Ad pro identifies keys to lower acquisition costs

Hal Smith, founder of H Street Digital, says his agency focuses on lowering clients’ customer acquisition cost on Meta and Google. He cites 5 performance levers that drive this effort, starting with the offer.

Smith’s experience in managing political fundraising campaigns has taught him the importance of the right message. He now applies this expertise to scaling direct-to-consumer outdoor brands through advertising.

Smith notes that the top goal of advertising is to get someone to stop scrolling and click, driven by curiosity and novelty. He emphasizes the need for intentional creative concepts that balance novelty with brand constraints.

Smith’s approach to ad messaging involves leading with a question that speaks to a pain point or aspiration of the target audience, driving curiosity and interest. He also stresses the importance of figuring out which part of a video or static ad drives the most interest and using that as the hook.

Crafting Effective Ad Messages

When helping brands understand this approach, Smith’s agency starts by identifying the pain points or aspirations that merchants are trying to solve or hit. They then hone in on the language that target prospects use to describe these needs and ensure that the people in the ads reflect the target audience.

Smith notes that a common ad mistake is not optimizing for the right purchase event. Instead of going for the highest volume at the lowest price point, brands should set up a custom purchase event for new customers and use it as their main optimization goal in Meta and Google.

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This approach creates a framework where the platforms have to work to reach new customers, driving a creative testing strategy that involves assembling a variety of target customer personas, angles, and formats. By testing the right purchase event, Meta and Google can provide insights into what creative is working well.

Smith recommends aiming for enough conversion actions in a given period to confidently know what’s working and what’s not. The ad volume depends on the budget and target CAC, with a larger budget and lower target CAC allowing for faster learning and better variety.

Performance Levers For Success

Smith’s agency has identified five performance levers that impact customer acquisition cost. These include the offer, creative, account structure, and signal engineering. A strong offer and compelling creative can contribute to lowering CAC.

Signal engineering, which involves setting the right targets for Meta and Google to optimize for, is also critical. By auditing accounts and removing platform restrictions that limit learning, brands can improve their CAC.

Smith’s agency uses a variety of strategies to help brands achieve their goals, including identifying pain points or aspirations, honing in on the language that target prospects use, and ensuring that the people in the ads reflect the target audience. By using these strategies, brands can create effective ad campaigns that drive results.

Optimizing Purchase Events

The importance of optimizing for the right purchase event cannot be overstated. By setting up a custom purchase event for new customers and using it as their main optimization goal, brands can create a framework where the platforms have to work to reach new customers. This approach drives a creative testing strategy that involves assembling a variety of target customer personas, angles, and formats.