An unfortunate truth: if you are doing growth marketing, you are probably wasting 40% or more of your ad spend.
Northbeam would like to help.
Our Media Strategy team has worked with thousands of the smartest growth marketers in the world. From that experience, we’ve created something we call The Daily Ad Optimization Framework, penned by our Head of Media Strategy Ryan Kovach.
This is a step-by-step process for helping you maximize the performance in your ad accounts, regardless of the channel. This works on Meta, YouTube, TikTok, anything.
We’ve identified that the constant pursuit of new customer acquisition across channels is the most effective strategy for companies that want to be successful via performance marketing.
In this process, you’ll learn how to set clear performance targets and hold your ads against them. This will give you a clear process to repeat for 15-30 minutes a day. This strategy will teach you how to measure, prioritize, and experiment toward new customer acquisition, regardless of your budget, channel mix, or industry vertical. Of course, it works best with Northbeam dashboards.
For most performance marketers, consider this your Northbeam 101 introduction. If you can stick to this process for six months, your entire business will transform.
Let’s get into it. I made this handy infographic to take with you.
Before you start
Have 90 days of clean data in Northbeam. Let’s not mince words. We are building a completely new set of performance data for your ad accounts. With infinite lookback windows, complex machine learning models, and shifting seasonality, it takes time for the data to be strong. If you cannot wait 90 days for maximum accuracy, then obviously you aren’t serious about this process. There are no shortcuts to proper performance. This 3-month buildup is necessary for extreme accuracy of your Northbeam data. You can still use Northbeam through this time, but some of your metrics you’ll want to avoid until your conversion lag has gone through a few cycles.
Set your performance benchmarks. Northbeam has a Profit Benchmarks tool that will allow you to identify the exact MER/ROAS goals you need to hit by channel, campaign, and ads in order for your ad account to be profitable. Many people never calculate this number, they just push for the best ROAS possible. You need to understand the exact threshold you need to hit for PROFITABILITY, not just growth.
Turn on Northbeam Apex and Clicks + Deterministic Views. These are the moneymakers that will transform your ad account. If you start using these from day one you will run circles around your competition.
Once you’ve done these three things, move on to step 2:
1. Gut check: is your business ready for this?
This Ad Optimization Framework will put your business into overdrive. Are you prepared? Don’t laugh. The only thing worse than wasting money is driving the entire ad account into the ditch because you didn’t take this seriously.
Consider your budget. Do you have the cash flow and political mandate to increase your marketing spend as your results improve? Because that’s what we’re gonna do.
Also important are logistics: do you have any inventory constraints? Are there huge delays in your product delivery pipelines to your warehouse? Are you well-equipped to adjust the size of those purchase orders as demand grows? These are critical for not running out of “gas” AKA inventory we’re obviously trying to move faster.
Finally, clarity and alignment: is your team prepared for the numbers to change? Does everybody agree that new customer acquisition is the whole point? You have to be prepared to stop looking at blended new/returning customer metrics.
This means in the short term, your numbers are going to look worse - but that’s the point. We are choosing to look at more conservative numbers and hold ourselves to a higher standard. If your ROAS halves in your reporting because now we’re only looking at NEW customer ROAS, your stakeholders must be expecting this change. The narrative must be clear with your bosses and clients. If it is, then you can move forward.
Why we prioritize new customer acquisition above all else
Sure, you could take control of an ad account and sell lots of products to the same customers you already have, and call it an efficient ad account. But new customer acquisition is a network effect.
With every new customer, you increase awareness of your brand. You increase opportunities for new upsells. You put your product into the hands of more people. You get more reviews, you get more reach, your legend grows.
Acquiring new customers above all else creates a compounding snowball of growth that supports every aspect of the business, from marketing to product to logistics. This is the secret North Star of the world’s top-growing businesses.
2. Review your channel performance
At this point, you have your benchmarks set up (which are visible at all times in your dashboards), your clients/bosses are on board, and you have clean data. Now we evaluate where we are today.
Set your attribution modes to 7-day clicks only. For longer trend health, you can set it to 60-day. Accrual accounting aligns revenue to the spend date, correcting for conversion lag — essential for upper-funnel ads and higher-AOV products to be measured fairly.
Open your Sales Attribution view in Northbeam and start at the channel/ad platform level first. Ask yourself: “Is this channel above, near, or below my required performance benchmarks?”
Luckily, the performance benchmark speedometers (as seen in the bottom of the image below) will tell you if a channel is at, above, or below benchmark.
You can see the benchmark “speedometers” at the bottom. All systems green - we are above benchmark in this demo example.
Once you’ve taken stock of your channels, use the tabs at the top of the table to drill down further into campaigns, ad sets, and ads for each channel. Soon you’ll start to recognize which ad sets, campaigns, and channels are driving your growth.
These winning growth vectors may align with what you expected. But in many cases, they actually don’t. This is why alignment is important: the ads you thought were driving your growth may actually be flimsy compared to stuff you thought was a waste.
Create saved views on your Overview and Sales Attribution pages to make this faster next time. I recommend tiles on the Overview page for nROAS, nCAC, New Visit %, New Customer %, CTR, CPM, ECR, and RPV, by channel.
Quick definitions:
nROAS: New Return On Ad Spend. Revenue from new customers / spend.
nCAC: New Customer Acquisition Cost. Spend / new customers acquired.
Accrual vs. Cash accounting: Accrual aligns revenue credit to the spend date, correcting for conversion lag. This is critical for channels with slower paths to purchase, where clickthrough purchases are not as common (CTV, YouTube, TikTok). Use accrual for daily operations; use cash when reconciling with finance.
New Visit %: Percent of sessions from first-time visitors (session-level).
New Customer %: Percent of purchasers who are first-time buyers (person-level).
ECR: Ecommerce conversion rate. Northbeam’s way of describing CVR.
RPV: Revenue per visitor (session level.)
Making decisions
Now we come to the most critical part: deciding what to do with this data. There are many ways to analyze your performance, obviously. But the most brutal and direct question to ask:
For each channel, campaign, adset, and individual ad: is this asset green (above benchmark) on nROAS or nCAC AND do you have enough data to trust the signal?
Let’s break this down.
Is it above the nROAS benchmark? This means this ad is outperforming the bare minimum nROAS number required to consider this ad asset profitable. At this point you’ve already done the math on COGS and everything else automatically with Northbeam’s Profit Benchmarks tool. So you know if it’s above this nROAS, then this asset is making more money than it’s spending.
Is it above nCAC benchmark? Perhaps for your business customer acquisition costs are more important than ROAS. We see this for high-AOV businesses sometimes. If your ad is above your nCAC benchmark, then you know without a doubt that the ad is acquiring customers at a rate that is profitable.
Do you have enough data to trust this signal? What we mean here: has this asset been live long enough, this experiment running long enough, to have results worth testing? A good rule of thumb: know how many conversions you really need to trust results. Typically we’d say at least 10 or more purchases in that 7-day window that are around your usual average order value. This would suggest that the asset is behaving normally.
3. If the answer is yes, then you scale.
This is where things get easy. You are only going to scale things that grow new customers, period.
If your experiment campaigns/ad sets has >10 AOVs in the window of time you’ve selected, is above the nROAS target or below the nCAC ceiling, congrats: that asset is fit to scale.
Our advice: increase budget by 10% and make a note to yourself of the change. Come back tomorrow and repeat the entire decision process.
If performance holds or improves, step another 10% in the budget until the results start to flatten or inventory constrains you. We’re trying to find the upper limit of diminishing returns for this ad asset in terms of new customer growth. We’re not trying to maximize ROAS here - we’re trying to maximize new customer acquisition.
A note on prospecting vs catalog/retargeting: favor scaling prospecting, as it typically grows new customer percentages. Catalog or retargeting ads may be green, but these often plateau quickly as you expand spend. Plus these don’t usually bring new customers. Keep these ads efficient: don’t let them cannibalize budget that would be better served acquiring new customers. Measure these categories with nROAS and new customer percentage to keep them honest.
Understanding accrual: Ads can accrue credit after you’ve paused them. It’s okay to re-enable those ads if subsequent accrual numbers brings them above target — but evaluate with the same nROAS/nCAC thresholds and windows as before. Sometimes it takes a minute for ads to truly blossom.
4. If the answer is no, then trim.
If your campaigns or ads aren’t hitting the benchmarks, you’ll see red speedometers in your dashboard. It’s time to cut these ads before they become a problem.
If a campaign/ad set has <5 AOVs and is below the nROAS target or above the nCAC ceiling, cut that line item’s budget. Use your judgement on how much to cut. If it’s far below, consider turning it off. If it’s just below, let it run a few more days at a lower budget to see if it will become efficient. Maybe you can test some creative variants of this asset.
Judge your creative using Northbeam data, NOT in-platform metrics. This is the crux of this entire strategy. Your key metric should be Northbeam nCAC if new customer acquisition is the goal.
Pro tip: keep a running backlog of creative ideas and hypotheses and match them to the funnel stage of the ads you want to improve. Which takes us to the next step:
5. Post-review: what do we do now?
The key of this entire strategy is getting clear action items for whatever data you see. No questions, no guessing. Although every business and ad account is different, you can typically diagnose what went wrong and what to do next just by looking at the metrics we defined above.
Quick rules of thumbs for what to do:
If nROAS is weak and nCAC is high: your spend is drifting toward existing customers: tighten up your creative angles and audiences to reach net-new customers, or reallocate spend toward prospecting channels that do a better job of lifting new customer percentage.
Low new visit percentages: If new visit percentages are low, but new customer percent is healthy, that channel likely drives multiple sessions per user. People are interested, they keep coming back and evaluating. This could be a valuable upper-funnel asset: assess the number of visits per user and your actual conversion lag before you cut these assets.
Weak clickthrough rates: launch new creatives; ensure your message in those creatives is the right fit. If CPM is high: test placements, geos, or broaden your audiences.
Weak conversion rate: If conversion rate lags, you know you need to fix your product detail pages and landing pages, or build more trust through testimonials. Try custom landing pages for each ad asset.
Weak revenue per visitor: Something’s wrong with the offer. Is the price too high? Can you discount (but please, try not to)? Is there a bundle or cross sell you can do?
Guardrails and food for thought
Some loose tips, as you engage with this process:
Northbeam’s platform is bespoke for this type of analysis. You could use this process on other attribution platforms, it’s just going to be harder, more manual, and the data won’t be as accurate. Northbeam isn’t just an ad attribution platform: it’s a philosophy of growth.
Your prospecting is your growth engine. Protect it. Scale these ads as your top priority. Don’t fall into the trap of focusing on lower-funnel channels like Google simply because the one-day clicks only data looks better. Speaking of:
Your catalog and retargeting ads are your “moat” that ensures efficiency. Don’t expand spend too much here, keep things tight. Don’t assume that a green benchmark means to dump spend on this. These often can’t absorb scale profitably and can mask a weaker top of funnel. We want incremental customers — focus on those.
Good prospecting creatives should spike clickthrough rate and new visit percentages. You want to drive that engagement and awareness of your brand.
Good retargeting creatives should boost conversion rate and revenue-per-visitor. Campaigns aimed at driving the last mile of purchase should succeed on these metrics. But, measure both prospecting and retargeting profitability on nCAC.
Remember: we are trusting Northbeam data, not-in platform data. Platforms live in silos and don’t talk to each other. Your customers, however, fly across TikTok, Google, Facebook, etc. No one platform drives the entire journey. Northbeam distributes ad attribution credit across touchpoints. Trust the multi-touch source of truth to decide what scales.
Don’t rely on cash accounting mode for daily ad operations. Conversion lag will fool you, especially on upper-funnel campaigns. It takes time for most ads to drive a sale. Accrual measures that best Use accrual for ad experiment decisions; use cash for finance reporting.
Last words
You now have a playbook that will help you transform your entire ad account. Of course, all businesses are different and some of these rules may not apply to yours evenly. But for the most part, this will get you there.
Huge thank you to Ryan for creating this framework from years of study. He had this to say:
“When the data is right, the daily work gets boring… in a good way. Scale, trim, repeat.”
If you need help understanding Profit Benchmarks, Northbeam’s CJ Hunter has you covered. Here’s a step by step guide (with video!) on how to master Profit Benchmarks, arguably the most important step in this process.
Remember folks: there is no magic trick that will 10x your ad performance. There is only focused, organized, and diligent experimentation, supported by good data.
Let Northbeam be the launchpad that sends your business to the moon. Get on a demo and see it in action.
🚨 AppLovin is now open to all advertisers, after 14 years closed. Let the new world begin.
📺 CTV platform Vibe.co sold to Wal-Mart for somewhere around a billion. Huge congrats to our friends over there. Spoiler: we’re looking to get Vibe added to the dataset in this weekly email. Stay tuned for that.
🤖 ChatGPT ads now allow for conversion optimization. Now it has some teeth. Let’s see where this goes.
🤔 Data: why is everybody’s Meta performance tanking? In case you missed this.
☀️ Let’s go to ecommerce summer camp in the Hamptons. Camp Commerce is back, baby. Register now - it’s coming up soon.
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