The biggest mistake ad buyers make is scaling winning ads wrong and seeing massive drops in ad performance.
This is like self-sabotage and leads to performance collapses that end relationships (or worse, kill businesses).
WHY DOES THIS HAPPEN?
It’s because Meta Ad delivery costs are non-linear. That means to increase reach 2.5x, you may have to increase budgets 5x or more.
Experienced media buyers, particularly those with experience buying TV ads, are very familiar with the rising costs of ads as you reach more and more of your audience.
Let me explain why this makes sense.
Some people log in more. Some people click ads more. Some people are the perfect fit for your message-market fit. So you can always reach about 10% of people very efficiently.
As you reach deeper into your audience, all the “low-hanging fruit” is gone, and it becomes more competitive. This means costs go up.
Once you’ve reached more than 50% of your audience, everyone left is very expensive to reach. And it gets to a point where it’s so cost prohibitive, it simply doesn’t make sense to advertise any more.
WHAT CAN YOU DO?
Plan your audience size and ad budgets together. Anticipate how your ad costs might change, and make adjustments to your audience size and ad budgets together.
Imagine your last month’s data was:
You spent $20,000 on ads
You reached 1,000,000 people
Your total audience size was 2,500,000 people
That means it cost $20 to reach every 1,000 people (a $20.00 CPM) and you reached 40% of your audience.
If your want to increase your budget 2.5x without losing efficiency, you probably need to increase your audience size to be 2x-10x larger.
Why? Because 40% monthly reach is already getting expensive. Reach further into your audience, and your costs will run out of control.
NEED HELP PLANNING?
I have a spreadsheet that helps you calculate your CPM, anticipate how your costs will change, and plan how large an audience size you will need.