Comment by _factor
13 hours ago
I doubt the ROI would be so high if organic results stood any chance.
The ROI on bribes is very high too, but we haven’t legalized those (officially).
13 hours ago
I doubt the ROI would be so high if organic results stood any chance.
The ROI on bribes is very high too, but we haven’t legalized those (officially).
> I doubt the ROI would be so high if organic results stood any chance.
This is just the same fallacy. In what world are people going to organically share ads for this company on their Facebook feeds? Who is going to Google the company name before they know about it?
Every business needs to proactively acquire customers.
Distribution and CAC are top of mind values for any growth business. It has been this way long before Google and Meta existed. Digital advertising actually makes it cheaper and easier than ever to acquire customers at scale.
A lot of people enter the company or product name into the browser's search field and reach their intended target through an ad at the top of the results. If they proceed to purchase something, does this count as a conversion? I think it does. Unlike traditional advertising, this didn't influence the customer's decision to buy at all.
> A lot of people enter the company or product name into the browser's search field
They had to already know the company name or product name to get there.
This doesn’t just happen. Spreading the name of the product and getting it to stick in people’s minds takes a lot of advertising budget, on the whole.
1 reply →
Information can travel without people paying for it do so.
Ban most ads and everything will still work fine.
Sounds like ads will just get replaced with covert word of mouth enticements. Want to get people to know about your product? Send free samples to influencers. Maybe even fly them out to CES and put them in nice hotels so they can experience your product announcements/demos. All of this is "unpaid", of course.
2 replies →
I would prefer a world that returned to the older '30 second blip (for the only) sponsor of the program' ad, which also seemed to be of the limited form: Here's Product X, it does Y, which makes your life better because Z. Informative, dry, stated by an announcer in a calm and not demanding way.
CAC-LTV by itself is not a great long term strategy. But it can appear like one in the short term to investors.
So there is a plethora of companies happily dumping investor money into paid customer acquisition.
Blue Apron was a classic example of borderline fraudulent growth metrics and a cash grab IPO before the customer acquisition funnel collapsed.