Operating in the B2C space is not an easy feat when you are starting out. It’s hard to create awareness and it’s even harder to stand out against giant advertisers.

So, can startups compete in crowded channels like Instagram or Facebook?

How most Ads Platforms work in 2021

Let’s take the Instagram advertising algorithm for example.

Here’s its most basic formula.

TOTAL VALUE = (Advertiser Bid x Estimated Action Rates) + User Value

(Advertiser Bid x Estimated Action Rates) -> maximizes Advertisers Value

The higher the bid and the better you target the more your ads over-index others.

User Value -> maximizes the User Value

Instagram assigns a score based on how your ads contribute to the Instragram ecosystem (a.k.a does it create engagement?)

The bottom line is..

As a startup you may lose on the Advertiser Value but you can still win against big advertisers based on User Value – defined by the quality of your creatives.

The secret is mastering the quality of your Ads Creatives

And by Ads Quality I dont mean a $200K video shoot, but creatives that drive engagement. If your ads receive ENGAGEMENT (views, likes, shares, comments) the algorithm will assign a higher USER VALUE because you are positively contributing to the platform ecosystem.

So if you are a startup marketer this closing line is for you:

Think CONTENT FIRST when creating your ads. If you create engaging ads that people genuinely enjoy consuming and do not want to skip, the algorithm will help you win.

Win, against bigger advertisers.