Do ads work?

If the local bank were offering a sale on dollar bills, ninety cents each, how many would you buy?

Most rational people would say, "I'll take them all please." Especially if you had thirty days to pay for them.

So, why, precisely, do you have an ad budget?

If your ads work, if you can measure them and they return more profit than they cost, why not keep buying them until they stop working?

And if they don't work, why are you running them?

The time-tested response is that you're not sure, that ads are risky, that you can't tell. And for some sorts of products and some sorts of ads, you'll get no argument from me.

Digital ads are different (or they should be). You should know cost per click and revenue per click and be able to make a smart guess about lifetime value of a click. And if that's positive, buy, buy, buy.

And if you don't know those things, why are you buying digital ads?

When Amazon was at its key growth peak, the mantra there was $33. They would buy unlimited ads, of any kind, as long as they generated new customers for $33 or less each. There was a risk that $33 was too high a number for the business to sustain, but the ads were no risk at all. As long as they came in under that number, there was unlimited money to buy them.

How often do you hear the marketing person say, "that's a neat idea, but we don't have the budget this year"?

Shouldn't she say, "We have an unlimited budget for ads that work"...