How to Test Viability of Paid Advertising Channels for User Growth?
Testing Paid Advertising Channels is a critical step in determining their efficacy for user growth. This concept outlines the approach to effectively test these channels.
Criteria for Businesses Using Paid Advertising:
Paid advertising is particularly suitable for businesses with a higher Average Revenue Per User (ARPU), which allows them to invest in these channels while still achieving a healthy return on investment. It's also beneficial for businesses targeting broad audiences or aiming for rapid user acquisition.
List of Paid Advertising Channels:
Channels to consider include Google Ads, Facebook and Instagram Ads, LinkedIn Ads for B2B audiences, and newer platforms like TikTok Ads in relevant geographies. Each platform offers unique targeting options and user demographics.
Setting Up Tests and Measuring Success:
Paid advertising often involves navigating steep funnel drops from impressions to clicks, and clicks to conversions. It’s important to set up proxy conversions (like sign-ups or downloads) to gauge the economics and audience relevance of each channel.
For instance, testing different ad creatives on Facebook to see which yields higher engagement or using A/B testing on Google Ads to determine the most effective keywords.
Examples of Testing Viability:
- Google Ads: Test different ad groups with varying keywords and monitor click-through rates and conversion rates.
- Facebook Ads: Experiment with various demographic segments and interests to find the best audience fit.
- LinkedIn Ads: Useful for B2B products, test different content formats (sponsored content, InMail) to see what resonates with a professional audience.
By methodically testing and analyzing the results, businesses can identify the most effective paid advertising channels that align with their user growth objectives.