Category: Startups

This post refers to my work with a startup. Like with all work and consulting projects, I wait at least 6 months before writing/tweeting about them.

While setting up adwords campaign for a product set, I felt 2 different pulls.

1. Set up keywords as broad as possible to gather the widest set of users who may want our product. Even people who weren’t really looking for our product, or had an idea that a product like ours (so relevant to their needs) even existed. Or,
2. Set up narrow keywords about our product’s specific focus areas, thus targeting users who are looking for ‘us’.

Option 1 has its pitfalls – broad keywords would mean we’d rank quite low on some of them, and our CPC quite high. However, if designed properly, this had a chance of helping us reach out to a much wider audience and, if clicked, grow really fast.

Option 2, on the other hand, would limit us to only serving users who are looking for a product like ours, or maybe even our specific product. Thanks to high relevance, and narrow focus, the CPC would generally be lower, and clicks per thousand impressions much higher than the first option. However, this would also amount to spending money to preach to the converted, if not the choir. Is that really the best way to spend on adwords?

I started off with option one. Saw really high CPC, really low engagement, but huge number of impressions. I was treating my ads, like any old-school pre-digital marketer, as a billboard next to the freeway. Even though people weren’t clicking through, I was hoping the ads were creating a space for our product/brand somewhere in their memory which might help direct them to us later based on brand recall.

The old school MBA in me was marginally satisfied, but the data wrangler was itching.

So, I set up another campaign. A very narrow one. So narrow that when you searched for any keyword combinations, our website listed in top 10 of organic results. Quite often more than once. And there were only 2 ads shown – ours and that of the only big 800 lb gorilla in our competition. As expected, the ads started resulting in traffic immediately – a trickle, thanks to narrow nature of targeting, but at a very low-cost. Almost 1/8th of the cost of the broader ads, and it could’ve still been optimised further.

Success!! Or was it? Were we paying Google to send us users who were anyway going to come straight to us? Spending money to preach to the converted, if not the choir?

Looking back now, a few months on, I see both ads as being different part of the sales & marketing jenga.

The broader ads, much like the billboards I compared them to, are for brand marketing. The core purpose of these ads is to create awareness for your product/brand for search terms which may be relevant to your potential users, but where you never feature anywhere close to the top results to get any organic traffic (or visibility). Yes, they may land you a few direct users. But the goal is not to land users ‘now’. The goal is to land users in the future. Users who don’t even know that they need, or will need, your product. Goal is to, in old-school marketer speak, create brand recall.

Focusing on CPC for a brand-awareness adwords campaign is the worst metric possible – sorta like checking how many (incremental) people bought insurance from AIG the day after United played in AIG jerseys.

So, how do we calculate the real – total, long-term – benefit of the brand awareness adwords campaigns? I don’t have a strong answer, yet. But impression numbers are a good starting point – higher the better.

The narrower ads are only partially for marketing. Their core goal is to reach out to users for whom your product is a strong match, and then lead them directly to your conversion page* – and only to your conversion page. Not the home page, not the about product page, not a sign-up page, and definitely not (in absence of your ad) to your competitor’s whatever-page. The narrower ads are your sales-activation channel.

For these ads, the focus should be tightly on the cost – your CPCs. Lower your CPCs (multiplied by conversion rates of your conversion page) as a %age of lifetime value of a customer, higher your margins on the sale. Impressions are important too, but not in isolation like the broad, branding ads. The metric that eventually matters is [Impressions x [CPC x Conversion rate (to paid users, or whatever)]], while keeping the second part of that computation as below the LTV as possible. It’s not straight forward, or easy. And in part, its bit of art, along with data science as well. But that’s the fun part, innit ;)

Which ads should you run? Depends on who you are and what you do.

If you are an early stage XaaS business, like we were, I’d suggest you focus on narrow, sales activation campaigns. Money is tight, life is short. Invest in the present, and if we live to tell the tale, we’ll spend enough on marketing to tell the tale we want.

If you are already generating good cash flows, or are handsomely funded, like our 800lb competitor was, do both – broad brand awareness campaigns, and narrow sales activation ones. Further, don’t keep sales activation campaigns to your product. Run narrowly targeted campaigns on all complementary/supplementary products as well. Run narrowly targeted campaigns on products of competitors, potential competitors, and emerging competitors. Don’t hold back. You’ve got an in, a chance, now go for the kill.

As a separate tip, if you’ve grown a bit and have a bit more of a budget to look beyond Google – Facebook is the place to be for broad, branding advertisements, and Twitter is much better suited for narrowly targeted, sales activation ads. Choose your next medium wisely.

Continue reading Adwords – narrow or broad