Solved: Will Upper Funnel Events Help Optimize Campaign?

Hi there,

Thanks for reaching out!

Read your question about optimising your newsletter campaigns and it’s a situation I've seen a fair few times. It's a classic problem when you try to shift an ad campaign's focus down the funnel. The instinct to go straight for the highest-value conversion is understandable, but Meta's algorithm doesn't always work the way we'd logically expect it to.

You’re right that performance slows, but the real question is whether you're building a sustainable system for growth or just trying to force a result from a cold audience. The short answer is that you’re likely better off splitting your budget, but the way you structure it is what will make all the difference. Sticking with one campaign that’s trying to do everything is often a recipe for high costs and a lot of frustration.

I'll give you some of my thoughts on how you might want to approach this, based on what we've seen work for similar subscription and software models.

We'll need to look at how the Meta algorithm actually thinks...

The first thing to get your head around is the almost brutal single-mindedness of the Facebook algorithm. When you tell it to optimise for a specific conversion event – in your new campaign, 'premium subscriptions' – it takes that instruction incredibly literally. It will scour your entire audience to find the tiny fraction of people who exhibit behaviours most similar to those who have subscribed to premium offers in the past. It will then show your ads only to them.

This sounds great in theory, but it has a few major drawbacks. Firstly, that pool of people is probably quite small, which is why your performance has likely slowed down. You're asking the algorithm to find a needle in a haystack, and that costs more money and takes more time. Secondly, and more importantly, the algorithm completely ignores everyone else. It ignores the person who would have happily signed up for your free newsletter, loved it for two weeks, and then upgraded to premium. By optimising only for the final sale, you're telling Facebook to disregard the entire customer journey and the process of building trust.

You asked if the upper funnel events coming through on your new campaign will help it optimise. The honest answer is: not really. When your campaign objective is 'premium subscriptions' (a Purchase event, I assume), a free signup (a Lead event) is just noise to the algorithm. It sees that event happen, but it files it under 'not what I was asked to find'. The algorithm doesn't have the nuance to think, "Ah, this person is a step on the way to becoming a premium subscriber." It just thinks, "That wasn't a premium subscription. Next." You are effectively paying the platform to find you the most expensive users, while ignoring a much larger pool of potential customers you could nurture.

We've seen this with clients before. They come to us with a campaign optimising for sales with a high CPA, and they can't understand why it won't scale. The truth is, they're trying to ask for marriage on the first date. It’s far more effective to build a system that generates cheap dates (free signups) and then nurtures the best ones into a long-term relationship (premium subscriptions).

I'd say you need a proper, structured funnel

Instead of thinking about it as one campaign, you should think about it as a machine with two distinct parts. This mirrors how people actually decide to buy things. They discover, they consider, then they purchase. Your advertising should be structured in the same way.

This is how I would generally structure it, based on the audience prioritisation we use for our clients:

Part 1: Top of Funnel (ToFu) - Prospecting Campaign

-> Objective: Generate free newsletter signups. You should set your campaign objective to `Leads` or `CompleteRegistration`. Whatever your upper-funnel event was that worked so well before.
-> Audience: This is for cold audiences. People who have never heard of you. You’d test different audiences here in separate ad sets. Start with detailed targeting based on interests and behaviours relevant to your newsletter's niche. Think about what pages, tools, or public figures your ideal reader follows. Once you have more data, you can build lookalike audiences from your best free subscribers. The goal here is volume and data acquisition at a low cost.
-> Why this works: You're giving the algorithm an easy job: find people likely to give you their email for something valuable and free. The cost per free signup (CPL) will be massively lower than the cost per premium subscription. I remember one software client who was generating signups for under £2 each with this method. Trying to get a direct purchase from a cold audience would have been ten times that. You are building your most valuable asset: your email list.

Part 2: Bottom of Funnel (BoFu) - Retargeting Campaign

-> Objective: Drive premium subscriptions. Here, you set the campaign objective to `Purchase` or `Subscribe` – your bottom-funnel event.
-> Audience: This is exclusively for warm audiences. Your primary audience here will be a custom audience of your free newsletter subscribers (you can upload your email list). You can also retarget all website visitors from the last 30-90 days, or people who have engaged with your Facebook or Instagram page. Crucially, you must exclude existing premium subscribers to avoid wasting money on people who have already converted.
-> Why this works: Now you're advertising to people who already know, like, and trust you to some degree. They've raised their hand and said they're interested. The message you send them can be much more direct. The conversion rate from this warm audience will be far higher than from a cold one, making your cost per premium subscription much more efficient. You're no longer asking for marriage on the first date; you're proposing after several successful dates.

This two-part structure lets each campaign do what it's best at. The ToFu campaign is a cheap lead-generation machine. The BoFu campaign is a highly efficient sales-closing machine. They work together, but they are separate.

You probably should adjust your ad messaging for each stage

A huge mistake people make is running the same ad to everyone. An ad designed to get a cold prospect to sign up for a free newsletter should be very different from an ad meant to convince a free subscriber to upgrade.

You need to talk to them differently based on their 'temperature'.

For your ToFu (Prospecting) campaign, the goal is low-friction conversion. You're selling the free newsletter, not the premium one. The copy needs to address a pain point and offer the free newsletter as the solution. It's about demonstrating value with zero risk to them.

For your BoFu (Retargeting) campaign, the audience already knows the value of your free content. Now you need to sell them on the transformation that the premium version offers. What's the exclusive content? Is there a community? Do they get direct access to something? You can be more direct because you've already earned their attention.

Here’s a rough idea of how the messaging could differ:

Using different messaging like this acknowledges where the user is in their journey with you and makes the ad far more relevant and effective. A generic ad simply can't do this and will always underpreform.

You'll need to understand the numbers to scale this properly

This all sounds more complicated, so why bother? Because the numbers work out much better in the long run. To understand this, you need to stop focusing only on the immediate cost per conversion and start thinking about your Customer Lifetime Value (LTV).

The real question isn't "How low can my CPA go?" but "How much can I afford to spend to acquire a great customer?" Let's do some back-of-the-napkin maths. This is just an example, you’ll need to plug in your own numbers.

Calculating your LTV:

-> Average Revenue Per Account (ARPA): Let's say your premium subscription is £15 per month.
-> Gross Margin %: For a digital product like a newsletter, this is high. Let's say 90%.
-> Monthly Churn Rate: What percentage of premium subs do you lose each month? Let's assume a healthy 5%.

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

LTV = (£15 * 0.90) / 0.05
LTV = £13.50 / 0.05 = £270

In this scenario, each premium subscriber is worth £270 to you over their lifetime. A standard benchmark for a healthy business is to have an LTV to Customer Acquisition Cost (CAC) ratio of 3:1. This means you can afford to spend up to £90 (£270 / 3) to acquire a single premium subscriber and still have a very profitable model.

Now let's see how our two-part funnel fits into this £90 allowable CAC.

Suddenly, that £45 total CAC looks fantastic next to your £90 allowable CAC. You are acquiring customers at half of what you can afford to spend. This is a model you can scale. If you were only running the one campaign optimised for premium subs, you might be seeing a direct CPA of £70 and thinking it's too high to scale, when in reality you have plenty of room if you structure it correctly.

This math is what separates amatuers from professionals. It frees you from the tyranny of chasing a low CPA and allows you to build a predictable, scalable growth engine.

This is the main advice I have for you:

To put it all together, here is the actionable plan I would recommend you test. Ditch the single campaign approach and split your budget (maybe 70/30 or 60/40 between ToFu and BoFu to start) across this structure.

Implementing a structure like this is how you build a reliable system. Your prospecting campaign consistently fills the top of your funnel with low-cost, interested leads. Your retargeting campaign then efficiently converts the best of those leads into paying customers. It’s more work to set up initially, but it’s far more stable and scalable in the long run.

Getting this structure right, from the technical setup of the Conversions API and pixel events to the ongoing optimisation of audiences and creatives, can be a bit of a minefield. It's easy to misconfigure something and end up wasting budget while you try to figure it out. This is often where getting some expert help can accelerate your results and help you avoid common pitfalls.

If you'd like to walk through your specific account and see how a strategy like this could be tailored precisely to your newsletter, we offer a free initial consultation. We can have a proper look at your campaigns and data together and give you some clear, actionable guidance on the next steps. There's no obligation at all, of course.

Hope this helps you get things moving in the right direction.

Regards,

Team @ Lukas Holschuh