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Should your startup try SEM? Here’s how to answer

Published: July 30, 2013

Author: Sean Marshall

round hole
Image credit: toothpastefordinner.com

Search isn’t automatic. It isn’t the silver bullet to your marketing plan. Search isn’t as easy as it seems, and it certainly isn’t the right fit for every product and service.
Most companies can figure out how to take advantage of shades of intent and fulfill existing demand for their product. But what happens when there is no demand? What happens when things aren’t cut and dried?
More often than not, this is the conundrum disruptive start-ups find themselves in. With a flood of VC money, new startups are popping up to provide services people don’t even know they want. (Have you seen how many of them end in –ly, by the way?)
Search has built a reputation as the go-to channel for customer acquisition, but too often it’s become a case of fitting a square peg in a round hole. The greatest failure of most startups is not knowing how to address the intent of searches closely related to their category. Remember, most people won’t even know what you do and a startup’s search program will have to operate in the periphery of search intent (imagine marketing Google Glass through SEM…). It’s why the smartest startups have turned to lead gen models and deferred monetization until the customer is educated enough to want to buy.
Obviously there are risks to this. Let your lead gen programs run wild, and you might never monetize enough users to justify the expense.  But before you assume SEM is the first paid channel to leverage, take a step back and survey the field.
– Is anyone even searching for my product?
– If there’s demand for something related, who are the incumbents I’m up against, and can my margin objectives remotely align with CPCs in that market?
– If not, why not consider interest-based display? Better yet, why not FB or LinkedIn? (Looking at you, B2Bs.)
The SEM success of so many companies has skewed people’s perception of paid search. The idea that search is some perpetual money machine doesn’t apply to whole categories of companies – particularly those with the highest appetite for aggressive growth.  Yes, there are levers to pull, and balancing bids to margin goals gives search an unparalleled level of control.
Ultimately, every startup considering (or already testing) search should ask themselves these questions:
1)   Is search even the best place to start?
2)   Is there existing demand to fulfill?
3)   What is the competitive makeup of auctions (not who you think your competitors are – who is actually in the bidding)?
4)   What is the traffic potential of queries related to my product?
5)   Does my offer relate to the intent of users?
6)   If not, how can I tweak my funnel to leverage this demand?
7)   Do I have the expertise to test this the right way?
Nothing’s easy for startups, and though SEM has been deemed worthy of its own “For Dummies” books, it’s far from automatic. Be objective about it – the data won’t lie.

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