Cutting CAC in Half With Data-Driven Performance Marketing

Background

A rapidly growing D2C skincare brand approached Phoenix Media with a pressing problem: their ad spend was high, but returns were inconsistent. Despite a strong product line and decent brand awareness, their Customer Acquisition Cost (CAC) kept rising, and their Return on Ad Spend (ROAS) was below industry benchmarks.

The brand wanted scalable ad campaigns across Meta (Facebook/Instagram) and Google that would not only increase revenue but also reduce wasted ad spend.

Challenges Identified

High CAC Cost per customer acquisition was $48, eating into profit margins.
Low ROAS Campaigns delivered an average ROAS of 1.9x, below the client’s 3x target.
Poor Audience Segmentation Broad targeting led to wasted impressions.
Lack of Funnel Strategy No retargeting or structured ad funnel to nurture prospects.
Creative Fatigue The same ad creatives had been running for months, reducing engagement.

Phoenix Media’s Approach

1. Audit & Research

Conducted a comprehensive ad account audit (spend, performance, attribution).
Reviewed competitor strategies and industry benchmarks.
Defined ideal customer personas using first-party data, website analytics, and pixel events.

2. Funnel Strategy Design

Built a 3-Tier Funnel:
- Top of Funnel (TOF): Awareness campaigns with interest + lookalike audiences.
- Middle of Funnel (MOF): Retargeting website visitors, social engagers, and video viewers.
- Bottom of Funnel (BOF): Dynamic retargeting with personalized product ads, abandoned cart recovery, and limited-time offers.

3. Creative & Copy Optimization

Produced fresh ad creatives (carousel, short-form video, UGC-style ads).
Tested multiple ad copies with conversion-focused CTAs.
A/B tested ad formats (Reels vs. Stories vs. Carousels).

4. Budget Allocation & Bid Strategy

Shifted spend toward high-performing audiences.
Implemented CBO (Campaign Budget Optimization) to let algorithms allocate budget efficiently.
Leveraged Google Performance Max campaigns to capture bottom-funnel demand.

5. Tracking & Reporting

Installed advanced conversion tracking (via GA4 + server-side pixel integration).
Set up real-time dashboards for full transparency on spend vs. ROI.

Results (Within 120 Days)

Customer Acquisition Cost (CAC): Reduced from $48 → $23 (↓ 52%).
Return on Ad Spend (ROAS): Improved from 1.9x → 4.6x.
Monthly Revenue: Increased from $150,000 → $340,000.
Click-Through Rate (CTR): Improved by 64% through better creatives.
Cart Abandonment Recovery: Added $35,000+ in incremental sales from BOF retargeting.

Client Testimonial

“Before working with Phoenix Media, we felt like we were just throwing money at ads with little control. Their data-driven approach changed everything we’re acquiring customers at half the cost, and revenue has more than doubled. It finally feels like our ad spend is an investment, not an expense.”

Founder, D2C Skincare Brand

Key Takeaway

Performance marketing is not just about running ads it’s about strategic funnel building, data-driven optimization, and creative testing. Phoenix Media’s holistic approach turned a leaky ad system into a scalable growth engine, proving that with the right strategy, brands can achieve both lower CAC and higher ROAS simultaneously.