Solved: Ad Spend Plateau (The Real Reason)

Hi there,

Thanks for reaching out!

Happy to give you some initial thoughts. When I hear "results have plateaued" and "wasting money", my first thought isn't usually about simple 'spend optimisation'. That's normally a symptom of a deeper issue. Tinkering with bids and budgets on a flawed strategy is like rearranging the deck chairs on the Titanic. The real growth opportunities are usually hiding in the strategy itself, not in the daily ad spend figures.

Most of the time, a plateau happens because the core pillars of the campaign – the audience, the offer, and the message – can no longer support more scale. You've likely exhausted the small pocket of the market that was easiest to convert, and now you're hitting a wall trying to convince everyone else. To break through, you dont just need a fresh perspective, you need a completely different approach.

It's probably not your spend that needs optimising, it's your understanding of the customer...

Forget the sterile, demographic-based profile your last marketing hire probably put together in a spreadsheet. "Companies in the finance sector with 50-200 employees" or "mums aged 35-45 living in London" tells you almost nothing of value. It's why most ads are generic, bland, and get ignored. It's why spend gets wasted. To stop burning cash, you have to define your customer not by who they are, but by what their nightmare is.

You need to become an absolute expert in their specific, urgent, expensive, and sometimes career-threatening problem. This is the difference between an ad that gets scrolled past and an ad that feels like it's reading their mind.

Let me give you an example. We worked on a few campaigns for B2B SaaS firms. One client’s ICP wasn't just a "Head of Engineering". She was a leader terrified of her best developers quitting out of sheer frustration with a broken, inefficient workflow. Her nightmare wasn't 'needing better tools'; it was losing her A-team to a competitor with a smoother operation. That's a specific, emotional pain point. Another client was a legal tech SaaS. Their nightmare wasn't 'needing document management'; it was a partner missing a critical filing deadline, exposing the entire firm to a massive malpractice suit and reputational ruin.

Your Ideal Customer Profile isn't a person; it's a problem state. It's an urgent, painful situation they would pay almost anything to escape from.

Once you've truly isolated that nightmare, everything else starts to fall into place. You can stop guessing where to find them. Instead of targeting broad interests like "Business", you start looking for the niche signals. What podcasts do they actually listen to on their commute, like 'Acquired'? What industry newsletters do they actually open every morning, like 'Stratechery'? What SaaS tools are they already paying for, like HubSpot or Salesforce? Are they members of the 'SaaS Growth Hacks' Facebook group? Do they follow specific influencers like Jason Lemkin on Twitter? This level of intelligence isn't just data; it's the entire blueprint for your targeting strategy. If you haven't done this work, you have no business spending another pound on ads, becuase you're just guessing.

I'd say you need to completely rethink your offer...

Now we get to the most common failure point I see in almost every ad account I audit: the offer. I'm willing to bet your main call to action is something like "Learn More", "Contact Us", or the dreaded "Request a Demo".

Let's be brutally honest. The "Request a Demo" button is probably the most arrogant and ineffective Call to Action ever conceived in B2B marketing. It presumes your prospect, who is likely a busy, stressed decision-maker, has absolutely nothing better to do than book a 45-minute slot in their calendar to be sold to. It's incredibly high-friction and offers zero immediate value. It instantly positions you as just another commoditised vendor, no different from the ten others in their inbox that week.

When you're trying to scale past a plateau, you're reaching people who are less problem-aware and have less trust in you. A high-friction offer like a demo request simply will not work for them. 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 free to earn the right to solve the whole thing later. This is non-negotiable for growth.

What does this look like in practice?

• For SaaS founders: This is your unfair advantage. The gold standard is a free trial (no card details needed) or a generous freemium plan. Let them actually use the product. Let them feel the transformation. When the product itself proves its value, the sale becomes a simple formality. You stop generating "Marketing Qualified Leads" for a sales team to chase and start creating "Product Qualified Leads" who are already convinced. I remember one client, a medical job matching SaaS, was stuck with a £100 CPA trying to get people onto demos. We helped them shift to a value-first model and got their CPA down to just £7. That's the power of a better offer.


• For Service Businesses: You are not exempt from this. You must bottle your expertise into a tool, some 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 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 a B2B advertising consultancy, it’s a 20-minute strategy session where we audit failing ad campaigns and provide a clear plan, completely free.

Once you have a genuinely valuable offer, your ad copy writes itself. You stop selling features and start selling transformation. It's the difference between an ad that says "We sell fractional CFO services" and an ad that says:

"Are your cash flow projections just a wild guess in the dark? Are you secretly one bad month away from a payroll crisis while your competitors are confidently raising their next round? Get an expert financial strategy for a fraction of a full-time hire. We build dashboards that turn that uncertainty into predictable, calm growth."

See the difference? One is a description. The other is a solution to a nightmare. We're using a classic Problem-Agitate-Solve framework. You're not just selling a service; you're selling a good night's sleep.

You probably should look at your LTV before you worry about CPL...

The question you're asking, "are we wasting money?", is the wrong question. The real question isn't "How low can my Cost Per Lead go?" but "How high a Cost Per Lead can I actually afford to acquire a truly great, profitable customer?"

The answer lies in a metric most businesses I talk to either don't track or calculate incorrectly: Customer Lifetime Value (LTV). This is the math that unlocks aggressive, intelligent growth and frees you from the tyranny of chasing cheap, low-quality leads that never convert.

Let’s walk through it. You need three simple numbers:

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

The calculation is straightforward. I've laid it out in a table so its clearer.

Let's use a real-world example. Say your ARPA is £500, your gross margin is a healthy 80%, and your monthly churn is 4%.

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

There it is. In this scenario, each customer you acquire is worth £10,000 in gross margin to your business over their lifetime. This is your new truth. This number changes everything.

A healthy, sustainable business model often aims for a 3:1 LTV to Customer Acquisition Cost (CAC) ratio. With a £10,000 LTV, this means you can afford to spend up to £3,333 to acquire a single new customer and still have a fantastic business. Let that sink in.

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

Suddenly, that £50 CPL from a LinkedIn campaign targeting senior decision-makers doesn't look so expensive, does it? It looks like an absolute bargain. For instance, we worked with a B2B software client who saw a $22 CPL on LinkedIn for B2B decision makers. This is the mindset shift required to break a plateau. You stop optimising for cheapness and start optimising for value.

You'll need a better campaign structure to find new customers...

Once you have your nightmare-focused ICP, your high-value offer, and your LTV-driven budget, you can finally build campaigns that are designed for growth. But here's another uncomfortable truth: the way you're likely running your "awareness" campaigns is probably doing more harm than good.

When you set a campaign objective on a platform like Meta to "Reach" or "Brand Awareness," you are giving the algorithm a very specific, literal command: "Find me the largest number of people for the lowest possible price."

The algorithm, being a ruthlessly efficient machine, does exactly what you asked. It actively seeks out the users inside your target demographic who are least likely to click, least likely to engage, and absolutely, positively least likely to ever buy anything. Why? Because those users are not in demand by other advertisers. Their attention is cheap. You are literally paying the world's most powerful advertising machine to find you the worst possible audience for your product.

True awareness is a byproduct of having a great product that generates sales and word-of-mouth, not a prerequisite for making a sale. For any business that needs to see a return, you should almost always be optimising for a conversion objective - sales, leads, trials, appointments. Let the algorithm find you people who actually do stuff.

To do this effectively, you need a proper funnel structure. I see so many accounts that are just a chaotic mess of ad sets. Here's how I would generally prioritise audiences for a platform like Meta, from coldest to warmest. This structure applies to almost any niche.

You run separate, long-term campaigns for each stage of this funnel. Inside each campaign, you systematically split test your audiences and creatives. If an audience has spent 2-3x your target CPA without a conversion, it's a dud. Turn it off and test another one. This disciplined, structured approach is how you find pockets of new growth and scale efficiently without just throwing money away.

I've detailed my main recommendations for you below:

To break through your plateau and stop wasting money, you need to stop tinkering and start rebuilding. This is the main advice I have for you, based on what typically causes the issues you're describing.

This strategic framework is the fresh perspective you're looking for. It’s not a quick fix or a simple optimisation tweak. It’s a fundamental rebuild of how you approach paid advertising, designed to create sustainable, scalable growth.

Doing this kind of strategic overhaul on your own can be daunting. It takes a lot of time, rigorous testing, and a level of expertise that only comes from managing millions in ad spend across hundreds of different accounts. You have to analyse the data without emotion and be willing to kill ideas that aren't working, which is tough when it's your own business.

If you'd like a second pair of expert eyes on your campaigns to identify exactly where the biggest opportunities are, we offer a free, no-obligation 20-minute strategy session. We can look at your current setup together and give you a clear, actionable plan to start breaking through your current plateau.

Let me know if that's something you'd be interested in.

Regards,

Team @ Lukas Holschuh