A framework for paid and unpaid acquisition channels

Do founders really need multiple acquisition channels to grow?

In reality, focusing on 2 or 3 scalable, profitable channels is your clearest path to growth.

Here’s how we think about channels—both paid and unpaid.

Paid Channels

There are 2 types of ad targeting strategies:

1. Behavior: Serves ads to people searching for your product. Use these channels to capture inherent demand. For instance, if you sell dog food, you should run ads on searches like "best dog food".
2. Profile: Uses profiles/engagement to serve ads. Use these channels for product discovery. For instance, run ads to dog owners to help them discover your product.

Beware of saturating your audience with ads, though, when using profile-targeting channels.

No matter how many users are on Facebook, YouTube, etc., selling to a very niche subset risks inundating them with unwanted ads.

Your audience will begin ignoring them. Click-through drops and acquisition cost rises. Your brand's image will suffer, too.

You can avoid annoying your target audience by limiting daily ad spend, e.g. put a cap on your ad frequency to avoid fatigue. Trade short-term volume for long-term affordability.

Ultimately, to get paid acquisition to work for your startup, you must consider these three factors:

1. Cost: Is your margin high enough to sustain the channel's cost? I.e is this a keyword you can afford to compete on?
2. Audience Fit: Does it offer the right targeting to reach your audience?
3. Volume: Can you consistently reach that audience? I.e is the market large enough that you can always target new people?

The greater your margin, the easier it is to get ads working. Here are the most reliably performant channels:

• Facebook and Instagram: These ads perform remarkably well because they're impossible to ignore as part of the Facebook Newsfeed. They also offer rich targeting.
• Google Ads: Google is the world's dominant search engine, with at least 3.5 billion searches per day. This reach is important for creating a more impactful campaign.

If you can't get ads to run profitably, consider unpaid channels like SEO and content marketing.

Unpaid Channels

Startups should prioritize unpaid channels if they have longer time horizons, or if they can't get the margins of paid channels to work.

Paid channels scale quickly, while unpaid channels like blogs need time to build momentum.

Unpaid channels fall into one of two buckets:

1. Persistence: Growth through consistency. (SEO, Twitter, YouTube)
2. Hit-or-miss: Focused on achieving virality. (Reddit, Product Hunt, Hacker News)

Prioritize the first. Persistence channels offer compounding returns and rely more on time and effort than hard-earned cash.

Hit-or-miss channels are still valuable, though. Use them as accelerators, e.g. cross-post content to these channels for a better chance of occasionally going viral.

How do you determine which channel to start with?

Use the ICE framework. Score each channel on the following variables from 1-10:

• The Impact this channel may have, if successful
• Your Confidence it will succeed
• The Ease of trying it

Rank channels based on their average scores; the highest should be your top priority.

Takeaways

• Use these insights to figure out which acquisition channel to prioritize for your startup.
• Run growth experiments until you find your channel.
• Then focus on optimizing it.

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