Startup Week 15: Conduct your first Google AdWords Campaign

Search Engine Marketing, such as Google AdWords, has two primary uses for a startup: it can help you get customers and, even more importantly, it can help you determine whether there is a market-offer fit. A market-offer fit can tell you whether any product (even a perfect one) would generate significant demand to justify what it would cost you (time and money) to build it. Before jumping into the details, I want to provide you with some background as to why I think SEM is the most important part of your startup.

Unbiased Customer Feedback

Startups typically focus on solving a customer pain. Oftentimes, this pain is something that members of the startup feel themselves, meaning that the startup has a bit of domain expertise (if you currently lack domain expertise, you better get somebody on your founder team who has it). By having domain expertise, a startup can develop insight into what solutions might make sense before the customer feedback loop has been established, enabling you to build a long-term vision for your customers. But, this vision can have a downside: customers do not buy long-term vision, customers buy the promise of a solution to a problem that is meaningful to the customer right now. This sentence is a mouthful, so read it again. By making fast progress, startups can find themselves working on problems that the customers will have at some point if they use the product. The startup’s bias to look ahead may mean that the startup is not focusing sufficiently on the problems that the customer currently has. Building software in support of a long-term vision is bad for two reasons: it consumes resources that should have been spent solving problems that a customer currently has and it makes it harder (both technically and emotionally) for startups to make significant course corrections as the startup learns more about what it should be doing.

So how does SEM provide honest customer feedback? Simply. If you cannot sell your customer on the promise to cure a problem, there is no need to build a solution that actually implements the promise.  Think of it this way: assume you area door-to-door salesman and you are offering a lawn-watering system, and your first customers say “no thanks” without any further questions. There is no need to actually build any system to confirm that he does not want a “lawn watering system.” By not having spent time building a lawn-watering system, you are free to adjust your offer. You can try an “affordable lawn-watering system,” a “maintenance-free watering system,” a “waterless watering system”, a “lawn mowing and watering system”…keep iterating on your message until you find something where your customers start asking you some tough questions. Once you find an offer that your customers care about, you can build a product that supports the offer.

SEM allows you to go virtually door to door and present your offer to dozens if not hundreds of unbiased prospective customers. In combination with Google Analytics, you can use Google AdWords to determine both which of your offers resonate with your prospective customers and who your prospective customers are.

How to Run an SEM Campaign

The first thing you need to imagine is a likely customer interaction. The most basic interaction is what I call the good luck interaction: customer does search, customer sees your ad, customer clicks your ad, customer reads your landing page offer, customer makes purchase. I call this the good luck interaction for two reasons: it is good luck that you were able to find a customer in this manner; and good luck actually finding a customer in this manner. Typically, you will find a customer through a longer sales cycle, such as the first contact sales cycle: customer does a search, customer sees your ad, customer clicks your ad, customer reads your landing page offer, customer is intrigued by your offer but is not ready to make a purchase, customer provides you contact information (signs up for newsletter, joins community, etc.), you communicate with customer three times, customer makes purchase. This is called the first contact sales cycle because your goal with SEM is not to get a sale, but to get the customer to provide you with some contact that you can use over time to sell to the customer.

Whatever you envision as your primary sales cycle, you need to build your entire platform to support it. We will assume that you are using a first contact sales cycle. One implementation of the first contact sales cycle is:

• User submits query to search engine
• User is presented with advertisement
• User clicks on advertisement and lands at landing page
• User is presented with a “make purchase” or “sign up” dichotomy, and user will generally elect to provide contact information.
• You follow up with the user 3 times, reiterating your offer (eg-thanks for joining, customer X testimonial, special offer this week only).

Whatever approach you use, you will want to instrument each step of the way so that you can determine whether your activities are helping or hurting your performance.

Assuming that you would like to use this approach, here are the big brush strokes that you will need to use to implement your SEM campaign:

• Create a Google Analytics profile for your domain (which involves adding a bit of javasript to each of your web pages)
• Create a Google AdWords campaign
• Link your AdWords campaign to your Google Analytics profile
• Create your advertisement in AdWords
  • Campaign > New Campaign (Under Networks and Devices/Networks, Choose “Let me Choose” and uncheck “Display Network” to reduce click fraud, or domain owners earning a couple of extra bucks…and limit yourself to $1o per day and $1 CPC to start)
• Create a list of keywords based on combinations of words that appear in your advertisement
  • If there are not enough interesting keyword combinations in your advertisement, change your advertisement
• Once you have your keywords and advertisement page baked, build your landing page
  • Include every keyword combination at least once
  • Explain what every keyword means from your customer’s perspective
  • Explain how your service takes your customer from a first state (pain) to a second state (no pain)
• Create an offer page (or “Pricing and Plans” page) that explains precisely what you offer and how much it will cost
  • Include at least two options (this will encourage the user to choose between the two options instead of choosing between yes and no)
  • Include an incentive to share contact information “If you are not ready to buy, join our mailing list/join our community/subscribe to our blog”
• Create a contact page
  • This is anything that can entice the user to provide their contact information, from subscribing to your newsletter to joining your community
• Create an order page
  • Always be ready to get lucky.
• Create a blog and/or community page
  • These are not required, but may be helpful to convince your customer that you are serious. A blog shows that you have been working at and thinking about the problem space for a while, and the community provides your customer with a bit of social proof that other people listen to you.

That is a lot of work to get done just to test whether your offer makes sense. Notice that we have not actually built anything beyond the offer (eg-we have not actually developed any software that does anything to solve your customers’ pain). This is by design. The goal is to iterate on the offer until we find a problem that customers care about, and then build a wonderful solution. As one wise man told me, a good fisherman goes to where the fish are.

If you are interested in short-circuiting some of this work, you can head on over to SimplyStarted. This is a service that I am standing up to help people rapidly make progress on the market-offer phase of building a business. For $500, you can get a site that takes care of the requirements laid out above (at least the first step, it is up to you to iterate on your offer until you get market-offer fit). Even with SimplyStarted, this is a time-consuming process as you experiment with various offers to see what offer works with your customer while at the same time providing a commercially interesting opportunity for you.

Beyond Google Analytics

Google Analytics is a great first step, but you need to integrate everything you do: email campaigns, attending conferences, working your way through your Rolodex, messaging contacts on Facebook, Twitter, and LinkedIn. Certainly, these activities may result in traffic that you can detect on Google Analytics, but if you cannot trace a sale all the way back to the initiating activity (eg-the activity that you did that kicked off the sales cycle), you are only getting half the picture. I am working on integrating this into the SimplyStarted service, but I would love to find if there is an existing solution to tracking these web, non-web, and in-person marketing efforts in a unified manner.

I look forward to your comments. In particular, I look forward to hearing how you have used SEM to refine your offer and more quickly get to market-offer fit. Also, if you want to discuss the particulars of your first advertising campaign, drop a comment or give me a call.

Thanks.

Matt