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5 Mistakes Startups Make with SEM & How You Can Avoid Them – with Kevin Lee [041]

5 Mistakes Startups Make with SEM & How You Can Avoid Them - with Kevin Lee

This is part 2 of the interview with Kevin Lee. In this episode, Kevin will share some lessons to help software entrepreneurs be  more successful with Search Engine Marketing, even if you have a limited budget.

If you missed part 1 of the interview, then here’s the link:
Part 1: How a Startup Helped Consumers Raise $7.8 Million for Their Cause

Kevin Lee is the founder & CEO of We-Care.com, a service that allows online shoppers to donate a percentage of their online shopping (at no cost to them) to a non-profit, school or association. It has partnered with over 2,500 merchants from Travelocity to Sears, 1800Flowers and Apple. To date, We Care has raised over $7.8M. Kevin is also the co-founder & CEO of Didit, an award-winning full-service online advertising and marketing services agency that has been in business for almost 20 years.

5 Search Engine Marketing (SEM) Lessons:

In this episode Kevin (a 20 year veteran in the SEM space) shares some valuable lessons for startups:

  1. What you need to do before you start any SEM campaign
  2. The unfair advantage brands have against your startup/product
  3. How you should use ‘hyper-targeting' in your campaigns
  4. A simple change to create re-targeting campaigns like the pros
  5. What you can do if bidding for your PPC keywords is too expensive

Contact Information

Transcript

Host: Omer Khan

Guest: Kevin Lee

This is the ConversionAid Podcast, Episode-41. Welcome to the ConversionAid Podcast where we help software entrepreneurs to take their business to the next level. Each week, we interview proven industry experts who share their strategies and insights to help you create software that sells! Here's your host, Omer Khan.

Omer: Hey everyone, welcome to the ConversionAid Podcast. I am your host Omer Khan and this is the podcast for software entrepreneurs and companies who want to grow their business to the next level and create software that sells! Okay, today's episode is Part 2 of the interview with Kevin Lee. Kevin is the founder and CEO of We-Care, a service that allows online shoppers to donate a percentage of their online shopping at no cost to them, to a non-profit school or association. It's partnered with over 2,500 merchants from TRAVELOCITY to Sears, 1800Flowers and Apple and to date, We-Care has raised over $7.8M. Kevin is also the co-founder and CEO of Didit, an award-winning full-service online advertising and marketing services agency that's been in business for almost 20 years.

In this episode, Kevin will share some lessons to help software entrepreneurs be more successful with search engine marketing, even if you have a limited budget. Okay Kevin, welcome back.

Kevin: Thanks for having me.

Omer: Today we are going to talk about search marketing. Now, let's start by getting clear about what that actually means. How do you define ‘Search Marketing' in your business?

Kevin: The way I see it is, search is a consumer signal of intent, and so people are in an unusual state of mind when they are in search mode. They are much more open to suggestion, they are much more open to navigating to specific sites or engaging in consumption of information around whatever it is that they have an interest in, and so, search is almost like a state of mind that a consumer is in, and then how you get to that consumer while they are in that state of mind is a vendor or a channel or an ad creative issue. So that search intent is the key.

Omer: So do you think, sort of, primarily about SEM as Paid Search or do you also think about it as SEO or even these days, I guess, you know, even social media has a sort of a search component to it, so is it all of those things for you?

Kevin: Yeah, I think it's all of those things and it's even time-shifted search. So even display media or video search is a part of that equation, so all that is changing is just what the search engine results page looks like, if there is even a search engine results page. So the devices change; sometimes they are mobile, sometimes they are desktop, the preference between textual results, image results, news results, video results, you know, may be different from the searcher at different points in time, so it's really just what was their state of mind and sometimes, for retargeting purposes, you know, the person is actually in search mode for a considerable amount of time, even though the search query may have occurred in the distant past. So a lot of that has to do with whether or not the commercial intent that they had is for high consideration or low consideration decision, right? So deciding which flower bouquet to buy for your significant other is probably low consideration. You'll take a look at a few pictures and price-points to make a decision and move on, but you know, deciding who to use as your thirty-year fixrate mortgage providers is a long, you know, decision process, so being able to get an ad in front of somebody, even hours or days after they engaged in a search behavior with search retargeting, you know, that's still search in my mind, because the intent that the consumer had is still there or might be a honeymoon vacation plan that you're doing and so, you know, that just takes days and days to really think through all the options and so being able to target off of that behavior or that intent using display advertising or even video advertising, that can also be targeted, based on cookies, you know, that's all search; just different flavors of search. You've got eCommerce search like Amazon or Ebay or the RapidTime or where, you know, people actually start their search behavior right within an eCommerce environment, that's search too!

Omer: Now, you launched Didit almost 20 years ago, and as a full-service agency, you've worked with, you know, a lot of different clients, and so, I really wanted to take this opportunity to try and pick your brain a little bit, and really try to understand, as you sort of work with these different companies, and particularly with, you know, startups in mind, what are some of the common mistakes that you see these companies making when it comes to SEM and if you were launching a new startup this year, what are some of the things that you would be doing and maybe doing a little bit differently than others?

Kevin: I would say their mistakes, the major mistakes that existing, you know, brands maker are often different than the mistakes that are sort of freshly mentored startup would make, but sometimes part of the mistake that the freshly mentored startup makes is thinking that they can immediately have campaigns that are just as efficient and profitable as a more established brand and for a variety of reasons, that's really difficult to do, not the least of which that the established brands either particular category and that could be technology or eCommerce or pretty much anything, there is a familiarity that the searcher has with that established brand and so, that established brand is more likely to get the click, all other things being equal in a search result. So that gives them an unfair advantage, which manifests itself essentially as a discount in clicks, because everything SEO is managed within the search engine results page these days, using quality score or some other score very similar to quality score and quality score is a normalized projected click-through rate, so if you are a new company, you just launched and you think, “Hey, I am so glad we raised a half a billion dollars to launch superdiscountshoes.com and we should be able to have a campaign that's just as efficient as Zappos.” Well, you know, Zappos is a known name, and the shoe shopper may just not be quite as inclined to click on ‘Superdiscountshoes.com' in comparison to ‘Zappos', so we actually have some uphill work to get done, to have the same kind of a profit metric in our Paid Search campaigns that a Zappos might have. Similarly on the organic search side, like there is a amount of momentum that you get in organic SEO that is difficult to replicate in a short amount of time because if you actually look, like suddenly there are lot of positive SEO signals pointing to domain, you can actually have that backfire and…

Omer: I think it's a great point you make about the brands and you know, just thinking about, sort of, my personal experience, you know, the other day, I was searching for life insurance, right? And what I realized was that when I get the search results page, I didn't really care what the headline or the text of the ad or the results said; what I was actually doing was, I was scanning the domain to see if I recognized the brand.

Kevin: Exactly.

Omer: Right? And that was enough for me to click.

Kevin: Yeah, and the fact that you chose brands probably disproportionately higher when you were doing that, is that brand discount, because those brands are more likely to get the clicks, that gives them a high quality score, that lets them get the position in the search results page less expensively and so, that information in your brain, about that brand, is the result of all the other marketing that that brand has done, whether it's been done in search or it's been done in display or in social or TV advertising for that matter. All those things influence your behavior when you look at a search results page.

Omer: Okay, good. So from a startup perspective, you know, I hear people sometimes say, you know, “We tried doing some PPC; didn't really work, so we moved on to something else,” and the first lesson here is you got to be realistic when you start out. You are not going to immediately get profitable campaigns running, and you have to really consider the unfair advantage that brands have as well. But assuming that, you know, somebody is still going to, you know, they accept that and they still want to stick with doing some SEM, but they have a limited budget, what can they do, to start?

Kevin: You know, there's a lot of ways to try to identify the highest potential profitability clicks ahead of time. So in other words, given the small amount of budget, if you were advertising nationally 24 hours a day against every keywords you wanted, that might be $40000 a month, and you've got $400 a month, so then I have to think about, “Okay I am going to now go through and first look at my keywords and I will look at geographies and times of day and you know, all the other various ways of slicing and dicing; you know, maybe I will just take mobile devices because it's an app or maybe I will just take desktop and tablets because I think people will probably make a decision while they are, you know, at work, that kind of thing” and you know, slice and dice a campaign down to where you think the highest profit clicks might be and you get that working first and you know, although all sorts of ways to sort of narrow that focus down, certainly on the consumer's side, geography is a huge predictor, for example, of welfare income, right? So if you are either targeting lower income or higher income individuals or households, you know, that's great way to eliminate, you know, the waste or the less efficient portions of your campaign, so start small and learn what works, what resonates through from an ad perspective, what resonates from a landing page perspective, because everything is cumulative, right? Any efficiencies you gain either in a better ad or in a better landing page really empower you to bid more for that click, as you get better.

Omer: Okay, let's talk a little bit about retargeting. Now, when…I guess retargeting sort of started being used by marketers, initially I think it felt a little bit creepy, right, that suddenly you go to a website and suddenly how did somebody know that when you go to another website, that you were looking at a certain product on Zappos or whatever, and I think these days, consumers are getting more used to the idea of retargeting. But again, for a startup, what advice would you give people and what may be is a common mistake that you see people still making with retargeting?

Kevin: So the biggest mistake I see marketers making at retargeting is not setting frequency caps on their display retargeting campaigns and so, it really feels like you are being stalked if a brand is following you around everywhere you go and that those same ads for the same brand are showing up too often. If they are showing up just occasionally, it could be more by chance or serendipity that you are seeing the same brand again, so it sort of feels a little bit more natural. It's just important to set those frequency caps; frequency also will keep your campaigns more efficient because if the person hasn't responded to you, and you are showing ads to them 20 times a day, you know, upping that to 25 is not going to increase the chances of success.

Omer: Okay, that's great advice. Now, the other thing I wanted to ask you was, you know, these days a lot of people will say things like, YOU know, it was really easy with Adwords five years ago, because I could advertize against certain keywords and you know, for ten cents, right, and these days it's so expensive that I just can't afford to target those keywords.” Do you have any advice for people who are in that situation and if not being able to make Adwords work, what other options may there be that people should be considering, where they could put their ad?

Kevin: Well, you know, almost all the media that you buy these days digitally is in some form of auction and you know, Adwords and the Bing platform and its predecessor, at Overture in Yahoo Search, you know, they were…search was really the first place where media was auctioned off in real-time or close to real-time and either there could be a winner's curve scenario so that the person with the highest bids or the highest ad rank, meaning that they show at the top of the search results page, you know, they weren't necessarily actually winning; they could be moving money on every click. So yeah, I mean, auction markets from media are brutal and search is probably the most brutal because in some cases, there is such a shortage of good keywords for a particular industry category that the marketers really do beat themselves up against each other in an attempt to get those clicks. But, you know, you mentioned retargeting earlier, that's being used effectively as part of a content marketing strategy for SEO and social, because the idea is that, “I don't only have to retarget search behavior. I can retarget any behavior where the intent or an interest around my product is high,” and that could've been the result of social media, that could've been the result of an email marketing campaign, it could've been the results of a variety of things, and being able to then get messages in front of those individuals, using retargeting can be very effective. Similarly, you know, building bulks of CRM and social CRM strategy can be really effective, so you don't only necessarily have to retarget based on cookies. These days, with custom audiences and such, you can use things like email addresses and/or cell phone numbers, for example, or phone numbers to create a custom audience within the social media ecosystems and retarget your prospects or customers that way. So, you know, it's just a matter of trying to find the people at the right time with the right message and there are more than one channel to do that.

Omer: Alright. That's great advice, thank you Kevin. Okay, it's now time for our lightening round. I am going to ask you a series of questions and I would like you to answer them as quickly as you can. Are you ready?

Kevin: Yeah.

Omer: Alright. What's the best piece of business advice that you ever received?

Kevin: Best piece of business advice ever received is probably understand accounting.

Omer: What book would you recommend to our audience and why?

Kevin: Currently, I would probably like to recommend ‘Zero to One' – Peter Thiel, just because he articulates the difference between ventures that make a huge difference in a marketplace and ventures that are just normal businesses.

Omer: What's one attribute or characteristic in your mind of a successful entrepreneur?

Kevin: Successful entrepreneurs stay in touch with their employees and their customers.

Omer: What's your favorite personal productivity tool or habit?

Kevin: Productivity tool – my guess, current favorite continues to be email. I use my email Inbox; sometimes to remind myself to do things.

Omer: If you had to start over tomorrow, how would you go about finding that next business opportunity?

Kevin: I would probably not rush into it. Every business I have invented thus far has been the result of some kind of a catalyst in my ecosystem or in my life that caused me to think, “Wow! There is a better way of doing this,” or “Wow! There's a complete vacuum in this particular area. I wonder if there'd be a way of filling that vacuum,” so I would certainly wait until the right idea comes along.

Omer: If you…I already asked you that one. [Laughter] What's an interesting or fun-fact about you that most people don't know?

Kevin: Most people don't know I was actually born in Germany by mistake because my mom was visiting and I showed up 10 weeks early.

Omer: [Laughter] So does that give you a German nationality?

Kevin: Potentially yes, I have 2 birth certificates – one from the American Embassy in Germany and one from Germany.

Omer: There you go! Okay, and finally, what is one of your most important passions, outside of your work?

Kevin: Now, that's a tough one! May have to think and then you'll have to edit out my uhms.. and uhs… on it…passion outside of work is probably science. I think science and engineering education is so critical to the future of both our country and the world, that I feel like either it's just not getting the level of attention that it deserves.

Omer: Great! Kevin, I want to thank you for joining me today and sharing your experiences and insights with our audience and thank you for letting us get to know you a little better personally as well! Now, if folks want to find out more about We-Care, they can go to We-Care.com and for Didit, they can go to Didit.com. If they want to get in touch with you, what's the best way for them to do that?

Kevin: They could pick their social media flavor that they like. I am on Twitter, I am heavily on LinkedIn, you could find me on Facebook, although probably a bit more difficult, given how many other Kevin Lee's there are, but certainly, Twitter – I'm easy to find on Twitter, I'm easy to find on LinkedIn.

Omer: Awesome. Kevin, thanks again and I wish you continued success.

Kevin: Thanks, you too!

Omer: Cheers, thank you. Alright, I hope you enjoyed that interview with Kevin Lee of We-Care and Didit. You can get to the show notes for this episode by going to ConversionAid.com/41, where you'll find all the links and resources that we discussed today. If you'd like to get in touch with me, you can find me on Twitter: @omerkhan or email me at: omer [at] conversionaid [dot] com] If you enjoyed this episode, then I would really appreciate you taking a couple of minutes to submit a review on iTunes and subscribing to the show, if you haven't already done so. Just go to ConversionAid.com/iTunes. Thanks for listening. Until next time, take care.

[00:22:14]

Transcription sponsored by Karooya – Negative Keywords Tool

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Omer Khan

Hi, I'm Omer, the founder of SaaS Club and host of The SaaS Podcast. I help early stage founders and entrepreneurs to build, launch and grow successful SaaS businesses. Join me on this journey.