If you’re a digital marketer, you know the ongoing battle: balancing acquisition costs while scaling campaigns. You can’t ignore rising ad prices, yet pausing campaigns isn’t an option either. That’s where strategy beats brute force.
Today, let’s break down how we tackled high CAC and achieved scalable, profitable campaigns without burning a hole in the budget.
Understanding the Problem: Why CAC Creeps Up
Before diving into the "how," let’s address the "why." Rising CAC is often tied to these three culprits:
Ad Saturation: Competing in crowded markets means higher CPCs and CPMs.
Targeting Too Broadly: When your audience is too wide, you’re paying for clicks that don’t convert.
Skipping the Funnel: Many campaigns focus solely on new customer acquisition without leveraging retention strategies.
If these sound familiar, you’re not alone. The challenge is figuring out how to reduce CAC while maintaining ad efficiency. Here’s what worked for us.
Segmented Campaign Structures
We started by re-evaluating our campaign structures. Instead of lumping all audiences into a single campaign, we broke them down into micro-segments based on:
Purchase behaviour (first-time vs. repeat buyers)
AOV (Average Order Value) preferences
Product interest (specific categories or bundles)
This allowed us to create highly relevant ad creatives and landing pages designed specifically for each segment. For example:
High AOV products: We targeted users with discount-based incentives or bundle offers.
Low AOV products: Focus shifted to urgency-driven messaging like “limited-time deals.”
The result? A significant reduction in wasted ad spend because we weren’t throwing generic messaging at uninterested audiences.
Leveraging Retargeting Without Overlapping Audiences
Retargeting can deliver great results when done right, but overlapping audiences can quickly drain your budget. We audited our retargeting strategy to ensure no audience was being targeted in multiple campaigns simultaneously. Here’s what we did:
Exclude Already-Engaged Users: Those who clicked on an ad but didn’t convert were retargeted with a lower-cost funnel. Users who added to cart but didn’t purchase got product-specific ads.
Dynamic Retargeting: Dynamic product ads allowed us to show the exact product a user browsed, instead of a generic catalog. It’s like reminding someone of what they already wanted without being intrusive.
This small tweak alone reduced retargeting CPC by 30%.
A/B Testing Focused on Creative + Landing Page Synergy
You’ve probably heard about A/B testing a million times, but here’s the nuance: testing ad creative is only half the battle. We focused just as much on the landing pages.
Creative-Tested Ads: For example, one ad highlighted the pain points (e.g., “Tired of overpriced [industry] services?”), while another emphasized social proof (“Trusted by 10,000+ happy customers”). We saw which hook resonated best.
Landing Page Consistency: Matching the ad’s tone and promise with the landing page was crucial. If the ad talked about affordability, the landing page led with cost comparisons and payment options upfront.
This synergy increased our landing page conversion rate by 22%, which directly contributed to lowering CAC.
Harnessing Lifetime Value to Offset CAC
Reducing CAC doesn’t just mean spending less; it means making every dollar spent work harder. We doubled down on improving customer lifetime value (CLV) through:
Upselling and Cross-Selling: Post-purchase email flows introduced complementary products. For instance, buyers of Product A were offered a bundle with Product B at a discounted rate.
Subscription Models: Products that lent themselves to recurring purchases (like consumables) were bundled into subscription offers. This approach gave us predictable revenue streams and lowered acquisition costs over time.
The math was simple: If you increase CLV, even a slightly higher CAC is acceptable because every customer is worth more.
Analysing Placement and Platform Efficiency
Finally, we went granular with platform and placement analysis. Instead of blindly trusting algorithmic recommendations, we analysed performance by:
Platform: Meta Ads performed better for high-AOV products, while TikTok Ads drove volume for lower-priced items.
Placement: Surprisingly, Instagram Stories converted better for impulse buys, while Facebook Feeds worked for long-form copy.
What We Learned Along the Way
Reducing CAC isn’t a one-time hack, it’s an ongoing process of experimentation and refinement. The key lessons we took away include:
Audience Segmentation Matters More Than Ever: Broad targeting might get you volume, but segmentation drives profitability.
Creative and Landing Pages Should Work Together: Don’t let mismatched messaging leave money on the table.
Retention Can Offset High Acquisition Costs: Think beyond the first purchase. What’s your long game for each customer?
If there’s one takeaway, it’s this: lowering CAC is possible without sacrificing performance, but it requires a strategic approach. Don’t just throw money at ads, make your ads work smarter for you.
SO, WHERE DO YOU FIND THIS PARTNER?
Well, aren’t we glad you asked! We at DigiCom are obsessive data-driven marketers pulling from multi-disciplinary strategies to unlock scale. We buy media across all platforms and placements and provide creative solutions alongside content creation, and conversion rate optimizations. We pride ourselves on your successes and will stop at nothing to help you grow.
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