TLDR;
- Paid ads are almost always more effective and predictable than organic posts on X or Reddit for getting an audience that actually converts. Organic is slow and unreliable.
- Don't waste your budget on "awareness" campaigns. You should optimise for conversions (like leads or sales) to command the ad platforms to find you actual customers, not just cheap eyeballs.
- The key to great targeting isn't demographics. It's understanding your ideal customer's specific, expensive 'nightmare' and finding where they go online to solve it.
- Your offer is everything. A weak, high-friction offer like "Request a Demo" will kill your campaigns. You need to offer genuine, instant value for free to earn their trust.
- This letter includes an interactive calculator to help you figure out your Customer Lifetime Value (LTV) and what you can truly afford to pay for a lead, which is probably more than you think.
Hi there,
Thanks for reaching out!
I saw your question about whether it's worth spending money on ads versus trying to build an audience organically. It's a question I hear all the time, and to be honest, a lot of the advice out there is rubbish. People talk about organic like it's some magic free alternative, but it's not. I'm happy to give you some initial thoughts and a bit of guidance based on what we see work for our clients day in, day out.
The short answer is yes, launching ads is almost always the most effective way if your goal is predictable growth. But the reason so many people fail and waste their money, like that $2k you mentioned, is because they approach it all wrong. They focus on the wrong metrics, use the wrong messages, and have the wrong offers. Lets sort that out.
We'll need to look at the uncomfortable truth about "free" traffic...
First off, lets get one thing straight. There is no such thing as "free" traffic. Making posts on X or Reddit costs you something far more valuable than money: your time. You can spend hours crafting the perfect post, engaging in comments, and building a presence, only for it to be completely ignored by the algorithm. It's a gamble. One day a post might take off, the next three get zero traction. You have almost no control.
This is the fundamental problem with relying on organic. It's unpredictable and it doesn't scale on command. You can't decide you need 50 new leads this week and just "post harder" to get them. It doesn't work like that.
Paid ads are the complete opposite. They are a system. A controllable, scalable, predictable engine for growth. You put £100 in, you get a certain number of clicks and conversions out. If it works, you put £200 in and you get roughly double the results. It's a tap you can turn on and off. That control is what you're paying for. It's the difference between waiting for rain and building an irrigation system.
I remember one software client for whom we generated 3,543 users with Google Ads at just £0.96 per user. For another, we drove 5,082 software trials on Meta Ads at $7 a pop. You simply can't achieve that kind of volume and efficiency by posting in a subreddit. It's a different league entirely.
But to get there, you need to avoid the most common trap people fall into.
I'd say you need to stop paying platforms to find non-customers...
Here's a bit of a contrarian take for you. When most people start with ads, they run "Brand Awareness" or "Reach" campaigns. It seems logical, right? Get my name out there! But this is probably the single fastest way to burn your budget and conclude "ads don't work".
When you select "Reach" as your objective on a platform like Meta, you are giving its powerful algorithm a very clear command: "Find me the largest possible number of people, inside my targeting, for the lowest possible price." The algorithm is brilliant, so it does exactly that. It goes and finds the users who are cheap to show ads to. And why are they cheap? Because they never click on anything. They never engage. They certainly never buy. They are the digital window shoppers of the internet, and you are actively paying the world's most sophisticated advertising machine to find them for you.
It's madness. Awareness is a byproduct of making sales and having a great product, not a prerequisite. For a small business or startup, the only metric that matters is action. A lead. A trial signup. A purchase.
That's why you MUST set up your campaigns to optimise for conversions. By choosing "Leads" or "Sales", you change the command. Now you're telling the algorithm, "I don't care about cheap impressions. Go find me the specific people within my audience who have a history of doing what I want them to do - filling out forms, or buying products." The platform will then go and hunt for users who look and behave like your existing customers. This is infinitely more valuable, and it's the only way you'll get a return on your investment.
But how do you tell the platform who to look for in the first place? That comes down to truly understanding your customer.
You probably should focus on their nightmare, not their demographic...
Forget the generic customer profile you've probably seen. "Female, 25-40, lives in London, interested in yoga". It's useless. It leads to bland, generic ads that get ignored because they speak to no one.
To stop burning cash, you have to define your customer by their *pain*. Their specific, urgent, expensive, career-threatening nightmare. Your customer isn't a demographic; they're in a problem state. And your job is to become the world's leading expert on that problem state.
Think about it:
- -> A fractional CFO service isn't selling 'financial expertise'. It's selling a good night's sleep to a founder who is terrified of running out of cash and missing payroll. The nightmare is the fear of failure.
- -> A legal tech SaaS isn't selling 'document management'. It's selling security to a law firm partner who has nightmares about missing a critical filing deadline and getting sued for malpractice. The nightmare is the risk of ruin.
- -> A B2B data enrichment tool isn't selling 'contact info'. It's selling relief to a Head of Sales whose team is wasting days on manual research instead of closing deals. The nightmare is inefficiency and missed targets.
Once you've isolated that core nightmare, everything else falls into place. Where does a person with that specific nightmare go for answers? What podcasts do they listen to? What newsletters do they *actually* read? What software do they already use? Who do they follow on LinkedIn or X? This intelligence is the blueprint for your entire targeting strategy.
This process transforms your targeting from a vague guess into a precise, strategic operation. It's how you ensure your ad spend is focused only on those most likely to need your solution, right now.
1. Identify the Nightmare
What urgent, expensive problem keeps them up at night?
2. Find Their Watering Holes
What podcasts, newsletters, or influencers do they trust to solve it?
3. Build Targeting
Translate those watering holes into specific interests, job titles, or keywords.
You'll need a message they can't ignore...
Once you know who you're talking to and what their nightmare is, you have to craft a message that stops them scrolling. The mistake most businesses make is talking about themselves—their features, their company history, their 'innovative solutions'. Nobody cares.
Your ad has one job: to reflect the prospect's problem back at them so accurately that they feel understood. You need to enter the conversation already happening in their head.
Here are a couple of simple, powerful frameworks:
Problem-Agitate-Solve (PAS): This is perfect for services.
- -> Problem: State the nightmare directly. "Are your cash flow projections just a shot in the dark?"
- -> Agitate: Pour salt on the wound. Make the pain feel real. "Are you one bad month away from a payroll crisis while your competitors are confidently raising their next round?"
- -> Solve: Introduce your solution as the clear, obvious way out. "Get expert financial strategy for a fraction of a full-time hire. We build dashboards that turn uncertainty into predictable growth."
Before-After-Bridge (BAB): This works brilliantly for SaaS or products.
- -> Before: Paint a picture of their current, painful reality. "Your AWS bill just arrived. It’s 30% higher than last month, and your engineers have no idea why. Another fire to put out."
- -> After: Show them the promised land. A world where their pain is gone. "Imagine opening your cloud bill and smiling. You see where every dollar is going and waste is automatically eliminated."
- -> Bridge: Position your product as the vehicle to get them from Before to After. "Our platform is the bridge that gets you there. Start a free trial and find your first £1,000 in savings today."
Notice how none of these ads lead with the feature. They lead with the customer's emotional state. That's what grabs attention and earns you the click. But getting the click is only half the battle. What happens next is where most campaigns die a quiet death.
You'll need to delete the "Request a Demo" button...
This might be the most important piece of advice I can give you. The single biggest point of failure in B2B advertising is the offer on the landing page.
The "Request a Demo" button is quite possibly the most arrogant, self-serving Call to Action ever invented. It assumes your prospect, a busy and important person, has nothing better to do with their time than schedule a meeting to be sold to. It screams high friction and low value. It immediately puts you in the bucket of every other commoditised vendor clamouring for their attention. It's a campaign killer.
Your offer's only job is to provide a moment of undeniable value. An "aha!" moment that makes the prospect sell themselves on your solution. You must solve a small, real problem for them, for free, to earn the right to solve their whole problem for a price.
- -> If you're a SaaS company, the gold standard is a free trial or a freemium plan. No credit card. Let them use the actual product and experience the transformation for themselves. When the product proves its own value, the sale is just a formality. This is how you create Product Qualified Leads (PQLs) who are already convinced, not Marketing Qualified Leads (MQLs) your sales team has to chase.
- -> If you're an agency or consultant, you have to package your expertise. We do it by offering a free 20-minute strategy session where we audit failing ad campaigns. For an SEO agency, it could be a free, automated audit that reveals their top 3 keyword opportunities. For a corporate training company, a free 15-minute video module on a common management problem.
The goal is to shift their thinking from "Should I talk to this company?" to "Wow, if this is what they give away for free, imagine what paying them is like." This completely changes the dynamic of the sale and dramatically increases your conversion rates.
I'd say you need to understand the maths of profitable advertising...
This finally brings us back to your original point about spending $2k on ads. The real question isn't "how much should I spend?" or "how low can my cost per lead get?". The only question that matters is: "How high a cost per lead can I afford to acquire a great customer?"
To answer that, you need to know two numbers: your Customer Lifetime Value (LTV) and your Customer Acquisition Cost (CAC). Most founders have no idea what their LTV is, so they operate in the dark, trying to minimise ad costs at all times, even if it means getting low-quality leads.
Let's do the maths. You need three pieces of information:
- Average Revenue Per Account (ARPA): What's the average a customer pays you per month?
- Gross Margin %: After your cost of goods/services, what's your profit margin?
- Monthly Churn Rate %: What percentage of customers do you lose each month?
The calculation is simple: LTV = (ARPA * Gross Margin %) / Monthly Churn Rate
Let's say your ARPA is £500, your Gross Margin is 80%, and your Monthly Churn is 4%.
LTV = (£500 * 0.80) / 0.04 = £400 / 0.04 = £10,000.
In this scenario, every new customer is worth £10,000 in gross margin to your business over their lifetime. A healthy LTV:CAC ratio is at least 3:1. This means you can afford to spend up to £3,333 to acquire a single customer and still run a very profitable business.
If your sales team converts 1 in 10 qualified leads into a customer, you can now afford to pay up to £333 for each of those leads. Suddenly, that £50 CPL from a highly-targeted LinkedIn campaign doesn't look so expensive, does it? It looks like an absolute bargain.
This is the maths that unlocks aggressive, intelligent growth. Use the calculator below to figure out your own numbers. It will change how you think about your marketing budget forever.
Customer Lifetime Value (LTV)
£10,000
Affordable Customer Acquisition Cost (CAC at 3:1)
£3,333
I know this is a lot to take in, but hopefully, it starts to paint a clearer picture. Paid advertising isn't about throwing money at a platform and hoping for the best. It's a strategic, mathematical process of understanding your customer deeply, communicating a valuable solution to their most painful problem, and knowing your numbers so you can scale profitably.
I've detailed my main recommendations for you below:
| Recommendation | Why It's Important | First Step |
|---|---|---|
| Prioritise Paid Ads | Provides predictable, scalable, and fast results that organic channels cannot match. Gives you control over your lead flow. | Commit a small, fixed test budget (e.g., £500-£1000) for your first campaign. |
| Use Conversion Objectives | Commands the ad platform's algorithm to find users likely to buy, not just cheap impressions. Prevents wasted spend on non-customers. | Set up conversion tracking (e.g., Meta Pixel, Google Ads Conversion Tag) on your website's thank you page. |
| Define Customer by "Nightmare" | Leads to highly specific, effective targeting and ad copy that resonates deeply, increasing click-through and conversion rates. | Interview 3-5 of your best existing customers and ask them what problem you *really* solved for them. |
| Create a High-Value Offer | A low-friction, high-value offer (like a free trial or tool) is the #1 driver of campaign success. It builds trust and qualifies leads. | Brainstorm one small problem you can solve for your ideal customer for free and package it into an asset or tool. |
| Calculate Your LTV | Frees you from the tyranny of chasing cheap leads and allows you to confidently invest in acquiring high-quality, profitable customers. | Use the calculator in this letter with your best estimates for ARPA, margin, and churn. |
Getting this right from the start can be the difference between success and failure. Many businesses waste thousands on simple mistakes before they figure this stuff out, if they ever do. Working with an expert can help you skip the expensive learning curve and build a profitable advertising system from day one.
If you'd like to chat through your specific situation in more detail, we offer a completely free, no-obligation 20-minute strategy call. We can take a look at your business and give you a clear, actionable plan for how to move forward. Feel free to book a time that works for you if that sounds helpful.
Either way, hope this has given you a much clearer framework for thinking about this.
Regards,
Team @ Lukas Holschuh