Paid Advertising Sucks. Here’s Why You Should Use It.
George Revutsky, founder of ROIworks, has helped some of the fastest-growing B2C companies in the US with paid acquisition and growth, including Soothe, Mayvenn, Headspace, and Wag. He’s also worked on SEO and organic acquisition for other well-known companies such as Lyft, American Greetings, and Union Bank. And unlike many marketers, he maintains that paid advertising should almost always be a major part of the mix with organic acquisition.
Here’s his take on paid advertising, its role in the marketing mix, and what else you can use it for besides acquisition.
You’re not as good at PPC as you think
The biggest use case for paid advertising—and the one that people mess up the most—is paying for clicks and hoping for conversions.
Sure, paid advertising can lead to conversions. If you’re really good at both paid advertising and conversion rate optimization.
But the truth is, most people aren’t. “There are few great paid acquisition people in the US. Maybe 30 to 50. And the difference between an OK paid acquisition team and a great one is the difference between a $80 CAC and a $40 CAC,” George says.
If you spend a year focusing on nothing but learning AdWords and Facebook, optimizing, and testing creative you might become one of those people. Maybe. But odds are, if you’re a founder or part of a small team, you’re busy raising money, recruiting team members, and building your product. The chances that you will become truly great at paid acquisition are small.
Instead, you should hire a great PPC person or team, and adopt a strategy that uses paid ads as part of your mix—but does not rely on them alone. Unless you’re one of the world’s paid acquisition experts, it’s much more effective if paid advertising is only a piece of your marketing strategy.
Paid and organic go hand in hand
Unless you’re a pro, your paid advertising can’t live in a vacuum. You need to integrate it within your organic campaigns.
At its core, Facebook is focused on the top and middle of the funnel to create an initial impression and let people know your product exists. The conversion often happens later down the line. Instead of being viewed as independent acquisition channels, you should look at paid channels as the first step in a multi-channel funnel.
Facebook ads and Google organic search, for example, work very closely together, which many people ignore. They treat them as separate entities.
Let’s say you increase your Facebook spend. You’ll probably see more click-throughs, but you’ll also see more general impressions. When people see your brand more, they’re more likely to Google your company later, which will lead to a boost in your organic search traffic.
If you look at your organic search as independent of your Facebook ads, you’ll think that organic search is bringing in more leads at a low CPL (cost per lead), and that you don’t need paid advertising. Not true.
If you kill all your Facebook ads this month, your customer acquisition cost (CAC) will be super high all of a sudden—for now. By killing paid ads, you’ve killed top and middle of funnel eyeballs. Likewise, if you focus purely on paid advertising and forget about organic, you won’t get as many conversions.
What’s the point of a Facebook click-through if when they get to your page, they lose all interest?
As George says, “Try to build a holistic view of your blended cost per acquisition when you use two or three channels well together. Some of them can be paid. Some of them can be organic.” But they work together to achieve a conversion.
Paid ads can help validate pricing and product/market fit
Plain old acquisition isn’t the only use case for paid advertising. According to George, one of the best use cases of paid advertising is to test your assumptions about your product.
Yes, your assumptions. Like it or not, you have assumptions.
“I guarantee it that even if you are your target audience,” he says, “your assumptions are at least partially wrong. I promise you they are.” Let’s say you’re a bookkeeper who has been in the business for years and have built a SaaS product for bookkeeping. You’re still making assumptions—even if you’ve surrounded yourself with these people for your entire career.
In large markets, especially, you can’t know everything. You only know your piece, which means you’re missing a lot of use cases and a lot of buyer personas.
That means you don’t have product/market fit. But paid advertising can help.
How George validated Soothe with just a landing page
The founder of the in-home massage service Soothe wanted to build an app first, but George had them validate the concept first. To do that, George suggested they toss up a simple landing page, recruit 10-20 massage therapists in a limited geographic area, and advertise on Google AdWords. Fulfillment and scheduling could be done manually in the short-term.
By taking that small step and advertising the landing page before building the app, he saved Soothe a ton of time and money. They could validate their assumptions around CAC, conversion rate, logistics, parking, and lugging around massage tables.
George also recommends A/B testing pricing (with just the landing page!). Over time, you can use this to figure out how much consumers are willing to pay for your service. “Every app-in-the-making that’s figuring out pricing or logistics or buyer personas should try doing this for at least 2-4 weeks before building anything,” George said. “By advertising a landing page on Facebook, or AdWords first, you can build smarter and faster.”
The best growth marketers know the power of paid advertising. They use it to scale ROI and validate faster. And for a company to grow, they depend on quick experimentation. If you’re not running tests, then you’re company is running stagnant.
So put your foot on the pedal with paid advertising. Just don’t forget individual channel reports are not the be-all and end-all to understanding conversions. Each traction channel influences another.
If you can supply each channel with the right amount of fuel, then your company will bring the together the best of paid and organic to keep moving up and to the right.
Want to learn more about PPC? Here’s what to do when your paid ads aren’t converting.