Advertising Hacks for Startups
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Advertising Hacks for Startups

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Hacking online advertising as a lean startup. From my talk given at 500 Startups on May 8, 2012.

Hacking online advertising as a lean startup. From my talk given at 500 Startups on May 8, 2012.

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Advertising Hacks for Startups Advertising Hacks for Startups Presentation Transcript

  • ADVERTISING HACKSPAID TRAFFIC FOR LEAN STARTUPS Ilya Lichtenstein 500 Startups May 8, 2012
  • ABOUT ILYA• Started buying traffic in 2007• Grew my internet marketing business from $300 to six figure profits in a year• Founder of MixRank.com (Y Combinator, 500Startups)
  • AD CAMPAIGNS==STARTUPS?• 80/20 rule baseline• Returns governed by power law• Disproportionate returns from winners “make the fund”• Failure is the default state: All lose money in the beginning
  • THE GOAL
  • DATA FROM A REAL CAMPAIGN SPEND: ~$35,000/MONTH Month 1 Month 2 Month 3 Ad Groups 634 225 45% Ad Groups w/ Traffic 28% 89% 100%% Profitable Ad Groups 4% 12% 80% Net Profit/Loss -$26,300 -$17,201 $7,829
  • HOW DO YOU SCALE 100X FROM $50/DAY TO $5,000/DAY?
  • EASY.BUILD 100X MORE CAMPAIGNS.
  • PAID TRAFFIC IN 2012• Highly fragmented (resistance to consolidation)• Very inefficient (misaligned incentives)• Not a free market (price manipulation by everyone)
  • THE KEY TO HACKING THE MARKET• Arbitrage low value traffic into high value traffic• Get it cheaper OR monetize better• New business models help (ex. Zynga, Zoosk, ZocDoc)
  • ASSUMPTIONS• Some traffic is underpriced (inefficiency)• Diverse traffic sources bring diverse results (fragmentation)• Big wins will pay for failures (power law)
  • ACTIONS• Find cheap, scalable traffic sources(but not too cheap!)• Test faster than the competition• Many small experiments rather than few big ones• Track everything!
  • GOOD TRAFFIC SOURCES FOR STARTUPS• Self-serve platforms (Google, AdCenter, Facebook)• Transparent ad networks and exchanges• Direct media buys on smaller sites• Low cost/no cost partnerships• Fast build->track->iterate loop• Jump start organic channels(ex. StumbleUpon,TapJoy)
  • BAD TRAFFIC SOURCES FOR STARTUPS• Competing with brand advertisers• Any site with a media kit• Any site with a sales team• Anyone who will “optimize for you”• Big commitments
  • HOW TO SCALE FAST1.Test many diverse audiences and traffic sources quickly2.Focus on the ones that show promise3.Track everything and never stop optimizing
  • THANK YOU! WWW.MIXRANK.COM BLOG.MIXRANK.COM @MIXRANKILYA@MIXRANK.COM