Reduce Your CAC With Rapidfire Facebook Ad Testing — 5 Simple Steps

Ryan Byrne
May 8 · 8 min read

If you’ve ever experimented with Facebook ads, you probably know the power they have to drive traffic to your website, find new leads, and generate conversions. You might also know that if you don’t know what you’re doing, they’re a great way to spend a lot of money fast — with no real return on investment. When you’re working with cold audiences, your customer acquisition cost (CAC) can be high, leading many to abandon their efforts before they start seeing any returns. Thankfully, there is a way to reduce your CAC when working with cold audiences with the help of rapid-fire testing.

In this guide, the expert marketers at walk you through how to reduce your CAC when launching ads with cold audiences, in five simple steps.

Note: As a Smart Marketing reader, you probably hear us talk about “the expert marketers at ” quite a bit — but did you ever ask yourself ‘who are these nameless, faceless, marketing wizards serving me the finest marketing tips and tricks the internet has to offer’? Well, you are already familiar with me, Ryan Byrne, resident content marketer/coffee snob, but you might not know the rest of the team that I often rely upon for their expertise. The advice in this week’s article is brought to you by resident Growth Marketer, David Ebere. David has managed the PPC efforts for a number of national sports teams and has experience managing monthly ad spends of over 6-figures. After successfully launching and growing his own e-commerce stores, David joined the team and has graciously, (and reluctantly) shared his expertise with us for this post.

Step 1 — Identify your Niche

Before you begin launching your first (successful 😉) Facebook ad campaign you must first identify the niche your product exists in. Hopefully, you already know this and you can move on to the next step. If you’re not exactly sure, a great way to go about identifying your product’s niche is to ask yourself, what problem does your product seek to solve? For the purpose of this article, we will assume that our product is gender neutral baby clothing. In this case, we are trying to solve the problem of people being unable to find clothing for a child that does not impose an assigned gender onto the child. Now that we have identified our niche, we can move forward with determining what our audiences will look like when building our campaign with Facebook Ad Manager.


Step 2: Determine your Audience

You might have an idea already of who your target audiences are, but unfortunately, you are somewhat limited by the parameters that Facebook Ad Manager has to offer. Take a look at the types of cold audiences you can build within Facebook Ad Manager and try to build 3 audiences that closely resemble the types of people you would like to target. You can control for things like age, gender, location, marital status, income level, education level, etc. For our baby clothes company, we obviously want to target people who would be in the market for our product so our three audiences might be: expecting mothers, grandparents, and parents of children between the ages of 0–2. Thankfully Facebook has enough data to let us target with this level of accuracy. Your target audience might not be as easily narrowed down by Facebook’s audience-building tools so you might have to work with what you have available to you to build the closest resemblance.

Tip: If you can’t build an accurate audience with Facebook’s parameters, try targeting people who follow your competition. For our company, we might target people who follow companies like ‘Babies-R-Us’ or Milkbarn

Step 3: Determine your Creative/Copy

Now that we have our audiences taken care of, we can move on to focusing on the actual content of the ads. You want to be testing at least three different variations of your ad at this point to determine the effectiveness of each. Because you’re working with cold audiences you want to have creative/copy that will entice people to engage with your content. Try a product demo in the form of a video, a graphic that emphasizes pain points your audience has and presents your product as the solution, or even something as simple as a meme relating to your product (e.g. a cute baby video compilation).

Step 4: Test

With your audiences built and your ads created, it’s time to start testing. Because you’re working with cold audiences, you might not be seeing a positive return on investment (RoI) at this stage. Plan to budget at least $50-$100 a day at the campaign level for your initial round of tests, with the test going for 5–7 days.

Come September, you will only be able to set your budget at the campaign level so if you are reading this before then, you have the option to do this now, or divide it evenly across your ad sets.

At this stage, you’re simply optimizing for engagement on your posts. You might see some conversions depending on your CTAs but don’t worry too much if you’re not seeing sales come in right away, we will optimize for those in the next step. Keep in mind that Facebook needs about 50 actions/week of the action you are optimizing so see your tests through until you get at least that.

When testing, you want to be looking at:

  • Cost Per Mille (CPM) — lower = better
  • Cost Per Click (CPC) — lower = better
  • Click Through Rate (CTR) — higher = better
  • Cost Per Engagement (CPE) — lower = better
  • Video Views — Look for the ad with the highest rate at the highest percentage of video content watched

Once your test has run its course and you have determined what the most effective ads are, you can move on to the next step, optimizing for conversions.

Tip: Even though we are moving on to the next stage, you will still want to know which ad was the most successful. The data you gathered here will allow you to complete the next step, but it won’t remain reliable forever. You will want to know what ad works best if you plan on following this process in the future.

Depending on what stage of the marketing funnel you want to target customers in, step 5 will vary. It is possible to skip right to running BoF ads immediately if you have had significant traffic to your website or checkout page. If not — ToF or MoF ads might be your best bet. Ideally, you will be running ads for all three stages of the funnel, but if your budget is tight you might have to pick the lowest stage of your funnel that has sufficient data for you to build a large enough audience to run ads

Step 5(a): Test ToF Ads

There’s a reason we were optimizing for engagements in our previous tests. We were trying to provide Facebook with enough data for us to build quality lookalike audiences (LAA’s). Because Facebook now has enough data on the types of users who are likely to be engaged with our brand, we can then use Facebook Ad manager to build a 1% or 2% LAA and start serving them ads optimizing for our goal of conversions. In creating a LAA, we will have a much larger audience to target and allow us to scale the ad more easily.

Step 5(b): Test MoF Ads

If you have enough data to target MoF prospects, you can build an audience based on those who interacted with your initial ad test. This will serve people who liked, commented, or watched your video your new conversion oriented ads. If your initial test included a video in the creative, you will likely want to target people who watched 50% or more of your video because these people are more likely to be warmed up to your product and will be easier to convince to convert.

Step 5(c): Test BoF Ads

BoF users are the highest quality you can target and if you have enough users who fall into this category, they will give you the lowest CAC. BoF customers are people who have visited your website, product page, or have added items to their cart. In addition to being able to target these users, Facebook also gives you the ability to serve these users dynamic ads based on the content they were interacting with on your site. Try setting a budget to constantly run dynamic retargeting ads based off products that users viewed or added to their cart but failed to purchase.

A lot of success with Facebook ads comes from trial and error. Keep testing new creative, copy, and audiences to see what works best for you. If the golden rule of sales is ‘always be closing’, the golden rule of marketing is ‘always be testing’. If you’re looking for more Facebook ad hacks, take a look at earlier articles on setting up and priming your Facebook Pixel using micro-influencers, and be sure to give us a follow for more in-depth guides on how you can become a more effective marketer, without breaking the bank.

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Ryan Byrne

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Overly-caffeinated film and #CDNPoli junkie. Send me your Instant Pot recipes. Marketer @

Smart Marketing for the Lean Startup

All skill levels welcomed — levelling up is encouraged!