Why You’re Leaving Money on the Table If You Don’t Run Ads

Last month, Ladder co-founder & Chief Product Officer Michael Taylor gave a lecture at the GrowHack Bootcamp.

The lecture was all about using paid advertising as a means to “hack” organic growth.

Sounds like that doesn’t, or shouldn’t, make sense, right? Organic and paid are two distinctly separate beasts. Organic is free. Paid costs money. There’s no real room for crossover.

And yet running paid ads is one of the quickest methods to speed up your organic growth. From enabling you to test audiences quicker and more efficiently to allowing you to properly A/B test conversion copy, you can use the learnings you gather from quick, small-budget advertising tests and apply them to your organic growth efforts.

You can read about that full hypothesis here: Proven Paid Tests to Hack Your Organic Growth.

But in that discussion came another consideration – too many startups stay away from advertising for all the wrong reasons. As a former startup founder myself, I get it. I fell into the same exact trap myself.

Why spend money on ads when there are so many other seemingly more important things I could spend money on?

That’s what this article addresses – the myth that ads are in some way a thing to stay away from in the early days of a startup’s lifecycle.

Let’s dispel the idea that advertising should come AFTER you’ve built a strong organic growth engine.

Ads for Organic Growth

First and foremost, I’d like to point out something very important that too many founders and marketers tend to forget:

There’s no such thing as free marketing.

Every marketing test costs something. Even if you don’t assign it a budget, every test you run costs some amount of money. That money can be your time, the cost of the SaaS tools you use to execute it, etc…

free lunch
Source

You can do a hard salary calculation or factor in the cost of the tools to determine exactly how much a test costs, but that’s missing the point.

The real point is that the marketing tests you decide to run – whether paid or unpaid – have the potential to either make or lose money for your business.

The loss associated with an unpaid test is that you spent your time doing something that doesn’t work. That’s fine. You’ll be doing a lot of things that end up not working. It’s the nature of marketing as a whole.

The real danger comes in assuming that your unpaid tests were the better alternative over running ads. That they were the only thing you should have been focusing on.

That’s how you really hurt your business.

With that out of the way, let’s talk briefly about why you should use ads for organic growth.

Pro tip: For actual case studies on how to execute ads for organic growth, read Michael’s post on the GrowHack blog.

When you start focusing on organic growth, you’ll usually focus on tactics that require quite a bit of time before they actually show any significant impact on your growth. From SEO to content, CRO, and beyond, these are tests that require significant amounts of traffic and time before you can determine whether they were successful, inconclusive, or failures.

In that time spent waiting to determine the impact of a test, you’ve lost tons of time and potential for growth.

That’s where ads can come in to save the day. Running ads – even with tiny, $10-15 a day budgets – can immensely speed up your organic growth efforts.

Here are a few ways how:

  • SEO: Run AdWords ads to test different keywords, using the results you get (CTR, CPC, CVR) to determine whether you should focus your content and SEO efforts on those keywords.

  • Conversion optimization: Run split-tested Facebook ads, testing things like copy, creative, and CTA button prompts. When you find a strong combination, try it on your website, using Optimizely to A/B test it against your current homepage copy.

  • Audience testing: Want to know if you should be targeting single women in their early-mid 30s or new moms? Facebook can let you figure how each audience responds to your copy, creative, and product so you can quickly figure out your ideal target audience.

Those are just a sampling of how ads will let you boost your organic growth. Just a few simple small-budget tests can teach you all you need to know about a portion of your business in a week or two. Comparing that to months of a slow, organic-only focus seems like a no-brainer win for running paid ads.

Ads for Paid Growth

Budget is a huge issue for small startups. I know, having gone through tight budget times, that ads can be the last thing on your mind if you’re struggling with revenue and growth. But it’s a big mistake to forget that ads can be used to actually grow your business.

Not a revolutionary statement, is it? It’s probably the most obvious thing we’ve written on this blog. But you’d be shocked how often founders forget that advertising is a critical component in their growth toolkit.

Some think that there’s no way they could compete with bigger spenders. They’re wrong.

It’s about finding the right mix of audiences, keywords, and CPC bid to get your ad in front of the right eyes.

Others think that because they haven’t figured out organic, ads won’t work. They’re wrong.

As I detailed above, organic takes time. Use ads to speed up organic instead.

Yet others think that their budget has no room for ads. They may or may not be wrong depending on their business and their performance.

But that doesn’t mean they don’t have options.

Google AdWords, Bing Ads, and LinkedIn Ads all offer free credit for you to start running ads. Yes, very often they require that you spend money to get the credit, but that’s usually to double your ads budget for the month. So if spending $25 gets you a total of $100 in advertising with AdWords, that is actually a brilliant investment to make.

adwords ads

linkedin ads

bing ads

At the very least you can use these credits to validate the idea that advertising can grow your business. They give you enough runway to try a few small tests here and there, testing different audiences, copy, and creative. The results can give you enough confidence to know that you should be testing ads further.

The golden rule we’ve found is this: Don’t turn off your ads until you’ve gotten at least 30 conversions per variation.

Those conversions will tell you what you need to know not just about the parameters you’re testing (audience, etc…) but also about whether an advertising channel is worth your time and money.

So use those free credits, run some ads, and see what happens. Chances are you’ll find a lot of good traffic heading your way. And even if you don’t land new customers off the small spend, you’ve still learned a lot about your business along the way.

Ads for Creative Growth

You can also use advertising in “hacky” ways to creatively grow your business.

Want to increase conversions from your company’s Facebook page? Set up a chatbot to act as your Messenger system, running people through a registration prompt or even a longer journey where they submit information and get value in return. Then advertise that chatbot on Facebook.

facebook messenger

Want to get really aggressive with your competitors? Start spending to target their brand keywords.

competitor keywords

Set up an “us vs. competitors” landing page to go along with the ad to pop in a bit of extra firepower behind the messaging. Use a landing page builder like Unbounce to make the process super-easy.

Want to get the attention of an investor? Advertise to the CEOs and founders of their portfolio companies.

thomas korte

The point is that you can get REALLY creative with your advertising efforts. They don’t just have to be focused on growing traffic to your homepage and therefore increasing conversions.

You can advertise pretty much anything, and as long as it helps your business grow and it fits into a given ad platform’s rules and regulations, it’s all fair game.

Ads as “Growth Hacking”


It’s important to remember that “growth hacking” isn’t just a buzzword about doing unscalable, insane things to grow. It’s about the whole process of growth, combining organic, paid, and crazy to result in ??? for your business.

Advertising is a critical part of that strategy. Ignoring it is something you do at your own peril and can greatly impact your business’s growth potential.

It’s extremely important to remember that a failed marketing test isn’t a sunk cost. 57% of the marketing tests we run at Ladder result in a failed outcome. That sounds like a ridiculously high failure rate until you consider the failure rate of industry as a whole: 80-90%, according to a Harvard Business Review study.

ladder failed tests

If 8 of every 10 marketing tests you run fail, then you might get very discouraged very quickly. This is especially true if you’re running ads and they keep resulting in low or negative ROI.

But remember – even your organic tests cost you money. Those failures still burn your runway.

And that’s the real trick to growing your business. Lose small, win big.

We’ve talked about it a lot in the Ladder blog – small tests, small budgets, A/B testing everything, and never settling on a single result. Always pushing for better, and doubling down on what works while getting rid of what doesn’t.

Most of all, however, we take those failed tests and we use them to learn something about our business, about our clients’ businesses, and about our strategic approach. We take those learnings and adapt them into a clear plan for the next week, and the one after that, and the next month, until we create a winning formula.

That’s how we measure our success, and that’s how we treat advertising.

You should try the same for your business.


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