Perpetual Traffic Podcast Summary

Episode Title: The #1 Mistake That's Secretly Killing Your Meta Andromeda Ads with Cole Turner
Hosts: Ralph Burns (Tier 11), Lauren Petrullo (Mongoose Media)
Guest: Cole Turner (Growth Strategist, Tier 11)
Date: November 7, 2025

Episode Overview

This episode focuses on the pitfalls and best practices in calculating and understanding one of the most crucial but frequently misunderstood metrics in paid media: NCAC (New Customer Acquisition Cost). Hosts Ralph Burns and Lauren Petrullo, along with Tier 11’s growth strategist Cole Turner, dissect the common mistakes businesses make when calculating NCAC, the real implications of inaccurate cost tracking, and how brands can ensure profitable scaling—especially in the context of Meta (Facebook/Instagram) and omnichannel ad spend.

Key Discussion Points & Insights

1. Why NCAC is THE Most Important Metric

• NCAC vs. CAC: Many brands use blended CAC (Customer Acquisition Cost), not distinguishing between new customers and returning ones. This can create a false sense of profitability, as NCAC strictly focuses on what it costs to acquire a new customer.
  • Quote [05:32] Cole Turner: “NCAC is 100% the most important metric for any business... We might have great CAC on Meta... but if we’re just retargeting existing customers, we don’t actually know if we’re growing.”

2. The Miscalculation Trap

• Most businesses use incomplete data, focusing solely on “cost of goods sold” rather than a true variable “cost of sale" — which should include:

  • Shipping & fulfillment
  • Platform fees (Amazon, Shopify)
  • Credit card processing
  • Discounts, returns, refunds

• Result: Many brands “think” they’re profitable, but they're actually losing money with every new customer.

  • Quote [08:42] Cole Turner: “If you look at [cost of sale] as just cost of goods sold, it’s incomplete. True cost of sale... is all the variable costs that scale with orders.”

3. How the Error Happens

• Often, internal or client-provided calculators underestimate true costs. Even well-managed brands, or those working with Tier 11, sometimes misreport or misunderstand their actual margins.
  • Quote [11:31] Cole Turner: “I just think they might not have understood the importance of this calculation… we were using a blanket number... but it wasn’t the full story.”

4. The High Stakes of Getting It Wrong

• A miscalculated NCAC can mean overspending $9+ per order, which, when scaled, can be catastrophic for cash flow.
  • Quote [32:20] Cole Turner: “Originally, our NCAC goal was $35... when we redid this, it dropped to $24—an $11 difference per customer.”

5. Variable vs. Fixed Costs

• Variable costs: Scale with revenue/orders (should be in NCAC)
• Fixed costs (overhead): Do not scale but are critical when planning ad budgets. Brands often forget that selling more doesn’t necessarily eat up fixed costs faster; you have to intentionally scale to cover them.
  • Quote [13:28] Cole Turner: “It’s not really a factor in determining NCAC, but it’s extremely important when determining the budget... Sometimes people need to be spending more and they don’t understand that.”

6. Aggressive Scaling and Efficiency Trade-Offs

• Some brands focus too much on campaign “efficiency” and shrink ad spend, which ironically keeps them from scaling enough to cover fixed expenses and realize profits.
  • Quote [24:37] Cole Turner: “The counterintuitive approach... your efficiency can be too high. You need margin dollars more than efficiency for the lifeblood of the business.”

Notable Quotes & Memorable Moments

• [05:32] Cole Turner: “NCAC is 100% the most important metric for any business.”
• [08:42] Cole Turner: “True cost of sale percentage is all the variable costs that scale with orders.”
• [14:24] Cole Turner: “You can actually calculate the required ad spend needed to get over the overhead.”
• [24:37] Cole Turner: “Sometimes... scaling back to get more profitable isn’t the answer. Sometimes your efficiency can be too high.”
• [32:20] Cole Turner: “Our NCAC goal was $35... when we redid this, it dropped to $24—an $11 difference.”
• [31:38] Cole Turner: “Even a small percentage difference in how you’re calculating this can take you from breaking even or profiting and growing into a sustainable, large company. Or... you could be losing money on every single order.”

Detailed Timeline of Important Segments

| Timestamp | Segment | |-----------|---------| | 02:14 | Show intro & focus on metrics that matter, especially NCAC | | 05:32 | Cole explains why NCAC is more important than blended CAC | | 07:27 | Story: Discovery of a major NCAC calculation error | | 08:42 | Deep dive: What should/shouldn’t be included in cost of sale | | 13:28 | Cole discusses variable vs. fixed costs and budget planning | | 15:54 | NCAC Calculator walkthrough begins (details, sample numbers) | | 20:49 | Analysis: Overhead, scaling, break-even points | | 24:37 | Discussion: Why scaling ad spend can be essential for profitability | | 26:43 | Blended NCAC: How to account for non-paid channels in overall calculation | | 29:28 | Lauren on why brands lose sight of the numbers and overspend | | 32:20 | The magnitude of miscalculation: $11 per order loss risk | | 34:07 | Wrap-up: The importance of continuous improvement in financial tracking |

Best Practices & Actionable Steps

• Get your calculator: Download Tier 11’s free NCAC calculator (updated version) at tier11.com/ncac.
• Review all variable costs: Ensure you include fulfillment, platform fees, returns, and discounts—not just cost of goods.
• Separate variable vs. fixed (overhead): Use fixed costs for overall budget planning, not day-to-day campaign NCAC calculations.
• Don’t be afraid to scale: Sometimes, increasing profitable spend is necessary to cover overhead and achieve true business health.
• Know your numbers: Routinely audit your calculations and update them with real, current numbers.

Key Takeaways

• The most common—and dangerous—mistake in scaling Meta or other digital ad campaigns is relying on incomplete NCAC/cost calculations.
• Even a difference of a few dollars per customer can mean the difference between sustainable profits and a cash flow crisis.
• Using detailed, accurate calculators and keeping a close eye on all true costs is non-negotiable in performance marketing today.

Resources Mentioned

• NCAC Calculator V3 (Free): tier11.com/ncac
• Perpetual Traffic YouTube for calculator walkthrough: perpetualtraffic.com/youtube

Closing Thoughts

This episode delivers a masterclass in understanding the fundamental numbers that drive profitable paid acquisition. If you’re “scaling” without a precise handle on your true NCAC, you risk your company’s very survival. Take the advice from Cole, Ralph, and Lauren: audit your calculations, know your numbers, and always blend your operational and campaign data for a realistic view of your marketing ROI.

For More Insights & Tools:

Visit perpetualtraffic.com for free resources and episode archives.

Podcast hosted by Tier 11 | Summary prepared by Perpetual Traffic Podcast Summarizer (AI)