Does Adwords Work & Will it Work for My Startup?

Does Adwords Work & Will it Work for My Startup? Growth Marketing

Mark Spera

Director of Marketing at RealtyShares
Cofounder @ GrowthMarketingPro.com
Does Adwords Work & Will it Work for My Startup? Growth Marketing

Google Adwords, the most common SEM (search engine marketing) platform, is an appealing proposition to a lot of startups. For a few hundred dollars, you can advertise your business or service to an audience searching for exactly what you offer. It’s one of the simplest forms of advertising to understand and it works for B2B and B2C companies.

When a Google user queries “dry cleaning in san francisco,” an advertisement for Rinse, a San Francisco dry cleaning service appears atop the heap of search results.

Does Adwords Work & Will it Work for My Startup? Growth Marketing A company that sells “analytics software” to other businesses has an opportunity to capitalize on search volume of the 139 variations of that search query.

Does Adwords Work & Will it Work for My Startup? Growth Marketing

What is Google Adwords?

But of course Google NASDAQ:GOOG didn’t become a $650B company by giving away ad space. SEM is not necessarily cheap. In fact, Amazon spent $158 million on Google Adwords alone in 2013. See some of the other biggest spenders below.

Does Adwords Work & Will it Work for My Startup? Growth Marketing

Google Adwords is an auction. Some of the largest players can bid very high on keywords ($$$) and “win” the auctions, appearing #1 in Google’s search results.

Some industries have become famous for hyper-precise, hyper-competitive bid wars. The online travel vertical – Priceline and Expedia – is one of the most competitive. Because search intent is so local, there are literally hundreds of thousands of SEM auctions happening in the travel industry at any given moment.

Below is the SEMRush report for the “flights to san francisco” search query. This query is Googled over 12,000 times per month. Close derivatives of that term are searched many thousands more times.

Does Adwords Work & Will it Work for My Startup? Growth Marketing

Now imagine the keyword combinations: “flight from san francisco to la,” “san francisco flight to boston,” “flight to boston from san francisco july 7.” In the travel vertical, companies employ teams of search engine marketers to manage their portfolio of keywords, optimizing on a daily or even hourly basis. That shit cray.

Does Adwords Work & Will it Work for My Startup? Growth Marketing

Will Google Adwords Work for My Startup?

The good news is that SEM is not quite so competitive for most search terms. Some startups have done extremely well with an SEM-focused acquisition strategy. Good old hard work and smart optimization can go pretty far. But like anything, learning to do it well and then actually executing takes time – time that might be better spent doing something else.

Plus, for some search verticals it simply does not work. For instance, most fashion brands have trouble competing with Amazon, Gap, Target, Macy’s, etc. for their product’s search intent.

Fashion and other ecommerce companies may find more success with an affiliate program, guerilla marketing or content marketing. Read about how to build an ecommerce growth strategy here.

So back to the question: should my startup try Google Adwords? Let’s begin with the startups that might find much success with search engine marketing.

Adwords May Not Work if…

You’re in a huge SEM vertical

With few exceptions, it is tough to make SEM work if your startup is playing in the travel, loans and commoditized fashion space. Again, Zara, Nordstrom, UrbOut, Asos and every other retailer have “white tee shirt” somewhere in their Adwords portfolio. Unless you are prepared to outbid and out-optimize your competition you will face an uphill battle.

Or, you’re in a space with no search volume

While it is all-powerful – even omnipotent, Google cannot force Googlers to search for anything. Some verticals and products simply have no search intent. For instance, if you’re selling a “salmon filet pillow,” you might do quite well, but not with SEM. Nobody on earth is searching specifically for that. Use a tool like SEMRush to determine if your startup product offering has search volume.

Does Adwords Work & Will it Work for My Startup? Growth Marketing

You’re a Blog or Online Publication

Adwords is perfect for acquiring very specific (based on search intent) customers for as little as a couple bucks.

But blogs and online publications make very little revenue per visitor as compared with websites selling a product. If a blog is relying on selling digital ad space, they’re making just a few cents per visitor.

I spoke with a very successful financial technology blogger just recently. His blog makes a few hundred thousand dollars per year, but his revenue per visitor is between 5 and 40 cents. The cost of nearly every Adwords keyword is more than that.

Do Try SEM If…

 If Your Business is Urgent

Interestingly, local small businesses like locksmiths, glass fixers and repair shops perform pretty well with Adwords. The reason is that these services are needed asap. If your car is broken down, you are likely to call the first or second Google search result to get it fixed because you can’t get to work without it.

There is High Search Volume and Low Competition

Do you remember the movie The Endless Summer – when Robert August and Mike Hynson crest the hill in South Africa and finally see the perfect wave at Cape St Francis?

Does Adwords Work & Will it Work for My Startup? Growth Marketing

That is what it feels like when search engine marketers find a batch of keywords that are high traffic and low competition. It’s frequently difficult to figure out if your startup will hit a jackpot of profitable keywords, but I highly recommend using SEMRush or the Google Keyword Tool to find out.

In order to do this, you will simply type in the keywords you’re mulling over. SEMRush spits out a list of derivative keywords (sometimes hundreds) accompanied by a traffic score (“volume”) and competition score (“KD”).

SEMRush’s “Phrase Match Report” gave me 139 keywords for the search query “analytics software.”

Does Adwords Work & Will it Work for My Startup? Growth Marketing

In order to find profitable keyword sets that relate to your product, you have to pick terms with low competition (KD score) and more importantly, low CPCs (cost per click). Again, CPCs dictate how much you will pay for each click that comes to your website from each keyword ad.

What Next?

It’s often worth trying Google Adwords. It can work at some scale for some companies – who knows it could be 1% of your marketing budget or 90%. The only way to really know is to run a small test.

Let’s say Adwords works for you. What next? You can either run it yourself or hire an agency to run your campaigns and optimize daily. Adwords takes some work to get good at, but for many startups the juice is worth the squeeze.

Which Adwords Agency Should I work with?

Some options that are well-regarded:

3Q Digital
Metric Theory
Hanapin
ROI DNA
Elite SEM