When is the right time to hire an agency to run your ads?

(If you’re looking for the TL;DR, scroll to the bottom of this section to see my recommendation for minimum monthly ad spend that justifies hiring an ad agency)

I’ve chatted recently with a bunch of early stage DTC founders who are looking to outsource paid ads to AdTribe. The story usually goes something like this: the founder tried running ads on their own, but the ads didn’t convert. Now they’re looking to work with an expert who can help them run the campaigns properly and get better results.

But here’s the reality: handing the keys over to a marketing agency is not going to help reduce CACs and grow your business overnight. There are two key factors that are critical to successful paid social and Google ad campaigns:

1. product market fit

2. ongoing efforts to build the brand and drive awareness in other marketing channels

When there is clear product market fit, ads will work, even if the campaign set-up and ad set structures are messy and unsophisticated. On the other hand, we’ve worked with clients who didn’t quite have product market fit, and no matter how much time we invested or how complex we got with the campaign set-ups, conversions just weren’t there.

Some Founders think they need to run ads to find potential customers in order to understand product market fit. I think it’s actually the opposite - first build the brand foundations, confirm that you have some level of product market fit and THEN hire a marketing agency to help turbo charge your growth.

First, how do you know if you have product market fit? Here are some easy and cheap ways to figure it out:

• talk to your first 25 customers (who are not friends or family!) and ask them for their honest opinion: do they like the product? Is it unique and differentiated versus your competitors? Is the product worth the money they paid? Would they recommend it to other people?

• read your product reviews - what is the overall sentiment? Positive, negative or neutral?

• Are you seeing repeat purchases?

Second, here are some easy and relatively low cost things I would do to build your brand foundations:

• Focus on one organic social channel (either Tik Tok or Instagram) and go all in on content creation. Connect with other brands, creators, potential customers on the platform and start establishing real connections.

• Reach out to 50 influencers and creators in your niche and ask them if they are willing to work with you on a gifted collabs or affiliate basis.

• Build your email list by adding an email pop-up to your website and set up three basic flows: welcome, cart abandonment, and post purchase.

• Spend 5-10 hours on Youtube educating yourself on how to set up Meta ads. When you are spending less than $100/day, it is pretty simple and you should be able to manage it yourself if you understand the basics.

• Make sure you optimize your website for conversion: clear call to action and shop buttons, high quality product photography, social proof via product reviews and UGC. Have a compelling offer (we like to see a minimum of 15% off) as part of your email pop-up.

Once you’ve established product market fit and have started building a solid foundation for your brand OR you’re ready to scale ad spend to at least $5000/month, that’s the right time to hire an agency to run your ads.

What we’ve been discussing around the AdTribe Watercooler

• A proven framework from the Co-founder of Obvi to optimize creative strategies.

• Cannabis Campaigns on Meta: How to run profitable CBD & THC Ads (without getting banned)

• The New Rule of Law for E-commerce Businesses: first-order profitability

Want to get some help on building your brand foundation?

Want to get some help on building your brand foundation? Or just want to get some free advice on what to do or where to start? Reply to this email or email me directly at [email protected] and let’s chat!