This document discusses the good and bad of search engine marketing (SEM) for startups. It begins by outlining some myths and realities about SEM, noting that it can be highly competitive with no guaranteed return on investment. It then lists five reasons to avoid SEM: 1) no existing demand for your product, 2) uncompetitive economics, 3) lack of SEM experience, 4) a poor conversion funnel, and 5) an uncompetitive offer. However, it concludes by stating that with the right approach, including testing keywords and queries, targeted ad text and landing pages, and focus on conversion optimization, SEM can be profitable even for innovative companies.

1. The Good and Bad
SEM News for Startups
David Rodnitzky

2. The 80/20 Rule for Startups and SEM
2

3. Search Engine Marketing Myths v. Reality
Reality
Innovative companies
are the WORST fit for
SEM
SEM is highly
competitive = hard
SEM is efficient = ROI
not guaranteed
The long tail is . . .
DEAD
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4. Five Reasons You Should Avoid SEM
1. No demand for your product/service
2. Uncompetitive economics
3. Lack of SEM chops
4. Average or bad conversion funnel
5. Uncompetitive offer
Note: There will be some good news at the end of the
presentation – promise!
4

5. Reason #1: No Demand for Your Product or Service

6. SEM is the “Database of Intentions”
 People search for
EXISTING products
and services
 Search is about
fulfillment of
demand, not
creation
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7. Innovative Products and Solutions = Bad for
SEM
 Which keywords would you buy:
 In 1997 for Tivo? “VCR Alternative”?
 In 2004 for Facebook? “Share with Friends”?
 In 2012 for Lytro? “Focus 1000X Camera”?
7

8. Reason #2: Uncompetitive Economics

9. SEM is an Increasingly “Efficient” Market
• The long tail is DEAD
= Fewer keywords
with more auction
participants
• SEM is a staple of
most established
businesses
• Auction-based
economics favor
companies with
strongest finances
9
Source: http://wallstreetwit.blogspot.com/2008/05/efficient-market-
hypothesis.html

10. Search for “Cloud Computing”
10

11. Search for “low cost cloud computing that runs
on multiple servers in linux”
11

12. Search is Popular (Expensive), But Not Cool
2002 2004 2012
Red = Spend
Blue = Interest
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13. Reason #3: A Lack of SEM Chops

14. The 7 Habits of Highly Effective SEM
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Source: http://ppcassociates.com/7habits-guide.html

15. Reason #4: An Average or Bad Conversion Funnel

16. Great SEM without a Great Conversion Funnel
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17. Reason #5: Lack of a Compelling Offer

18. “The Competition is a Click Away”
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19. And Now for Some Good News

20. Solve All Five Issues = $$$$$
• AdWords is Marketing to
hand raisers – it works!
• Your competitors may not
know their true economics –
LTV, ROAS, can give you an
advantage
• Many (most?) AdWords
campaigns are poorly
managed = opportunity
• You can start with $5!
• Iterative testing of conversion
funnel is relatively easy
(Optimizely, Unbounce, etc)
• Offer testing is also easy and
most people don’t do it!
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21. The 7 Habits of Highly Effective SEM (Again)
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Source: http://ppcassociates.com/7habits-guide.html

22. Keywords vs. Queries - A Crucial Distinction
Keyword
Queries
22

23. Creating & Analyzing The Beta Campaign
Step One: Create the Beta
campaign “The Bait”
 All keywords should be on
broad match modified
(+broad +match +modified)
Step Two: Run raw search
query analysis on Beta
campaign
Step Three: Identify winning
queries and losing queries
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24. Creating the Alpha Campaign, Refining the Beta
Step Four: Create an Alpha
campaign. Move winning queries
into SKAGs in the Alpha
 SKAGs = Single Keyword Ad
Groups
 Put all Alpha queries on Exact
Match
 Create targeted ad text and
landing pages for each SKAG
Step Five: Add all losing queries to
the Beta campaign as Negative
Exact Match
24  -[free dragon tattoo poster]

25. The Air-Tight Account Secret
Step Six: Add all Alpha queries to
your Beta campaign as Exact
Match Negatives!
 This prevents Google from
matching a bait keywords to
your profitable Alpha query
 You control bid, ad text, and
landing page for winners!
Step Seven: Continue to identify
winners and losers in the Beta
campaign. Move winners into
the Alpha
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26. Ad Text – The “Gatekeeper”
• Call to action
• Four human emotions
 Fear
 Greed
 Exclusivity
 Vanity
• Targeted to specific ad group
• Test, test, test – CTR X Conv. Rate
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Source: http://www.amazon.com/Direct-Mail-Copy-That-Sells

27. Landing Pages – The “Closer”
• Clear call to action
• Important data above the
fold
• Establish credibility
• Highly targeted to your
keyword & ad text
• Function over form (limit
flash, sound, etc)
• Multiple methods of
communication
• Test, test, test
• Quality score: contact us,
privacy policy, about us, site
map, load time
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28. Your Next Steps
• Ask yourself – are you in the 20%?
• Assess your SEM chops or hire an
expert
• Work tirelessly on your
conversion funnel
• Start testing SEM - slowly
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29. Thank You!
david@ppcassociates.com
www.ppcassociates.com
@rodnitzky