Solved: Need Advice on Buying Ads for Marketplace Company

Hi there,

Thanks for getting in touch. I understand you're looking for some guidance on using paid ads to kickstart the consumer side of your new marketplace. It's a common challenge, but absolutly doable with the right approach. I'm happy to give you some of my initial thoughts and a bit of a roadmap based on my experience running these sorts of campaigns.

It's not as simple as picking one 'cost-effective' channel, as what works best really depends on your specific products, your audience, and your overall strategy. But we can definitely break it down.

We'll need to look at the core problem first...

The biggest hurdle for any marketplace is the classic 'chicken and egg' problem. You need consumers to attract businesses, and you need businesses with products to attract consumers. It's a tough spot to be in. Your idea to focus on jumpstarting the consumer-side first is a solid strategy. If you can build an initial audience of engaged buyers, it becomes a much easier sell to get businesses to list their products on your platform. They go where the customers are.

So, our entire advertising strategy should be geared towards solving this one problem: getting that first critical mass of consumers onto your marketplace as efficiently as possible. This means we're not just buying traffic; we're buying a foundational audience. Every pound spent needs to work towards that goal.

I'd say you need to pick your platforms carefully...

You mentioned Facebook, Google, and LinkedIn. Let's look at them through the lens of attracting consumers to a marketplace. The best ad platform is simply where your target audience can be reached effectively.

Google Ads: This is likely going to be a strong contender for you. Why? Because it captures intent. People go to Google when they are actively searching for something. If your marketplace features specific types of products, you can run Google Search ads that appear when people search for those exact items. For instance, if you sell handcrafted jewellery, you'd target keywords like "handcrafted silver necklace" or "unique artisan earrings". This gets you in front of people who are already in a buying mindset.

• -> Search Ads: Target people based on what they're typing into Google. This is your bread and butter for capturing high-intent users.
• -> Shopping Ads: If your platform structure allows it, these are massive. They show product images and prices directly in the search results and are brilliant for eCommerce.

The downside? It can be competitive and therefore expensive, depending on the products. I remember running a campaign for an HVAC company and seeing costs of around $60/lead. Your costs will depend entirely on the niche your marketplace serves.

Meta Ads (Facebook & Instagram): This is where you go to create demand, not just capture it. People are scrolling through their feeds, not actively shopping. Your job here is to interrupt them with something so compelling they stop and click. This is brilliant for products that are visually appealing or have a strong story.

The targeting options are incredible for consumer goods. You can target based on interests (e.g., people who like 'Sustainable Fashion', 'Home Decor', or competitor brands), demographics, and behaviours. You can build an audience from scratch here. Once you have some data, you can create Lookalike audiences, which is where Meta finds new people who are similar to your existing best customers. It's powerful stuff. For eCommerce clients, I remember one subscription box client hitting a 1000% return on ad spend, purely through well-targeted Meta campaigns. It's definitly a platform you should be testing.

LinkedIn Ads: Let me be brutally honest here. For attracting the consumer side of your marketplace, LinkedIn is almost certainly the wrong place to spend your money. It's a professional networking site. The targeting is built around job titles, company sizes, and industries. It's fantastic for B2B, and we use it to get great results for software clients, like getting B2B leads for around $22. But you're not selling to a Head of Procurement; you're selling to someone who wants a new pair of shoes or a unique lamp. The cost per click is significantly higher on LinkedIn, and the user mindset just isn't geared towards shopping for consumer products. I would put this platform on the back burner for now and focus your limited bootstrap budget elsewhere.

You probably should get a realistic idea of costs...

This is the million-dollar question, isn't it? The cost per result can vary wildly. It's affected by your targeting, your ad creative, the quality of your landing page, and the country you're in. But I can give you some ballpark figures based on what we see across many accounts. Let's assume you're targeting a developed country like the UK.

For something like a marketplace sign-up (a 'lead'), you're looking at a multi-step calculation. First, the Cost Per Click (CPC), then the conversion rate on your site.

So, a cost per new marketplace user of somewhere between £2 and £15 is a realistic range to plan for. If you can acheive anything under £5, you're doing very well. If your costs are creeping towards £15 or higher, something in your funnel is broken – either your targeting is wrong, your ads aren't compelling, or your website isn't converting.

Remember, this is for a sign-up. If your goal is an actual first purchase, the conversion rate will be much lower (typically 2-5% for eCommerce), so your cost per acquisition will be significantly higher.

You'll need a solid funnel and a plan to optimise...

Running ads isn't a 'set and forget' task. You need a structure. The biggest mistake I see is people just throwing up one ad with broad targeting and hoping for the best. We need to think in terms of a funnel.

1. Top of Funnel (ToFu) - Finding New People: This is your cold outreach. On Meta, you'll start by testing different 'detailed targeting' audiences. Group them by themes. For example, one ad set for interests related to 'Home Decor', another for 'Interior Design Magazines', and another for competitor brands. On Google, this is your keyword targeting. You're trying to find pockets of users that respond well.

2. Middle/Bottom of Funnel (MoFu/BoFu) - Retargeting: This is crucial. Someone clicks your ad, browses your marketplace, but doesn't sign up or buy. They're not a lost cause! They've shown interest. You need to run seperate retargeting campaigns to bring them back. Show them ads that remind them what you offer, maybe feature a specific popular product, or offer a small discount on their first purchase. This is where you convert the fence-sitters.

3. Optimisation is Everything: You must split test. That means running the same campaign but changing one thing at a time to see what works better. Test different ad images. Test different headlines. Test different audiences. I'd always start by split testing creative and targeting. When you find an audience or an ad that performs well, you put more budget behind it. When one is failing, you turn it off ruthlessly. It's a constant process of refinement.

And none of this matters if your marketplace itself isn't up to scratch. Before you spend a single pound on ads, look at your site with a critical eye. Is it easy to navigate? Is it trustworthy? Do you have clear photos and good product descriptions? I often see clients come to us with "ads not working" and the real problem is their website is slow, confusing, or looks untrustworthy. Adding trust signals like reviews, clear contact info, and a proffesional design can double your conversion rate overnight.

This is the main advice I have for you:

To pull this all together, here's a table of what I'd recommend as your initial plan of attack.

I know this is a lot to take in. Getting paid advertising right is a full-time job, and for a bootstrapped founder, your time is your most valuable asset. While you can certainly learn and implement all of this yourself, the learning curve is steep and costly mistakes are common.

Working with an expert can help you bypass the expensive trial-and-error phase and start with strategies that are already proven to work. I remember a store launch campaign where we generated 1500 leads at just $0.29/lead using Meta ads. That's the kind of efficiency that can make or break a new venture.

If you'd like to discuss this in more detail and see how we could apply our experience to your specific marketplace, I'd be happy to set up a free, no-obligation initial consultation. We could go through your platform together and map out a more concrete plan.

Regards,
Team @ Lukas Holschuh