Adwords – narrow or broad

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

Startup fundraising facilitators – Hazard to Help

Today, at #CampusEdu on Startup Fund Raising, wasn’t the first time I’ve heard investors warn about being swindled by people who act like investors up front, but in reality are connectors who help you polish your offering and connect you to the real investors.

It’s valuable advice.

Founders are under pressure when raising funding, and a friendly, supportive facilitator can be a welcome presence. Specially, when he’s misrepresenting himself as an investor. The misrepresentation hurts more when either the promised funding gets delayed, or disappears, but even more when the facilitator takes a hefty cut before passing the funds on the startup, disrupting runway and plans.

On the other hand, the ‘connectors’ are not entirely to blame. Two factors, described below, actually create a valid market for them to cater to:

  1. A disproportionately large proportion of capital available for investing in startups is in the West – primarily US & Western Europe. This presents a handicap for startups in developing world – South Asia, East Africa, Latin America, and SE Asia – limiting most of them to a small clique of domestic investors, at least for the early stage raises.
  2. Must investment funds prefer funding startups that they get introduced to from existing contacts – founders, investors, LPs, etc. If a startup founder isn’t already connected to these networks, getting good and proper introductions can be a high hurdle. A great product, with outstanding metrics, and/or team does still get funded, but for many good-enough startups this may just be another glass ceiling to crack heads against / hustle around.

This mix of geographical and social barriers creates an opportunity for a kind of individual to facilitate fundraising for startups. And nothing good comes for free.

The problem here, it seems to me, is not that there are facilitators in the market, but that they are misrepresenting themselves as investors to gain credibility.

The solution, in my opinion, seems to be to legitimise them.
If the investors accept that there’ll always be segments of the market that could have really promising startups who may be struggling to each them for one of the reasons above, or others, there’s a way forward:

  1. Publish a list of accredited facilitators that the investment fund works with.
    Just the way companies work with accredited recruiters or advertising agencies. Except, make the list public, so potential investees can see it and reassure themselves that they’re not being taken for a ride by the facilitator.
  2. Lay down a set of rules, partly public, about facilitator codes of conduct – %age fees, confidentiality, misrepresentation, etc.
    Even better if the industry can agree on a set of rules, and make them a standard.
  3. Do not work with, or accept meetings from, facilitators outside your (or industry’s) accredited set.

This helps bring the facilitator networks out in the open, makes their terms of engagement clear, and gives founders the confidence to engage them without them having to misrepresent themselves.

It’s an idea.

Continue reading Startup fundraising facilitators – Hazard to Help

Crowd funding across (continental) borders

The talk by Ricardo about Seedrs at CampusEdu event today, and this tweet by Sidin yesterday got me thinking –

Why aren’t there equity crowdfunding platforms for raising capital here in the West, by startups in India (and other developing countries)?

The flurry of crowd funding activity here, both equity and product/support based, demonstrates there is capital available to invest.

India, SE Asia, and parts of East Africa are home to some great talent building, or wanting to build, great companies. There is already a nascent investing community in these regions, but I’m sure they could do with more investments. Specially the community driven ones that also bring along benefits of a wider exposure, and validation on a wider scale.

There’ll be some hurdles – regulatory and cultural, the most obvious ones. But there’s also the opportunity of tapping in to the widespread, and relatively well-off, diaspora spread across the West. The diaspora loves to invest in social, and socio-political ventures, back home. And given the amount of diaspora money in Indian stock and real estate markets, they do love the investment returns too.

Wonder if there’s an opportunity here, and if anyone outside my conscious knowledge working on it.

Anyone got views? Share here, or tweet to me.

Continue reading Crowd funding across (continental) borders

Startups: On Boarding Employees

Many startups tend to keep the employees (usually devs & designers) focussed too narrow, never letting them expand to other roles, or keep them doing everything (usually non-tech employees/founders), without giving them time, resources or backing to develop expertise in one area.

I believe that there are no strict job descriptions or siloed roles in a startup – everyone does everything, at least some of their time. And it’s all for the better – of both the enterprise and the individuals. Everyone learns & grows, faster.

However, experience tells me that starting your stint with a specific role or project greatly improves the chances of a successful on-boarding. A specific project lets the new joiner do a deep dive and learn quickly about one specific area (become go-to person for that small, specific area), show some deliverables (thus earn cred in the new team), while also learning about rest of the roles (to get an idea of where they want to grow/expand).

Once a bit settled, more roles and responsibilities can, and should, be added. Not letting employees expand beyond their early roles, is just as bad as getting them to work on *everything* from the moment they step on-board. You never know, that backend dev could have evolved to become the best product manager or business development manager money could ever hire.

Continue reading Startups: On Boarding Employees

My 2011 startups-to-watch list

Came across my list of startups-to-watch from late 20111, while doing some spring cleaning yesterday. It was interesting to go back and see how the companies had fared over the 2-3 years since.

The Risers:

The Survivors:

The Pivotor:

The Acquired:

The Departed:

The list mostly conforms to my 3 key areas of interest in startups in 2011:

  1. TV interfaces (Plex, Snapp.tv, Corvair)
  2. Finance – Payment – Money Transfer (Stripe, Dwolla)
  3. ‘Easier’ Business Card solutions (CardFlick)

1st & 3rd were, and to an extent still are, areas that I looked at starting up  something of my own if no good solutions emerged. While my itch on bringing business cards to the digital century has been slightly sated by CamCard, the TV itch continues unabated…

If you made similar lists, do share who was on it, and how they did. Might just make an interesting comparison.

And if you too have an itch to work on solving the TV interface problem, get in touch!

Continue reading My 2011 startups-to-watch list

Company-watch on reddit

Pro-tip for marketers:

Learn what people are saying about your company on @reddit with a simple URL:

http://www.reddit.com/domain/[your-domain]

Example: Track any posts on reddit mentioning/linking Europe’s leading seed investment program here:  http://www.reddit.com/domain/seedcamp.com

P.S.: If the scarcity of posts on that Seedcamp mentions page bothers you, get in touch with the program here: Wanted: Head of Content.

Thoughts, from a lost context

Discovered these thoughts scribbled (hypothetically) on a note in a draft on my phone. Have lost the exact context in which they were written, but they still seem intuitive yet incisive:

Now that I think about it after a few hours, maybe it’s not just who you work for. Another factor could be what state is the organisation you work for in. I was comparing my state – kindling a startup – to theirs – working in huge, established organisation. My priority is speed. The priority in their organisations may be stability. My focus is to get there somehow. Anyhow. For their organisations, the focus is to stay there.  And to stay within the rules, norms and processes. My focus is quick iteration. Their organisations must be focussing on long-term strategy. Though, one thing is common – the target for both of us is survival. That doesn’t change with size.