Having a sort of childish look has allowed me to get away with some stuff in life. For example, being honest during times when prudence was probably the best answer.
Well, if I were portrayed in a Jane Austen novel, I’d probably be one of the indiscreet characters, by 19th-century standards. Luckily, that was more than 200 years ago, and today, appreciation for honesty outweighs sympathy, or that’s what the new generation of radical innovators might say.

Elon Musk, he’s a radical and an innovator, and hopefully, he has some honest people around him.

Honestly, during my time working in marketing, ads worked so poorly that I felt like a total failure. Testing is the secret, some say. Infrastructure is the secret, timing is the secret; no, you got it all wrong; user-generated content is the real secret.

Well, just like in an AA meeting, by talking to my colleagues, I realized that I was not the only one facing these problems.

If you have done marketing before, you might know that ads are like the Holy Grail of growth. It just brings growth, it triggers growth, and it’s a growth transaction. Well, that’s great…for providers only, I’m afraid.

So Ads aren’t so much a growth transaction, but rather a one-way transaction, or a win-lose situation.

Let’s look at the top Ad provider:

Google

Revenue generated from Ads: $70.2 billion in 2022 | 40.4% growth YoY.

Google’s Q3 2022 earnings report came in at $69.1B, of which $54.5 billion came from Google Ads.

• Gross Google Ad revenue: $39.5B
• Gross Youtube Ad revenue: $7.1B

Not too shabby.

Now, let’s look at the table below:

• Average click-through rate (CTR)
• Average cost per click (CPC)
• Average conversion rate (CVR)
• Average cost per action (CPA)

See this as a funnel. CTR is the number of clicks that an ad receives divided by the number of times it is shown:

For example, if an ad had 5 clicks and 100 impressions, then your CTR would be 5%.

Then the CPC is the cost per click. After clicking the ad, the average conversion rate measures the percentage of users or visitors that complete a specific action and the CPA is how much each action costs.

Some industries do better than others. Dating, for example, has a healthy average conversion rate and a low cost per action. But, what about Tech and eCommerce?

The online space is so saturated with ads of all kinds that people barely click, elevating the cost per action and therefore CAC (Customer Acquisition Cost) which is roughly $800 for Tech (B2B) and $400 (B2C.) The average CAC for an eCommerce in The U.S. is $20.

So…How can you keep alive as a company?

Top Biggest Ad Spenders in The U.S.

P&G

In 2021, Procter & Gamble spent $4.39 billion on ads.

They decreased their digital budget by $200 million compared with 2020. Imagine my shock. This decrease came after noticing ☝️ they weren’t reaching their target market effectively through digital ads.

Amazon

Last year, Amazon spent a total of $3.38 billion on ads. This is mostly during the holiday season, but competitors like Walmart, Costco, and Target spent not even 10% of that. That same year, Target Spent $1.5M.

GM & Ford Motor Company

2 of the largest automotive manufacturers, General Motors spent last year $3.24 billion while Ford $2.45 billion. Keep in mind the auto industry is one of the best-performing in terms of ads.

Why companies should reconsider Ad spending

When the word Recession starts to linger, the first to get spooked is the Ad market.

It’s much preferable to get rid of ad budgets than workers. Back in 2020, some brands paused ad spending because of the pandemic, and…Well, they kept selling.

In that same year, Uber stopped spending almost $200M and nothing happened.

We turned off $100 million of the annual spend out of $150 and basically saw no change in our number of rider app installs. What we saw is a lot of installs we thought came through paid channels suddenly came through organic. Listen to the full Podcast episode: Historic Ad Fraud At Uber With Kevin Frisch.

Just like with kings and fools, marketers seem to be obsessed with big and fancy numbers.

🎉This ad had 250k clicks in the first 2 hours.
🎉 We got $0.20 CPC.

Unfortunately, though, big numbers often don’t translate into more sales. They are just numbers in a fancy Power BI dashboard. What can you do instead?

3 Alternatives to Ads (that actually work)

Product Marketing

This is a fancy word for making sure a product reaches the market and survives. The reason why you find so many different descriptions about product marketing is that the job involves several already complex processes like product development, marketing, and sales.

Is it helping to develop a product? ✔️
Is it helping to market the product? ✔️
Is it selling the product? ✔️

Product marketing managers play a key role in product development as they are the voice of customers. The product starts with the customer!

💡Product Marketing ideas for startups:

All projects come with some level of difficulty. But you don’t need to build an intricate product to meet your marketing goals.

One of my favorite product marketing projects was developed by The Code Academy…

If you’re new to code, you will probably have no idea where to start. Like, it’s a new language and they’re fully aware of that. That’s why the team developed a quiz to discover your programming personality.

The results are quite spot on! I got the Dot-Connecter and it told me the language I should start with and in which work environments I might thrive.
The test works, as if this was an engagement campaign, instead of spending money on ads showing people career options, they chose to personalize the user experience and got people intrigued and engaged.

👉Click here to take the quiz and share the results you got in the comments below!

Growth Hacking

Growth hacking is all about speed and testing what works for your company. It’s an ideal method for startups as the main goal is to help companies grow as fast as possible with little budget. Not many people are comfortable with constant pivoting and round-the-corner deadlines, but growth hacking is growing in demand.

💡Growth Hacking ideas for startups:

Growth marketing is mainly designed for startups, but there are some common strategies that most follow, like using the Pirate Funnel. (It’s called pirate because of the funnel acronym AAARRR LOL.) This is a good place to start when it comes to building your own growth marketing strategy.

Programmatic Ads

Programmatic advertising uses software to buy and sell ads from multiple platforms. This is an alternative way to buy traffic without basically wasting so much money.

A good example of a programmatic advertising platform is AdRoll. This tool surfaces customers’ top channels and shows your ads where it matters.

The Final Lesson

I’m afraid we’re reaching the end of a trend and companies (startups in particular) should start to catch on to customer needs. If brands focus on sales instead of clicks, then Ads stop making so much sense.