Jonathan Martinez
Contributor
Jonathan Martinez is a former YouTuber, UC Berkeley alum and growth marketing nerd who’s helped scale Uber, Postmates, Chime and various startups.
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When scaling a paid acquisition channel, you should constantly question whether you’re spending in the most efficient way possible. If you’re scaling spending across various channels, it’s more than likely that you’re facing rising costs. But how do you know where and when to draw the line?
In this short article, I’ll discuss when to start measuring diminishing returns and how to use a simple regression analysis to find optimal spending levels.
Weekly performance trends
If you’re scaling any paid acquisition channel by 5-10x weekly, then it becomes important to maintain the pulse on the following metrics:
Cost per thousand impressions (CPM)
Customer acquisition cost (CAC)
Ad frequency (for paid social)
As paid costs scale, the number of impressions being served naturally increases, which causes CPMs to rise. If your CPMs are rising this usually means that your CACs and ad frequency are rising as a byproduct. A spreadsheet with those metrics laid out on a weekly basis will help you identify large upticks in costs, which can then guide your future budget allocations.
Regression analysis
If you’re looking to get analyti …
