Stop Pausing Underperformers--Meta Spend Drives Total Business Revenue

The conventional wisdom of pausing underperforming ads on Meta is not just outdated; it’s actively detrimental in the current advertising landscape. This conversation with John Moran reveals a critical, yet often overlooked, system dynamic: ad spend allocation is the primary driver of overall business performance, not just platform-specific conversion metrics. By shifting focus from immediate CPA figures to the broader impact of ad spend on Meta, and consequently on other channels like Google and Amazon, businesses can uncover hidden growth levers. This analysis is crucial for CMOs, media buyers, and business owners who are struggling to make sense of volatile ad performance and want to gain a strategic advantage by understanding the true engine of their revenue.

The Cascade Effect: How Meta Spend Reshapes Your Entire Business

The current Meta advertising ecosystem, particularly with the advent of Andromeda and GEM frameworks, demands a radical rethink of how we evaluate ad performance. Traditional metrics like Cost Per Acquisition (CPA) and conversion data, while seemingly objective, can be deeply misleading when viewed in isolation. John Moran argues that the real power lies not in optimizing individual ad performance based on conversions, but in strategically allocating ad spend. This isn't just about Meta; it's about understanding how Meta’s ad spend dictates performance across all channels.

Consider the analogy of a central nervous system. The ad spend in Meta acts as the primary signal, influencing everything downstream. When spend is shifted away from established, high-performing ads -- even if their individual CPA looks "bad" by older metrics -- the entire system can falter. Moran highlights a real-world scenario where reducing spend on core Meta ads by 30-40% didn't just impact Meta’s performance; it dragged down revenue across Amazon, Google, and other integrated platforms. This illustrates a profound consequence: the perceived "underperformer" might actually be the engine feeding the entire business.

"Ad spend to a specific group of ads will affect all channels. This is where the CPA is going to completely screw you up."

This isn't about chasing vanity metrics. It's about recognizing that Meta's algorithms, when fed with strategic spend, can create a positive feedback loop. The challenge, as Moran points out, is that most marketers are still operating under an outdated paradigm, pausing ads based on immediate, platform-specific conversion data. This leads to a "whack-a-mole" approach where they're reacting to the fallout of poor decisions rather than understanding the initial explosion of what truly works. The key takeaway is that Meta’s ad spend isn't just a line item; it’s a strategic allocation that shapes market perception, customer journey, and ultimately, total business revenue.

Beyond the Conversion Column: Unearthing Themes with Spend

The traditional approach to media buying, as described by Moran, involved strict rules: if an ad didn't convert within seven days, pause it. This methodology, while once standard, is now largely obsolete. The current Meta ecosystem, with its complex algorithms, requires a different lens. Instead of immediately scrutinizing conversion metrics, Moran advocates for a preliminary analysis focused on ad spend and engagement signals. This approach allows for the identification of underlying themes that resonate with the market, even if direct conversion attribution is obscured.

By filtering for active ads and examining spend descending, a clearer picture emerges. For instance, in one account analyzed, a significant portion of spend was concentrated on "chameleon" themed products -- specifically coffee mugs and water bottles. Even without looking at conversion data, the high spend directed towards these items indicated market resonance. Moran emphasizes that this isn't about guessing; it's about observing where the system, through its allocation of spend, is signaling interest. This method allows marketers to identify what the audience is "telling you they like," rather than relying solely on what "performed this week" by a narrow definition.

"We have to start to look at things in two different lights. ... So stop pausing your underperformers. And that's what we're going to get into here today."

This shift in perspective is critical. When conversion data is removed initially, the focus moves to engagement metrics like hook rates and click-through rates, which can provide a more stable indicator of ad effectiveness in the current environment. The analysis then layers in conversion data, but only after establishing a baseline of what’s resonating. This process helps avoid the trap of pausing ads that might be crucial for broader business health, even if their direct conversion attribution seems low. The implication is that by understanding these underlying themes and the spend allocation that supports them, businesses can make more informed decisions about creative production and strategic direction, leading to more sustainable growth.

The Illusion of Control: Why CPA Can Be a Dangerous Distraction

The most significant pitfall in modern ad management, according to Moran, is the over-reliance on CPA and conversion metrics to judge ad performance. The current Meta ecosystem, with its complex attribution models and the influence of external platforms like Amazon, renders these metrics unreliable as sole indicators of success. Moran illustrates this with a case where identical ads, showing similar engagement metrics (hook rate, click-through rate, impressions), produced vastly different conversion numbers. One ad showed 300% better performance than another, not because it was inherently superior, but likely due to Meta’s attribution favoring the ad that happened to be the "last view" before a purchase, or perhaps due to remarketing effects.

This discrepancy highlights a fundamental flaw: Meta’s conversion tracking can become a "participation trophy" system, awarding credit broadly rather than pinpointing the true driver of the sale. When conversion data conflicts with other indicators like high ad spend, engagement, and hook rates, Moran suggests trusting the latter. The logic is that if spend is concentrated on certain themes (e.g., chameleon coffee mugs) and these themes show strong engagement, they are likely driving business, even if Meta’s conversion column doesn't perfectly reflect it.

"The conversions I know are extremely false. And if the extremely true side is showing some consistency and growth and performance, but the what, with the conversions showed, if those are not aligned, which one do you believe?"

This doesn't mean conversions are irrelevant, but they should be analyzed after understanding the broader performance picture. The danger of chasing CPA is that it can lead to pausing ads that are actually feeding the entire sales funnel, thereby damaging overall revenue. The strategy, therefore, is to identify the core themes and products that are garnering significant spend and engagement, and then use conversion data as a secondary layer of validation, rather than the primary decision-maker. This approach allows for a more robust understanding of what truly drives business growth, protecting against the misleading signals that can derail effective marketing strategies.

Key Action Items:

• Shift Primary Analysis Focus: For the next quarter, prioritize analyzing ad performance based on ad spend allocation and engagement metrics (hook rate, click-through rate) before diving into CPA and conversion data.
• Identify Thematic Resonance: Within Meta Ads Manager, filter active ads by spend descending over the last 7-14 days to identify recurring themes or product categories that are receiving the most investment.
• Protect Core Spend: Identify ads or ad sets that represent the majority of your spend and have strong engagement signals. Avoid pausing these, even if their individual CPA appears high, as they may be critical feeders for other channels.
• Develop a "Feeder Strategy" Mindset: Understand that some ads may not show direct conversions but are essential for driving traffic and engagement that leads to sales elsewhere. Allocate spend intentionally to these "feeder" ads.
• Validate with Top-Line Revenue: After identifying strong themes and ads based on spend and engagement, cross-reference this with overall business revenue trends. If spend increased on a theme and overall revenue increased, this validates the strategy.
• Invest in Creative Based on Themes: Allocate resources to create more ad variations (images, videos, copy) around the themes that are consistently showing high spend and engagement, rather than solely focusing on direct conversion optimization.
• Re-evaluate Conversion Attribution Models: Over the next 3-6 months, explore different attribution models or third-party tracking solutions to get a more holistic view of conversion paths, acknowledging that Meta’s native tracking may be incomplete.