For every dollar a business invests in marketing, it earns four dollars back. That’s the usual benchmark - but what do you do when your emerging tech services startup spends precious money on ads, yet the ads don’t seem to deliver the desired results?
Advertising is an essential part of marketing your business, but it can also be a frustrating and expensive mistake. In this article, we’ll cover how to assess whether your ads need fine-tuning and how to fix some common problems.
As we've said before, you can’t correct course if you’re not keeping an eye on where you’re going. So be sure to review the following metrics often in order to get an idea of the health of your ad campaigns:
If your spending per lead or customer has gone up, or if you’re blowing past industry benchmarks, you might find yourself in a double bind. First, your digital ads will likely be penalized with an increasingly higher cost; second, even if you do get customers, the more expensive the acquisition, the higher your ROI target.
If you’re spending money on ads but not generating enough revenue in return, that’s a surefire sign that something is wrong with the campaign or your sales funnel. Persistently low ROAS can quickly become an unsustainable situation for a startup, particularly if you haven’t planned sufficient runway for your marketing efforts.
Not getting any bites? If your ads aren’t generating sufficient traffic for your sales funnel, there’s a strong possibility you’re either pitching to the wrong audience, or you’re failing to craft a compelling message.
Do any of these problems sound familiar? Let’s take a look at some typical causes.
If your ads aren’t keeping your sales funnels churning, there are a few reasons typically behind this.
Your customers aren’t generic, your services & solutions aren’t generic, so why should your marketing mix be generic? Not all advertising channels perform equally for every business.
If you don’t have a solid grasp of your ideal customer profile, audience segmentation, or bidding strategy, your ads might be targeting the wrong people or overpaying for clicks. This can drain budgets quickly while filling up your funnel with the wrong types of leads—or even none.
Your ads are an entry point into your sales funnel. Each part of your sales funnel must work together cohesively in order to have an impact. If the messaging or offers in your ads are disconnected from your landing page or other elements of your sales funnel, visitors will bounce without converting.
Regularly review your marketing campaigns and analyze which platforms and ad types drive the highest engagement and conversions. Don’t invest heavily in platforms that don’t align with your ideal customer profile. Instead, focus your efforts on your top-performing channels. Shift your budget away from underperforming channels and test alternatives that better suit your audience.
Frequent performance audits can help you spot inefficiencies in audience targeting, bidding strategies, and campaign settings. Use A/B testing to refine audience segments and ad placements.
Your messaging throughout your sales funnel should be mindful of your target audience’s pain points and expectations. This is true even at the later stages of the funnel, when your messaging might need to be more tailored to a particular organization’s stakeholders, but it is equally important right at the beginning, too. The messaging, imagery, and call-to-action should flow seamlessly into the landing page experience and subsequent touchpoints such as emails.
If your ads aren’t delivering the expected results, don’t just throw more money at the problem. Take a step back to evaluate your ad performance. Diagnosing the correct issue, refining your ad settings, and optimizing creative elements can go a long way toward resolving most problems. By making strategic adjustments, you can turn a struggling ad campaign into a powerful growth engine for your business.
At Vixul, we spend a large part of our time reviewing the forecasts created by the founders of our portfolio companies. It is amazing for us to see our founders mature as executives and be able to answer questions they couldn't in the past. Unfortunately, most founders struggle with these issues until we point them in the right direction. We believe the lack of guidance on forecasting is a primary issue for early-stage tech services founders.
That's why we're working on an eBook with detailed instructions on how to set up forecasts for sales pipelines. This will help you plan your new year with better foresight. The book will be free for people on our mailing list when it is published, so please subscribe now to ensure you receive it.