Let’s face it: Paid ads no longer work. Advertising may be the most popular customer acquisition channel, but it is increasingly saturated and expensive. Click-through rates are notoriously low — usually in the single-digit percentages — and the customer acquisition cost (CAC) seems to be going up, no matter if you’re relying on Google Ads, social media ads or any other type of digital advertising.
This can often be detrimental to young companies that are yet to find product-market fit, have limited marketing budgets and cannot compete with more established players in the market, as the cost of acquiring a customer may sometimes be higher than the lifetime value of this customer (like when the ad costs more than the product and the customer only purchases once). Moreover, advertising is not a sustainable marketing channel — leads and customers stop coming in the second you stop paying.
And finally, most customers no longer pay attention to paid ads. Instead, they are likely to skip over them.
The evidence is clear: If a startup is looking for a sustainable customer acquisition channel, paid ads are not the answer. Before exploring the alternative, it’s worth taking a moment to look into the reasons why advertising is not as powerful as it used to be.
WHY IS ADVERTISING LOSING ITS IMPACT?
Over time, any marketing channel reaches the point when it becomes oversaturated. Paid ads are no exception. They are the go-to for any company with a marketing budget that would like to acquire new customers. In fact, digital advertising (and sometimes also more traditional advertising methods, such as billboards, print, radio and TV) are baked into the go-to-market strategy of most companies.
The problem is that, the more companies start relying on advertising and sponsored content, the harder it becomes to get cost-efficient results through this marketing channel. This has happened time and time again, with social media marketing, Google Ads, influencer marketing and traditional advertising methods. Of course, there are advertising channels that haven’t reached this point yet (such as podcast ads), but getting there is only a matter of time.
However, over-saturation is not the only reason advertising conversion rates are low. The main reason is that many (potential) customers perceive advertising as inauthentic. Picture-perfect ads with catchy slogans concocted by smart digital marketers may generate buzz for a few days but will ultimately fail to resonate with potential buyers because they tend to focus on products, not values and mission. Brands have a clear incentive to tell potential customers that their products are “the best,” but why should customers trust this is the truth? How would they know what a brand stands for, what their goal is?
People are no longer just buying products. Customers now want to know who the company behind the product is, what they stand for (such as if they support #BlackLivesMatter or not), what they’re trying to achieve in the grand scale of things, and how the world will change because of their vision. We all yearn to be a part of something bigger than ourselves, to identify with a brand’s mission and values, and many of us increasingly put our money behind companies that align with our moral code.
But how can companies effectively communicate their mission and values with potential customers? Enter authentic marketing.
WHAT IS AUTHENTIC MARKETING?
Authentic marketing is a new marketing channel that encourages companies to be transparent about their mission and values, so customers can understand the “why” behind the brand.
Authentic marketing doesn’t require a lot of money, giving early stage startups that don’t have large marketing budgets an opportunity to shine and differentiate themselves from the competition. There are multiple ways to communicate authentically with existing and potential customers — from engaging with them on social media and sharing content they find helpful to building a community around your product.
However, the true power of authentic marketing is unlocked when you tell your company story in front of as many audiences as possible — nothing communicates your values and mission better. The most effective way to do this is by finding opportunities for exposure through media and public speaking. This way you will be able to tap into existing audiences and share your story with people who you otherwise would not be able to reach and who might be looking for a product just like yours.
Contrary to popular belief, you don’t need to land a feature or a mention in a national media outlet in order to attract customers to your brand. While coverage in a large publication could certainly help, the media landscape has shifted significantly in the last couple of years, allowing multiple creators to launch industry-specific podcasts and newsletters that cater to a highly curated and loyal audience. This means that you have many more chances to tell your story to different audiences that are highly targeted to you and much more likely to become customers after seeing that a creator they trust told your story. For example, if your company is in the wellness space, you will likely benefit more from being featured in wellness-specific podcasts and newsletters as opposed to a larger generalist publication.
The same is true for events. There are a number of panels and conferences across various industries that are looking to add fresh perspectives and feature innovative entrepreneurs. With most events happening online right now, this allows many more opportunities for exposure, as you’re no longer limited by geography. In addition, the majority of these events are recorded, which means that people who did not attend the live session can later listen to the conversation and learn about your company.
Authentic marketing provides a low-cost way to share your story, mission and values with potential customers by speaking at events and generating media coverage. Unlike paid advertising, it can help you generate leads in perpetuity because the links to your media interviews and speaking engagements will be online forever. Not only can this help potential customers discover your company months (or years) after initial publication, but the backlinks to your website will also help your SEO in the long run. So, instead of spending money on paid ads, consider investing in authentic marketing. It will be worth it.