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When is the right time to start paid advertising? What needs to be in place first?
NOW! Do it! Sorry. I got excited.
The short answer is to start paid advertising when you have $5000 to spend for fast data and results. The long answer is to start paid advertising when you want to test a new channel to drive conversions and you have the time and/or budget to run a methodical and thorough paid advertising campaign. There are a lot of benefits of paid advertising:
1. Fast results - inbound marketing, although effective, can take a long time to start seeing consistent results that can be used for sales funnel optimization. In contrast, paid advertising can drive quick data, which can be leveraged to make data-driven decisions.
2. Audience testing - Most business plans have the target market and persona built in, but you still might not know who is the best audience to target. Social networks like Facebook and Twitter are full of segmented audiences; depending on your product, you could test a dozen interests and behaviors to learn more about who is most likely to purchase your product/service.
3. Reach new customers - Let's be honest, this is a no-brainer. But even if you have done a great job of finding your target market via blog posts and Tweets, there is still a boatload of people out there that do not know you exist.
4. Retargeting/re-engagement - It is a great way to save an abandoned cart or to get a returning customer. Or maybe they went to your website on a mobile device and you want to target them on a desktop device.
So, when is the right time?
1. Operationally, you need to be able to handle an increase in traffic and conversions; you do not want to start sending a bunch of traffic to your site when you will be unable to handle an influx of new orders or appointments.
2. Budget - I would recommend spending at least $4000 to $5000 for the first month of advertising; you will be able to successfully run creative and audience testing without an uncertainty that you have enough data to make data-driven optimizations.
3. Gain exposure/drive conversions - If you're a young company and do not have a big following paid advertising can be the boost you need to drive your first conversions.
What needs to be in place first:
1. Pixels - Make sure all of your pixels and tracking software is in place prior to launching your ads. Pixels are your friend; they tell you how well your advertising campaign is doing. Even if you are not going to start advertising for a month you should still get them installed immediately because you can use your web traffic for retargeting and/or creating lookalikes.
2. Lookalikes - You can create customized audiences from a variety of sources: emails, web traffic, and/or conversions. The first, emails, is the strongest - I would upload a list of your emails to your advertising platform before starting.
3. Advertising and Testing Plan - Don't just start uploading images and text and crank the advertising machine on. Make sure you know what you are testing and what you want to learn from said test. The more you know the better your campaign will run and the more money you will save in the end.
4. Advertising partner and/or consultant (optional) - Some people are able to do the research and successfully run their own advertising campaigns. Other people look at Power Editor and blackout. Leverage networks like this one and ask questions; paid advertising costs money - YOUR money (or someone else's) - don't shrug your shoulders and just try something without know exactly what you are doing. If you have the extra budget, I also recommend hiring a consultant like myself who can set up the campaigns the right way, run all of the testing, and then provide detailed reports about what is happening.
I hope that is helpful!
Justin - thanks so much. Awesome answer and it validated a lot of our assumptions.
What would you advice for someone with a £1000 advertising budget? I would like to get some traffic for my new marketplace website.
I have spent a considerable amount of time building the supply side. Now I am ready to start some targetted ads.
I am hoping to attract 4000 users per month and convert at least 1/4 of those.
Hello, Yun - I didn't see this until now; sorry for the late reply.
£1000/$1250 isn't a lot - if your goal is 4000 users per month you're looking at £0.25 CPCs; in my experience, desktop users are more likely to convert on marketplaces, but they also cost more to have them be engaged. If you have a universal/unisex product you could do a website click campaign (mobile & desktop) with broad targeting with retargeting ads (desktop only) at £30/day, but to be honest, that number of clicks/users might not be at the 133/day goal you want to reach.
Hi @omermolad ,
Just had a look at your website (www.vervoe.com) to give you a more nuanced answer.
Without doing any keyword research, my question would immediately be: Do customers actively look for your type of solution? The reason I ask is because the answer to this question will influence your paid strategy immensely.
If so, what words would they use to describe your solution?
Would they use words like "recruitment software" or would that mainly cover more all-in-one solutions? (from my understanding your software helps companies better filter candidates and isn't an all-in-one recruitment solution - correct me if I'm wrong)
1) Google as the paid channel:
Google can be a great channel to acquire leads. But the reason why I asked what words your prospects use to describe you, is this:
In the example of "recruitment software", if people have a different type of solution in mind than what your solution offers, they're unlikely to convert on your landingpage because that is not what they're looking for. And hence your CPL will skyrocket. (Again I'm not an expert in your field, I'm just using this as an example)
So this is something that can make or break your success on Google.
Linkedin advertising has worked tremendously well for B2B companies that I've worked with. But because Linkedin is an early-in-the-funnel channel, here are a few things that need to be in place:
- Generally, people on Linkedin are not looking for your type of solution. So offering a free trial can often not be the most attractive offer. But you can test this to confirm.
- Get your targeting right for the lowest CPL. (often targeting groups can be an effective way)
- If you're gonna offer something more early stage than a free trial, the rest of your automated nurture flow needs to be at least half decent to educate filter out some prospects that are ready for the next step.
P.S. : I've written an ebook about Linkedin advertising with real life examples that could be very useful to check out if you consider this channel: https://sorted.co/linkedin-advertising-ebook/
Facebook for B2B can work effectively. But here it's important to get your targeting right. (See Justin's answer with regards to the pixel, look-a-like audience, etc.)
4) I haven't seen Twitter advertising work for your type of product. So unless you are keen on proving me wrong, I'd suggest putting your money elsewhere.
5) Are there relevant podcasts you could sponsor? Don't go for the mass-appeal podcasts. Smaller podcasts can work amazingly well if they're well-targeted.
6) Can you do a (paid) joint venture with another company that targets your ideal prospects?
Feel free to drop me a line if you have more questions: email@example.com :)
Philippe, great answer. Thanks for taking the time. I like what you're doing at sorted.co.
Also read: https://growthhackers.com/articles/growth-comes-from-one-of-two-places
There are so many good answers in this discussion. I just want to simply summarise my experiences and thoughts about this issue.
When you work on "user acquisition" the first thing you need to consider should be about your product/service etc. Not online or offline channels. If you work on well established product which means that market has a need and your product one of the solution to that need, start advertising right away. Probably you start with a bad ROI, when you go on and collect some real user data, start to see what's going on clearly then optimise.
If your product/services is not well defined, never ever thought paid advertising will solve your "user acquisition" problem. Product/Service and Market fit problem is really a fundamental business issue and it can't solved just with marketing operations.
The other option is testing P/M fit itself. You attract let me say 5K people in your landing page and hopefully say your awesome value proposition and except them to take an action. This is completely different option. When you do that, don't forget that you're in experimenting whatever your gut feeling say you. You can burn all of your ads budget and got a whole, big zero! Second important thing for this purpose don't focus on CPC, CPM, CPA or budget you spend. Focus on really how many people you get and what they did. (Sometimes, some people ask me to "We need to pause this campaign, it spend so much money etc." I look at it and only 10 people click on it. No sense :( )
1. If you're marketing guy and you're not sure about product, don't start any advertising. (No matter what founder/ceo say about how product is awesome. People love their product and they thought market has similar response to product and market DON'T.)
2. If you're CEO, Founder or decision maker, don't look at paid advertising is a certain way to get new users/customers. Paid advertising is highly related with your product attractiveness. If you have P/M fit issue, paid advertising won't solve it.
- If you're a clever business person, you can use paid advertising for validation. It can be fastest way. (Be prepared to burn money for test/data)
If your website/landing page has ever converted someone, you can bring others and try to convert them as well.
It's about as simple as that.
Your question seems to suggest that you think that "starting paid advertising" is some kind of achievement. It's not.
It's just a traffic source.
If your site has a method of conversion (e.g. Buy Now, Request a Demo, Schedule a Consultation, etc.) and you can setup the platform's respective tracking pixel on the success page (e.g. Facebook pixel for FB, Adwords pixel for Adwords, etc.), you can begin to test that platform.
The only times you might not want to run paid is
A) Your product is very cheap AND people don't really want it
B) There's no way to actually convert on your website, which can ofcourse be fixed by adding a way to convert - e.g. embed a WuFoo form or something.
C) Your website is generally a complete and total disaster, but you'd be surprised how many 1999 looking websites still turn a positive ROI on paid.
I read somewhere about people recommending that you setup "similar audiences" etc. Simply put, for a guy with your experience with this subject matter, that is terrible advice. We spend 6 figures a year across all platforms and we don't use "similar audiences" (not arbitrarily, they don't work well for us nor for a lot of other businesses). That's just someone trying to sound smart.
If you're just starting out on a paid platform, don't overcomplicate this. Start the way you start everything, with an MVP. Then invest the time to learn the dynamics of the platform (or source to a professional). Each paid platform has very distinct and unique dynamics that may not carry over one from another and you probably won't see much success until you get at least a b-level understanding.
Honestly, it just sounds like you're dealing with analysis paralysis. Let me know if you have any more specific questions.
I usually tell people to always be testing a little bit of paid media. By even spending ~$300/month, you can be always learning about your customers, value proposition and customer landscape.
How aggressively you spend depends on if you need paid media to be one of your top growth channels. Not all companies need paid media, but many do.
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