💯Focus Unpopular opinion: Ads are a waste of time

[t2van]

I'll start by saying I've only run adverts internally and never had any luck.

(I'm sure someone will say I didn't give it enough time or hire the right person — which is kind of the point of this post; we'll see.)


Before I get into it — I don't think ads work when selling to the public. As a retailer, I don't think the ROI is there. If I were selling to a business instead, ads probably work, because the ROI is much higher.

I sell mainly to the public, and that's the focus of this thread.

I've always stuck to organic because I could never get ads to work. But as the company's grown, more and more people reach out about ad spend — claiming they can improve my ads (I don't run any, great research) or that they can 10x my client base.

Every so often, especially during quiet months, I cave and start booking calls. I think, "yeah, maybe I need ads."

In every one of these meetings, I get a rough ROI projection — but none of them factor in the cost of paying them. Take your ad spend, your product cost, sell the product, then pay a % to the person or agency running it — where's the profit? Not in my opinion.

People point to my customer lifetime value (LTV) and retention as reasons I could spend more to acquire a customer. Sure — but if I spend £500 to get a customer who only spends £50 a year, it takes 10 years to see a return. That's not growth, that's bleeding money to acquire a client.


In a slide deck, the maths looks great and gets you excited. In reality, it falls short.


Ads are the shortcut

Personally, ads are the shortcut. The easy way out. People want to spend money because it feels like a shortcut. If ads really worked that way, I'd be all over them. I'm not. They don't. It's the internet's snake oil.

Years ago in print advertising, I was told you needed a minimum 6-month magazine booking before seeing any ROI, because:

Month 1: Your advert gets ignored
Month 2: They see your advert
Month 3: They start to remember you
Month 4+: They start to trust you, because they remember you

That's print. Why would digital be any different? It isn't.

Ads = instant impressions. In my opinion, advertising is a battle of impressions. When you're starting out or trying to grow, impressions come from two places:

• Ads (money)
• Organic (time)

Do you think customers buy more readily from someone who paid to reach them, or someone who took the time to understand them before they ever bought anything?


Ads will always play a part — they're a tool, and like any tool, there's a time and place for them.

Say you're a new business with £10,000 to spend. You hire an agency, run ads, and get 50,000+ impressions. How many of those actually buy from you? I'd bet your first ad spend runs at a loss.

What does your agency tell you then? Spend more, give it time, increase the budget, keep going until we dial it in. Fine for them — that's your money, and they get paid regardless. Meanwhile you're doing exactly what every competitor is doing: burning money on ads, hoping for a sale.

In my experience, most agencies say you'll break even or see ROI after 2–3 months. Great — except now I'm £30k in the hole, assuming I even have more money left to spend. If not, I'm stuck. Didn't work? Business gone, or I'm putting it on a credit card and landing myself in a world of hurt.

Now take that same business and invest those 3 months (time, not money) into creating content and building the site organically. After 3 months, I've built content that holds its value and keeps paying off. I've still got my £10k in the bank, and I've got something that works for the cost of time instead of money.

I've generated 50k+ impressions the same way — except I've built trust with my audience before spending a penny. That customer is far more likely to buy from me than one who saw an ad on a semi-relevant keyword. It cost me time, not cash.

I get it, time is hard to find. But there's no shortcut. People avoid creating content because they're not confident at it, don't understand it, or don't know how to market themselves. Yet those same people will spend money on ads expecting a different result.

But what about the YouTubers who show ads working — selling socks on Etsy and making it look easy? Sure, maybe it does work for some. But all they usually show you is turnover. They rarely share what they actually spent on ads, what the product cost them, or what the real margin was.

That's part of my issue with ads for public-facing sellers. It's often pushed as default advice for new business owners, and I think that advice is bad.

B2B might be a different story. If you're billing for your time or expertise, the ROI is tied directly to the value of your time — you're essentially selling yourself. That's different from selling a product like a TV, a memory card, or socks. But even then, it still comes down to time vs. money.





I'm not writing this to trash anyone's services, jobs, or agencies — just sharing my opinion on why I think ads don't work, from this thread https://officeoutlaw.com/threads/worst-business-advice-you-ever-got.4325/#post-51200.

What do you think? Am I wrong? Am I off the mark? Is it just because I've never run ads myself? Interested to hear your thoughts, good and bad.

 

[SilverClouds]

Wrong niche bruh. There are niches where it's so cheap and return is so huge that IMO in these cases it's more expensive and time consuming to produce sm content. So it makes sense to them and they get return in first month. Probably doesn't work in your niche and you shouldn't bother if costs don't make sense.

 

[t2van]

Wrong niche bruh. There are niches where it's so cheap and return is so huge that IMO in these cases it's more expensive and time consuming to produce sm content. So it makes sense to them and they get return in first month. Probably doesn't work in your niche and you shouldn't bother if costs don't make sense.

But the costs don't add up in most if not all e-commerce businesses.

The product costs you something. You still have costs associated with that product storage, shipping,packaging etc.

Can you give an example?

It's different if your exchange is for time or selling say software, course or whatever.


I don't get if ads take time and money to dial in. How is content cheaper Vs the longer term gains?

You mean in the niche you not mentioned but still the point is ads take time and money to dial in.

 

[RiskyStuff]

Wrong niche bruh. There are niches where it's so cheap and return is so huge that IMO in these cases it's more expensive and time consuming to produce sm content. So it makes sense to them and they get return in first month. Probably doesn't work in your niche and you shouldn't bother if costs don't make sense.

But then your business nature is completely different. It's not a company with stock, but something speculative anyone can run from their basement.

 

[SilverClouds]

But the costs don't add up in most if not all e-commerce businesses.

The product costs you something. You still have costs associated with that product storage, shipping,packaging etc.

Can you give an example?

It's different if your exchange is for time or selling say software, course or whatever.


I don't get if ads take time and money to dial in. How is content cheaper Vs the longer term gains?

You mean in the niche you not mentioned but still the point is ads take time and money to dial in.

It's not about ecom vs services vs digital products etc / how you organize the business, it's about the niche and country, that makes a huge difference.

I understand your concern, that's why I don't argue even - ads ARE a bad idea for many businesses, that's where 'ads don't work' comes from. Honestly as much as I'm pissed at clients, also these agencies are very unethical for trying to shove ads down your throat when numbers don't add up and apparently they can't deliver.

Why you're so concerned about this? Do you want ads specifically to work? Or any traffic source additional to seo is fine, just looking to diversify?

Post automatically merged: Today at 4:38 AM

But then your business nature is completely different. It's not a company with stock, but something speculative anyone can run from their basement.

I don't run ads for my agency

 

[RiskyStuff]

I don't run ads for my agency

I was speaking in general... your agency runs social media and t2van doesn't like them too. You see the pattern now.

It's hard for me to understand the big image too... there are so many variables...

 

[t2van]

It's not about ecom vs services vs digital products etc / how you organize the business, it's about the niche and country, that makes a huge difference.

Nah I don't agree with that.

The country and niche has nothing to do with it. I don't think there is any difference.

If sell in London, New York, Russia or Colombo I still have a product and cost. Those costs might be different because of how the country or city operates but there is still a cost. The cost has to be paid?

Now I understand pricing makes a difference if I say I was a roofer selling my services in a cheap coal mining town with no prospects vs doing the exactly the same roof in London. If I charged my cheap prices in London no one would hire me as it would probably be seen as a scam. So you get a larger margin for exactly the same service.

There I agree service and location pays a part.

When selling a product it does not.

I understand your concern, that's why I don't argue even - ads ARE a bad idea for many businesses, that's where 'ads don't work' comes from. Honestly as much as I'm pissed at clients, also these agencies are very unethical for trying to shove ads down your throat when numbers don't add up and apparently they can't deliver.

I don't think it's a case of ads don't work I think they do work, there are plenty of case studies and people make a living out there doing ads so obviously they work.

I think them being shown as some kind of fix all advice for getting sales with the investment vs reward I think that's when it's a bad idea for many businesses.

Why you're so concerned about this? Do you want ads specifically to work? Or any traffic source additional to seo is fine, just looking to diversify?

No not concerned. I mentioned in another thread I said that worst advice I had was to do ads

So thought id expand and get a bit of a discussion going. It's not about shitting on any one service, industry, ads or doing ads at all. Just it's what I consider to be an unpopular opinion.

Your always going to get Organic Vs Ads and the people in both camps.

I was speaking in general... your agency runs social media and t2van doesn't like them too. You see the pattern now.

Nah I don't like social media because of what I see it as.

I do understand the value of it from a business stand point my thing about not liking social media gets in the way of my company not taking advantage of it because I don't like it.

I'm trying to change that as mentioned else where and getting out of my own way.

This thread isn't about me bashing on ads, bashing on social and all the things I THINK are shit. Because believe me there would be plenty.

It's just sharing my thoughts on why I think (rightly or wrongly) ads are a waste of time that is all

 

[SilverClouds]

...and this is exactly why I don't send random outreach and reply to businesses that are actually looking for someone . Just look at how much into trolling this guy is . Idiots that try to sell something to him are sooo fucked from the start .

 

[Dopious]

It has always been this way, you need a healthy roi on the product you sell or it will never add up, it is all about the order value against the cost.

 

[t2van]

...and this is exactly why I don't send random outreach and reply to businesses that are actually looking for someone . Just look at how much into trolling this guy is . Idiots that try to sell something to him are sooo fucked from the start .

How is my question trolling?

 

[SilverClouds]

How is my question trolling?

It's ok, we disagree, waste of time to have pages of discussion on this. What you say is in direct opposition to what I saw on clients' ads accounts (not only managed by me because I also had access to accounts previously ran by owners or other agencies). If others want to discuss have fun.

 

[roydan]

I think them being shown as some kind of fix all advice for getting sales with the investment vs reward I think that's when it's a bad idea for many businesses.

This is more of a dishonesty thing rather than ads not working.

I believe my views on that matter are widely known lol.. when you set your ads and use cogs as part of the equation it's easy to make ads work in ecom. To make it scale is another challenge but that's not really the core of this discussion.

To take shelf space and assign its cost to ads doesn't really make sense to me, unless you're talking about expanding the current setup just for the ads' sales.
Beyond that, most marketing is measured in gross profit because most rent and labor (excluding scenarios where people are hired and space is rented just for ads and in that case it would usually be solved with scale rather than with lowering CAC) are fixed costs. It's designed in a way that determined whether ads has net contribution to the business or not.

 

[t2van]

It's ok, we disagree, waste of time to have pages of discussion on this. What you say is in direct opposition to what I saw on clients' ads accounts (not only managed by me because I also had access to accounts previously ran by owners or other agencies). If others want to discuss have fun.

But all you see is the cost of the product + ad spend to get that sale?

You dont know what the client is spending to get that product in, make it, or whatever it maybe you just see the ad side of things?

I get if you don't want to reply. But that's kind of my point it's OK to say they get X ROI or whatever but your just the person running the ads unless you have an inside track on all the operational costs to get, make or produce that product having X ad cost a Y product sale doesn't mean anything.

 

[t2van]

This is more of a dishonesty thing rather than ads not working.

I believe my views on that matter are widely known lol.. when you set your ads and use cogs as part of the equation it's easy to make ads work in ecom. To make it scale is another challenge but that's not really the core of this discussion.

To take shelf space and assign its cost to ads doesn't really make sense to me, unless you're talking about expanding the current setup just for the ads' sales.
Beyond that, most marketing is measured in gross profit because most rent and labor (excluding scenarios where people are hired and space is rented just for ads and in that case it would usually be solved with scale rather than with lowering CAC) are fixed costs. It's designed in a way that determined whether ads has net contribution to the business or not.

Scale doesn't work if your only net £1 per product.

Thats ALOT of ad money you need to spend to get the cover you need to grow.

Using ads as a contribution to the business is just about turnover and vanity at that point. It's all just fluff as because the amount you end up needing to spend to see your growth at some point the business can't afford it as with growth and scale other costs come in, more staff, more overheads, bigger units and leases costs constantly go up but your margin is still £1.

But then using the argument of scale comes down to time.

So if you require scale of ads to grow why not invest that time into something organic that gives you the same or more amount of impressions and sales?


Ads I think have impact, when used correctly.

They require time and money to make them work and to see any kind of return just like anything else, however the upfront cost is often money over time.

I think spending money on ads if you have already reached a certain point to provide brand credibility probably is worth while and makes sense even if the return is £1 but to get you to that point there are better options I think, you can't get there with ads it's just a temporary fix and a short cut that people want because they are shit at producing content or get stuck on doing "seo keyword research"

note: it doesn't have to be seo that's just an example it could be social, YouTube etc the time could be invested else where for better longer term results and gain the same if not more impressions

 

[roydan]

Scale doesn't work if your only net £1 per product.

Thats ALOT of ad money you need to spend to get the cover you need to grow.

Using ads as a contribution to the business is just about turnover and vanity at that point. It's all just fluff as because the amount you end up needing to spend to see your growth at some point the business can't afford it as with growth and scale other costs come in, more staff, more overheads, bigger units and leases costs constantly go up but your margin is still £1.

But then using the argument of scale comes down to time.

So if you require scale of ads to grow why not invest that time into something organic that gives you the same or more amount of impressions and sales?


Ads I think have impact, when used correctly.

They require time and money to make them work and to see any kind of return just like anything else, however the upfront cost is often money over time.

I think spending money on ads if you have already reached a certain point to provide brand credibility probably is worth while and makes sense even if the return is £1 but to get you to that point there are better options I think, you can't get there with ads it's just a temporary fix and a short cut that people want because they are shit at producing content or get stuck on doing "seo keyword research"

note: it doesn't have to be seo that's just an example it could be social, YouTube etc the time could be invested else where for better longer term results and gain the same if not more impressions

You take an extreme scenario (margin of £1 for every product in a given store) and try to use it to say that ads can't realistically work for ecom.

On top of it, you force two conditions that are also not that common:
Each user buys only 1 product
Each user buys once
While trying to hit ROI on the first purchase.

So in that case, ads are a horrible idea, but imagine having a watch shop, margins are usually around 50% depending on the brand.
It's a different story.

Now, take two products and sell them together, either as a his/hers or weekday/weekend pair and you got yourself a new type of category very few others have.
Look at the data, if you see the average client buys from you 6 times in a two year span, you can aim to hit ROI after 6 months rather than on the first sale and things make more sense.
You can squeeze your buyers through emails, sms with special offers and whatnot (depending on niche, of course) but CAC is only one part of the story.

It's true that not every business is in a status they can aim to break even after 6 months, but there are butt loads of models you ignore here.

You can be creative with ads in a way that helps you gain more brand searches, you can even sell a £7 ebook about something related to what you sell and then upsell later through emails or any other mean.

So I agree that in some cases ads don't make sense but in many other cases they do and it's on the client to apply common sense to wether to give it a shot on not (beyond agencies that are practically scamming businesses trying to sell unrealistic dreams).

If ads have positive net contribution, why not keep them? You call it a temp fix, but contribution is contribution. You are not limited to one channel, you're free to do SEO, GEO, PPC and any other combination of 3 letters known to man together, and only keep those who's contributions are positive.

I hope I was clear. Not a fan of how ritalin makes me feel in the last couple of days.

 

[t2van]

You take an extreme scenario (margin of £1 for every product in a given store) and try to use it to say that ads can't realistically work for ecom.

Yeah I forced the £1 because most e-commerce sites on average (data probably changed) run on 5-15% margin so assume 10%

If the sale of £30 gives them £3 you still need to pay the person doing the ads and pay for the advert.

On top of it, you force two conditions that are also not that common:
Each user buys only 1 product
Each user buys once
While trying to hit ROI on the first purchase.

Yeah it depends on the store type. I mean not everyone is going to come back and buy a TV every month vs say washing up liquid.

So in that case, ads are a horrible idea, but imagine having a watch shop, margins are usually around 50% depending on the brand.
It's a different story.

Now, take two products and sell them together, either as a his/hers or weekday/weekend pair and you got yourself a new type of category very few others have.

But even a watch company the user buys once? By the time they come around to needing another watch (unless they collect) are they going to remember to come back to you or are you still retargeting them with ad spend?

The margins won't be 50% either maybe on a product. But the higher end the product the more the kit out of the store front, packaging and all sorts. That margin has to pay for the business to operate.

Just because the margin is 50% what about the other costs who covers that? Not the product something else?

The sale of goods the profit covers all business operating costs no matter the product margin it all comes from that.

Yeah your going to have more money left over but I bet things like the store costs more to operate, there will be MUCH higher processing fees and so on all of that is still coming out of the 50%

It's never that clean cut. That's my point.

Thats what people miss with ads. No matter the margin running ads is another cost that needs to come out of that profit. That additional costs is not always there either!

Look at the data, if you see the average client buys from you 6 times in a two year span, you can aim to hit ROI after 6 months rather than on the first sale and things make more sense.
You can squeeze your buyers through emails, sms with special offers and whatnot (depending on niche, of course) but CAC is only one part of the story.

Yes I understand that, this comes under the life time value to acquire that customer and then you can see an ROI over time. But the outlay to get that customer and then waiting 2 years to see an ROI is a long time when I've spent the money out in the first instance.

I'm still spending money to acquire them and than time to net an ROI.

In fact I still have to invest money and time to see an ROI when I could produce content that's costing me nothing but time and see the same kind of ROI as the ads version (money + time)

 

[UnusualSubstance]

I'm.tipsy but like ads are basically organic content with a cta at the end.

Yeas sir.

Master organic and thou shall be granted ads performce

 

[roydan]

most e-commerce sites on average (data probably changed) run on 5-15% margin so assume 10%

10% gross on COGS? No way that's even close. If you take salaries, rent, insurances, etc than fine. But them you attribute all of this cost to ads as if it's linear.

Yeah it depends on the store type. I mean not everyone is going to come back and buy a TV every month vs say washing up liquid.

They won't but you can sell brackets or installation, a deal with the cables, give them a good offer on a sound system that fits the tv they bought. It can't end with the thanks for your purchase page.

But even a watch company the user buys once? By the time they come around to needing another watch (unless they collect) are they going to remember to come back to you or are you still retargeting them with ad spend?

They don't need to remember, you have their email. Sell them additional bands, batteries, warranty, offer them servicing the watch after 6 months with 2 way delivery, you name it.

The margins won't be 50% either maybe on a product. But the higher end the product the more the kit out of the store front, packaging and all sorts. That margin has to pay for the business to operate.

True, but these are fixed costs. If you sell nothing you still paid them, so how can you tie it to ad spend.

Just because the margin is 50% what about the other costs who covers that? Not the product something else?

The sale of goods the profit covers all business operating costs no matter the product margin it all comes from that.

Yeah your going to have more money left over but I bet things like the store costs more to operate, there will be MUCH higher processing fees and so on all of that is still coming out of the 50%

I cant agree with this point. You can't measure every channel against the fixed costs. If you ended up additional people to cope with that extra demand, fine

It's never that clean cut. That's my point.

It's never a clean cut, but the way to cover fixed costs is scaling up while trying to maintain gross/ad spend.

Yes I understand that, this comes under the life time value to acquire that customer and then you can see an ROI over time. But the outlay to get that customer and then waiting 2 years to see an ROI is a long time when I've spent the money out in the first instance.

I'm still spending money to acquire them and than time to net an ROI.

That's true to some businesses but not to all. Some can wait in exchange for the extra scale (buying a lot of traffic has marginal costs as well) and some prefer scaling down to a point where they're hitting ROI on the first purchase and then getting the rest of the user's LTV "for free".
There are as many models as there are businesses, paid ads don't fit everyone but they can work for a lot of them, especially if you're maximizing your clients' LTV.

I

 

[t2van]

10% gross on COGS? No way that's even close. If you take salaries, rent, insurances, etc than fine. But them you attribute all of this cost to ads as if it's linear.

Nah net not gross.

They won't but you can sell brackets or installation, a deal with the cables, give them a good offer on a sound system that fits the tv they bought. It can't end with the thanks for your purchase page.

They don't need to remember, you have their email. Sell them additional bands, batteries, warranty, offer them servicing the watch after 6 months with 2 way delivery, you name it.

Yeah but your spending money to get all that information when you can get it for a time investment rather than money.

True, but these are fixed costs. If you sell nothing you still paid them, so how can you tie it to ad spend.

They still have to be paid. It comes out of the money the business has.

If I sell nothing from ads do I still not have to pay for the advert or the person's time running it then?

That's a fixed cost.

The person running the ads.
The ads that don't convert.

I cant agree with this point. You can't measure every channel against the fixed costs. If you ended up additional people to cope with that extra demand, fine

It's never a clean cut, but the way to cover fixed costs is scaling up while trying to maintain gross/ad spend.

In business everything is a cost. From your accountant to taxes to staff from ads to the ink you use.

There is always a cost.

Nothing is free.

All of these costs come out from any sales you make regardless of where it comes from.

The problem with the scaling logic is if you scale to cover costs your customer acquisition costs actually goes up and every customer you get your losses go up with it.

I get scaling and controlling costs like your outlay.

But your fixed costs are never fixed with scale they increase.

Scaling to try and win and profit with ads on a scale is high risk and leads to ruin.

 

[SilverClouds]

What you're talking about here @t2van is a business with deep internal problems that should be fixed or the business closed down, throwing ads at it won't solve the problem because business itself is flawed. AKA: Company is too broke for ads. So don't do ads. Simple.

Also any failure to communicate about how your business functions or what costs you have or how much you earn is on you. I actually ask these things, but like you said I can't see them in Analytics so business owner has to communicats these things clearly, else I won't know (because ie they chicken and don't tell me) and won't be able to do my work properly. But yeah, don't get ads, your business is too unstable for ads (even if you earn, like you said you have different costs, so probably books look like shit so need to act accordingly).