. His framework is practical: plot daily spend against MER, model scenarios in a spreadsheet, test with incremental increases, and repeat. Factor in LTV, inventory limits, and the lower LTV of sale-driven customers, then stay flexible enough to adjust spend in real time. With Q4 approaching, that agility matters, since most brands finish Black Friday wishing they’d spent more, not less.
Who This Is For
Built for Founders members running DTC brands or managing accounts where the question is “are we actually winning?” rather than “is ROAS up?” Especially useful for operators planning Q4 budgets, agencies thinking about contribution-margin-based incentives, and anyone who hasn’t yet mapped their unit economics or found their own scaling sweet spot.
At a recent Foxwell NYC Meet-Up, Kaena Miller delivered a presentation that struck a chord with DTC brand owners, marketers, and agencies alike. His talk focused on a deceptively simple but often elusive question: “Are we winning?” Drawing from his agency’s experience managing client accounts, Miller broke down what “winning” should mean for modern brands and how to achieve it.
Redefining Success: Three Core Goals
He began by highlighting that most brands approach growth through one of three lenses:
Maximize profit today: Focusing on immediate returns and maximizing the cash in the bank by month’s end.
Grow through reinvestment: Using profits to acquire new customers for long-term sustainability.
Aggressive acquisition at all costs: Typically reserved for well-funded brands with “monopoly money” to burn.
Most brands fall into the first two categories, striving to balance profitability with growth. Rarely does a client enjoy the luxury of prioritizing acquisition without regard to efficiency.
Understanding the Financial Basics: Contribution Margin and Unit Economics
Brands should look beyond top-line revenue and focus on contribution margin (the cash left after subtracting all variable costs and ad spend). This is the money available to cover fixed overhead (OPEX), and, ultimately, to generate profit. Miller stressed the importance of understanding variable costs (like cost of goods, shipping, fulfillment, and transaction fees) and calculating contribution margin per order and in total, before and after ad spend.
Unit economics is a broad term for understanding all the costs associated with each order. By calculating these accurately, brands can model how changes in spend or efficiency affect profitability.
The Scaling Dilemma: Why More Spend Doesn’t Always Mean More Profit
A central theme in Miller’s talk was the relationship between ad spend, efficiency (MER: Marketing Efficiency Ratio), and profit. He showed that while increasing spend can drive growth, it also leads to diminishing returns. Platforms like Meta are excellent at finding high-intent buyers at low spend levels, but as brands increase budgets, efficiency inevitably drops.
He illustrated this with the concept of the "power law curve": At low spend, efficiency is high, but volume is low; at high spend, volume is high, but efficiency declines. The sweet spot lies somewhere in the middle where total contribution margin is maximized. Finding this point is part art, part science and requires ongoing testing, scenario planning, and data analysis.
A Practical Approach: Testing, Modeling, and Adapting
Miller offered a practical framework for brands:
Map out daily ad spend and MER in a scatter plot to visualize the relationship.
Use simple spreadsheets to model different spend scenarios and predict where the sweet spot might lie.
Test assumptions by incrementally increasing spend, monitoring efficiency, and comparing actual outcomes to predictions.
Repeat this process regularly to refine your understanding and adapt to market changes.
He also recommended automating this process, where possible, by piping business data into daily models that guide spend decisions.
Beyond the Basics: LTV, Inventory, and Seasonality
Miller cautioned that real-world business is more complicated than a tidy spreadsheet. Several factors add nuance to the model:
Lifetime Value (LTV): For brands with strong repeat purchase rates, it’s sometimes worth taking a loss on the first order to gain a loyal customer. However, this is risky. Historical LTV data doesn’t guarantee future results, and you still need to cover cash flow and operating expenses.
Acquisition channel and product mix: Different channels and products yield different LTVs. Brands should analyze LTV by channel, product, and cohort to inform marketing and merchandising.
Seasonality: Customers acquired during sales events like Black Friday often have lower LTVs than those acquired during regular periods.
Inventory constraints: Most brands don’t have unlimited inventory. Miller encouraged brands to model how much product will sell organically versus through paid efforts, and to adjust spend accordingly to avoid stockouts or over-investing in products that will sell out on their own.
Agility and Real-Time Decision Making
Miller closed his talk by urging brands to stay agile, especially during key sales periods like Q4 and Black Friday. He advised against rigid budgets or fixed plans. Instead, brands should be ready to adjust spend in real time based on live performance data. In his experience, most brands finish major sales events wishing they had spent more, not less.
Agency Alignment: Incentivizing for Contribution Margin
Miller also discussed agency compensation, with advocacy for incentive models tied to contribution margin instead of flat fees or percentages of spend. This approach aligns agencies with brand profitability and keeps them invested in real, bottom-line results.
Conclusion
Kaena Miller’s presentation offered a clear-eyed, data-driven, and practical roadmap for brands seeking to maximize profitability. His core message: the path to “winning” is about understanding your numbers, testing your assumptions, and being ready to pivot as the market changes. For DTC brands heading into the busiest season of the year, his advice couldn’t be more timely.
Replay · Foxwell Founders NYC 2026
Watch Kaena Miller's full talk, "Are We Winning?"
How to find the spend level that maximizes contribution margin, not ROAS. It's one of 8 sessions in our Q4 Media Buying Crash Course, built to get your account ready before Black Friday.
