Do Ads Work for Startups?
- 1 June 2022
Let us say you want to launch a new product, and you invest a lot of time and effort into developing the product’s first version. After its launch, you place ads on Facebook and Google to drive customers to the website. However, you don’t get a single click.
Several factors affect the performance of paid ad campaigns. Wrong audience targeting, low ad budget, and poor material could result in poor-performing campaigns. It may seem unclear initially, but trust me, it eventually gets easy-peasy once you get the hang of it.
Enough introduction; let’s get to it!
Paid Ads Help Create Demand
When a product or service lacks demand, PPC (pay-per-click) advertisement is a helpful tool to make your product/service visible to potential buyers. Brands should be in the product-market fit. Product-market fit is when the products or services are already creating buyer demand, making it a key driver for startup growth. The better your product-market fit is, the easier it will be to convince prospects to buy your product or service — eventually making PPC ads much more effective.
Paid Ads Provide Transparent Results
Remember when advertisers relied on billboards, posters, and television commercials? These advertising mediums are expensive, yet you cannot track the exact number of people who have seen and bought your products or services—so much money is spent for many uncertain results.
Digital ad campaigns are the opposite. Advertisers can start with a small budget, and results are traceable. You will know precisely who was targeted, their location, and when they saw the ads.
The success of paid advertising campaigns is determined by the difference between the cost of customer acquisition and the cost of customer retention. If the products/service you offer does not have a product-market fit, your customer lifetime value is zero.
Paid Ads allow you to A/B test cost-efficiently
You can easily create ad groups with different ads to maximise your campaign results. This will help you categorise which one of your ad strategies works best.
Additionally, you can target different groups of people in your micro-campaigns to find the market segment that is most responsive to what you have to offer. For example, Facebook has a Campaign Budget Optimisation where you can use different ad materials, and Facebook will automatically split the budget and put more on the best-performing ones.
Organic reach alone is not enough. An excellent marketing strategy contains both organic and paid reach. It is best to focus on creating good content first and eventually launch ads when your organic reach is good enough, and yes, paid ads do work!
If you are interested in learning more about growth marketing, check out our Ultimate Growth Encyclopedia, which is full of information, tips and tricks, frameworks, etc., to help you grow your business. Check it out in Notion!
I’m Daniel – a marketing & growth expert. I specialise in helping companies and startups acquire the right kind of high-quality users that are critical to your mission. I do this by deeply understanding who your customers are and by finding ways to bring them on board in a way that is scalable, predictable and repeatable by creating a Growth Machine. I have capacity to assist in advisory or execution roles, so do get in touch and let's see if I can help.
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