Natural CAC & the Meta Auction: Scale Without Killing ROAS
The Andrew Faris Podcast
How Meta's Auction Sets Market Prices
Andrew asks how the auction works and describes Meta's auction dynamics, second-price mechanics, and marketplace equilibrium.
INTELLIGEMS
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FERMAT
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Most brands feel the Meta ceiling: spend more, ROAS drops—cut spend, volume collapses. In this episode, we unpack why that happens and how to scale profitably by understanding your natural CAC, the Meta auction mechanics, and the non-linear trade-off between efficiency and volume. You’ll learn how CPMs reflect marketplace equilibrium, why “two-to-one ROAS” shows up at scale, and what actually moves results: estimated action rate, post-click profit optimization, and business design that supports volume.
We walk through a practical playbook: identify your current natural CAC; use higher-quality, message-market-fit creative to penetrate deeper at the same bid; optimize profit per click (upsells, offers, bundles, pricing tests); explore new audiences/angles; ship new products to unlock fresh demand; and engineer the P&L (opex, supply chain terms, staffing, capital) so you can win more auctions without burning margin.
If you run a 7–9 figure brand and care about scaling with profitability, this is the meta-ads episode that pays for itself. What you’ll take away:
• How Meta’s auction actually prices your customer and why CAC “settles.”
• The marginal frontier concept and why scale/efficiency is non-linear.
• The levers that raise volume without wrecking contribution margin: creative EAR, profit-per-click tests, LTV expansion, and capitalization strategy.
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CHAPTER TITLES:
00:01:44 - What Is Natural CAC?
00:04:40 - High Volume Meta Ads
00:05:41 - Your Brands Natural Customer
00:08:10 - Breaking Down How Ad Auctions Work
00:12:21 - Why Meta CPM’s Have Gone Up
00:17:35 - The Value of a Specific Search Term
00:20:51 - The Importance of a Strong LTV
00:25:06 - How To Win At Cost Thresholds?
00:35:42 - Lowering Your OpEx
00:37:58 - The Best Brands DO THIS
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ADMISSION
Get the best media buying training on the Internet + a free coaching call with Common Thread Collective's media buyers when you sign up for ADmission here: https://www.youradmission.co/andrew-faris-podcast
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FOLLOW UP WITH ANDREW
X: https://x.com/andrewjfaris
Email: podcast@ajfgrowth.com
Work with Andrew: https://ajfgrowth.com
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