Solved: TOFU Objective - Awareness vs Leads for Quality?

Hi there,

Thanks for reaching out! Happy to give you some initial thoughts on your situation. You've asked about using awareness vs lead objectives for your top-of-funnel (TOFU) ads, with the goal of getting better quality leads. It's a common question, but I think you might be focusing on the wrong part of the problem. The low CPMs you see on awareness campaigns feel good, but they're a trap that costs businesses a fortune. The real path to quality leads has almost nothing to do with building a "TOFU" audience with awareness campaigns and everything to do with fundamentally changing how you target people and what you offer them.

We'll need to look at why your 'funnel' thinking is costing you money...

Right, lets get straight into it. The whole TOFU/MOFU/BOFU funnel concept, especially the way most people apply it to Meta ads, is a bit of a relic. The idea that you need to 'warm up' an audience with cheap awareness ads before asking them to do anything is fundamentally flawed and misunderstands how the platform actually works today.

You've noticed that awareness campaigns get you loads of reach for a very low CPM, while lead campaigns have a much higher CPM. This isn't a bug; it's the system working exactly as designed. Here is the uncomfortable truth: when you set your campaign objective to "Reach" or "Brand Awareness," you are giving the algorithm a very specific command: "Find me the largest number of people for the lowest possible price."

The algorithm, in its infinite wisdom, does exactly what you asked. It seeks out the users inside your targeting who are least likely to click, least likely to engage, and absolutely, positively least likely to ever pull out a credit card and buy something. Why? Because those users are not in demand by other advertisers. Their attention is cheap. So you are actively paying the world's most powerful advertising machine to find you the worst possible audience for your service.

Think about it. You're building a retargeting pool (your 50% video viewers and website visitors) from an audience that was optimised from the start to be uninterested. It's the definition of garbage in, garbage out. You're trying to sell to a room full of people who were only there because the tickets were free and have no intention of buying the merchandise. This is a huge reason why so many businesses feel like their funnels are "leaky" and their leads are low quality.

The best form of brand awareness, especialy for a service-based business, is a competitor's customer switching to your service and raving about it. That only happens through conversion. Awareness is a byproduct of solving a real problem effectively, not a prerequisit for making a sale. You should switch all your campaigns, even those targeting cold audiences, to optimise for your actual goal: conversions (in your case, website leads). The CPM will be higher, yes, but that's because Meta is now working to find the small slice of people in your audience who are actually showing signals that they might convert. You're paying a premium for quality, which is exactly what you should be doing.

I'd say you need to redefine your customer, not your funnel stage...

So, if funnels are the wrong way to think about it, what's the right way? It starts with forgetting the sterile, demographic-based profiles. "Companies in X sector with Y employees" tells you nothing of value and leads to generic ads that speak to no one. To stop burning cash on low-quality leads, you must define your customer by their pain.

You need to become an obsessive expert in their specific, urgent, expensive, career-threatening nightmare. Your ideal customer isn't just a job title; they're a person staring at a problem that's keeping them up at night. Your ICP isn't a person; it's a problem state.

For example, if you're a fractional CFO service, the nightmare isn't 'needing financial advice'. It's 'being one bad month away from a payroll crisis while your competitors are confidently raising their next funding round.' Your ad shouldn't say "Expert Financial Services". It should say, "Are your cash flow projections just a shot in the dark? We build dashboards that turn uncertainty into predictable growth."

Once you've isolated that nightmare, you can build your targeting around it. Find the niche podcasts they listen to on their commute. The industry newsletters they actually open. The SaaS tools they already pay for. Are they members of specific Facebook groups? Do they follow certain influencers on LinkedIn? This intelligence is the blueprint for your entire targeting strategy. On Meta, you can target people who follow competitor pages, are interested in specific software they use, or engage with industry publications. This is a thousand times more effective than targeting a broad demographic.

Do this work first. Map out the pain, the language they use to describe it, and where they go to find solutions. Only then do you have any business spending a single pound on ads. Because now, your ads can speak directly to that pain, and the people who respond are, by definition, pre-qualified. They have the exact problem you solve.

You probably should rethink your offer...

Now we get to the most common failure point in all of B2B and service-based advertising: the offer. Your current goal is to get a "lead via website form." This is a huge ask. It's the equivalent of walking up to someone at a networking event and immediately asking for their business card and a sales meeting. It’s high-friction and low-value for the prospect.

The "Contact Us" or "Get a Quote" button is perhaps one of the most arrogant Calls to Action ever conceived. It presumes your prospect has nothing better to do than book a meeting to be sold to. It instantly positions you as a commoditised vendor, forcing them to do all the work.

Your offer’s only job is to deliver a moment of undeniable value—an "aha!" moment that makes the prospect sell themselves on your solution. You must solve a small, real problem for free to earn the right to solve the whole thing.

What does this look like for a service business? You must bottle your expertise into a tool, content, or asset that provides instant value.

-> For a marketing agency: A free, automated website audit that shows them their top 3 SEO opportunities.
-> For a data analytics firm: A free 'Data Health Check' that flags the top issues in their database.
-> For a corporate training company: A free 15-minute interactive video module on 'Handling Difficult Conversations'.
-> For us, as an advertising consultancy: A 20-minute strategy session where we audit failing ad campaigns completely free.

This is your *real* top of funnel. It's not a video view. It's a value exchange. You give them something genuinely helpful, and in return, you get a lead that is now highly qualified. They've raised their hand and said, "I have the problem that your free thing helps with." They've experienced your expertise firsthand. The subsequent sales conversation is now a warm, consultative discussion, not a cold pitch.

You'll need a better way to think about your ad spend...

This brings us back to cost. You're worried about high CPMs, but you should be worried about your Customer Acquisition Cost (CAC) in relation to your Customer Lifetime Value (LTV). The real question isn't "How low can my CPL go?" but "How high a CPL can I afford to acquire a truly great customer?" The answer is in the LTV.

Let's break down the maths. You need three numbers:

1. Average Revenue Per Account (ARPA): What do you make per customer, per month/year?
2. Gross Margin %: What's your profit margin on that revenue?
3. Monthly Churn Rate: What percentage of customers do you lose each month?

The calculation is simple: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Let's run an example. Say your service is £1,000 per month (ARPA), your gross margin is 70%, and you lose 5% of your clients each month (churn).

LTV = (£1,000 * 0.70) / 0.05
LTV = £700 / 0.05 = £14,000

In this scenario, each customer is worth £14,000 in gross margin to your business. A healthy business model aims for a 3:1 LTV:CAC ratio, meaning you can afford to spend up to £4,666 to acquire a single customer. If your sales process converts 1 in 10 qualified leads into a customer, you can afford to pay up to £466 per qualified lead.

Suddenly, that £50 or £100 CPL from a conversion-optimised Meta campaign doesn't seem so expensive, does it? It looks like an incredible bargain. This is the maths that unlocks aggressive, intelligent growth and frees you from the tyranny of cheap, low-quality leads. Use the calculator below to figure out your own numbers.

So, here's how you should actually structure your campaigns...

Okay, let's put this all together into a practical campaign structure that you can implement. Forget the TOFU/BOFU seperation for now. Instead, think in terms of Prospecting (reaching new people) and Retargeting (re-engaging interested people). Crucially, both campaign types will use the 'Leads' conversion objective, optimised for your website form submission.

In this model, your Prospecting campaign is doing the work of finding new potential customers who are ready to act now. You're not "warming them up"; you're putting a compelling, value-first offer in front of a highly relevant audience and letting the algorithm find the buyers. The Retargeting campaign is simply a second chance to convert those who showed interest but got distracted. This is a much more efficient and effective use of your budget.

I've detailed my main recommendations for you below:

To make this all as clear as possible, here’s a summary of the strategic shifts you need to make. This is the main advice I have for you:

What kind of conversion prices should you expect?

Now, even with the right strategy, you need realistic expectations about costs. The answer isn't straightforward as it depends on your optimisation goal, the country you're targeting, your industry, and your creative.

For something like a lead form submission (a signup), you're looking at a wide range. In developed countries (UK, US, CAN, etc.), Cost Per Click (CPC) often falls in the £0.50-£1.50 range. A decent landing page might convert at 10-30%. So, your cost per lead might be anywhere between £1.60 (£0.50 / 30%) and £15.00 (£1.50 / 10%). For B2B services, it is often on the higher end of that spectrum, or even higher. We've managed B2B software campaigns where a lead cost was around $22 on LinkedIn, and others where we got it down to $2.38 on Meta by nailing the offer and targeting. It varies wildly.

If your service is highly competitive or high-ticket, expect to pay more. I remember an HVAC client we worked with in a competitive area; their cost per lead was around $60, but since one job was worth thousands, it was extremely profitable. The key is to know your numbers (your LTV) so you can assess performance properly.

Below is a simple calculator to help you estimate your potential Cost Per Lead based on ad performance and landing page effectiveness. See for yourself how a small improvement in your landing page conversion rate can dramatically reduce your costs.

This is obviously a lot to take in, and shifting from chasing cheap reach to investing in a robust, conversion-focused strategy requires expertise and careful execution. Getting the targeting right, crafting a high-value offer, writing compelling ad copy, and continuously optimising is a full-time job.

If you'd like an expert pair of eyes on your account to build out a proper strategy based on these principles, we offer a completely free, no-obligation consultation call. We can walk through your specific setup, help you define your customer's 'nightmare', and give you some tailored advice on how to start acquiring high-quality leads profitably.

Hope this helps!

Regards,

Team @ Lukas Holschuh