Scale Ad Spend Without Blowing Up Your CAC (Part 1)
Why you can't just change your ad platform budget and go on holiday
In partnership with Ballpoint
I’m working on this series with Josh from Ballpoint, a performance marketing agency I’ve worked with at Yonder. If you’re thinking about scaling your performance spend and want expert help, they’re worth a conversation.
As a marketer who’s always turned to product to solve my problems, realising I couldn’t just word-of-mouth my way out of our growth challenges was a big moment for me.
So I spent two years learning what made up an effective performance marketing strategy. Measurement, experimentation, channel mix - the lot.
I did this alongside Josh Lachkovic, managing director at Ballpoint, a performance marketing agency that specialises in just that.
So I’ve teamed up with Josh on a three part series on scaling performance marketing. Josh is one of the most knowledgeable people I’ve come across in the industry and for two years has been a regular source of debate, idea sharing and learning. I’m sure he’d say the same about me but I haven’t asked.
The three part series breaks down into:
Knowing what changes at scale, when it’s time to spend more and how to get ready
How measurement, creative production, testing, and infrastructure change at scale
What can go wrong, working with agencies and building your team
Let’s get into it.
Why can’t you just spend more?
If you’re clueless, or me two years ago, the first question you might ask is why not just spend more money? Change the budget to £100,000 and we can all just go on holiday.
Sadly, it doesn’t work like that. I’ve learned this the hard way. Over and over again.
For the sake of this series, we’ll talk about Meta advertising network, though the fundamentals apply to other creative-led channels like TikTok, Twitter, etc.
What happens when you increase spend
When you spend on Meta, your CPAs are based on the audiences you’re currently reaching. Early on, you’re likely doing a good job reaching early adopters. But when you spend more, Meta pushes your ads into new audiences who aren’t as ready to buy.
Your creative burns out faster. Your CPAs creep up. The platforms don’t have enough conversions to learn from. And suddenly the thing that was working beautifully at £10k is haemorrhaging money at £30k.
At Yonder, we scaled our performance spend from almost nothing to mid five figures too quickly. All of the above happened to us. We didn’t have enough creative ready, we didn’t have the right tracking in place, and our CAC was unmanageable at that level. We had to dial it down and start again. So fun.
Are you actually ready to scale?
Wanting to scale and being ready to scale are different things. Here’s what needs to be true before you start throwing more money at Meta.
Your unit economics need to work at current spend
This sounds obvious but it’s surprising how many brands try to scale their way out of bad economics.
If your LTV:CAC ratio is less than 3:1, you’re probably not ready to spend more. For bootstrapped businesses, you probably need higher — maybe 4:1 or 5:1 — because you don’t have the runway to wait for payback.
– Josh
Payback is the time in which a customer ‘pays back’ their acquisition cost through the revenue they generate. CAC alone is a bad metric to measure your acquisition, because it doesn’t account for the revenue they generate.
A subscription product with 80% month-one retention can afford a longer payback window than a one-off purchase that needs to make money on day zero. If you’re a high-frequency product — subscriptions, meal kits, anything people buy repeatedly — you can be more aggressive because you’re buying future revenue. If you’re a one-off purchase, your margins need to be big enough on that first transaction.
Make sure all of that makes sense before you spend more. Scaling with bad economics is a great way to bankrupt your business. Zuck will be waiting for you when you’re ready. Don’t rush.
You have real product-market fit signals
Another big learning for me was that channel fit is a big part of product-market fit. Sadly, better products die all the time. SAP did £30 billion in revenue last year, and no one knows how to use that junk. Doesn’t matter.
Getting your acquisition engine firing is essential to product-market fit, not just something you do afterwards. Until you’ve proven a repeatable, scalable engine, you haven’t nailed that “market” side of the equation.
That said, you need some foundation before you scale paid. At Yonder this looked like incredibly high Trustpilot ratings, lots of word-of-mouth growth and almost zero churn. We had the fundamentals of a great product in place, but not the channels to reach more people. Make sure you’re seeing something similar.
If you’re still iterating heavily on the product or your messaging changes every month, you’re not ready.
You can survive if CAC spikes temporarily
When you scale spend, CAC almost always goes up before it stabilises. Sometimes it spikes 20-30% in the first few weeks as the platforms learn and your creative fatigues faster.
Can you absorb 3-6 months of higher CAC while you figure it out? Budget for it and don’t be surprised when it happens.
If a 25% increase in CAC for a quarter would cause a crisis, you’re not ready to scale aggressively. Start slower.
Your CEO and board understand what will happen
This is the one that trips up a lot of marketing leads. You need internal buy-in that performance marketing doesn’t scale linearly. If your leadership expects £100k spend to deliver exactly 10x the results of £10k spend, you’re going to have a bad time.
Set expectations early. Explain that efficiency will likely dip before it stabilises. Show them the ramp plan (more on that below) and get alignment that you’re playing a longer game. Over-communicate. Then communicate some more.
Make it clear up front so you’re not having this conversation for the first time when CAC spikes and everyone’s panicking. That’s not a fun meeting.
What’s fundamentally different at £100k/month
Creative volume goes through the roof
At £10k/month, you can usually get away with a few new ads per week. You can make them yourself on Canva or with your phone without much fuss. And if you have some early winners you can just keep them running.
At £100k/month, you need 25+ new ads per week (new concepts and variations) just to keep up with fatigue. Producing that kind of creative — images, videos, scripts, approvals, compliance — is a massive job.
“At Ballpoint we have a metric called ‘Ads Launched Per Mille’ (ALM). For every £1,000 of ad spend, how many ads are we launching? For brands spending mid-five figures, this should be around 0.25. As you get above £100k, it can drop to 0.1-0.15 because your winners can sustain more spend before burning out. But the absolute number of ads you need is still way higher.”
— Josh
Meta likes to see 50 conversions per week per ad set, but you can generally tolerate 20+ in test campaigns because the tradeoff in learning rate is worth it.
Before you scale, you need to know: who’s making the ads? What’s your brief template? What’s your approval process? How fast can you go from idea to live ad?
If the answer to that last question is “two weeks,” you’re not ready for high spend. You need to turn around new creative in days, not weeks.
I was terrible at this early on when working with Josh’s team. I’d sit on creative briefs for weeks and it was only when I realised the impact on our experimentation and CAC that I adjusted my way of working. I was the problem.
Your team structure needs to change
A £10k/month spend can be managed by a marketing lead doing it as part of their job. Once you’ve got tracking set up and know your way around Ads Manager, it’s not hard to update a few campaigns and some creative each week.
At £100k/month, that’s impossible.
“A performance marketing team today is really a marketing strategist or CMO, an insights manager or planner, a copywriter, a creative strategist, a creative designer or editor, a creative operations manager, and a data analyst. The role that was one person at £10k/month is now effectively ten people.”
— Josh
We scaled with Ballpoint before hiring in-house. They got us to about 60% of what a full-time hire could do, but the real benefit was the thought leadership with Josh and their creative function that produced all our ad creative until we slowly brought it in-house.
That year taught us what good looked like and meant we could hire slowly and hire well.
Measurement needs to get more sophisticated
At £100k, marginal gains on measurement really start to matter. You need proper conversion tracking, the Meta Conversion API (CAPI) set up correctly with engineering support, and you need to start thinking about incrementality.
It’s much easier to fix tracking at £10k than at £100k.
Decision-making speeds up
At lower spend, you can afford to wait and see. Take a look at a dashboard when you’ve got some time. Review things at the end of the month.
At higher spend, you need weekly (sometimes daily) reviews. A losing ad at £100k/month can burn through meaningful budget in days, not weeks. You need processes that let you spot problems and react fast.
At Yonder, our finance manager was regularly following our spending patterns and alerting me when something was different so we could look into it.
Ramp up spend slowly
Here’s a general framework for how to increase spend over time. This isn’t gospel — every brand is different — but it’s a sensible starting point.
The basic rule: increase 20-30% per month when CAC is stable:
£10k → £13k → £17k → £22k → £29k → £38k → £49k → £64k → £83k → £108k
That’s 10 months to go from £10k to £100k+. Feels slow. But it’s your most likely path to success.
I’ve seen 50-100% increases and also 10% crawls. Everyone is different, you may move faster or slower.
– Josh
If your CAC is holding steady, you can afford to increase by 20-30%. If CAC is creeping up, slow down. If CAC is spiking, stop and diagnose before increasing further.
In reality, you’ll probably see this go up and down anyway. The platforms, your audience, and competition mean performance will vary a lot. It doesn’t make sense to spend the same amount when things are bad as when things are good.
If you need 100 ads live to spend £100k/month efficiently, you might need to run 300 tests to find those 100 winners. And that assumes you launched them all at the same time, which you didn’t.
Ads burn out after a few weeks. Winners stop winning. You need a scale approach that supports your ability to find enough winners continuously. If you ramp spend faster than you can ramp creative volume, you’ll blow up your CAC and have to pull back anyway.
Slower ramps protect your CAC while you build your creative engine. And a healthy CAC means you have more budget to reinvest, which means you scale faster in the long run. Patience is a virtue, I’m told.
What’s next
Okay, so we’ve covered knowing when you’re ready and what to expect at scale.
Next week in Part 2, we’ll dig into how to manage your measurement, creative production, testing, and infrastructure change at scale.
See you there.
In partnership with Ballpoint
Hi, I’m Tom.
I’ve launched products at Monzo, Wise, and built the brand and marketing team at Yonder from scratch. I write about what actually works in startup marketing for marketers on the verge of breakdown.
If you want help understanding why your brilliant product isn’t selling itself, find me on LinkedIn.
Thanks - this is super helpful. Looking forward to the part 2.
Loved sitting down with you on this, and what a great resource and primer on all things paid social.