Why Early Stage Startups Should Not Engage in PPC Campaigns
Should the two words (startups and PPC) be even in the same sentence?
Early-stage startups are most likely bootstrapped and are still working on customer development, finding Product / Market Fit, and refining their product to get the “Aha” moment.
PPC can drive in traffic fast based on search volume and cost per click. I am a big fan of PPC, I have run campaigns in the past that has worked complementary with all the other marketing activities such as Search Engine Optimization, Content Marketing, and Social Media Marketing. It works and I am all for it.
PPC Ads are dominant in our everyday online search activities when using a search engine. On Google, these are the ads placed on top of ALL the organic search results rankings. These are the ads that hover above everything on the first page. It is clear and It is visible for everyone to see and click.
And for startups trying to create awareness and drive more traffic to their website, it seems like the most logical way to get started and be see - be visible.
And having run and successfully launch multiple Google PPC campaigns in the past, I know it works..but it isn’t for everyone especially for early-stage startups.
Now, there are obviously 2 advantages when running a PPC campaign.
IT BRINGS IN TRAFFIC FAST
Yes. You read that right. And it does bring in traffic. I have run campaigns in the past where everything works perfectly - the right words, the right copy, the right bids,(all through testing and optimizing of course), and a sufficient budget and we get conversions. It does happen from time to time.
By carefully choosing the right keywords based on search volume, with the bids and budget for your campaign. Traffic will surely come. Now, whether these paid traffic visitors convert or not is another story. (which is more of a CRO story)
LITERALLY ABOVE YOUR COMPETITORS
If your competitors are solely relying on organic search to get drive traffic, then having your own PPC Campaign will literally put your site above theirs.
For example, this keyword search for “NYC Pizza”.
If you’ve noticed, the whole upper page section is dominated by the PPC ad of Goldbelly Pizza. Immediately that is where our eyes are trained to look and most likely you will scroll down a few times but would go back up to check. (And if we do click, the company is charged based on our activity)
So yeah. PPC does bring in traffic and places your ad above competitors (within the given budget)
However, before you dive head-on into running PPC campaigns, there are some warnings that you should be aware of.
1. YOU WILL ATTRACT DIFFERENT TYPES OF VISITORS (and some are not your targets)
There will be obviously more traffic coming to your sites and possibly more click-throughs on your ads. However, the visitors that are coming are mostly in the following order
Just browsing and doing research
Accidental clicks (50% based on a recent PPC study conducted in December 2019)
Possible Buyers
And since PPC is Pay Per Click, you will literally pay for every click that your ad gets whether or not the visitors convert. This can be further traced to Google Analytics based on the bounce rate per channel.
2. BIDDING WAR WITH COMPETITORS
One of the exciting things that PPC brings to your marketing campaigns and traffic acquisition is the transparency of information available on Google and other keyword research tools on the amount of monthly search volume per search term (keywords) and the cost per click (the amount of how much you will pay for every click)
So for example, let’s go with the search term “practice management software”.
As you can see, the monthly search volume for this term in the United States market is around 1,600 which is high and looks promising.
Now to simplify how to set up a PPC campaign, you need to set a budget on how much you are willing to spend for this search term, and would want really outbid everyone and all your competitors.
1,600 Search Volume x CPC ($15.24) = $24,384 is your estimate monthly expense
But of course, this is just one search term, ideally, you will have a set for a branded, competitor, generic, and also long-tail keywords.
Let's say you're planning to launch PPC campaign for a new gaming console. Here's a chart of search terms to work with.
Basically you need to cast a really wide net and search terms to get traffic above your competitors. And it will be a huge expense in running all of these campaigns.
And in the end, you may spend more on PPC than you would want to.
PPC is an excellent marketing channel to drive traffic and it comes with a hefty price tag, and startups are not usually in a position to spend most of their funds on PPC campaigns. The time to use this marketing activity will eventually come, but probably in later stages.
And having worked with early-stage startups in the past and in the present, most bootstrapped by their founders and are working with a small pool of funds to get their product out, there are some better alternatives such as Search Engine Optimization, Social Media Marketing, and Content Marketing,