MicroConf Tactics: AI Ads Will Be The Next Land Grab (Here's How I'd Play It)

**Rob Walling** (0:07)
Welcome back to the MicroConf Podcast. This is a Tactics episode where we look at audio from one of our most popular YouTube videos. This one's called AI Ads Will Be the Next Land Grab. Here's how I'd play it. Before we dive in to the show, MicroConf Europe tickets are on sale. And MicroConf Europe is in Iceland in Reykjavik, September 21st through the 23rd. We have a lineup of incredible speakers, our world-class hallway track, and of course, producer Sonja is lining up some amazing excursions, hot springs, thermal spas, and a distillery tour.
I'm going to be in Iceland in late September, and I hope you can join us. Tickets are as inexpensive as they will ever be, and we will sell this event out. So if you want to join me in Iceland in September, head to microconfeurope.com. And with that, let's dive in to how AI Ads are the next land grab and how I'd play it.
I got into Google AdWords and Facebook Ads early enough that growing my business felt almost unfair, like I had access to a lever that my competitors didn't know existed. Both times, that advantage disappeared within a couple years, as everyone else caught on and the cost normalized. Now that the AI Chat platforms are introducing ads, I think we're at the beginning of another one of those moments. And the opportunity here is real. The hard part is timing. If you move too early, you're likely to waste money. If you move too late, you miss out on what could be a great marketing channel, at least while ad costs are low. So today, I'm sharing a framework to help you get the timing right. This isn't a step-by-step tutorial, it's how to think about this whether you're just getting started or already scaling. And stick around to the end because after investing in and advising hundreds of SaaS companies, I've seen a few traps that aren't obvious until it's too late. I don't want you to make the same mistakes. First, I want to talk about why this is an opportunity. Whenever a new ad platform launches that has scale on the supply side, meaning they have a lot of ad space to sell, there isn't enough demand to drive up the prices of the ads yet. And as these companies like Facebook and Google and Instagram, as they've tried to develop their ad tech and honed it to make it a really efficient auction, as they're doing that, they're testing things out and a lot of clicks are cheap. Back in the early days, Google AdWords had five and 10 cent clicks if I recall. I was getting Facebook clicks in 2012 for like 20 cents, 25 cents, consistently targeting my ideal customer profile. And that's how I was able to quickly grow one of the SaaS companies I was running at the time. So when these new ad networks launch, there aren't a bunch of books and content about it.
The playbook isn't saturated yet, and that creates opportunities for founders who are willing to take some risk. So with these AI companies burning cash, at some point, they're going to need to become profitable and make money. And obviously, they're charging subscriptions, but ads are the obvious path. It's what Facebook and Google did. It's how television has been monetized for decades. It's how radio was monetized before that. Any type of mass media or widely used free tool of any kind, built for consumers, is usually monetized with ads. And of course, I'm the person who will happily pay for a subscription to skip ads, but most people won't. They'll take the free version with the ads. That's the opportunity. So in this video, I'm going to walk you through two playbooks. One is if you have a new product, and the other is for an already successful product that you're trying to scale. So if you have a new product, you probably have low budget and a lot of learning to do. In this, your mindset should be that you don't need the perfect channel. You really just need fast signal. You cannot afford brand only experiments. You need to think like a conversion marketer, a direct response marketer where you see results from the clicks to a trial sign up or to a purchase. So before you spend a dollar on ads, there are a few basic things that are really important. Having at least some understanding of your ideal customer profile can help, and this can be psychographic data like where are they, maybe what their role is at their job. It's going to depend a lot on the targeting the ChatGPT allows you to have, but realistically, knowing your ideal customer profile and the more you know about them is going to be helpful. In addition, having one core use case or value proposition that you can articulate very simply in a few words is going to be important. We've only seen video with a mock-up screenshot of what an ad might look like, but it's very sparse on the text, right? So you're not going to have a paragraph to explain the value that you create or what you're going to do for your customers. So that's where you're going to need to figure out, how do I come up with something compelling, this use case or value proposition, and then maybe you have three or four that you want to split test if you have the budget. Third, you need a landing page that actually converts. Ideally, this is not your homepage. Usually, you want to copy your homepage if it is already a high converting landing page, or you've done the best you can to make it that. And then you change the headline on that page to match the headline of whichever ad you're running. Fourth, you need onboarding that activates people. Maybe that's manual. You can do things that don't scale for now if you're still early, but if folks are coming into your funnel and they are signing up for a trial or they're paying you and they're not getting onboarded, that's a problem. So if any of those are broken, ads are basically going to be wasted money. They're just going to amplify that problem. Something to think about is trying to define the smallest success metric that matters. So you're not going to get a positive return on your ad spend by day 7