Hi there,
Thanks for reaching out! It sounds like you've had a rough go of it over Cyber Monday, which is frustrating when you've committed that much budget. A 0.50 ROAS is definitely painful.
I'm happy to give you some initial thoughts and guidance. Your plan to expand countries to lower CPMs is a very common reaction, but I'd say it's probably the single biggest mistake you could make right now. It's like trying to fix a leaky pipe by turning up the water pressure in the whole building – you'll just make a bigger mess. The real problem isn't your CPM; it's somewhere deeper in your strategy, and we need to diagnose that first before you burn another penny.
TLDR;
- Stop Spending Immediately: Your plan to spend another £1-2k hoping things improve is just setting money on fire. Pause your campaigns now and diagnose the root cause of the poor performance.
- Don't Chase Cheap CPMs: Expanding to other countries to "fix" high CPMs in the USA is a trap. You'll likely get lower-quality traffic, lower conversion rates, and an even worse ROAS. Fix your core market first.
- Isolate Your Winners: Your observation that one demographic is driving all purchases is the most important piece of data you have. You need to build a new, separate campaign targeting ONLY this group with tailored creative.
- High CPMs Are a Symptom, Not the Disease: High CPMs during Cyber Monday in the US are normal. It means you're in a competitive auction. The problem is your ad creative and offer aren't strong enough to win that auction profitably.
- This letter includes an interactive Break-Even ROAS Calculator to help you understand your real profit targets and a Funnel Diagnostic Flowchart to pinpoint where you're losing customers.
First things first: We need to stop the bleeding...
I need to be blunt here. Your plan to "continue this daily ad spend until i am down $2-3k" is a recipe for disaster. Hope is not a strategy in paid advertising. Every dollar you spend right now without a clear hypothesis for improvement is a dollar wasted. The algorithm isn't going to magically "get better" if the underlying inputs—your creative, your audience, your offer—are wrong.
Before you do anything else, you must pause the campaign. Right now. You've already gathered some expensive but valuable data: you know what *isn't* working, and you have a clue about what *is* (that one demographic). It's time to stop spending, take a breath, and analyse what happened. Throwing more money at a failing campaign is one of the quickest ways to go out of business. We need to shift from gambling to calculated testing.
The siren call of cheaper countries... and why you must resist it.
I see this all the time. An advertiser gets spooked by high CPMs in a tier-1 country like the US or UK and decides to expand their targeting worldwide to bring the average cost down. On the surface, the logic seems sound. Lower CPMs should mean a more efficient campaign, right?
Wrong. It's a classic rookie error. A lower CPM often correlates directly with lower purchasing power, lower user intent, and ultimately, a far lower conversion rate. You might pay less to reach 1,000 people, but if none of them can afford or are interested in buying your product, you've achieved nothing but vanity metrics. Your ROAS will almost certainly get worse, not better.
Let's look at the maths. High CPMs in the USA aren't a sign of a broken platform; they're a sign you're competing in the most valuable e-commerce market in the world. The challenge isn't to run away from the competition, it's to create an ad so compelling that you can afford to compete and still be profitable.
Expanding your country targeting is a scaling strategy, not a fixing strategy. You only do it once you have a proven, profitable campaign in your core market. Trying to use it to patch a hole in a sinking ship will only make it sink faster.
| Metric | Scenario A: USA Only (Your Current Reality) | Scenario B: USA + Cheaper Countries (The Trap) |
|---|---|---|
| Ad Spend | $1,000 | $1,000 |
| Avg. CPM | $100 | $25 |
| Impressions | 10,000 | 40,000 |
| Avg. Click-Through Rate (CTR) | 1.0% | 0.5% (Lower intent traffic) |
| Clicks | 100 | 200 |
| Website Conversion Rate (CVR) | 2.0% | 0.5% (Lower purchasing power) |
| Purchases | 2 | 1 |
| Avg. Order Value (AOV) | $250 | $150 (Lower purchasing power) |
| Revenue | $500 | $150 |
| ROAS | 0.50x | 0.15x |
Let's talk about that winning demographic... that's your life raft.
You said, "one demographic in particular is where almost all my purchases is coming from". This is your entire focus now. This isn't just a clue; it's a giant, flashing neon sign pointing you toward profitability. Your next step isn't to make 'a' new creative; it's to build an entire new campaign structure around this specific group of people.
Here's what you need to do. This process is about isolation and focus, giving Facebook's algorithm a crystal-clear signal about who you want to find.
- Create a New Campaign: Don't just add a new ad set to your failing campaign. Start fresh. Call it "[Product] - Prospecting - [Winning Demo]". The objective must be Conversions (Sales).
- Isolate the Audience: In your first ad set, target *only* this winning demographic. Be ruthless. If it's women aged 25-34 who live in California, that's all you target. Layer on a few highly relevant interests if you need to, but keep it tight. You are telling Meta, "Forget everyone else, find me more of THESE people".
- Craft Tailored Creatives: Now you make new video ads, but they must speak directly to this specific demographic. What are their unique pain points? What language do they use? Why is your product perfect for *them* specifically? Your current ads are likely too generic. This is your chance to make a message that resonates deeply. Test at least 3-5 different video concepts.
- Allocate the Budget: Put 70-80% of your total daily budget into this single, highly-focused campaign. Starve the failing campaigns and feed the potential winner.
By isolating this audience, you stop wasting money on people who don't convert and give the algorithm a much clearer path to success. This is how you turn a losing campaign around.
1. Analyse Campaign Data
Break down results by age, gender, placement etc.
Identify a high-ROAS segment?
2. Duplicate Campaign
Create a new campaign dedicated to this segment.
3. Isolate & Tailor
Target ONLY the winning demo. Create new, specific ads for them.
Profitable, Scalable Campaign
Your $100 CPM isn't the problem, your ad is.
Let's reframe this. A $100 CPM isn't "high". It's the price of admission to sell to the best customers in the world during the most competitive sales period of the year. Your competitors are likely paying this, and some are doing it profitably. The question isn't "How do I lower my CPM?" it's "How do I make my ads so good that I can afford a $100 CPM?".
The answer is almost always creative. With a $1k/day budget, your ads are being shown to tens of thousands of people. Creative fatigue is real. The same video that worked last month will get ignored today. You need a relentless testing process.
You mentioned video ads. That's good. But what's the message? Are you just showing the product, or are you telling a story? A great structure we often use is the Before-After-Bridge:
- Before: Describe the customer's world *without* your product. Show their frustration, their problem, the thing that keeps them up at night. Make it relatable.
- After: Paint a picture of their world *with* your product. Show them the ideal outcome, the relief, the success, the happiness. This is the promised land.
- Bridge: Introduce your product as the simple, easy bridge that gets them from the 'Before' state to the 'After' state.
This framework forces you to focus on the customer's transformation, not just your product's features. This is what stops the scroll and gets people to actually watch and click. You should be testing new videos with this structure every single week, especially at your level of spend. One winning creative can be the difference between a 0.5 ROAS and a profitable campaign. For one of our eCommerce clients in the women's apparel space, a systematic approach to creative testing on Meta Ads helped us drive a 691% return. For another, a subscription box company, we achieved a 1000% return on ad spend, purely by refining the creative and targeting on the same platform.
You need to know your numbers to win
A low ROAS is a problem, but to fix it, you need to know what a "good" ROAS even is for your business. It all depends on your profit margins. A 2x ROAS might be fantastic for a business with 80% margins but a disaster for one with 30% margins. You need to calculate your Break-Even ROAS—the point at which you are no longer losing money on your ad spend.
Break-Even ROAS = 1 / Gross Profit Margin %
If your products have a 40% gross margin, your break-even ROAS is 1 / 0.40 = 2.5x. This means any campaign with a ROAS below 2.5 is actively losing you money. Knowing this number changes everything. It becomes your primary KPI. Use the calculator below to figure out your number.
50%
2.00x
My recommendations for you...
This is a lot to take in, I know. But turning around a failing ad account requires a systematic approach, not wishful thinking. The good news is that you have the budget and the initial data to make this work. You just need to apply it correctly.
I've detailed my main recommendations for you in the table below. This is the exact process we'd use for a new client in your situation.
| Your Current Problem / Plan | My Recommended Actionable Solution |
|---|---|
| "Continue spending $1k/day until I'm down $2-3k" | PAUSE IMMEDIATELY. Preserve your capital. Stop the campaign and shift to a diagnostic mindset. Do not spend another dollar until you have a new, data-backed plan. |
| "Expand countries to lower my CPMs" | ABANDON THIS PLAN. This is a fixing strategy, not a scaling one. Focus all your energy on making the USA campaign profitable first. Cheaper traffic will not solve a core offer or creative problem. |
| "One demographic is where all my purchases are coming from" | ISOLATE AND AMPLIFY. Create a brand new campaign targeting only this demographic. Allocate the majority of your budget here. This is your number one priority. |
| "Making a new creative" | SYSTEMATISE CREATIVE TESTING. Develop 3-5 new video ads specifically for your winning demographic using the Before-After-Bridge framework. Build a process to test new creative weekly. |
| Unclear on profitability targets | CALCULATE YOUR BREAK-EVEN ROAS. Use the calculator above to understand the exact ROAS you need to be profitable. This becomes your North Star metric for all campaign decisions. |
Fixing this isn't just about tweaking a few settings; it's about fundamentally changing your approach from reactive spending to proactive, structured testing. It takes discipline and expertise to diagnose the real bottlenecks in a funnel. I recall a client selling cleaning products who was struggling with profitability. By implementing this exact kind of structured approach, we were able to increase their revenue by 190% and achieve a 633% return on their Meta Ad campaigns. It can feel overwhelming, but it's the only path to sustainable growth.
If you'd like an expert pair of eyes on your ad account to help you implement this kind of strategy, that's what we do. We offer a free, no-obligation initial consultation where we can go through your campaigns together and build a concrete plan of action.
Hope this helps!
Regards,
Team @ Lukas Holschuh
