• Matthew Lerner

Is it Okay to Pay for Traffic?

“Why is web traffic like sex?” goes an old Growth Hacker joke... “Because only losers pay for it." 😏

Truth is, I’ve been a bit of a snob on this point, because I see so many companies “buying growth” mainly via paid traffic, with questionable payback periods and weak fundamentals. But that’s not fair…

I work with one B2C client, and they’re able to buy signups on FB for <$3, with a value of $20, and recoup their investment within a month. But the stars are really aligned for this company:

  • The message in the winning ads came from 15 customer interviews (and sounds nothing like any of their competitors)

  • They already have product-market fit, and have been optimising retention and pricing for 2 years

  • B2C app with an impulse buy price point

  • Strong conversion through their funnel

  • Large enough customer base that they can build a good lookalike audience

  • Enough organic inbound traffic they have a good prospect base to retarget

  • Enormous market, so they won’t saturate their audience

  • Altogether, it’s not (yet) 20% of their acquisition, so if it gets expensive or stops working, it won’t kill their business

Always remember, Google and Facebook are auction-based systems, so you need to have structural advantages that enable you to out-bid other companies and keep good unit economics yourself. Also, like any auction or exchange, prices often rise unexpectedly, so you should not depend on it entirely.

The huge danger appears when people throw more money at the paid channel to try to hit growth targets, instead of looking for the root cause of the problems, lower down in the stack - in the ‘core’. Therefore, the big lesson of the day is…

Start with a Strong Core

The good news is that all the stuff that gives you a “structural advantage” on CPA is exactly the Startup Core Strengths work I keep harping on about! (Understand your customer, deliver value, optimise conversion, choose the right metrics, etc.) So having a “strong core” is not opposed to paid traffic. It’s the foundation that ensures your paid traffic is hugely profitable!

6 views0 comments

Recent Posts

See All

How do you measure "brand building?"

Are you planning to “build a stronger brand” in 2021? (Who isn’t?) But that goal is kind of fuzzy… how do you actually measure it? You could use complicated (expensive) solutions… custom “share of voi

6 Scalable Alternatives to Paid Traffic

As I write this, we're heading towards Cyber-Monday, and Facebook CPAs are rising 10% - 20% per week. What can you do to rein those CPAs in? In the short term, get really good with targeting, creativ

The 3 Most Dangerous Words in Startup Marketing

The meeting is going fine, until... the founder says we need to "educate the market.” 😳 At this point, employees, founders, and investors should get very nervous. After the 1,000 marketing plans I've

Never miss a lesson.


Terms & Conditions | Privacy Policy | Contact Us
Please note that participants’ comments on the program and results information refer to similar programs that members of our team have developed and run as part of 500 Startups. The information presented has been prepared in good faith by Startup Core Strengths, but has not been independently verified. Please read our Terms and Conditions for additional information.