Acq section 7- Detailing Paid Advertising

Is the lifetime value of your customers large enough to spend money to acquire them through performance marketing (Google, Meta, LinkedIn ads), if yes, what is a good customer acquisition cost that will support the business model (Is CAC to LTV ratio healthy?). Calculate lifetime value broadly. Here’s a quick refresher on how to do this HERE.

What is expected?

When using paid channels like Google, Meta, LinkedIn, or YouTube, it’s important to determine whether your customers' Lifetime Value (LTV) justifies the spend. Ask yourself:

• Is the lifetime value of your customer large enough to cover the Customer Acquisition Cost (CAC)?
• Is the CAC to LTV ratio healthy for your business model?

Here’s how to proceed:

1. Calculate Lifetime Value (LTV)
   Before creating ads, broadly calculate the LTV of your customers to ensure you can afford the spend.
   [Use this guide as a refresher on calculating LTV.]
2. Choose an Ideal Customer Profile (ICP)
   Pick one ICP for your ad campaign. This will be the audience you focus on targeting with precision.
3. Select Advertising Channels
   Choose where your ICP spends the most time. Here are some examples:
   [Refer to these resources for channel-specific strategies: Facebook Ads, Google Ads, Programmatic Ads, Snapchat Ads, LinkedIn Ads]
4. • LinkedIn: Professionals and B2B audiences.
   • Meta (Facebook & Instagram): Broad consumer base, often B2C.
   • Google Search: Capture high-intent users searching for solutions.
   • YouTube: Video-driven audiences, ideal for visual storytelling.
5. Align with Product-Market Fit
   Focus on acquiring users in segments where your product has achieved the highest product-market fit. Prioritize these segments in your ad strategy to maximize results.
6. Define Your Creative Strategy
7. • Write a Marketing Pitch: Start by crafting a clear, compelling pitch for your product. What value does it provide, and why should your ICP care?
   • Tweak the Pitch for Each ICP: Customize your message for different customer segments to ensure relevance.
   • Build Ad Creatives: Design at least two ad creatives (e.g., images, videos, text ads) that reflect your marketing pitch. Use tools like Canva or Figma to design mockups and preview your ads in Meta’s Creative Hub.
8. Example Execution
9. • For Google Search Ads, create expanded text ads using this online tool.
   • For Meta Ads, design visual creatives that resonate with your ICP’s desires or pain points. You can use Canva or Figma for easy design.

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