There are a lot of terminologies floating around which can get confusing for startups. One of the areas where it is even more so is the part where startups need to reach out their users and customers.
As per Lean Startup methodology reaching out to users is referred to as the Customer Development process.
For B2B startups it is all about sales which is essentially all about meeting customers in person. Though even the Customer Development process stresses on the importance of meeting users in person. So from a high level perespective they are both the same processes.
Advertising is by definition related to ads and there are tradional mediums like the newspapers, TV, Cable, radio and Super Bowl and internet age mediums like Google ads, Facebook and ads on mobile apps. But isn't Facebook ads also same as marketing on Facebook? Well not exactly.
And if you are not yet sufficiently confused then you can try and think about sales vs marketing or customer development vs marketing. As someone commented on a Startup discussion group today, "If you do not do marketing then how will you identify your early adopters? So startups need to be doing marketing from Day Zero."
Let's take a step back and instead of debating the English meanings of these words, think about the paramters or aspects of reaching out to users by startups. There are essentially three aspects that a startup should keep in mind and then choose how exactly they want to reach out their users:
1. Conversations vs pitching: Do you want to understand what the user needs and what the user wants (both can sometimes be different from each other) ? Or are you trying to close a sale ? Are you trying to have a conversation with your users or are you pitching to them ? Before you reach product market fit (how do you know if that has happened or not ? ~ once you have natural word of mouth happening) the focus for startups should be on having a conversation i.e. improving their understanding of the user's needs and wants.
Customer Development is high on the need to understand your users, and advertising is the least on need to understand your users. I have seen startups use pictures of attractive women for increasing clicks on their facebook ads. It can definitely increase the click through traffic but will decrease the percentage of users who signup or stick around.
One startup founder who believed he was doing customer development, showed me his prototyped and asked me, "Do you find this useful ?" Given human nature, most people will respond with a "yes" but will never end up becoming his customers. That clearly was "pitching" and not "having a conversation", irrespective of what the startup founder believed it to be. So one needs to be careful about this aspect of reaching out to users. It is the most easy to fall into trap.
2. Push vs pull: You can either attract users to yourself and make them contact you, or you can contact your users directly.
Customer Development and Sales are push based, where you seek a meeting. Marketing and Advertising are pull based methods. In the beginning when you are targeting lesser users startups should favour push based methods as they are more effective and keep you closer to the users and build stronger relationships with your customers. In the longer term or at larger scale or when you do not know who specifically would like to be your user, when you have to cast a wider net for getting potential users, then pull based methods allow you to do that.
3. Targeting vs discovery: An analogy to explain the difference between targeting and discovery of users ~ "the medicine Viagara was developed to target heart patients as users but luckily for the pharma company they discovered another more profitable and suitable segment of customers."
So you can always make a list of who you want to be your users and define customer segments, to target them through sales and advertising and you can also create ways for your users to discover you (or ways for you to discover who also wants to be your user). Making it easier for your existing users to spread word of mouth about you, is helping your future users easily discover you. Creating a lot of quality content, also known as content marketing is another way of letting future users discover you.
The customer development process is aligned with the discovery process and sometimes referred to as customer discovery because you let the initial potential users you speak with guide you and make suggestions on who are other more suitable users. But the user discovery methods are helpful even at later stages for a startup as the markets shift and the startup seeks growth in other markets and geographies.
Targeting methods like advertising and sales seem attractive (if you have the budget for them) because they will give immediate results, but they also have much higher associated customer acquisition costs. The discovery mode methods of content marketing and encouraging your existing users to spread word about you (inherent virality) give results slowly, but at lower costs and in the longer term will give you many more users.
Though most people consider advertising to be a subset of marketing, I prefer to think of marketing to be more aligned with discovery of users and advertising to be more aligned with the targeting of users. While both of these are pull methods which cause your users to contact you.
So go ahead and think why and how best you should reach out to your users, but start doing that today, even before your product is ready.