This document provides an overview of search engine marketing (SEM) for startups. It discusses key SEM concepts like cost per acquisition, lifetime value, scaling challenges for startups, and the importance of optimizing keywords, bids, ads, and landing pages. The document recommends focusing optimization efforts on these four main areas and establishing proper tracking to measure metrics like customer lifetime value and cost per acquisition that are important for evaluating SEM performance. It also stresses the importance of developing a plan that includes setting a budget, goals, and structuring the SEM account before launching campaigns.

1. SEM For Startups
Soso Sazesh
^

2. Who Am I?
• Founder of Growth Pilots
• Helped 50+ companies with paid acquisition

3. What is SEM?
Paying for search engine traffic in hopes that you
make more in revenue than you spend…
• Can be very profitable and scalable
• Can also be very unprofitable and not at all
scalable

4. Captain Obvious Matrix
Profitable
Not Profitable
Scalable Not Scalable
Be Here Hope
Hope Don’t Be Here

5. SEM 101
• Customer intent shown by keyword search
– “best online payroll software”
• You choose how much you are willing to pay
to get traffic from each keyword
• Finite amount of search volume for a given
keyword
• The goal is finding as many keywords as
possible that are profitable

6. SEM Variables That Matter
Three variables:
• Cost to acquire a customer (CPA or CAC)
• Lifetime revenue generated by a customer
(LTV)
• Market size (Volume)
• LTV > CPA with Volume is what matters

7. The Scaling Dilemma
CPA
Conversion Volume
Keyword A
LTV
Breakeven
Volume

8. LTV > CPA at Scale is Hard
LTV
v
Conversion Volume
CPA

9. Challenges for Startups
• Unproven LTVs
• Niche/emerging markets with low search
volume
• Lack the time and expertise to do it right
• Competing against irrational advertisers

10. The Ingredients of SEM
• Things you can’t control
– Your market size
– Your competition
– Your LTV
• Things you can control and optimize
– Keyword selection
– CPA (bids)
– Ad copy
– Landing pages

11. Keyword Selection
• Two approaches depending on your goals
– Start broad and narrow down
– Start narrow and expand gradually
• Use a combination of intuition and Google
Keyword Planner to generate relevant
keywords

12. Keyword Match Types
• Broad: payroll services
• Broad modified: +payroll +services
• Phrase: “payroll services”
• Exact: [payroll services]

13. Negative Keywords
• Negatives prevent unwanted clicks
• Very underutilized but very important
• If you sell children’s toys you probably don’t
want to appear next to people looking for sex
toys

14. Search Term Report
• Tells you what people are actually searching
for
• Usually lots of surprises in here
• Critical resource for keyword expansion and
exclusion

15. Quality Score
• Each keyword is given a 1-10 score based on
– The relevancy of the ad triggered by the keyword
– The expected clickthrough rate of the ad triggered
by the keyword
– The landing page experience of the ad triggered
by the keyword
• Quality Score affects ad position and amount
you pay per click

16. Bidding
• You choose the maximum amount you are
willing to pay per click for each keyword
• The actual amount you pay for a click will be
less than your bid
• Bidding should be based on conversion rate
Bid = Target CPA X Keyword Conversion Rate

17. The AdWords Auction
• Ad position
– Position is determined by your bid and your
quality score
• Cost Per Click
– Cost per click is determined by the bid and quality
score of your next best competitor

18. Ad Optimization
• One of the most under-rated aspects of SEM
• Ad copy should match the keyword it’s paired
with
• Know the limits of testing (diminishing
returns)

19. Landing Page Optimization
• Landing page optimization can have a
dramatic effect on conversion rate and quality
score
• Diminishing returns apply here as well

20. Takeaways
• 4 main things to focus on
– Keyword Optimization
– Bid Optimization
– Ad Optimization
– Landing Page Optimization

21. Tracking
• If you don’t have the proper tracking in place,
you will not be able to measure LTV or CPA
• Recommended Tools
– AdWords conversion tracking for keyword-level
tracking
– KISSmetrics or Mixpanel for customer-level
tracking

22. Put A Plan Together
• Get tracking in place
• Determine budget and CPA goals
• Keyword research
• Map out account structure
• Build campaigns and write initial ads
• Optimize the big 4 frequently and intelligently

23. Questions?
Soso Sazesh
soso@growthpilots.com