I am a regular contributor in the Growth Hackers Community; I help likeminded growth hackers and entrepreneurs with questions they have about marketing. Here is a sample of my answer to the question, “When is the right time to start paid advertising? What needs to be in place first?”
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.
Benefits of paid advertising
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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.
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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.
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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.
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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.
When is the right time?
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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.
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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.
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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
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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.
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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.
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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.
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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.
Read the whole answer and other responses at GrowthHackers.com.
