Mangrovea

How to use Paid Ads to launch a business, and is it a good idea?

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We regularly receive requests from entrepreneurs who have just launched a business and would like to use ads to find their first customers.

The first questions we are asked in these cases are:

  • How much will it cost to have x number of customers?
  • What kind of results can I expect if I put in such and such a budget?
  • Is this a good idea?

And the most common answer to all these questions is:

It depends, and it's difficult (if not impossible) to know.

Because that's the difficulty of making ads when starting a business: you can't be sure of anything.

I might as well say it now: there are therefore cases where it's better not to do anything until the company is more solid. (more on this below).

We also talk about the advantages and opportunities that this represents (because there are some!). and points to pay particular attention to if you make them.

Advantages of making ads when launching a business

Quite obviously, ads provide almost instantaneous customer acquisition.

You open your e-commerce site, set up your tracking system (correctly), launch your ads and have your first customers within a day.

It's seductive, of course.

And that's the first advantage: it's fast.

You don't have to wait until you've built up a reputation and word-of-mouth that your competitors are often years ahead of. Advertising networks only care about two things: that your ads have good quality indicators, and that you pay for the campaigns. Two points that are independent of your seniority.

The second advantage is that paid is well targeted. So you can choose which products and services you want to sell first, and run campaigns for them.

Another less obvious advantage is that you generally have a lot of precise data in ads platforms (Google Ads, Meta Ads etc.) that are not present on organic platforms (Analytics, Search Console etc.).

In-depth demographic data that lets you know your customers better, click costs that tell you how competitive each segment is, info on which keywords and phrases convert (on which you can then produce organic content or focus your messages)... You have access to a whole battery of insights that are very useful.

These advantages have synergistic effectsThe fact of having velocity in launch is interesting because this speed brings you traction, enables you to develop the organic axes more quickly and thus gives interesting compound effects over time.

Another advantage is the budget control and a certain predictability of results after a while. You can therefore set small budgets at the outset, then gradually scale the account (no more than +15 to +20% per week) as your campaigns become more profitable.

Last but not least less time-consuming than, for example, writing SEO articles and posting on social networks several times a day. So you can quite easily add paid channels to your strategy without blowing up your work time. Which is a significant advantage, as our entrepreneurial days are often very full.

The problems inherent in most start-ups

The vast majority of start-up companies have tight budgets.

That's the first problem: you've got everything to do and a limited budget.

Tracking, a well-optimized site, creative, campaigns... everything has to be put in place. And under these conditions, it's hard not to panic and pull the plug when something doesn't work, because sometimes resources are so limited.

And your competitors generally have (much) bigger budgets than you.

The other problem you quickly run into when trying to launch ads is the fact that you have a very large number of ads to launch. unclear idea of what to do coming mainly from our intuition (which is often unreliable) and from what the competition is doing (and copying them wouldn't make you stand out de facto).

We have no reliable historical data to rely on to find out what works and what doesn't.

So there's a greater earnings volatility (you can launch campaigns that don't work at all, and campaigns that are successful over the same period), need more testing and pay close attention to indicators.

Also, even though managing an account with several tens or hundreds of thousands of euros invested per month and containing several thousand ads is more time-consuming than a start-up advertising account, there's an advantage: it's easier to set up a new account than to manage an existing one. incompressible minimum working time to be produced to manage campaigns properly.

Even if they are smart about time and reasonable about pricing, most freelancers and agencies will have management packages to set up and manage your ads that will be often expensive for a young company and difficult to negotiate downwards, because a small account means you have to pay attention to everything and be very reactive. Expect your service provider to cost as much as you invest. This ratio should then gradually reduce as your investment increases, but in the beginning the cost of an agency or freelancer often absorbs a major part of your budget.

Users are generally also more "severe with ads than with organic content. As a result, you'll often have less time to capture their attention and deliver your message before they scroll down or skip the ad. A complicated product or a need that users are not yet fully aware they have (typical of many innovations) are additional difficulties.

Finally, and in our view this is the main problem for a start-up company: unlike organic means, an advertising account is not capital you build up for your business, it's a cost.. If you stop paying, the agencies stop sending you traffic, unlike SEO, for example, which will continue to bring you leads even if you stop producing content.

As with the benefits, these problems can have adverse compounding effects: you don't have much of a budget, so you're testing few things, which are unlikely to be very profitable immediately because you don't yet know what to position yourself on, you have to keep investing otherwise you won't be able to keep testing and optimizing to achieve good profitability, and if you cut everything off, you lose more or less all the traffic it was bringing you.

So you understand thatwe don't recommend it for everyone.

That said, there's no reason to be afraid. While there are some cases in which ads are not recommended, there are also plenty of opportunities to be seized when you're not.

Cases in which we do not recommend starting with ads

Now that we've covered the opportunities and problems of ads in business start-ups, you've already got an idea of when we don't recommend ads in business start-ups.

In concrete terms, the higher the risk, the longer you should wait before launching into ads.

For example:

  • If your budgets are really too limited We recommend that you have a minimum of €1,000 - €1,500 a month to lose for potentially 3 to 6 months, without jeopardizing the survival of the business, so as not to launch yourself under the wrong conditions and create more difficulties than solutions.
  • If your product is very complicated to explain, or if users are not sufficiently aware of their needs A good rule of thumb is to ask yourself whether you think you can trigger an interaction (usually a click) with your target in less than 3 seconds of viewing or reading.
  • If you don't have a sound organic growth strategy in place at the same time With a few exceptions, we don't recommend that the majority of your traffic come from paid channels, as this would make you too dependent on the advertising agencies (who can decide to raise their rates overnight without warning).

If you don't fall into any of the above categories, then ads can be an excellent launch strategy that will put your growth on steroids and save you valuable time in a fast-moving environment 🙂

What to look out for when making ads for business start-ups

However, please note :

  • Good tracking. This is non-negotiable. Simply install a WordPress plugin and put your Google ID in it, or install pixel Meta Ads is often insufficient. You'll lose too much data, you'll get too few feedbacks, your campaigns will optimize more slowly (and maybe even wrongly), which is the best way to throw your ads investment out the window. It's important that your conversions rise correctly in the platforms, with as little wastage as possible. If you have no idea whether your tracking is good or not, chances are it's not.
  • Don't try to rank for the most expensive, high-volume keywords. in search ads. They'll be expensive, more competitive, less profitable, and it's a safe bet that your small scale will make it hard for you to absorb a lot of traffic in any case. Give preference to more specific, less competitive keywords focused on your most profitable products and services at first.
  • In the same way in social ads, start with well-targeted audiences to bring you your first low-cost conversions. Once you've got a few conversions under your belt, you can broaden your audience and let the AIs do the selection work.
  • Always in social ads, don't make big-budget creations from the start. Start by making large numbers of low-cost creations (we have just published a guide on this subject 😉).
  • Be sure to set up your payment methods with the control rooms. An account suspended for non-payment because your credit card limit has been reached will often fall back into learning mode once restored, with a significant impact on your performance.
  • Have thoroughly tested your site from end to end. It's not uncommon to find bugs and sometimes major problems in new sites. It's annoying when you're paying to bring traffic to a site that doesn't work properly. Test your site on several devices, several browsers, in real-life conditions.
  • Don't be overconfident. Stay open and try out different strategies and messages. You'll often be pleasantly surprised.
  • Having the right person take care of it. This is important because it often makes the difference between good and bad results. If you or someone on your team has good campaign management skills, you can save money and manage it in-house (unless you have large budgets, in which case we still recommend external support alongside the work of your in-house team to compare points of view, get your "head out of the game" and optimize your big budget). If you don't have this profile in-house, call in a freelancer if your total budget is under €2,000/month. Above that, you can opt for a freelancer or an agency, depending on whether you want to manage the project yourself or delegate more management.

Conclusion

Launching a business with paid ads is a tempting strategy, offering speed and precise targeting, but it's also fraught with pitfalls and potentially high costs. Ads enable almost instantaneous customer acquisition, providing valuable data to refine your strategies and messages. However, the challenges are not to be underestimated: limited budgets, lack of reliable historical data, strong competition, and the need for meticulous, reactive management.

It's crucial not to rush into this without adequate preparation. Sufficient budgets, a clear understanding of your product and its market, and an organic growth strategy are essential. Ads should not be your only source of traffic, as this could make the survival of your business too dependent on advertising agencies.

If you decide to take the plunge, make sure you have robust tracking, avoid overly competitive keywords, target your audiences wisely and test different strategies. Agility, caution and the ability to adapt quickly are the keys to successfully using ads as part of a business launch.

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Maxime Cochini
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Choose a date and time that suits you for a discovery call with our team.

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Maxime Cochini
CEO & Co-Founder
Themes: Ads
Book a discovery call

Choose a date and time that suits you for a discovery call with our team.

Your contact
Maxime Cochini
CEO & Co-Founder
Book a discovery call

Choose a date and time that suits you for a discovery call with our team.

Your contact
Maxime Cochini
CEO & Co-Founder
Themes: Ads
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