Is it safe to scale your startup on a paid channel? What do you do if the price of advertising increases? Should startups scale with online ads?


Look--there's risk EVERYWHERE.

You've already pointed out the hazards of developing a marketing strategy dependent on a single platform.

You've also noticed that you need to set your price to buffer against rising short and medium term costs.

Startups should test and scale with whatever promotional media is resulting in increasing sales. Do more of what is working.

No one can give you a magic ticket or golden path to success. There are no guarantees. Anyone who tells you that is lying...even if they aren't consciously aware of it.

Nobody can guarantee YOUR product or service will take off on a platform they have experience with.

Nobody can guarantee YOUR ads will ever be approved and see the light of day on a platform they have experience with.

Nobody can guarantee copy that worked with their niche on the platform they're familiar with will work for you.

Test, and find out.

Business is made up of choices and risk. You do your analysis, pick your best likelihood of success, and set your course. Sometimes it works out and sometimes it doesn't. What matters more is how you handle that feedback.

Get started.

Answered 9 years ago

Hi, I've been running paid media campaigns for companies since 2004. There are some definite advantages to using online ads. It's a great way to build awareness right out of the gate (even pre-launch). You can test messaging & value props much more quickly and effectively when you're paying for exposure than when you're waiting to be discovered.

Paid ads shouldn't be the ONLY channel you use: earned & owned are important too, and to your point they continue to reap benefits over time. Earned & owned may be the marathon to paid media's sprint, but don't overlook the value of paid in driving awareness & feeding the funnel for other efforts.

One final bit of advice if you're considering paid search as part of your paid media; PPC on the Search network tends to be a lot more costly than on Display, and it's not a great tool for awareness generation. Search can be insanely effective if you have either an established brand or a super strong offer in a low-cost niche, but it's a very expensive channel to simply "get the word out" or attempt to scale.

Answered 9 years ago

I own many niche based businesses online, the first thing I do is dive into paid advertising. Its the fastest way to start generating revenue. Organic leads takes time and alot of work.

Let me know if you have any more questions.

Answered 9 years ago

"Should startups scale with online ads?"

Yes, but only after you exhausted:
1) Direct Sales potential;
2) "Word of mouth" potential;
3) Content Marketing potential;
4) Partners Program potential.

In other words, when you have built an organic base of your marketing channels.

If you already done with it, measure exact values of customer acquisition costs and try to keep it. It's normal, if paid channel has a fluctuation about 20-30% to this value, but don't exceed this figure.

One more thing, don't focus your attention only on CAC. Make cohort analysis for paid channel, keeping high quality of lead nurturing.

Remember, that Quality always outweighs Amount. Mostly because of viral and organic potential of quality leads.

Answered 9 years ago

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