New customer acquisition on Meta is getting cheaper, contrary to popular opinion.
When looking at average nCAC across all 1,000+ ad accounts tracked by Northbeam, we can clearly see that costs dropped by as much as 33% in Q3 year over year.
This is tracking billions in ad spend, filtered for accounts that only appear in both quarters, for a fair comparison.
How is this possible?
A few hypotheses:
1. Public opinion (especially on this platform) is quick to blame Meta. Anecdotal evidence is NOT indicative of an actual trend - you must bring data. This is kind of our whole thing at
@northbeam.
2. Meta has made significant algorithmic changes this year, as we've seen in past charts shared on this channel. It seems like these changes are working. Or at least, people are adapting.
3. I do not expect this drop to continue forever. Although we have eschewed all seasonal trends here, CACs will increase during BFCM and stay elevated through Christmas.
4. Targeting new customers has gotten easier. Northbeam Apex and Meta's incremental attribution have improved new customer acquisition performance across our advertisers.
5. So it's not just prices - it's HOW we are targeting new customers. Because we're better at targeting, it's getting cheaper over time.
6. These attribution models only improve with time. Therefore, the downward trend seen below.
7. The huge spike is Amazon Prime Day + Father's Day + 4th of July, which were awkwardly placed near each other this year.
8. Meta remains undefeated. We had some growing pains there, but this chart clearly shows that on average, new customer acquisition is improving, at least across Northbeam advertisers.
9. Everyone is listening to people like
@9operators when they hammer new customer acquisition as a key priority for your business, and therefore folks are getting better at it.
10. Something happened this summer. Some kind of cultural vibe shift mixed with macro changes. Folks are just... happier? And happier people buy more stuff. You probably feel it too.
11. Macroeconomic challenges around gas prices, shipping disruptions, and exchange rates have culled a generation of DTC businesses, which has decreased competition somewhat. Lots of businesses folding this year.
12. Meta is actually listening to us and building a platform that permits us to efficiently and cheaply target new customer acquisition. Granted, they are still pushing AI that will make many of the people reading this message redundant.
13. The loudest folks online are the ones having problems with Meta Ads. I know many killers on here who don't ever speak to their own performance and are doing great right now. As a wise man once said:
"The realest ecomm operators move in silence like the 'g' in lasagna."
What are you seeing in your data?
All charts and analysis by
@BryanBumgardner 🛰️