Rue La La CEO: Yes, Facebook Ads Work

Rue La La / ScreengrabRue La La CEO Ben Fischman helped grow a huge e-commerce business with very little traditional advertising.

"We use minimal advertising for customer acquisition," Fischman told Business Insider's Social Commerce Summit. "We rely on word of mouth and viral marketing."

He explained his reasoning as follows: "If you're visiting a city, stay in hotel and ask for a great restaurant, what the concierge tells you it doesn't hold much credibility. If you're going to a city and a friend tells you, you write it down and remember. Our membership buys so much and trust so much because the initial introduction wasn't done through a search ad but through a friend."

But Fischman did say he's on the lookout for effective advertising platforms.

"We're testing everything, always," he said. "Literally, we just have to."

Unsurprisingly, Fischman likes doing ads via friend-heavy social media platforms.

"Display ads on Facebook ... has been effective," Fischman said. He continued, "I think Facebook advertising, as long as it's contextually relevant, works."

While search can work for the long tail, Fischman also strongly relies on business relationships as advertising opportunities.

"Finding partners with similar and finding ways to co-introduce," Fischman said.