Over the past few years, e-commerce brands have watched their Customer Acquisition Costs (CAC) climb steadily - and in many cases, alarmingly.
If it feels like you're paying more than ever just to get a customer to click 'Buy', you're certainly not alone.
At OutSearch, we've been helping clients not just survive but thrive in this increasingly expensive landscape. In this article, we're breaking down why CAC is rising and how our smarter, sharper PPC strategies are keeping it in check.
Why Is CAC Rising for E-Commerce Brands?
There's no single reason CAC is trending upward - it's a perfect storm of digital and economic pressures. More businesses are advertising online than ever before. That higher competition means higher bids and more retailers fighting for the same audience, and people are being careful about their spending.
Privacy changes such as iOS updates and GDPR have limited tracking capabilities, making it harder to optimise campaigns based on user behaviour. Shoppers expect personalised, seamless experiences. Generic ads don't cut it anymore, as customers have higher expectations and lower tolerance.
Google and Meta have both shifted toward more automation, which, if not properly managed, can lead to wasted spend. The result? E-commerce brands are spending more per click - and per customer - than they were just a few years ago. So, how is OutSearch combatting these pressures and still delivering the same strong results for customers?
Smarter Bidding with CSS Partners
The most obvious way to reduce CAC is to reduce your CPCs. One of the most overlooked strategies for reducing cost-per-click (CPC) is leveraging a comparison shopping service (CSS) partner - and OutSearch is one of them.
Using a CSS partner can reduce your CPCs by up to 20% on Google Shopping campaigns. Google incentivises the use of CSS partners by offering more competitive rates to balance the market.
That's instant margin back in your pocket - without changing anything about your product, pricing or paid search Ads.
Targeting the Right Customers (Not Just Any Click)
Throwing Ads at the wall and seeing what sticks is expensive. Instead, we focus on hyper-targeted customer segments. By targeting a smaller and tighter audience, it's possible to eliminate significant wasted Ad spend and decrease CAC.
How do we do this? By using first-party data for smarter lookalike audiences, advanced audience layering and segmenting for high-intent users.
By re-targeting and re-marketing to specific segments, and by segmenting new vs returning customer audiences we can deliver a much reduced customer acquisition cost, and a higher ROAS. In short, this cuts down on wasted Ad spend and boosts conversion rates by ensuring you're putting your Ads in front of the people who are most likely to buy.
Taking Advantage of Google's Automated Discounts
Google recently introduced automated discounts in Shopping campaigns, and it's a game-changer - if you know how to use it.
We've implemented this newly launched feature for our clients to offer dynamic, real-time discounts based on user behaviour and competition. This gives potential buyers an extra nudge toward conversion, without the need to run a full-on sale or blunt discount across your entire product catalogue.
Better yet, because these discounts are optimised by Google's algorithms, they're often more cost-effective than blanket promotions and improve your overall return on ad spend (ROAS) and lower your CAC.
Strategic Budget Allocation: Spend Smarter, Not Just More
When budgets are tight, and CAC is high, smart budget allocation is more important than ever.
At OutSearch, we analyse your entire Ad account to reallocate spend toward high-performing campaigns and product categories, best-converting audiences, and devices with the lowest CPCs and strongest ROI.
By cleverly segmenting your product catalogue into top sellers, low sellers, high margin and low margin etc. it's possible to dramatically improve campaign performance and keep CAC down by deploying Ad budgets surgically.
OutSearch: The Smarter Way to Beat the CAC Squeeze
Yes, customer acquisition costs are rising - but that doesn't mean you're powerless. At OutSearch, we believe working smarter is always better than spending more.
Through clever tactics like CSS partnership savings, precision targeting, Google's latest automation tools, and smarter budget allocation, we've consistently helped clients offset the CAC crisis and continue to scale sustainably.
If your paid media feels like it's running harder just to stand still, it might be time to switch strategies - or partners. Let's talk about how we can help you beat the CAC crisis, one smart click at a time.
by E-commerce Director Peter Howarth
Peter is an E-commerce Director with over 20 years of experience in business, online retail and digital marketing.
Managing development and digital marketing teams and Agencies, Peter is well versed in the key success factors in E-commerce.
Peter co-founded and grew a global e-commerce business from start-up to £25M revenue.
Ready to lower your CAC and increase ROI?
Back to PPC Blog
