Traditional marketing doesn't work for us

What It Covers

37signals cofounders explain why three attempts at traditional paid advertising failed despite spending millions, with customer acquisition costs reaching tens of thousands per customer for their project management software Basecamp.

Key Questions Answered

• •Branded keyword trap: Buying your own brand name on Google appears profitable but cannibalizes organic clicks—users who click paid ads would have clicked free organic results instead, making the spend wasteful without incremental customers.
• •Product-market fit for ads: Impulse-buy products like sneakers and games convert well through social media ads, but complex B2B software requiring organizational adoption has astronomical acquisition costs that rarely justify the spend at small-to-medium business price points.
• •Earned versus bought audiences: Building an authentic audience through consistent teaching, writing, and sharing over years generates sustained customer interest, while content calendars and instrumental marketing produce disengaged ghost audiences that ignore corporate posts despite large follower counts.
• •Testing baseline incrementality: Run dark periods by turning off all paid advertising for one month to measure true impact—eBay discovered tens of millions in annual ad spend produced zero incremental results when accidentally disabled.