Audience size matters — Audience size is determined not just by how many people want your product, but more narrowly, how many people are the right users for your product, want it more than your competitors, want it now, and can afford it. That range narrows quickly. The resulting audience is smaller than you estimated. Many companies find their target audience is too small to keep Facebook or Instagram ads running at scale.
Product Demand — How much does your target market want your product? If your product is just a nice-to-have, you’re at a disadvantage compared to companies selling things that people desperately need or think they desperately need, like health insurance or loans. Also, the less obvious your product is, the better you’ll need to market it. This can require superior marketing skills and months of iteration.
You won’t know if your product crosses these profit, scale, and demand thresholds until you’ve spent a statistically significant amount of money per advertising channel per sub-audience. This could range from $1,000 to $2,000 or more per channel and will vary depending on your business.
High profit margins – If you charge customers $2,000 for a finland mobile database mattress or $10,000 per year for enterprise software, you have more wiggle room to experiment before advertising works.
Products with high word-of-mouth or referral rates - If new users refer more paying users, then you may be able to tolerate the upfront loss of acquiring customers through advertising.
Succeeding in the Free Channel
If you fail to make paid channels work, you’ll rely on free channels: content marketing, referrals, word of mouth, sales, PR, community, and more.
This is an acceptable outcome. It’s not necessary to succeed at paid acquisition — it’s just convenient because it scales so quickly.
Unpaid channels benefit from being free from the volatility of ad channels, audience risk, and CPM pressure. Unpaid growth is often more reliable and more within your control.