No matter if you’re a fresh startup or a fast-growing scaleup, any experienced, strategic growth marketing agency will tell you: it’s extremely risky to go from 0-60 when it comes to Facebook spend. Even if you’ve got a hefty marketing budget, starting with trim, efficient spend, a clear strategy for testing (audiences, placements, flows, creative, and more), and a team that’s prepared to glean actionable insights is critical for laying a solid foundation. Even when we meet founders or marketing teams that are already working with big budgets looking for scale, it’s super important to do it deliberately and incrementally.
So, the ultimate question becomes: How do you drive down cost per acquisition while scaling your budget on Facebook? As the saying goes, there is more than one way to slice a pie. There’s really no secret sauce or one perfect way to approach this question. It is more about diving deep into your brand, getting explicit about what you want to accomplish, and developing a strategy that is research-based and customized.
Let’s back up a bit and start from the beginning.
Apothékary is a brand that’s got a mission to change our relationship to supplements. Instead of walking into a pharmacy to get your supplements, Apothékary offers clean, plant and mushroom-based alternatives channeling the conviction that good is medicine.
Understand How iOS 14 Throws Wrenches
We started working on Apothékary’s paid social campaigns in May of 2021 which was right around the time when Apple’s iOS 14 changes and privacy updates went into effect. With this, we had to rethink the campaign architecture and targeting. Assuming a large majority of Apple device users opted out of app tracking, we had to get creative with our targeting to take into consideration the overall customer journey.
- Do they know you?
- Do they like you?
- Do they trust you?
Answering these questions will take you all the way through the funnel. Considering what stage of the funnel you’re at comes into play when thinking through effective targeting, creative development, and even budget allocation. Aaand we’re back to bid strategies which is one of the main factors that determines your campaign’s potential for success.
Unsure Which Bid Strategy Gets You Results? Test!
There are multiple bid strategies available on Facebook, depending on what campaign objective you selected. Bid strategies help facilitate your campaigns in getting the desired outcomes, like increasing people to your site and spiking sales! The two main strategies we looked at with Apothékary were lowest cost and cost caps. Lowest cost focuses on spend-based bidding, whereas cost caps focus on goal-based bidding. Both of which have a time and a place to generate the most efficient results. You have to ask yourself: Do you want to capture as many people as possible for the lowest cost available or do you want to keep the cost per acquisition at or below the cap you set
To figure out what works best for Apothékary, we started with a test. We tested two top funnel campaigns. You guessed it! One optimized for lowest cost and one optimized with cost caps. With the campaign optimized for lowest cost, we have seen costs fluctuate more frequently than with the campaign optimized with cost caps. With that campaign, we have seen more stable CPAs, staying at or below where we set the cap.
The lowest cost bid strategy has helped us spend our full budget, but our CPS fluctuated with auction competition — whereas, the cost cap bid strategy stayed more steady, averaging below where we set the cap at. For my visual people:
The cost per acquisition mirrored the auction competition:
We set the cost cap at $125, and the cost per acquisition has averaged below $80:
Testing these bid strategies at the top of the funnel has helped us get a gauge on what works best for our prospecting audiences. We ultimately learned optimizing for lowest cost helps to keep our purchase volume high but at a higher cost. We learned that optimizing our campaigns using cost caps helps us to keep our cost per purchase lower but with slightly lower purchase volume.
Analyze Your Results, Rinse, and Repeat
At the end of the day, it’s all about what matters most to your business. If your ultimate goal is to control your spend and get the lowest cost in the auction then it makes the most sense to optimize your budget for the lowest cost. If your ultimate goal is to control your cost per acquisition and potentially decrease your purchase volume then it makes the most sense to optimize your budget using cost caps. Setting your cost caps slightly higher than your actual goal helps find the sweet spot for the ideal cost per acquisition, but… as I said earlier, there’s really no secret sauce. You have to… You guessed it! Test. Ready to put the pedal to the metal? Let’s talk.