Frontend losses and Backend profit

Bordeaux | Summer 2024
Winning on the first click isn't that simple anymore.

Three years ago, I went to Puremix to help them optimize their ads and content strategy, and my first look at the dashboard was a total shock. I saw campaigns running at a 0.80 ROAS. In any normal DTC setup, spending a dollar to get eighty cents back is a disaster, but the founders, who were pioneers in the subscription space, stopped me and explained the architecture behind those numbers.

They weren’t looking at the day one return because they weren’t selling a one time product. They were acquiring a cohort. They showed me that if you actually trust your data, that 0.80 ROAS is just a calculated entry fee. The front end loss becomes irrelevant with a back end profit.

And this shift toward subscriptions has become the biggest 2026 trend in the industry. The market has reached a level of sophistication where a basic “buy now” ad struggles to offer the margins it used to. Between the noise of AI generated content and Meta hiking the price of attention, winning on the first click isn’t that simple anymore. This is why apps like Subscribility are everywhere right now. They make the transition look like a simple software toggle, but you have to keep your guard up because these platforms are selling you their own subscription, so they naturally downplay the operational reality.

The truth is that this model takes at least two or three full yearly cycles to actually mature. You have to be prepared to survive a long valley of death where your cash flow is negative on every new lead, trusting that the math will eventually compound in your favor. It’s a valid strategy, but it’s definitely not for every brand. The math only holds up if people actually stay, and spreadsheets can’t force retention. At Puremix, it worked because they built an indispensable community of audio engineers who didn’t want to leave. Without that layer of genuine utility or community, you’re just forcing a business.

For many DTCs, the better move might be leaning into modular ad content, retargeting, meme marketing, or community led ads to lower that initial barrier.