It’s becoming quite apparent that the Startup world is experiencing a slowdown and there appears to be no quick-end in site, unless you scrap everything your doing and start over. According to many articles from very reputable news sites around the web, the common issue at hand is the lack of funding coming from Venture Capital Firms. In addition, due to this shift in funding, Startups are now forced to change their thinking on how to grow their business on a shoe-string budget. In this post, I will discuss the importance of hiring a digital marketing firm that can not only get their business off the ground, but also do it without relying on the stress of getting additional funding to keep the doors open for another month.
Why is Venture Capital Slowing Down?
Across the major news sites and tech blogs, there has been a slew of articles discussing the apparent slowdown of Venture Capital funding across the globe (not just in the USA). According to the Forbes article entitled Tech CEO Shares Difficulties of Raising Venture Capital in a Down Market, the authors Samantha Walravens & Heather Cabot of GeekGirlRising stated “According to a 2016 report from PricewaterhouseCoopers and the National Venture Capital Association, funding in Silicon Valley startups fell 19.5% in the first quarter of 2016 compared to a year earlier, and is down 10% for seed stage companies in the first quarter 2016, amidst fears over the global economy and the run-up in startups’ valuations.”
To reinforce this trend, another article from Bloomberg.com, entitled “Is There a Slowdown in Venture Capital?” Phil Libin goes on to say that the reason for the pause and/or decline in Venture Capital funding is due to the current lack of interest of those “Me Too Businesses” that once thrived with the evolution of smartphones and social media. However, he does go on to say that right now is a great time for startups that can offer something new and original. See the video below for the interview (courtesy of Blooomberg.com)
Is Online Finally Catching up to Traditional Media?
In another yet predictable twist, it appears Social Media has finally started to crack that old TV Advertising Egg and is creeping its way deeper into the annual $ 70+ Billion Dollar TV Ad Budget. According to the AdAge.com article “TV Budgets Shifting to Social? Yes, It’s Time to Worry” author
Debra Aho Williamson states “… eMarketer believes the conversation about social and TV will change. For buyers who want the best way to reach their audience, the growing video businesses of Facebook, Instagram, Twitter and Snapchat now present a viable alternative to TV.”
Williamson also goes on to say that even though this shift sounds monumental, the actual amount of Ad dollars from TV to social is very small. On the other hand, she believes that this trend can very easily become a real “game changer” in the near future. So, with the potential of more advertising dollars making their way to the online marketing world, Startups are going to have to rely more on Digital Agencies to promote their product/service.
Getting Big Agency Results on a Shoe-String Budget
Since VCs and Investors are only interested in funding companies that offer something new, exciting and most importantly different, what does that mean for those “me too businesses”? Due to this natural shift in the business ecosystem, Startups need to find a more affordable way to launch their “baby” to the world without going bankrupt in the process. To help with this scenario, startups need to find a reliable Digital Agency that can jump right in and “move the needle”. This agency would need to provide guidance and help build the foundation needed to compete in this highly competitive online space. Here’s a recent article entitled “What Every Startup Needs to Know Before Choosing a Digital Agency” which can help highlight other services that Startups can benefit from.
Here is a brief outline of the services that startups need to remain competitive
Many Startups, especially Early-Stage Startups, operate on very small Ad budgets and are often second guessing themselves on where they can get the “best bang for their buck” with regard to online advertising. Based on the trends mentioned in this article about the decline in VC funding Social media getting more of the overall Ad budgets, it’s pretty clear that Startups need to focus on finding an affordable digital agency that treats them like a partner and not another typical client.
Over the years, I have seen so many horror stories when it comes to PPC Management. Whether it’s advertisers flying blind with their ad budgets or the common event of not knowing that their ads are being shown with irrelevant terms, there should always 100% transparency between the agency and the client. Furthermore, there needs to be more HONESTY on behalf of the PPC Agency. In this post, I will talk about a few areas of the Agency/Client Relationship that should be based on being honest with the client.
Educate the Advertiser:
Let’s face it, the PPC agency knows more about PPC Marketing than the client. However, that does not mean the client needs to be taken advantage of because they do not know how everything works. The person handling the client’s account needs to “in many ways” educate the client as to what is working, not working and where there are opportunities.
Everyone makes mistakes, right? Well, PPC Agencies should not try and hide them just because they can get away with it. Agencies should be forthcoming with admitting mistakes that were made and how efficiently and effectively they were fixed. It’s better to be honest with the client, than having them find out later that you lied to them. Ever heard of a Referral or a Testimonial?
Honest and Factual Reporting:
Over the years, I have seen so many poor examples of PPC Reporting where clients receive an excel spreadsheet of just Clicks, Impressions, CTR%, CPCs, etc… and not a single keyword or text ad or even a sentence on the performance of the account. In today’s world that is unacceptable. Moreover, I have also seen examples of trend charts being manipulated to disguise the true performance of a specific metric. Agencies have a responsibility to provide not only excellent service, but also honest and factual reporting.
PPC Marketing is not for everyone and for those who are spending money have this perception that the more they spend the better the results. That is completely FALSE. If an client/advertiser was given any sort of Guarantee from an agency, they should “run for the hills”. Guarantees in PPC Marketing are very dangerous for both parties because they create false expectations. An agency must be honest and upfront with the client when it comes to setting expectations both on performance and future success. The agency must have a clear understanding of the client’s:
- Cost per Conversions/Acquisition
- Targeted Audience
- Messaging Tactics
- Daily and Monthly Budgets
Honesty is always the best policy in PPC. Agencies have a responsibility to not only provide excellent service, but also be honest and forthcoming with the client. I have heard countless stories of poor PPC Management, including the topics I mentioned in this post. Some may say that is good for the industry because it creates more “turnover” and more opportunities for other agencies. However, for this PPC Geek, I believe in Happy Clients.
Like anything, mastering the fundamentals of pay-per-click account management requires both practice and perseverance. Today’s #Ham4PPC comprises nine lessons I’ve learned from my years as a PPC professional.
Read more at PPCHero.com
As someone who has been fortunate enough to be a part both the Startup and Digital Agency World, it pains me to witness the many recurring mistakes that are happening by bringing these two worlds together. The Agency wants the business and the Startup wants the best and smartest people to “grow their baby”. It all sounds like a “no-brainer’ right? Well, this perfect situation can sometimes be clouded by one of the most bastardized words in the client-agency relationship – Expectations. In this post, I will highlight some of the misconceptions that could, at the very least, help the next Startup as they prepare to show their product/service to the world.
How to Play the Digital Agency Game:
Don’t get me wrong. There are many highly reputable Marketing Agencies in the world that do not fit this description. On the other hand, there are some other Agencies that work on a different playing field that is not financially supportive of Startups. Most agencies take a 15% commission of Ad Spend regardless of performance or the companies financial situation. These agencies often provide a “Production Line” level level of service that question the actual time spend which leads to the overall client performance. Beware of agencies that promise GOLD and deliver pennies.
What Startups really need from an Agency:
- 100% transparency of where and how their money is being spent.
- Daily Direct communication with the Strategist/Marketer.
- Less than 24 hour turn-around times for typical updates.
- Level of ongoing Education on how the digital advertising world works.
Big Agency Regurgitation
I have witnessed many horror stories over the years from prospects/clients from either a performance or client relationship with a previous agency. The one thing that all of them had in common was the lack of achievable expectations. Situations such as poor communication, lackluster performance and just an overall bad experience have not only left a bitter taste in their mouth but also question the entire agency experience. Moreover, this feeling of being “burned” has motivated their thinking to bring the marketing “in-house” as the only alternative to reaching success. This is not a good thing….
As a big fan of conferences, they often open your eyes to a whole new world of innovation, prosperity and vision for business owners and that’s a great thing. However, it can sometimes backfire to the point of confusion and anxiety of what to focus on first. It is very easy for Entrepreneurs to get “over-excited” about the latest bells and whistles in software, automation and analytics. They are told that once they have these tools in their toolbox, they can turn their business into a fortune 100 company instantly.
Unfortunately, a reality check is needed to bring everyone down from this “high” and re-focus on the core issue at hand which is identifying, engaging and converting with their core audiences within a sensible budget. Remember, investing in Shiny Objects make you vulnerable, not successful.
The Misunderstanding of Monetization
In some instances, both advertisers and agencies, often forget to track every interaction point and that little oversight can be an unfortunate mistake. This assumed “low-hanging” fruit for tracking things other than traditional eCommerce/Lead Gen Forms such as (below) can completely skew overall performance and future optimization which could be devastating to startups as they hunger for continual growth.
- Contact Forms
- Email Newsletter Signups
- Live Chats
- Phone Calls
- Pageviews of a particular page can lead to
Mistrust of the Case Study
Case Studies are a great source for understanding the successes of a particular experience that allow the reader to adapt to new ideas and strategies. However, you need to be careful not put to put too much emphasis on the successes of these studies because of the substantiated factors which often lead inaccuracy. Here are some examples:
- Geography (Some of these studies reference a specific GEO area and not the wider population)
- Singular view and opinion. Often, these studies are done by a small group of people which may have biased opinions based on data collected.
- Case Studies are often used as a “Toot your own horn” strategy to generate more business. (Google is pretty good at that)
Don’t Bet the Farm
I can understand the anxieties of Startups where they want to launch their business with a big bang. However, spending too much too fast (especially in the PPC marketing world) can completely ruin their chances for steady sustainable growth. It’s imperative to start testing “right out of the gate” as well as identifying the quick wins and losses. Moreover, you will need to develop strategies to generate relevent traffic and awareness through alternative methods such as Social Media, SEO and quite frankly “word of mouth”. To prove this theory, just a take a look at these screenshots from SpyFu’s Monthly Trend function.
Outside Opinion Overload
Yes, it’s important to get as much feedback as possible when launching a new company. However, getting advice from people who think they know certain aspects of online marketing because they read an article or attended a conference, can be a slippery slope. Taking advice and/or criticism from someone “on the outside” that completely contradicts the vision of both your business partners and hired experts can be harmful to the business. This 3rd party opinion is often made without any understanding of what it takes to implement as well as its expected outcome. Whether it’s strategies about Landing Pages, Brand vs. Non-Brand, or even simple things such as Promotions and Offers can have a negative effect on revenue if not discussed by everyone on the team.
Solution: Soak up all of the feedback you can get, discuss with your team and agree to label these new ideas as “TEST” Campaigns and analyze the heck out of them.
Forecast Projection Failures
How many times have you seen someone simply create excel formulas which magically forecast the future of online marketing revenue based on a single monetary amount. (For example, if we increase our budget from $ 10,000 to $ 100,000 we will generate an additional $ 1 million dollars.) Yeah, I wish that were all true. However, that is not the case. The math may sound great to a Venture Capitalist/Investor, but it’s just not realistic.
- Take in account the following scenarios:
- Market Saturation Levels
- Seasonality Highs/Lows
- Potential Technical issues
- Search Engine Algorithm changes
- Increased Competitor landscape
“Off the Mark” Target Audiences
Hate to say this, but I have witnessed startup companies that thought they new their audiences and it wasn’t until they over-spent their PPC dollars and countless Landing Page A/B test to come to that realization. Selling a product or service requires more than just a few hours of typical market research. When it comes to online marketing, either hire a PPC Consultant or purchase PPC Competitive Research Software such as SpyFu.com to see some of these invaluable competitor information:
- Monthly Budget Trends
- PPC and SEO Keywords
- Top Text Ads
- Their own PPC and SEO Competitors
- Review monthly and seasonality trends
- Compare up to (3) three competitors and see which terms they are all bidding on.
Here’s an example:
Whether you are building a Startup company or growing an existing one, the agency experience should be a positive one. However, dealing with the “dog eat dog” agency world when it comes to trust, expectations and continual growth is unfortunate and should never happen. I hope this blog post, at the very least, has provided some insight into preventing these situations as well as learning from them. Finding the right agency partner is just as important as finding the right target audience.
Hero Academy is a new video series by Hanapin Marketing that offers short and basic how-tos for marketers that are new to paid media, looking to expand into new platforms like Quora, or need tutorials for learning and implementing new features in advertising. While many of the videos feature our own Hanapin team, we also […]
Read more at PPCHero.com
New jobs have been posted to PPC Hero’s Job Board, including new positions open at Hanapin Marketing, JEMSU, and Online Optimism. Here’s a brief look at some of the positions available: Online OptimismNew Orleans, LARole: Digital Ads Strategist (SEM/PPC) Online Optimism’s Advertising Department is growing, and we’re looking to add a Digital Ads Strategist to our other two full-time SEM/digital […]
Read more at PPCHero.com
If you’re brand new to digital marketing, you’ll likely hear the term CRO. It doesn’t matter if you’re a digital marketer working at an agency, member of an executive team working at a SaaS company, or marketing team member at an e-commerce company, you may hear this term and need to know what it is.
Read more at PPCHero.com
Hero Academy offers short, entry-level how-to training videos for marketers new to paid media at no cost. Perfect for an employee that just started working at your digital marketing agency.
Read more at PPCHero.com
- Qualtrics’ Julie Larson-Green will talk customer experience at TC Sessions: Enterprise
- Advertising Platforms for Podcasts
- Delete your pages and rank higher in search – Index bloat and technical optimization 2019
- Facebook snags former Vine GM to run product for its new experimental app division, NPE Team
- Why commerce companies are the advertising players to watch in a privacy-centric world