Hi there,
Thanks for reaching out!
Happy to give you some of my initial thoughts on your campaign structure. It sounds like you're in a pretty good spot already with a 7x ROAS and a $120 CAC for a $1k product – that's a solid foundation. Many businesses would be envious of those numbers.
The question you're asking about TOFU/MOFU/BOFU is a common one, but I'm going to be brutally honest with you: for most direct-response businesses like yours, building a complex, multi-stage funnel with different objectives like 'Awareness' is one of the fastest ways to burn your budget and actually reduce your performance. It's a concept that's often misunderstood and misapplied, leading to a whole lot of wasted ad spend. The real path to scaling isn't adding more layers, but by refining what's already working and understanding the deep psychology of your customer.
Let's unpack what a more profitable structure looks like.
TLDR;
- Stop thinking about TOFU/MOFU/BOFU as different campaign objectives. For your business, every campaign objective should be 'Leads' (or whatever your final conversion event is). The 'funnel' refers to your audience temperature, not your ad setup.
- Running 'Awareness' or 'Reach' campaigns is like paying Meta to find you the worst possible audience—people who are cheap to show ads to precisely because they never click or buy. It's a trap.
- Your Ideal Customer Profile (ICP) isn't a demographic; it's a specific, urgent, and expensive 'nightmare' you solve. You need to define this pain point with absolute clarity to unlock effective targeting and messaging.
- Your current $120 CAC is great, but calculating your Customer Lifetime Value (LTV) will reveal your true 'allowable' CAC. This is the key to scaling aggressively and intelligently, as you'll know exactly how much you can afford to pay for a high-quality lead.
- This letter includes an interactive calculator to help you determine your Allowable Cost Per Lead and a flowchart illustrating a better campaign structure.
The Big Mistake: Paying Meta to Find You Non-Customers
Here’s the uncomfortable truth about the advice you’ve heard. When you set up a campaign and choose 'Brand Awareness' or 'Reach' as your objective, you are giving the algorithm a very specific, and very dangerous, command: "Find me the largest number of people, inside my targeting, for the lowest possible price."
The algorithm, being the ruthlessly efficient machine it is, does exactly what you asked. It scours your audience and actively seeks out the users who are the *least* likely to click, the *least* likely to engage, and absolutely, positively the *least* likely to ever book a meeting or pull out a credit card. Why? Because those users aren't in demand. Their attention is cheap. Other advertisers, the smart ones running conversion campaigns, aren't bidding for them. So Meta serves your ad to them for pennies.
You are, in effect, paying the world's most powerful advertising machine to find you the worst, most unqualified audience for your product. You'll get impressive-looking numbers—a huge reach, thousands of impressions—but it's a vanity metric that translates to zero impact on your bottom line. I remember one client who came to us after spending thousands on an 'awareness' campaign for their eLearning platform. They had reached over a million people but generated less than ten signups. It was a complete waste.
For a business selling a $1k product, awareness is a *byproduct* of having a great offer that solves a real problem, not a prerequisite for making a sale. The best form of brand awareness is a new customer who is so thrilled with the result they tell their friends. That only happens through conversion.
We'll need to look at a better campaign structure... One Built for Profit
So, if not a multi-objective TOFU/MOFU/BOFU funnel, then what? The answer is simpler and far more effective. You should only ever use the 'Leads' objective (or 'Sales' if you were ecommerce). Your entire budget should be focused on telling Meta's algorithm to find people who are most likely to perform the action you actually want: booking a meeting.
The concepts of TOFU, MOFU, and BOFU are still useful, but they should define your *audiences*, not your campaigns. You're dealing with different levels of audience temperature—cold, warm, and hot. You can, and should, target these different audiences, but always within a campaign that's optimised for conversions.
Here's how I would structure it. You can think of it as a funnel, but it's a funnel of audiences, all pouring into the same high-intent objective.
TOFU (Cold Audiences)
- -> Interest Targeting
- -> Behaviour Targeting
- -> Lookalikes of Customers
MOFU (Warm Audiences)
- -> Website Visitors
- -> Video Viewers (50%+)
- -> Social Page Engagers
BOFU (Hot Audiences)
- -> Landing Page Viewers
- -> People who started booking
- -> (Excl. those who completed)
Campaign Objective: LEADS
In this model, you would have one primary, long-running campaign with the 'Leads' objective. Inside that campaign, you create different ad sets, each targeting one of these audience groups:
- Ad Set 1 (TOFU - Prospecting): This is where you test your cold audiences. Start with detailed targeting (interests, behaviours). Once you have enough data (at least a few hundred customers), you can build high-quality Lookalike audiences. A Lookalike of your past customers is often the most powerful audience you can build.
- Ad Set 2 (MOFU/BOFU - Retargeting): This ad set targets your warm and hot audiences. You can group them together to start, especially if your traffic is low. This includes people who have visited your website, watched a significant portion of your VSL, or engaged with your Facebook or Instagram page. Your ad copy here would be different, acknowledging their familiarity with you ("Still thinking about it?", "Here's what you might have missed...").
This structure is simple, powerful, and it keeps Meta's algorithm focused on the only thing that matters: getting you qualified meetings at a profitable cost. It avoids the budget fragmentation and inefficient learning that comes with running multiple campaigns with different objectives.
I'd say you need to define your Ideal Customer Nightmare...
Now, having the right structure is only half the battle. Your current 7x ROAS suggests your targeting and messaging is already working to some extent. But to scale, you need to move beyond surface-level targeting and define your Ideal Customer Profile (ICP) not by who they are, but by the problem that keeps them up at night.
Forget the sterile, demographic-based profile like "Parents aged 35-50 with an interest in education." That tells you nothing of value and leads to generic ads that speak to no one. To stop burning cash on the wrong people as you scale, you must define your customer by their specific, urgent, expensive, career-threatening, or emotionally-draining nightmare.
Your ICP isn't a person; it's a problem state. Let's imagine your edtech product helps students with maths.
- The demographic is "Parents of children aged 10-14."
- The nightmare is "A parent opening their child's report card and feeling a pit in their stomach because they see a failing maths grade, terrified their child's future opportunities are slipping away and feeling helpless because they don't know how to fix it."
See the difference? The second one is an emotional powder keg. It's specific. It's urgent. It's deeply painful. That is what you sell a solution to. You don't sell "online maths tutoring"; you sell "the relief and confidence a parent feels seeing their child finally understand algebra and get an A on their test."
Once you’ve isolated that nightmare, you can find your audience with frightening precision. Where does that terrified parent go for information? They're probably not just liking "Education" on Facebook. They might be in specific parenting forums, following child psychology influencers, reading certain blogs about academic struggles, or using apps designed to help with homework. That intelligence is the blueprint for your entire targeting strategy. Do this work first, or you have no business spending another pound trying to scale your ads.
You probably should improve your messaging...
Once you understand the nightmare, your ad copy writes itself. It stops being about features and starts being about transformation. You deploy a classic copywriting framework like Problem-Agitate-Solve (PAS).
Let's compare two approaches for our fictional maths product:
| Generic, Feature-Focused Ad (What most do) | Nightmare-Focused Ad (What you should do) |
|---|---|
|
Headline: Online Maths Tutoring Body: Get access to our award-winning edtech platform. With 24/7 video lessons and interactive quizzes, we help students improve their grades. Sign up now! |
Headline: That Feeling When You See Their Report Card... Body: (Problem) Does your heart sink when you see another low maths grade? It's terrifying to watch your bright child struggle and not know how to help. (Agitate) Every failed test can chip away at their confidence, closing doors to future opportunities. Don't let maths anxiety define their future. (Solve) Our program turns confusion into confidence. We don't just teach formulas; we rebuild their understanding from the ground up. Watch our video to see how we make maths finally 'click'. Book a free assessment today. |
The second ad will outperform the first one dramatically, even with the exact same targeting. It enters the conversation already happening in the customer's mind. Your VSL and your entire landing page should be built around this same principle. You're not selling a course; you're selling the solution to a nightmare.
You'll need to calculate your true acquisition cost ceiling...
Right now, you know your CAC is $120 and your ROAS is 7x on a $1k product. This is great, but it doesn't tell the whole story. The real question isn't "How low can my CAC go?" but "How high a CAC can I *afford* to acquire a truly great customer?" The answer lies in its counterpart: Lifetime Value (LTV).
Understanding this number is the single most important peice of financial insight for scaling a business with paid ads. It frees you from the tyranny of cheap leads and allows you to bid more aggressively for higher-quality customers who are more likely to convert.
For a one-time purchase like your $1k course, the calculation is simpler than for a subscription business. The basic formula is:
LTV = (Average Purchase Value * Gross Margin %)
Let's make some assumptions. Your average purchase value is $1,000. Let's say your gross margin after any delivery costs (server fees, instructor payouts, etc.) is 80%.
LTV = ($1,000 * 0.80) = $800
So, each customer is worth $800 in gross margin to your business. A healthy, sustainable business model often aims for a 3:1 LTV to CAC ratio. This means you can afford to spend up to $800 / 3 = ~$267 to acquire a single customer and still have a very healthy business.
Suddenly, your $120 CAC doesn't just look good; it looks like you have a massive amount of room to grow. You could potentially *double* what you're willing to pay per customer and still be profitable. This is how you outbid competitors and scale your campaigns. You're not looking for the cheapest leads; you're looking for the most profitable customers, and you know exactly what they're worth.
But we need to factor in your sales process. You're not selling directly; you're generating a lead for a meeting. Let's work backwards.
You said your show-up rate is 50%. Let's assume your sales team closes 25% of the people who show up for a meeting. This means:
- To get 1 sale, you need 4 meetings (1 / 0.25).
- To get 4 meetings, you need 8 booked calls (4 / 0.50).
So, you need 8 leads (booked calls) to make one $1,000 sale. If your allowable CAC is $267, your allowable Cost Per Lead (booked call) is $267 / 8 = $33.38.
Your current CAC is $120, which I assume is your cost per *final sale*. This means your current Cost Per Lead (booked call) is $120 / 8 = $15. You are well below your allowable CPL. This is fantastic news. It means your model is highly efficient and you can afford to pay more to get more volume.
Here’s an interactive calculator so you can play with your own numbers.
This is the main advice I have for you:
To summarise, your focus shouldn't be on building a complicated, multi-objective funnel. It should be on doubling down on what works and systematically removing any friction between your prospect's problem and your solution. Here's an actionable plan based on everything we've discussed.
| Area of Focus | Current Approach / Problem | Recommended Action | Why This Is Better |
|---|---|---|---|
| Campaign Structure | Considering a complex TOFU/MOFU/BOFU funnel with different objectives (e.g., Awareness). | Consolidate into a single campaign type with the 'Leads' objective. Use ad sets to target different audience temperatures (Cold, Warm, Hot). | Maximises budget efficiency and forces the algorithm to focus only on finding users who will convert, eliminating wasted spend on low-intent impressions. |
| Audience Targeting | Likely using broad interest-based targeting. | Define your ICP's "nightmare" in detail. Target niches, influencers, forums, and tools your ICP uses to solve their pain. Build Lookalikes of your best customers. | Moves from generic targeting to hyper-relevant targeting, increasing ad relevance, lowering costs over time, and attracting higher-quality leads. |
| Ad Creative & Messaging | Focuses on the VSL and booking a meeting. | Rewrite ad copy and landing page headlines using the Problem-Agitate-Solve framework. Speak directly to the customer's "nightmare". | Creates a powerful emotional connection that stops the scroll and compels action far more effectively than feature-based messaging. |
| Metrics & Scaling | Focused on CAC ($120) and ROAS (7x). | Calculate your LTV and Allowable CPL. Shift focus from minimising CPL to acquiring leads at or below your allowable CPL ceiling. | Gives you the financial confidence to scale spend aggressively, outbid competitors for the best traffic, and grow your business predictably. |
| The Offer | A high-friction "Book a Meeting" call-to-action. | Continue with what works, but test a lower-friction alternative (e.g., "Download a free guide," "Watch a 10-min case study") to capture leads not yet ready for a call. | Increases your total lead volume and builds a valuable email list for long-term nurturing, converting prospects who would have otherwise been lost. |
Following this plan will give you a much more robust, scalable, and profitable advertising system. You're already doing well, but these adjustments are what separate businesses that stay at 7x ROAS from those that scale to become market leaders.
Implementing all of this correctly—from the deep psychological research into your ICP's nightmare to the technical setup of the campaigns and the constant testing of messaging—takes a significant amount of time and expertise. It's not just about setting up an ad; it's about building a predictable customer acquisition machine. Misinterpreting the data or targeting the wrong 'pain point' can lead to expensive mistakes.
That's where professional experience makes a huge difference. We've scaled numerous campaigns for course creators and software companies, like one campaign where we generated $115k in revenue in just 1.5 months for a course, precisely by applying these principles. We can help you sidestep the trial and error and implement this entire optimisation process for you, ensuring that every dollar you spend is working as hard as possible to grow your business.
If you'd like to discuss how we could apply this strategy specifically to your business in more detail, I'd be happy to offer you a free, no-obligation initial consultation. We can go through your current ad account together and identify the biggest opportunities for growth.
Regards,
Team @ Lukas Holschuh
