This Is When You Should Turn Ads Off
The video explains when to turn off Meta ads based on economic KPIs, specifically when spend exceeds your break-even ROAS or CPA thresholds. The speaker emphasizes that KPIs are relative to each brand's own economics and offers a free calculator to help determine break-even points.
Summary
The speaker addresses a common question in Meta advertising: when should you turn off underperforming ads? The core answer is that ads should be turned off when they spend beyond your defined KPI thresholds, but the speaker stresses that these thresholds are highly relative to each brand's individual economics.
The speaker gives two contrasting examples to illustrate this relativity. Some scaling brands operate with a very low ROAS target of around 0.6, meaning they are willing to spend aggressively and accept minimal returns during growth phases. On the other end, some brands have a CPA threshold of $150 even when their AOV is only $90 — a scenario that would appear loss-making on the surface but may be acceptable depending on LTV or other factors.
For most advertisers, particularly those just starting out, the speaker recommends cutting ads when they fail to hit break-even ROAS during the initial spend period. This break-even point accounts for the first transaction's profitability before factoring in repeat purchases or lifetime value.
The speaker promotes a custom calculator they've built that accounts for COGS, payment processing fees, and other cost factors to help advertisers determine their precise break-even ROAS. This tool is available by DMing the word 'metrics' to the speaker on Instagram.
Key Insights
- The speaker argues that the decision to turn off Meta ads should be triggered when spend exceeds your defined KPI, but stresses that KPIs are 'extremely relative' and vary significantly by brand.
- The speaker claims that some aggressively scaling brands operate with a ROAS KPI as low as 0.6, meaning they cut ads only when performance drops below that minimal threshold.
- The speaker presents an example where a brand with a $90 AOV still sets a $150 CPA as their cutoff point, illustrating that surface-level loss-making metrics can still be acceptable depending on brand economics.
- The speaker recommends that most advertisers, especially those just starting out, should cut ads when they fail to achieve break-even ROAS within the initial spend period.
- The speaker has built a calculator that factors in COGS, payment processing fees, and other variables to help advertisers identify their precise break-even ROAS, available via Instagram DM.
Topics
Transcript
[0:00] How do you know when to turn off ads in meta? When they spend more than your KPIs. But, that's ultimately going to depend on your economic KPIs is extremely relative. Some brands that are scaling like a [ __ ] their KPI is to be at like a 0.6 ROAS. If it's below that, they have to cut it. If it's below like a $150 CPA and their AOV is like 90, then that's their point where they're [music] like, "Okay, we have to turn this off." Most people on the other hand more like right around your break even point on the first initial [music] period of spend is when you should cut stuff. Or if it…
Full transcript available for MurmurCast members
Sign Up to AccessMore from Mark Builds Brands
google ads vs FB ads
Google and Facebook ads serve different purposes in the marketing funnel. Google excels at middle and bottom-funnel retargeting and should be implemented alongside Facebook for the halo effect, while Facebook is better for scaling cold traffic and demand generation/YouTube ads work well for top-of-funnel conversions.
The Real Role Organic Content Plays
The speaker argues that organic content is the only realistic starting point for e-commerce entrepreneurs without a budget, but paid advertising is ultimately a more valuable skill to develop. Learning paid ads requires developing direct response copywriting abilities, which the speaker compares to learning a new language.
is europe actually the shortcut to ecom succes
European markets can offer better CPAs and profitability for early-stage e-commerce businesses, but they're not a scalable shortcut to success. The U.S. market remains the dominant end-game for virtually all successful D2C and CPG exits, making it the inevitable focus regardless of initial market choice.
Is Being Happy With 1-2K a Month Actually Cope
The speaker argues that being satisfied with 1-2k per month is mostly self-deception and comfort zone avoidance rather than genuine contentment. They contend that life should be about pursuing one's full potential across all dimensions, and that claiming satisfaction with a low income is only justified after achieving significant wealth.
How to create S tier winners
To create S tier creatives, it's essential to understand your customer deeply and to analyze existing winning ads to identify effective variables that can be combined into new concepts. This iterative testing approach allows marketers to refine their creatives using insights gained from lower-tier ads.