Mike and I stated working on crowdSPRING in the summer of 2006. We incorporated the company in May 2007 and launched the crowdSPRING marketplace in May 2008. We’ve learned many important lessons along the way. In some ways, our experience is typical of other start-ups. In other ways, it is not. I want to share some of our adventures (and mis-adventures) in the hope that it’ll help others looking to start a company or those who’ve already launched a start-up. So, from time to time, I’ll post a new tip, based on our experience with crowdSPRING over the past two years (and my experience advising technology start-ups over my 13 year career as an attorney). Follow me on Twitter for more tips.

Start-up Tip 6: Ten Practical Search Engine Marketing (SEM) Tips

Given the huge amounts of money spent on SEM, it’s a sure bet that you are going to consider whether you should spend some of your valuable dollars on SEM as part of your overall marketing strategy.

[NOTE: The suggestions in this post apply to both start-ups and to established companies looking to launch SEM campaigns].

SEM involves using search engines (such as Google) to promote your product or service. Billions of searches are performed every single month. When you start an SEM campaign, you decide how much you are willing to spend and the keywords that you want to bid on. You set your maximum budget (per day/per month) and if you happen to be among the highest bidders for a given keyword when search results are being delivered, your ad will be shown alongside search results (on the side or at the top, for example). SEM ads are circled in red in the following search on Google for “graphic design”.

SEM is a simple idea and can be a powerful tool for many companies. It can also be costly and ineffective for other companies.

While much has been written about SEM by many self-professed “experts”, it’s not easy to find useful tips for SEM campaign(s). And there’s also this – a huge amount of SEM content is not only bullshit – it’s wrong.

I am not suggesting that you should become an expert in SEM or manage your own SEM campaigns. SEM can be complicated and it does require a great deal of attention. We’ve been using and recommend Keyword First if you want some expert help in this area.

On the other hand, plenty of people self-manage successful SEM campaigns. Don’t be intimidated by all of the options and tools. If you decide to conquer SEM on your own, I want to share with you what we’ve learned about SEM over the past seven months.

I am not an expert in this area. These are the things I would have wanted to know back in May 2008 when we launched crowdSPRING – and I hope that they help you to avoid some of the SEM mistakes we made along the way.

So, here we go – the 10 things I would have loved to know about SEM the day we launched crowdSPRING:

1. Define your goal

I do understand that for most, the goal is to make money. But that typically doesn’t happen overnight. Before you can evaluate whether SEM campaign(s) can play an important role in your overall marketing efforts, you’ll need to set interim goals for those campaigns so that you can measure your progress. For example, one interim goal could be to drive a certain amount of traffic to your site (regardless of conversion rates). Another interim goal could be to get your cost per conversion rates below a certain amount after 90 days. You can also set a more specific goal – for example, driving more traffic when people search for logo design, web design, or company name on the various search engines.

We never established interim goals early on, which led to much confusion. Once we started setting interim goals, it was easier for us to assess progress.

2. Define conversion accurately

A conversion is an action that a user performs on your website. For example, if you care most about registrations of new users, a user who registers on your site from an SEM lead will count as a conversion. Conversion is important because you will ultimately look at the cost to obtain each new conversion on your site. If the cost is under your budget, you’ll be happy. If the cost is greater than your budget, you might find that SEM might not be an effective option for your business.

Early on, we kept changing our definition of “conversion” and this created two problems. First, it created useless data because we could not compare conversion rates later in the campaigns to the earlier data. Second, it made conversion a moving target and made it difficult to evaluate our success. Once we settled on a defined conversion, it was much easier to make decisions and look at comparative metrics.

3. Develop your keywords smartly and carefully

You’ll want to spend some time researching your keywords. This can take time. Look at your competitors and find the keywords they are using to market their products or services. Look at the meta keywords in their HTML code – these will give you lots of insight into the keywords your competitors consider important. Use tools to create permutations of words, to find singulars, plurals, synonyms, etc. of your intended keywords.

I use (and like) the SEO for Firefox extension to help with keyword strategy. You might take a look at the various businesses, such as Keyword Discovery, that help you focus on the keywords that might be most important for your SEM campaigns.

You’ll also want to spend some time with this powerful tool from Google that allows you to view statistics based on actual Google search queries. This tool will look at your existing site and prepare a keyword report based on the content on your site – a very helpful feature.

Keep an open mind about keywords. If you are bidding on a term such as “mortgage”, you’ll find that plenty of others may out-bid you. So you need to get creative. Are there other ways to refer to the same terms that are not quite as popular, but perhaps more affordable for you? For example, if you’re optimizing on the term company name, consider business name instead. Don’t get overly fixated on any single word. SEM campaigns can include huge lists of keywords. Our own SEM campaign has included thousands of keywords. A company like Ebay is easily tracking millions of keywords in their SEM campaigns.

You’ll be presented with many different options when setting-up your SEM campaigns – take the time to study and learn the differences between those options. For example, you’ll have to decide on Google whether you want a Broad Match, Phrase Match, Exact Match or Negative Keyword. Don’t be afraid to experiment. Broad matches would cause your ads to appear more often (thus potentially maxing out your SEM spend earlier in the month). Exact match would cause your ads to appear less often, potentially stretching your budget, but you might find your conversion rates are lowe. Every company is different and there is no clear rule for which type of matching option will work for you.

4. Ad Copy is important

You have very limited space for your SEM ad copy. And since your ad is shown next to other contextual advertisements for the same keywords, ad copy matters. Remember that unless you entice a user to click on your ad, it won’t matter if you have a great landing page, great product, or great service.

A few suggestions: look at your competitors and study how they market via SEM to their potential customers. Are they focusing on price? Value? Guarantees? Selection? You’ll want to find ways to distinguish your ad from others and you’ll have a tough time doing so unless you know what your competitors are doing.

You certainly can study larger companies, but remember that their SEM spending is substantial and no single ad will give you great insight into their strategy. You are better off focusing on smaller, more budget conscious competitors.

(more…)