> I once joined a company as a consultant - in the previous 12 months, they'd spent their entire $1,500,000 marketing budget on Google/Facebook ads. Using Hubspot we could track leads through the funnel and look at exactly how many customers this money had generated. The answer was 0.
This just doesn't pass the smell test for me. Places that are smart enough to have raised/made $1.5 MM just for marketing are generally smart enough to roll it out slowly, track conversions, and be adjusting ad content and ad placement along the way. You know, the absolute basics -- "AdWords for Dummies".
This makes as much sense as saying that a company spent $1.5 MM on five engineers for a year without a single line of code ever being written.
I don’t know the specifics, but a company I worked at definitely decided to get ‘serious about ads’ by hiring a director of marketing and seemingly giving him an unchecked budget.
About 2 years later, he left the company. Very few - if any - customers were generated, but there was a sizable Google Ads spend.
I think the business owners had quite good luck with hiring talented people and letting them get to work, fairly hands-off. The guy spoke well and could quote many marketing gurus. I never found what he said to be particularly useful for the company, but I assumed he was getting results since someone was keeping him around.
I believe many owners of successful businesses have blind spots and need people they can turn to fill them. Sometimes that goes poorly.
Right now I’m fixing a similar snafu where I’m halving a not-insignificant AWS monthly bill for a company due to an ‘expert’ doing something very expensive. Like, 2 weeks of work will cut many developers annual salaries worth of AWS spend a year. Sometimes you get bad advice and you’re growing & making enough money that you can ignore the seemingly huge inefficiencies.
> This makes as much sense as saying that a company spent $1.5 MM on five engineers for a year without a single line of code ever being written.
I mean, if you change this to ‘functional line of code’ or ‘usable line of code’ I have definitely seen that occur with one or two developers over my career.
I don’t think it’s the norm, but I do think it happens.
Hey there - author of article here. This story is 100% true, believe it or not. The problem for them was mainly that the agency running their ad account counted "demo requests" as their top metric and mistakingly counted all demo requests that came in as attributed to the marketing spend. So they reported on faulty numbers during the entire year. Hubspot showed that direct ads actually didn't work at all (mainly because they didn't really have PMF yet). Needless to say, that agency got fired pretty quickly.
Did the demo requests look like they came from legitimate companies, or just random gmail addresses? In the former case, your demo must have sucked. In the latter case the agency likely scammed you.
So the 2 leads we got were real - I think they downloaded some document on the site (hence we saw their email) but they never even booked a demo with the company. The other demos we received were real but they came in through SEO, not the ad spend.
From what I understand, this is not a company, but the personal blog of a (former) consultant that worked for a company that had already spent $1.5mil when he took over. Given that context, the headline seems clickbaity as he wasn't personally involved, but whatever.
+1, it was definitely written by someone wise but the thin veneer of storytelling added makes you feel cheated instead of engaged/drawn along the post. Such an abrupt ending
Hey, author of article here - the parent comments are correct, I mealy consulted after they already spent this amount. I'm sorry if you felt cheated out of a story - I'm planning to write more about this later in the series but it didn't really fit the story about PMF & setting objectives so I could not round it out more in this one. But I've realised I might have to write a separate post just about this specific incident and what we did to bring the spend and results back on track. Thank you!
While this example is admittedly extreme, I think you’re severely underestimating the amount of bullshitters and charlatans that are able to secure VC funding.
This just doesn't pass the smell test for me. Places that are smart enough to have raised/made $1.5 MM just for marketing are generally smart enough to roll it out slowly, track conversions, and be adjusting ad content and ad placement along the way. You know, the absolute basics -- "AdWords for Dummies".
This makes as much sense as saying that a company spent $1.5 MM on five engineers for a year without a single line of code ever being written.