How Young Businesses can Use Advertising for Generating Sales in 2023

How Young Businesses can Use Advertising for Generating Sales in 2023


Wed Apr 05 2023

5 min read

Klub Team

Klub Team

From fin-tech & D2C, to entrepreneurship & investing, Kaleidoscope is Klub's take on the how's and why's of the finance, investment, & D2C worlds.

The digital landscape is constantly evolving along with the behaviour and expectations of the user present on it. Users have become increasingly reliant on digital platforms to satisfy their everyday needs - whether it’s entertainment, shopping, education, or staying in touch with friends and family. In order to fulfil these needs and better serve users, there has been a proliferation of businesses online. However, with so many businesses now jostling for users’ attention, attention itself has become a valuable commodity.

We spoke to Navin Madhavan, VP - Revenue & Operations, Demand Platforms at InMobi, on how young businesses can break the clutter and boost their sales by investing in paid advertising. Here's what he had to say -

In my last 10 years of experience of working in the digital marketing ecosystem, I’ve learnt that businesses with exceptional products can sustain on organic traffic and referrals due to the merit of their product. However, to gain wider exposure, augment sales and unlock their true potential, it is imperative for a brand to allocate resources towards paid advertising. In fact, I firmly believe that "While great products can survive on organic traffic, they can thrive with advertising." A measured, targeted approach to digital advertising can offer a range of benefits to businesses such as building brand awareness, establishing credibility, and creating recall, all of which can lead to predictable growth. This is especially true in a market like India where most shoppers are starting their journey on digital media and the number only keeps increasing every year. As per Nielsen’s Bharat 2.0 study, India has almost 600 million smartphone users, with rural users growing faster than an urban user. Looking beyond the usage, the more promising numbers are that they discover sales and offers mostly on their smartphones and complete purchases on their mobile devices. There is no more a compelling reason for brands to start spending digitally to help turbocharge their growth aspirations.


Across mature and young brands, InMobi works with over 15,000 brands globally, while even larger platforms like Google and Facebook boast of numbers in the millions with a broader set of categories across B2B, B2C and SMBs being addressed through their platforms. Clearly, digital advertising works for many brands, so if you aren’t investing already, you should ask yourselves as to what is standing in your way. In case you’re wondering where to start or how to go about advertising digitally, I recommend a three-pronged approach combining user data, affinity levers, and eye-catching visuals. Here’s how brands can get paid ads right -

  1. Leveraging first party data heavily - For starters, it’s important for a brand to understand its own users and then try and look for users similar to those who have interacted or transacted with the brand. This can be done by building a first-party data asset i.e. data compiled from the company’s own sources. Next, the brand can leverage this data to improve targeting precision and reduce ad waste, map the customer journey, and ultimately reduce attrition and increase ROI.
  2. Using different types of levers to identify target audiences- Now that the brand has an idea of who their users may be and their demographic, the next step is to go beyond that and identify different levers - content, brand, and affinity, through which brands can reach out to audiences that may be of interest. This can ensure that the brand advertises on relevant websites, apps, YouTube channels, and engages with content where these users spend a lot of time. By knowing what these users like and what their interest patterns are, the brand can create partnerships and collaborations that are beneficial for them in increasing top of the mind awareness and eventually, revenue.
  3. Utilizing interesting and engaging creatives- When investing in paid advertising, it's imperative that brands deploy interesting and eye-catching creatives. It would be pointless if your ad reaches the right person but is unable to attract them or communicate the brand’s message. For a young brand looking to stand out and break the clutter, videos that showcase the product or user led testimonials could be the way to go. It builds a lot of credibility for the brand. Influencer-led creatives are another way to stand out. This will work best if the brand can identify and collaborate with influencers that have the highest engagement with your target audience. Something to keep in mind here is, when creating videos for mobile, the same user could be using their phone in portrait  or landscape mode as in the case of Instagram reels and YouTube videos, so it’s important to build both horizontal and vertical videos. So, my recommendation to brands here would be to stitch an interesting narrative and make sure your audience sees it.

It's important to remember however, that measuring paid advertising is critical for any brand that wants to run effective ad campaigns. Evaluating key metrics such as clicks, impressions and conversions will enable the brand to take data-driven decisions and increase their Return on Ad Spends (RoAS).

Here are a few suggestions from my experience in advertising on how to correctly measure paid ads -

  • The first step to measure effectively is to have benchmarks in place on what the brand’s organic traffic and sales are before starting with paid advertising. These baseline metrics can help you evaluate the impact of your paid advertising campaigns more accurately. Additionally, having these benchmarks in place before starting, can help you set realistic goals for your campaigns. The key metrics for measuring the success of your advertising campaigns would be to understand click through rates, conversion rates, time spent on your app/website by sources of traffic and of course Return on Ad Spend (ROAS).
  • Investing in full-fledged marketing attribution and analytics tools to track the performance of campaigns and incrementality in traffic could be very valuable for brands. In fact, brands must try and attribute everything, even things as simple as creating unique coupon codes for different channels is a low cost mode of experimentation and attribution. This will give brands insights into which campaigns are driving the most traffic and sales, which channels and touchpoints are effective, and how they can adjust their advertising strategies to improve the return on investment. Tools like Appsflyer, Branch, Google Analytics, Adobe Analytics and Amplitude can help achieve some or all parts of this.
  • Lastly, it’s critical for brands to keep tabs on some key metrics which can reveal insights based on which brands and marketers can amplify efforts that reap the most benefits and optimize the ones that are falling behind. So if a brand has high Click Through Rates (CTR) on creatives, their creative hygiene and relevance of ads to users who are seeing them is on point. CTRs will naturally depend on the type of formats you use - with small banners showing the lowest CTR due to their position at the bottom of pages and full-screen formats such as interstitial and videos being highest as they are more prominent. On an average, shopping and retail creatives see anywhere between 1.2-1.5% CTRs on smartphones, with banners being lower around 0.2-0.5%, while interstitials and videos could go as high as 5%.  Whereas, High Bounce Rates indicate that targeting of ads needs to be improved and the medium of advertising is not working because users are either accidentally clicking on the creatives or looking for something else when they visit your website. Another important metric is Conversion Rate and how much less it is than organic traffic. On an average, you would expect paid traffic to convert only 30-50% effectively as organic traffic ie. a user who organically discovers your brand is at least twice as likely to make a purchase than somebody who discovers you through brand advertising. If you see the conversion rate from paid traffic having very large gaps to your paid traffic, brands should relook at their paid advertising strategy across the channels on which you are spending, creatives you are using and your own website/app not being as friendly to new users.

Combining first-party data, establishing interest patterns and levers, and using interesting creatives with a measured data-driven approach can help young businesses successfully harness the power of digital advertising to reach their business goals.

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