Effective marketing for start-ups
This blog is very close to being just a scribe of a video by Adam Erhart, and if you are more into videos than reading, here you go:
https://www.youtube.com/watch?v=4ajmfzj9G1g&t=213s
WIIFM
I am basically a start-up. I have my own business that is in the start- up phase, and although I am a sole trader at the moment, my goal is to build a web design agency. Not just any web design agency, but the best that money can buy. And not just in Ireland, but worldwide. So big dreams and goals, hard work ahead.
So I have a service that I want to offer to as many people as possible, as soon as possible. My first thought is to create a proper online advertising campaign targeting Google search ads, for what is called an in-market audience. The budget is not high, but with good content it will pay off. Maybe I will also include a social media platform like Facebook or something similar. I have a great service to sell and I need to make sure that potential buyers know about what I have to offer. Sounds familiar? Let’s dive in.
The mistake
The mistake is exactly that first thought; to build a proper online advertising campaign out of the bat. An effective marketing campaign requires good content to be successful. While this is not enough and we’ll look at the most important aspects of a proper campaign, good content is crucial. But if I plan to create a campaign with good content, why is that a mistake? Because at this point I don’t know what good content is. Before I go into what I think are the most effective strategies for a successful marketing campaign, after reading a bit about the topic, I will explain in more detail why I think it’s a mistake to start with the approach aforementioned.
Marketing in a nutshell
Marketing is a business function like any other. Accounting, production, financial analysis and management, human resources and service management, customer service, product development, sales and so on.
Marketing and sales are very similar in that they both have a similar goal. That is, to sell your product/service to your customers. The difference is that sales is a 1 to 1 environment and you get instant feedback from your prospect/customer, allowing you to adjust your offer in real time to fit what you’re seeing and learning. Marketing, on the other hand, is a 1 to many environment where you don’t get immediate and clear feedback from your prospect and customer, so any adjustment to your content/message takes much more time and is more expensive. The challenge of marketing is also its advantage: with a single message, a company can sell its services/products to a large number of people — with one caveat, which I will discuss below.
Is marketing the same as advertising?
No. Advertising is a function of marketing, it’s the tool that marketing uses to amplify the reach of the message. This is the main reason why my initial thought is a mistake, because I wanted to go straight to advertising without performing the marketing function. It’s like starting a game without reading the rules and knowing how to play the game. It’s no coincidence — except in games of chance — that people who are just starting a new game almost always lose to more experienced players.
Intermission
A side note and completely off topic. The more I learn about writing effective blogs, the more I know the ground rules I keep breaking. This blog is no different from previous ones I have written. I have broken every single rule I have learned so far. Moving on. I’ll start with what you should do in terms of advertising and then I’ll tackle the marketing side of things or the work that needs to be done before advertising. And I feel like I might break some rules with this approach as well, but I am going to do it anyway because…
Advertising — Digital Marketing
Advertising is an accelerator rather than an initiator. This means that you should use paid advertising when you’re already doing well in sales. Not only because you need the capital to pay for the advertising campaigns, but because advertising is an accelerator and not an initiator. We all know the many types of advertising, we’re bombarded with it every day and every moment. Billboards, written ads in the press, TV, radio, online pop-ups, in-app ads, social media and the ones I forgot like clothing brands on labels and so on. I will focus on digital marketing because I believe it’s the most relevant today, I’d say the most effective and it’s the area I want to work in.
Digital marketing uses online advertising as a tool for amplification. Online advertising is based on auctions and due to the very limited real estate on the SERPs (Search Engine Result Pages), the number of bidders who win is quite limited. Since no one would pay to have their ad appear on the second page of the SERPs, and almost no one would look at the first page if we could see that the first page consisted only of paid ads, we have a situation where space on the first page of the SERPS is very limited and therefore expensive.
Show me the money
You might be tempted to think that the winning bidder is the one who has the most money and is therefore in a position to pay it. And while there is some truth to this, the fact is that even those who have the money to pay are in competition. So how does the bidding system work? The following information relates to Google’s services as I have no knowledge of the other search engines. I would think they’re very similar, with some minor tweaks on some of the algorithms, but essentially the same, at least for the purposes of this article.
There are 3 main areas that are evaluated to find the winner for displaying an ad. I’m going to try to simplify this a bit because there are many different types of ads that determine who competes against whom. For example, even if 2 different companies are targeting cyclists in the same area, one company could be targeting different segments of that audience as well as different data and custom segments. In practice, this means that the 2 businesses might want to target cyclists, but are essentially not targeting the same cyclists. I think this is an easy and quick to read article on audience targeting if you’re interested. For more in-depth information on google ads topic, just use the provider’s library, i.e. Google Ads Help
What’s the score?
The three main areas that are evaluated to determine which ads to run.
1 — Bid. As mentioned earlier, this is an important score. Basically, you are saying that you will pay an amount of x to have my ad displayed if these conditions are met (you set the conditions, e.g. the different segments mentioned earlier). To bid efficiently, you need to know your business numbers very well. And the better you know the numbers, the higher you can bid and be sure to get your money back and then some.
2 — Estimated CTR or click-to-rate. This estimate is calculated by dividing the number of clicks on an ad by the number of impressions or views of the ad. These estimates are calculated based on past performance and the relevance of your ad message to your target audience. This is an area where good content is paramount.
3 — Quality of the ad. This is calculated using various methods, such as the bounce rate (when someone clicks on an ad and returns to Google search within the first 10 seconds) and other algorithms that try to place the highest quality ads possible on the highly coveted SERPs.
Who are the winners?
Winners are calculated by adding up the scores of each area, and whoever scores the most will have their ad displayed. I can’t say how the individual categories are weighted in Google’s calculations or what details the algorithms take into account, but I think this explanation clarifies this process well.
Google wants to show ads that are clicked on, because they get paid for the ads that are clicked on. Typically, companies want to reach a larger audience to sell their products/services. To achieve this, they first need to bid to place their ad and then get people to click on their ad. As we have seen, this goes hand in hand. There are various business models or specific campaigns where conversion is not a sale, or perhaps not even a goal, such as for businesses that want to increase brand awareness for instance.
Google wants everyone to be a winner, because winners pay. Google wants your ad to be displayed and clicked on, for all ads to be displayed and clicked on. To that end, Google has set up various support tools and automations to help everyone get their ad displayed and clicked. Essentially, they help you bid more efficiently within your budget, improve your targeting and the quality of your ads. Or you can hire a professional digital marketing agency. It’s still a mistake for new businesses to start right away with paid advertising, but I don’t want to repeat myself.
Running the numbers
I have already mentioned that good content is critical to an effective marketing campaign, but it’s not the only requirement. Someone who has studied marketing for 4 years can present you with a more comprehensive list than this, but I think this is the gist of it. I’ll also present some of the most effective strategies you should use in your marketing campaign. That should do it for you.
I’m not going to ask you to comment below and engage with this content because at this stage of my blog, the ratio of spam to genuine comments would be atrocious and would divert my focus and attention to an unproductive area that I can easily avoid (you have my email though).
So back to the requirements for an effective marketing campaign. On top of good content, you need time, money and perseverance. I’d argue that if you give it enough time, allocate the right amount of money, are not afraid or ashamed to be persistent, and are able to create good content (just a hint: your product/service has to be something people want), you will succeed.
The money again
I stress again that you need to know your numbers.
You can create your own content and pretend that the time you spend on it and the skills you need to do it don’t cost you any money. Make sure you create a highly targeted and relevant ad that inspires your audience to take action though.
You can run your own marketing and advertising campaigns with persistence and believe that the time and skills to do so will cost you and your business nothing. You would be wrong, but you can think it.
What you won’t to be able to think comes at no cost is the actual advertising campaign that you have to pay to go live and stay live. Your ads need time to optimise. So you need to allow a couple of weeks for bidding, because there is no point in optimising an ad until it has been live for at least 2 weeks.
You need to know your numbers, your CLV (customer lifetime value), your CPA (customer acquisition cost), your expected conversion rate or ROI. This is not easy to know and nearly impossible when you’re just starting out. You will also be competing with companies that use tracking and pixel people for retargeting and are willing to pay exceptionally high costs per click.
What can I do then? Try PESO
If you’re starting out, use the PESO model. PESO stands for Paid, Earned, Shared, Owned.
Paid is what we just talked about, but it doesn’t have to be just your Google search or display ads and your Facebook, Instagram, Tik-Tok or Twitter ads. As I mentioned earlier, it can also be a billboard ad in your city, an ad on TV or in a newspaper or magazine, etc. Any paid ad falls into this category.
Earned media is mainly word of mouth and the message that is passed on within and from your network. This is hard to do and hard to track, but you should definitely put some time and effort into it. A guest post on a blog, an interview with a podcaster, a news article that you submit to your local newspaper or station TV — whatever you can think of to get you and your business some authoritative media exposure.
Shared media is organic social media. If you create valuable, engaging and entertaining content, chances are it will be shared further if you share it on a social media platform. However, you are a “slave” to the algorithms of the platforms you use.
Owned media are things you can own and control. These include your website, your podcast and your email list. Try to build these media as quickly and efficiently as possible.
Strategise
I think the best approach is to use the four different strategies. So go ahead and create your own content. Use earned media to get backlinks, guest posts or PR. Use shared media to spread your message further. And use your own media to get that content out there and maybe some more specific content for your own mailing list.
After a while — and again, marketing takes time and persistence, not just money — you’ll have a good understanding of what works and what doesn’t. What you should focus your efforts on and what message is most effective. Not only will you get better at creating good content, but you will also turn your marketing initiatives from a risky and costly endeavour into a strategic and calculated business decision.
Now you should be better prepared to create content for paid media and reach people you would not otherwise be able to reach. Now you should be able to run an effective marketing campaign.
A promise is due — Effective marketing strategies
If you apply the above strategy and know the key requirements for an effective online advertising campaign, you’ll be in a pretty good position to avoid the following common scenario. “My marketing is not working, no one is clicking, the algorithm is not working for me.” Maybe it’s simply a matter of quantity rather than quality. You can easily start jumping from platform to platform, for example from print to Facebook or from Instagram to Twitter, because what you tried on one platform did not produce the results you want and need.
Sure your content might suck and that’s the reason why, but it doesn’t have to be. Your content could actually be good, but you have not hit the sweet spot yet. This is where time and perseverance come into play.
Bell Curve
Imagine a bell curve. Maybe I’ll include an image to make it easier to understand (I have learned that images work well in blog posts — just one of the rules I might continue to break unless I feel it’s necessary, as is the case here).
The area where the exponential increase highlighted in the figure below takes effect is the minimum effective dose (MED). The smallest amount of an input required to achieve a desired result. Nothing you do whilst on to the left of this limit will produce the desired and needed results. There’s not enough exposure and engagement to make a difference. This is where businesses that are only half committed to their digital marketing campaigns usually fail. This lack of commitment usually manifests itself in terms of money or time (if the campaign is being managed by an expert and not the business owner themselves, which in this case can manifest itself in a lack of skills). In most cases, it’s enough to just keep going to cross the MED line and approach the sweet spot of marketing.
The sweet spot
This is where the magic happens. Your persistence, the time and money you have invested in your strategy and campaign will be rewarded, and small actions can yield big results. Your reach and, more importantly, your potential reach is enormous. Even if you’re in a niche market, the industry numbers, especially if you look at them globally, will be much bigger than you thought possible. You might think that hitting the sweet spot is irrelevant if you specialise in mushroom-infused coffee. With an estimated CAGR (compound annual rate growth) of 6%, I beg to differ. Why do you think the really big companies spend millions on effective marketing campaigns when they are already in the sweet spot? Because it’s an immense pool of opportunity that seems almost inexhaustible.
Granted, there is an area called the area of diminishing returns, where more money, skills and time do not yield more returns. Every single piece of traffic and target you optimise for will cost more and more, to the point where it costs more than what you get in return. That would mean you have exhausted the sweet spot. Congratulations, you would be the first in history.
Where are the strategies?
If you’re still reading, I hope it’s because you’re finding it a good use of your precious time. But it is quite possible that you are thinking to yourself: you could have written that more succinctly, because I have the kids to feed and you still have not told me any effective marketing strategies. Or you prefer long texts that go into depth and offer many expert insights from an authority in the field or refers that authority to good academic or other research. I’d say I am sitting in the middle and will find out over time if there’s an audience for this brand or if I need to pivot, which I’ll do until I have you in my enthrallment. Have I pushed it too far?
The Rule of Seven
The Rule of Seven is based on the fact that most customers do not buy from you on first contact (I should know). The number of touches depends mainly on how expensive what you are selling is. The cheaper it is, the fewer touches are needed. So it starts at one touch when she first comes into contact with your product or service, and goes up to well over 7 touches for more expensive products/services. The rule of seven is a thing. It’s a strategy, use it.
Where does your customer live?
Find out where your target audience is, where they live, i.e. where they spend their time online. If they’re not on Tik Tok, there’s no point in advertising there. Once you know where they are, you need to make sure you are constantly reaching them with added value, content and offers.
The mere exposure effect
This effect is effective because we humans associate frequency with trust. The more often we appear in front of people, the more often they see us and the more familiar they are with us. The more familiar they are with us, the more they will eventually trust us.
For effective email marketing campaigns, you should of course know your market and adjust the frequency accordingly, but a couple of emails a week should be a minimum for most (if they’re interested in what you have to offer, which should be the case, otherwise they would not be your customers or subscribe to your emails). Some successful companies send emails to their customers twice a day if this is appropriate and acceptable for the particular company and target group. This is a strategy where persistence is key.
Go deep rather than broad
Drill deep down on who your target market is. The deeper you go, the easier it will be to communicate effectively with that market segment and build strong relationships. Less is more.
ICA
Ideal Customer Avatar. This is a marketing term that refers to the profile of your ideal customer. Get a clear picture of the common characteristics of your key customers/target group.
Demographics (age, gender, income bracket, occupation)
Geographics (country, city, town)
Psychographic (values, attitudes, interests, beliefs, political affiliation, lifestyle)
Your product will determine how broad or narrow some of these characteristics are within your customer / target group. Your ICAs should be as specific as possible and you can have more than 1 single ICA. However, the different ICAs will need different messages and approaches as you will most likely solve different problems for each individual ICA.
What do customers buy?
Customers buy solutions. Customers don’t buy when they understand, they buy when they’re understood. Your job is to understand 2 things about your customer. Her wants, needs, desires and/or dreams. And her fears, problems and frustrations. Then you need to find out which of these are the most important and immediate. This way you can position your product/service as the solution the customer needs. Your only task is to lead them from their problems to their needs.
Sell the results, not the features
You know what your customer needs and you have the product/service that will solve their problems. Do not sell them the features that will achieve that, because we buy mainly on emotion, not logic. Sell the results, help them see the reality of using your product/service.
But if this first approach does not work, try again (perseverance) and this time start with the features and hold back a bit on the benefits. Sometimes we are more logical than emotional. As mentioned before, marketing takes time, money, good content and persuasion, there is no other way, did you count 7? Some rules are better when they are not broken.
This article wouldn’t be possible without the knowledge I’ve acquired from Adam Erhart who so generously shares his thoughts and expertise on the matters of Digital Marketing.
In my next article, I may share how I learned to write effective blogs and how I butchered this blog after already being aware of some rules. At least now I know I broke the rules, that’s progress from previous articles.
In conclusion
Do not give up. Learn, adapt, persist, add value and ádh mór.
