Solved: Wasting Ad Spend? (A Step-by-Step Fix)

Hi there,

Thanks for reaching out! It sounds like you're in a tough spot, seeing your marketing budget evaporate without a clear return. It's a very common problem, but the good news is it's almost always fixable. The issue is rarely just about tweaking a few bids or pausing an ad set; it usually runs a lot deeper than that.

I'm happy to give you some of my initial thoughts and guidance based on what I've seen from running hundreds of campaigns. The key isn't just to "optimise spend," but to build a system where every pound you spend is an investment with a predictable outcome. Lets get into it.

We'll need to look at what's really draining your budget... and it isn't the ad platforms.

Right, let's be brutally honest. Most people who say their ad spend is "inefficient" are pointing the finger at the wrong culprit. They blame the Facebook algorithm or Google's high CPCs. In reality, they're pouring water into a bucket full of holes. The single biggest drain on any ad budget is a fuzzy, ill-defined strategy.

Forget the sterile, demographic-based profile your last marketing hire probably put together. "Companies in the finance sector with 50-200 employees" or "women aged 25-45 who like yoga" tells you almost nothing of value. It leads to generic, wallpaper ads that speak to precisely no one and get ignored. To stop burning cash, you have to define your customer not by who they are, but by the specific, urgent, and expensive nightmare they're living through. This is the absolute foundation. If you get this wrong, nothing else matters.

Your Ideal Customer Profile (ICP) isn't a person; it's a problem state. You need to become an obsessive expert in their career-threatening headache. For example, a Head of Engineering at a tech scale-up isn't just a job title. She's a leader terrified of her best, most expensive developers quitting out of sheer frustration with a broken, inefficient workflow. That's her nightmare. You don't sell her "workflow software"; you sell her the ability to retain her top talent.

For example, for a legal tech SaaS, the nightmare wasn't 'needing document management'. It was the senior partner staring at the ceiling at 3am, petrified of a junior associate missing a critical filing deadline and exposing the entire firm to a multi-million-pound malpractice suit. See the difference? One is a feature, the other is a visceral, emotional pain.

Once you've isolated that very specific nightmare, you can find them. Where do they go to talk about this pain? What niche podcasts do they listen to on their commute, like 'Acquired'? What industry newsletters do they *actually* open and read, like 'Stratechery'? What SaaS tools are already on their company credit card, like HubSpot or Salesforce? Are they lurking in the 'SaaS Growth Hacks' Facebook group? Do they follow people like Jason Lemkin on Twitter for advice? This isn't just data; it's the blueprint for your entire targeting strategy. You have to do this work first, or you frankly have no business spending another single pound on ads. It's the only way to make sure your message finds the few people who desperately need it, instead of getting lost in the noise and draining your bank account.

I'd say you need to fix your offer before you spend another quid...

Now we get to the second-biggest hole in the bucket: your offer. The number one reason why campaigns fail, bar none, is a weak offer. An offer that asks for too much and gives too little in return. I see so many founders and businesses with a great product or service who completely fail at this hurdle. Their campaigns bleed money because their central Call to Action is built for their convenience, not the customer's.

So, lets talk about the "Request a Demo" button. I want you to go to your website and, metaphorically speaking, delete it. The "Request a Demo" button is perhaps the most arrogant and self-serving Call to Action ever conceived. It presumes that your prospect, a busy, stressed-out decision maker, has nothing better to do with their time than schedule a meeting to be sold to by one of your junior sales reps. It's high-friction, low-value, and instantly positions you as just another commoditised vendor clamouring for their attention. It's a conversion killer.

Your offer's only job is to deliver a moment of undeniable value. A genuine "aha!" moment that makes the prospect sell *themselves* on your solution. You must solve a small, real problem for them, for free, to earn the right to talk about solving the whole thing.

If you're a SaaS founder, this is your biggest advantage. The gold standard is a completely frictionless free trial (no card details required) or a generous freemium plan. Let them get their hands on the actual product. Let them feel the transformation. I remember one B2B SaaS client who achieved 1535 trials in a short period. This demonstrates how a value-first offer can lead to Product Qualified Leads (PQLs) who are already convinced, rather than just Marketing Qualified Leads (MQLs) for a sales team to chase.

If you're not a SaaS company, you are not exempt from this rule. You must bottle your expertise into a tool, a piece of content, or an asset that provides instant, tangible value.
-> For a marketing agency, this could be a free, automated SEO audit that instantly shows them their top 3 keyword opportunities.
-> For a data analytics platform, it could be a free 'Data Health Check' that flags the biggest integrity issues in their database.
-> For a corporate training company, it could be a free 15-minute interactive video module on 'Handling Difficult Conversations' that a new manager can use immediately.

For us, as a B2B advertising consultancy, it's a free, no-obligation 20-minute strategy session where we get into the weeds of a failing ad account and provide actionable advice. It's about giving value first. When you fix your offer to be about *their* immediate gain, not your sales process, you'll find your conversion rates will climb, and your cost per aquisition will fall. That's how you stop the budget disappearing.

You'll need to know your numbers inside out...

"What should my Cost Per Lead be?" is the wrong question. It's the question people ask when they're flying blind, focused on cost instead of value. The real question, the one that unlocks aggressive, intelligent growth, is "How high a CPL can I *afford* to acquire a truly great customer?" The answer to that lies in a number you absolutely must know: your Customer Lifetime Value (LTV).

Without this, you're just guessing. You're turning off campaigns that feel "expensive" when they might actually be your most profitable. Let's run through a quick, back-of-the-napkin calculation. You need to know three things:

1. Average Revenue Per Account (ARPA): What does a typical customer pay you each month? Let's say it's £500.
2. Gross Margin %: After your cost of goods/service, what's your profit margin on that revenue? Be realistic. Let's say it's 80%.
3. Monthly Churn Rate: What percentage of customers, on average, do you lose each month? Let's say it's 4%.

Now, the calculation is simple:

LTV = (ARPA * Gross Margin %) / Monthly Churn Rate

Let's plug in our numbers:

LTV = (£500 * 0.80) / 0.04
LTV = £400 / 0.04
LTV = £10,000

There it is. In this example, each customer you aquire is worth £10,000 in gross margin to your business over their lifetime. This number changes everything. It's your North Star for ad spend.

A healthy, sustainable business model often aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. This means for every £3 of lifetime value, you can spend £1 to acquire the customer. With a £10,000 LTV, you can therefore afford to spend up to £3,333 to acquire a single new customer and still have a fantastic business.

Let's take it a step further. If your sales process converts 1 in every 10 qualified leads into a paying customer (a 10% conversion rate), you can afford to pay up to £333 per qualified lead (£3,333 / 10).

Suddenly, that £250 lead from a LinkedIn campaign targeting a specific CTO, which you previously thought was "too expensive," doesn't look so bad, does it? It looks like an absolute bargain. This is the maths that separates the businesses that scale from the ones that stagnate. It frees you from the tyranny of chasing cheap, low-quality leads and allows you to confidently invest in finding high-value customers. Knowing your LTV is not optional; it's the bedrock of a predictable growth engine.

We'll need to stop paying platforms to find you non-customers...

Here's an uncomfortable truth that costs businesses a fortune. When you go onto a platform like Meta (Facebook/Instagram) and set your campaign objective to "Reach" or "Brand Awareness," you are giving the world's most powerful advertising algorithm a very specific, and very stupid, command. You are telling it: "Find me the largest possible number of people for the lowest possible price."

The algorithm, being an obedient servant, does exactly what you asked. It scours your target audience and actively seeks out the users who are least likely to click, least likely to engage, and absolutely, positively, guaranteed 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. You are literally paying to find the worst possible audience for your product.

The best form of "brand awareness" for any growing business is a competitor's customer switching to your product and raving about it. That only happens through conversion. Awareness is a byproduct of having a great offer that solves a real problem, not a prerequisite for making a sale. For 99% of businesses, your entire budget should be focused on objectives that drive a tangible action: leads, signups, trials, or sales. I've seen clients reduce their Cost Per Acquisition by 90% simply by switching from an awareness to a conversion objective. For example, a medical recruitment SaaS client saw their CPA reduced from £100 to just £7.

So, how do you better pre-qualify your audience and ensure you're reaching people with intent?

-> On Google Ads: You target keywords that express specific commercial intent, not broad informational queries. If you sell an outreach tool, you don't target "what is cold email." You target "software for lead generation" or "contact info finding tool." You show your ads only to people who are already actively searching for the exact kind of solution you provide. They have pre-qualified themselves.

-> On Meta & LinkedIn: You target the pain. For that same outreach tool, you don't just target a broad "marketing" interest. You find interests related to the *problem*: "lead generation," "email marketing tools," or you target people who follow competitors, or publications that discuss this exact problem. You then hit them with an ad that calls out their specific frustration. This way, you know that the people who click are already wrestling with the problem your product solves. They are much further down the buying journey.

I'd say your account structure is probably holding you back...

When I audit new client accounts, one of the most common things I see is a complete mess of a campaign structure. Dozens of ad sets being tested at random, overlapping audiences, no clear funnel logic. It's like throwing darts in the dark. A logical, prioritised structure is essential for systematic testing and scaling.

The further down the funnel an audience is, the more valuable they are and the better they will usually perform. You need to speak to them differently. Here is how I would usually prioritise audiences for a Meta ads account, from the highest intent to the lowest. This same logic applies to other platforms too.

You start with your smallest, highest-intent audiences first (BoFu), because they'll give you the fastest and cheapest conversions. You secure that ground. Then, you use the data from those conversions to build powerful Lookalike audiences to find new people (ToFu). You need seperate campaigns for each stage of this funnel, with messaging tailored to their level of awareness. A cold prospect needs to be told about their problem. Someone who abandoned their cart just needs a reminder or a small nudge.

When you structure your account this way, you create a machine. It stops being a gamble. You can clearly see which part of the funnel is working and which isn't, and you can allocate your budget intelligently to scale up what's delivering results. This structure brings method to the madness and is the key to scaling your ad spend without your returns falling off a cliff.

This is the main advice I have for you:

I know this is a lot to take in. The core message is that optimising ad spend isn't about little tweaks; it's about fixing the fundamental strategy. You're losing money because there's a crack in the foundation, not because your CPC is ten pence too high. Here’s a summary of the strategic shifts you need to make.

Implementing all of this correctly is a significant amount of work, and it requires deep expertise to get right. It's not just about knowing which buttons to press; it's about understanding the intricate dance between audience psychology, data analysis, and platform mechanics. This is where professional help can make a huge difference, turning your ad spend from a cost centre into a predictable and scalable growth driver.

If you’d like to go through your specific situation in more detail, we offer a free, 20-minute strategy session where we can take a look at your ad accounts together and give you some concrete, actionable recommendations you can apply right away. There’s no obligation at all.

Hope this helps give you a clearer path forward!

Regards,

Team @ Lukas Holschuh