A paid acquisition budget can be wasted even when clicks and installs look healthy. This guide covers four checks for growth teams: whether conversion events reflect real business actions, whether the audience can support delivery, whether existing customers are being overlooked, and whether experiments have a clear decision rule. Start with measurement before changing bids or adding another channel.
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You spend on ads with wrong or no event mapping
Event mapping connects actions in your product to the measurement and advertising systems that use them. Define the event before optimizing for it: a successful registration, a completed purchase or a funded account is different from a button click. Check that one genuine action produces one recorded event, that failed attempts are excluded, and that the event name, value, currency and timestamp match across systems. Account for consent, attribution windows and conversion delay when comparing reports.
Don’t panic!
The example below illustrates a possible retargeting journey. It does not establish exactly which signals a platform used or whether the ad caused the purchase. Here is an example that just happened to me today. I was in Barcelona, Placa Catalonia with a couple of friends, and we wanted to rent bikes from Bicing – a local bike rental service – and just like everyone would do, we all started searching online to find the website, check prices, download the app, and rent bikes. However, I ended up renting an electric scooter instead of a bike. The offer was better, and I don’t need to paddle a lot, right? So, I rented the e-scooter and we went to the beach. After a couple of minutes, I decided to check social media, and I saw an ad from Bicing offering me a 20% discount. I got motivated to rent a bike from Bicing and so I did. My action here – the app registration – was later sent from the measurement partner to the ad channel to be used in retargeting me to actually do a rental action that drives actual revenue to Bicing. Your advertising budget can be wasted if you don’t have the right event mapping and tracking in place. This will leave you blind on how much is the return on your ad spend and won’t help the algorithm in understanding your campaign or targeting the right people at the right time.
Targeting a small audience size
The main goal of the advertisers is to catch as many potential customers as they can by offering attractive deals and luring them with glamorous offers, and then these people become loyal customers of the product or service. In the past, this was very simple. Target as many people as possible through billboards or TV ads and hope for a percentage to buy your product or service. By that time, companies were hiring local advertisers or marketers because the job needed local experience and a lot of gut feeling. This changed in the modern world, where advertising is built on data. This means that advertisers understand how their customers behave and who they are more than ever before. Marketing teams no longer rely on gut feeling when creating an ad; instead, they base their advertisements on data. While it is still possible to target everyone, but this approach isn’t preferred in the new age of advertising. However, this approach has a not-so-negative side. It’s not enough for companies to know what data to use, to have the tools to collect and process this data to be used in creating marketing strategies. But to have enough data and to target suitable audience size. Learn More: Ad Budget Calculator
Targeting a small audience size comes with 2 bad outcomes as follows
1. High costs → Most ad channels offer auction-based campaigns. Where you and other companies compete in an auction to win an ad impression. You don’t necessarily pay per impression because an ad channel could allow a pay-per-click “PPC” model. If your audience size is small, you will be bidding or simply auctioning on the same audience many times against various other brands at the same time. This means you will have to increase your bids. Which will eventually increase your Cost Per 1000 Impression and Cost Per Click and leads to higher Cost Per Action. 2. High Creative Fatigue → Ads are your queen and they’re your first impression or elevator pitch, whatever you want to name them. You get seconds or even less to hook someone’s attention. And get them interested in just reading your ads with the hope that they click on them. Good ads will perform. But what most marketers forget is the frequency a user sees the same ad within the same day, week, or month. Targeting a small audience size will cause a high frequency. Simply ad channels will keep serving the same ads to the same people as long as your campaign is targeting them and live with enough bids and budget.
You have 2 problems to solve
The first is user’s interest because they will get tired of seeing the same ad over and over again, but this is fixable, change your ads more frequently, but then you get hit by the second problem which is the cost and the work behind creating these new ads finding and testing new winning ads that gets their attention again.
Prioritize only new customers
It’s undeniable that pressure will increase on you, marketers, to boost the numbers. One of the biggest challenges that many marketers are facing is having prospects willing to buy at any cost. As a result, achieving new leads for your sales funnel will become more challenging because your prospects are getting warier about sharing their contact information with unfamiliar brands. In addition to that, companies grow by continually adding new users and retaining existing ones, but simply gaining a new customer is not always the right way. Research shows that a 5% increase in customer retention rates could increase your profits by 25%. In addition to that, it will cost you about five times more to gain a new customer compared to retaining an existing one. This doesn’t mean you should stop looking for prospects. But it does mean you should take time before opening a new campaign and spending a portion of your budget. Maybe targeting those who engaged before will drive higher returns and bring you close to your advertising targets.
Experimenting too much
A useful experiment starts with a specific problem and a decision you can make from its result. Define the control, the treatment, the target metric, the budget limit and the minimum observation period before launch. Allow downstream conversions to mature, record other changes made during the test, and retain a result that is inconclusive instead of forcing a winner. Prioritize the constraint with the largest plausible commercial effect, rather than spreading a small budget across many unrelated hypotheses.
Conclusion
Each of us has a great advertising campaign in mind. However, there are a lot of factors that determine whether that campaign is going to be successful or not. And many of those variables cannot be controlled. Even the best advertisers have landed on the other side of the spectrum as their campaigns fail to achieve their goals. We all make mistakes, but the best ones are the ones balancing between their wins and losses and efficiently managing their advertising budget to reach their targets. That’s it for this one, see you in the next article. Ciao!
