The Andrew Faris Podcast Natural CAC & the Meta Auction: Scale Without Killing ROAS
Oct 7, 2025
Discover the secrets to scaling profits without sacrificing ROAS. Learn about natural CAC and how it impacts market prices in Meta's auction dynamics. Delve into why blended ROAS often centers around 2:1 and explore creative strategies that enhance audience engagement. Uncover practical steps to optimize post-click value, explore new audiences, and launch new products. Gain insights into designing your business structure for effective scaling while maintaining competitiveness in the marketplace.
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Episode notes
Nonlinear Scale–Efficiency Tradeoff
- Meta ads exhibit a nonlinear trade-off between scale and efficiency where small changes in spend can produce outsized ROAS shifts.
- The platform often 'settles' a cost that reflects marketplace dynamics, not an arbitrary Meta-set price.
Natural Customer Creates A Market CPM
- Brands have a 'natural customer' who costs a certain CPM to reach, which aggregates into a market price.
- That CPM reflects many bidders in an auction setting reaching an equilibrium.
Auction Dynamics Produce ROAS Equilibrium
- Meta's auction functions like an economic market that sets prices via bidding, producing a blended ROAS equilibrium.
- Across many advertisers that equilibrium often lands near a ~2:1 ROAS because brands spend until contribution margin is met.