Ten Practical Search Engine Marketing (SEM) Tips Ross | December 23rd, 2008

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.

5. A/B test your ad copy – always

When we started, we had one ad copy and we later expanded that copy to multiple different variations. Most SEM products, such as Google’s AdWords program, are set up to allow you to create champion/challenger situations that test different versions of ads. If you are not testing at least two ad copies, you need to write additional ads.

You can let the AdWords system control the frequency with which a specific ad will be shown based on its success in converting users (or you can rotate the ads evenly). You can define success in different ways. For example, if you consider it sufficient that a user comes to your landing page, you can define success based on click-through rate (CTR). [Example: If one out of 100 users clicks your ad copy, the CTR of that ad is 1%]. If you optimize based on CTR, AdWords will optimize to make sure that the ad copy which has the highest CTR rate is shown the most times.

On the other hand, you might define success as a registration of a new account, and the optimization will be set differently.

Whether you optimize based on CTR or another criteria depends on how you measure ROI from your SEM campaign. For example, if you are selling a service and have budgeted $10 to acquire new registered users, you need to know whether your SEM campaign costs you more than $10. If you optimize based on CTR but don’t assess the frequency with which people who click to your site actually register, you might not be able to determine whether you are spending more than $10 or less than that amount. On the other hand, if you optimize based on registrations, you’ll be able to easily determine what you are paying, in your SEM campaign, for each registration.

Replace ads that are not effective with other variations and continue to create challenges to your successful ad copy. We’ve found that it’s important to continue to experiment.

6. Landing pages matter

User experience is important. Sadly, you’ll rarely hear it mentioned in the context of SEM. Here’s what Russ Unger, a specialist in user experience, says:

“I see us as Experience Designers, who truly try to provide what is best for a user—while making sure business objectives are met.  Unfortunately, we just can’t always do what is best for the users, so we have to try to make sure that we are presenting an overall experience that can meet as many goals and needs as possible for the business and the users.”

After a user clicks your ad in a search engine, the landing page is the first thing they’ll see on your site. So spend some time thinking about where to send your users when they click your SEM ad copy. In some cases, it’s perfectly appropriate to send them to your home page. In other cases, you’ll want to create special landing pages that are closely tailored to your ad copy or to your SEM campaign(s).

Most people tend to ignore SEM landing pages, thinking that once the user is on your site, they’ll find their way around. That’s a dangerous assumption. If the measure of your success is something other than CTR – you’ll want to make sure that your landing pages help you achieve that goal. It’s a balancing act, as Russ points out.

Many people don’t pay attention to bounce rates. Bounce rates measure how many visits went only to that landing page and nowhere else on your site. Bounce rates are not a complete measure, but do help you assess whether certain pages are better than other pages in drawing traffic further into your site.

7. A/B test landing pages – always

This one seems so simple, but it’s something that eluded us for some time. It was so simple – we didn’t think of it!

Just like the champion/challenger opportunities for ad copy I discussed above, you have the ability to create either different or identical ad copy, but with different landing pages. For example, you can send users to your homepage in one variation and to a special landing page you created specifically for your SEM campaign. The conversion rates may vary substantially – so take advantage of this feature and optimize your ad copy/landing page as much as possible.

When we started, we set our homepage as our landing page for all SEM ad content. We then started experimenting, adding our how it works page and other pages to see if we can impact conversion rates (for us – yes). So – make sure you experiment to find the best landing pages to match your incoming SEM traffic.

8. Review your bids and cost/conversion ratio by keyword

It’s very tempting to look to the overall reports on conversion rates for the entire campaign to determine whether the campaign is effective. This is a mistake.

You’ll want to make sure that your bids on individual keywords are set properly. For example, you might find that it’ll be cheaper in the long run to pay more for certain keywords that convert at a higher rate than to pay less for keywords that convert at a lower rate. In such cases, you’ll want to increase spend on certain keywords and eliminate or decrease spend on other keywords. In any case – look periodically at your bids and cost/conversion ratio for every keyword. This is a time consuming process, but will give you great insight about ways you’ll want to tweak your SEM campaigns.

9. Don’t be afraid to make changes

Early in our SEM campaign, we were worried about making changes. We kept waiting for more and more data so that we could properly asses whether our campaigns were effective.

It is important that you are looking at relevant data, and it’s true that more data is often better. But that’s not always true. Early in our campaigns, we waited too long to make changes and regretted waiting when we saw that our changed ad copy, or changed landing pages, worked better than the copy/landing pages we used prior to the changes. And in other cases, for certain campaigns, we found that changes didn’t improve things at all – leading us to terminate certain SEM campaigns earlier and saving money in the process.

10. Don’t forget analytics

Take advantage of your site analytics to evaluate how your SEM campaigns compare to your SEO and other campaigns. You’ll also want to carefully study analytics to further understand whether the conversation rates you set for your SEM campaigns are meaningful. For example, if you define registration as a conversion, you may be able to track whether a specific ad copy/landing page combination is more likely than another to pass visitors to your shopping cart.

If you are using Google Analytics, this is pretty easy to do, because Google keyword campaigns are integrated into the analytics tool.

If you have your own tips or stories, please feel free to share in the comments. And if you enjoyed this post, please also take a look at other start-up tips we’ve written about:

Start-up Tip 5: What’s Your Revenue Model?

Start-up Tip 4: Ten Suggestions For Raising Start-up Capital From Angels

Start-up Tip 3: When To Leave Your Full-Time Job

Start-up Tip 2: Lead by Example, Not By Title

Start-up Tip 1: Surround Yourself With Smart People

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