10. Losing money from ads
Testing Demand for Our Shopify App Idea: Ad Spend, Leads, and What We Learned
In this article series, we’re building an app together. The current concept we’re exploring is simple: a directory of apps that are already profitable on WooCommerce but missing on Shopify.
In the previous article, I created a landing page and launched ads to validate the idea. Let’s see how we did!
The Landing Page & Ads
I followed Alex Hormozi’s classic template for the landing page:
Headline
Subheadline
Image
Three bullet points
His idea is, keep it simple, and we can easily experiment with the text.
I ran ads across Google Ads and Reddit Ads, targeting keywords and subreddits where Shopify app developers hang out. Both campaigns ran for about a week (with a few days lost to verification delays).
Google Ads Results
628 impressions
44 clicks
7% CTR
$51.20 spent
$1.16 cost per click
The click-through rate of 7% is strong for a cold landing page. The cost per click was dropping quickly over the week, so running this for longer might have revealed a more stable and potentially lower cost.
However, $1.16 per click is still high for a simple validation landing page—especially when only a small percentage of those visitors will opt in.
Looking at search terms gives us some early signals:
We also saw a familiar pattern from past campaigns: India and Pakistan made up around 60% of clicks. This is worth considering for future ad campaigns and product-market fit.
Reddit Ads Results
6,974 impressions
33 clicks
0.47% CTR
$91.46 spent
$2.77 cost per click
Although Reddit delivered far more impressions, the click-through rate was extremely low. On the plus side, because subreddits are tightly defined, we can be confident the ad reached the exact audience we care about.
This makes Reddit feel more like a brand awareness channel—lots of targeted eyeballs, few clicks. Still, at $2.77 per click, we likely need to rework the creative. I actually think that the ad would have been viewed by almost everyone who visited the subreddits!
Total Results: Lead Generation
Across both campaigns, we generated:
11 hot leads
That’s a conversion rate of:
11 / (33 + 44) = 14%A 14% landing-page conversion rate is something that I’m reasonably happy with, given the page is so simple.
Unfortunately, we didn’t configure tracking to know which channel each lead came from—an easy fix for next time.
What We Spent
Google Ads: $51.20
Reddit Ads: $91.46
Lead capture tool: $37
Total: $179.66
This means each lead cost roughly $16—too high to be sustainable. For a paid user funnel to justify that cost, conversion from lead → paying user would need to be very high.
Also, since most users of the subreddits saw the ad, we can’t exactly throw money at the problem. The groups are already as targeted as it gets.
What We Learned
Despite the high costs, several positives emerged:
Reddit seems effective for brand awareness due to high and targeted impressions.
Google keyword data gives us direction for future SEO-driven, free traffic.
We now have a reusable landing page ready for future experiments.
And of course, we now have 11 (very expensive) leads we can pull into our beta list—along with leads gathered from direct outreach on Reddit.
What’s Next
In the next article, we’ll start building the actual app based on what we’ve learned and validated so far.
Stay tuned!