Cost capping or putting a cost cap in your paid social is ruining your CPA (Cost Per Acquisition). Here’s why.
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First, by putting a cap you’re limiting the amount of data you’re able to give the platform.
This is then going to slow down its learnings to be able to understand who your ideal audience is.
Secondly, tell me how the cost of your impressions is quantified.
There’s a lot of driving factors behind this. But if there’s an ideal audience who is at their emotional peak for your or your competitor’s product, that means that cost per impression is going to go up. And if you have a cost cap, you are not going to be able to bid for somebody who’s at their emotional peak for your product. However, your competitors are going to be able to snatch that and bid up.
Thirdly, it’s going to be easier to scale if you don’t have a cost cap on.
If you try to double your budget with a cost cap, you have no idea if you’re going to be able to spend that budget. You may be limited. You may not be able to spend a dime more. However, if you have a free market and you don’t have a cost cap, you’re going to be able to scale more easily. Plus, you’ll have a more controlled price as you scale.
Lastly, when it comes down to it, we’re just not as smart as the machine learning.
This includes the near limitless amount of engineers who are continuously improving it day over day. Instead, trust in the free market. Give as much data as you can to the machine learning. That’s going to be able to best position your CPA for now and in the future.
That’s why we say no to cost capping on Paid Social. Click here to learn more and subscribe to your YouTube Channel for our latest videos.
