digital marketing for startups (2015)
TRANSCRIPT
WHO AM I?
2
Joni Salminen
Ph.D., marketing
• Bachelor’s thesis 2007: Search-engine
marketing on the Internet
• Master’s thesis 2009: Online advertising
exchange
• Dissertation 2014: Strategic problems of
early-stage platforms on the Internet
Experience:
• Teaching digital marketing at the Turku
School of Economics (2012 →)
• Marketing manager (ecommerce: ElämysLahjat.fi)
(2011 →)
• Consulted various startups on digital marketing
TODAY
• “In this keynote, Dr. Joni Salminen gives an introduction to
various digital marketing channels and concepts, including
SEO, AdWords, Facebook Ads, viral marketing, analytics, and
growth hacking. The participants will gain basic understanding
of these topics, as well as information on where to learn more.”
• The keynote will be followed by individual coaching sessions
for each startup in the Startup Journey program. The coaching
sessions will take place on 15th July, 2015.
• The teams are asked to register here:
https://docs.google.com/spreadsheets/d/1wUmVKgYdUCAuV7
MeAykDd7nb9jaqTXnObD1e01Jwdzk/edit?usp=sharing
3
STRUCTURE
1. key points in digital marketing
2. digital marketing channels: SEO, AdWords, Facebook…
3. digital marketing stack
4. a couple of advice here and there…
THE ”MARKETING
MIX”: 4P MODEL
Product
Price
Place
Promotion
THE ONE THING MOST
STARTUPS MISS…
Distribution.
Many successful businesses are successful because they have a
strong distribution network (i.e., resellers).
If all you have is App Store, you’re on thin ice.
(Even in app business, you can have distributors. Find out who
the best ones are, and strike a deal.)
DIGITAL MARKETING?
Traffic driving (pre-click) and site optimization (post-click).
a. Traffic driving = buzz creation
b. Site optimization = analyzing user behavior
TRAFFIC?
there are two types of traffic:
a. organic
b. paid
(marketers want to increase one or both)
”WE DON’T HAVE MONEY”
• most startups don’t have money.
• does this mean they should only focus on organic traffic?
• yes and no.
YES, FOCUS ON
ORGANIC TRAFFIC
• The magic word is ”engagement”
• (Another magic word is WOM. Why is WOM important?)
THE TWO METRICS MOST
COMPANIES DON’T TRACK
(BUT THEY SHOULD)
• CAC
• CLV (Revenue per month x Avg. Lifetime)
• When CAC < CLV, you’re good. But you need to know what
those figures are! (It’s much harder than what what you might
think.)
• Some pointers: Google it; use a CRM system; force
registration & login; record everything in your database (the
Facebook way)
WAYS TO ACHIEVE
CAC ZERO
• PR (yes, it can work – look at Wolt)
• ”viral marketing” (this is like magic)
• beware of ’build it and they will come’ fallacy! (”we don’t need
marketing”)
• beware of magical thinking (”we’ll just do some viral marketing
/ google adwords / social media”)
• …or think like this, if you want to fail.
YOU WON’T GET CAC
ZERO IN THE FIRST
ITERATION
• or the second, or the third…
• in fact, you only get it after dozens of iterations, if ever
• this is much trickier than just paying for users
• at the same time, it’s a great opportunity to truly focus on
improving the core product (because that’s pretty much all
you can do)
NO, BECAUSE…
1. testing paid channels gives a CAC estimate, which can be
used for evaluating scaling (”if I, as an investor, put x €, how
long it takes for me to get it back”)
2. most companies simply cannot do without advertising (”if
viral marketing was easy, there would be no advertising
industry”)
VIRAL COEFFICIENT
15
USER CTA
ACCEPT?
x * y > 1 is
viral growth
no
(decision to
invite)
x = invited
friends
y% = acceptance
rate viral hook, “why
is this
interesting?”
yes
viral loop, ”the steps a user
goes through between
entering the site to inviting the
next set of new users” (Chen
2007)
2nd gen.
PAID VIRAL MARKETING
• This is called increasing the number of ”patient zeros”, with the
help of advertising.
• Viral marketing is actually shit in most cases. Why?
• (Because of shark fin)
HOW TO SOLVE THE
SHARK FIN?
• measure ENGAGEMENT and RETENTION, and focus on
improving those
• (remember the leaking bucket problem)
ORGANIC GROWTH
ASSISTED WITH MONEY
• an average company can grow somewhat without money on
marketing
• however, it will grow faster with paid marketing (rachet effect)
• if the core product is good, the paid marketing will accelerate
growth (but it won’t grow because of marketing)
PRODUCT & MARKETING
ARE INHERENTLY TIED
• shitty marketing x great product = likely a failure
• shitty marketing x shitty product = a sure failure
• great marketing x shitty product = a sure failure (”people are
not stupid”)
• great marketing x great product = has some possibilities in the
tough market
• a good marketer is always looking for a good product.
THINK ALSO THE RUNWAY
• most startups just fade away
• life gets in the way; people graduate, get ”real” jobs, get
married, etc.
• and of course there is competition (but that’s not the main
worry; mostly they die away because the team breaks)
• so, you have to act NOW and be QUICK
• in this kind of environment the slow-moving marketing tactics
such as SEO and content marketing are difficult, because the
results are not instantaneous which demotivates the team
”JONI, WE HAVE A FREE PRODUCT.
IS THIS A GOOD IDEA?”
• No. No money = no business
• Customers give you money, without them you have only free
users
• Free users = free riders
The only exceptions are, when
1) your exit strategy is to get acquired by Google, or
2) you aim to get over 10 million users (because that’s
what indirect monetization requires)
”BUT WHAT ABOUT
FREEMIUM?”
Sure. But the free part in that is just a marketing tactic, nothing
more. (I.e., you still have to build a product people are willing to
pay for.)
”HOW TO GET PEOPLE JOIN”
IS THE WRONG QUESTION
The right question is ”How to get people pay?”
…and because people are not stupid, you have to offer them
something valuable.
…and because you don’t know what’s valuable for them (no, you
don’t), you have to find out.
WHAT I SUGGEST
INSTEAD…
is to focus on high service level,
customer experience
and customer satisfaction
to bring you returning customers
and new customers through referrals,
for this has always been in the core of business.
SO, DON’T WASTE YOUR TIME
THINKING ABOUT FEATURES
Think about services you can offer for the customers to help them
reach their goals.
IN EARLIEST STAGES, ONLY
MARKETING YOU NEED IS…
• customer development!
• (whether or not Steve Blank likes it called like that, it’s market
research)
• you want to discover who your customer is and validate your
beliefs about him/her
PROBLEMS, OR JUST
”PROBLEMS”
• I bet 100€ that most teams here are solving trivial products and
have what is known as ”vitamin pill” as opposed to pain killer
• It’s normal, because they don’t know enough about real
industries / real people to understand their problems
• (Btw, if I ever see another ”bar application”, I’ll leave the room
and never come back.)
GET OUT!
So, you go out of the building to interview people (b2b/b2c), run
surveys and get all kinds of first-hand data about the problem
you’re solving.
After that, you have a much better understanding of the customer
needs and wants (and you may discover your original idea of
customer/product sucks). This is useful for both product
development and marketing.
WHY DO PEOPLE (GENERALLY)
BUY?
• to save money (b2b/b2c)
• to get more money (b2b/b2c)
• to make life easier, or more secure (Dropbox)
• to satisfy a vice (beyond gaming, this is tough)
• …well, some also want to make others happy
• and some products are necessities
HUMAN TOUCH – THE UNEXLOITED
ASSET OF ONLINE STARTUPS
• So far, startups have focused on replacing human labor
• Some of them have combined technology and human
successfully (e.g., Airbnb)
• In the future, technology should be used to create jobs, not
take them away
• (…but we’re not yet in the future…)
HOW TO LEARN CUSTOMER
DEVELOPMENT
• If you have to read one book about this topic, read this
one: http://www.amazon.com/Interviewing-Users-Uncover-
Compelling-Insights-ebook
• If you want to read another book, then it's this
one: http://www.amazon.com/Lean-Customer-Development-
Building-Customers-ebook
• Here are my slides on customer development:
http://www.slideshare.net/jonis12/customer-development-an-
introduction
• …but the best way is learning by doing
GOOGLE ORGANIC: SEO (SEARCH
ENGINE OPTIMIZATION)
Definition: Creating content, links, and social signals to rank
better in search engines (Google) for selected terms which are
deemed important for the business.
Example: most sites in the world.
THE GOOD AND BAD
Good Bad
Pretty much every website
needs to know this
Results take time to show
Free traffic from Google It’s not ”free”; it takes time,
3-6 months
Results can last long Vulnerability to Google’s
algorithm changes
Doesn’t work when people
are not looking for products
in your category
HOW TO USE IT IN A
STARTUP?
Rank better for relevant terms, when people are looking for a
solution in your product category.
(Google can easily bring the majority of your traffic.)
HOW TO START?
1. Do keyword research
2. Map who rank the best, think of ways to cooperate for links
3. Make sure all content is original and fresh
4. Hire a good SEO guy (but beware of blackhat!).
SEO METRICS
• Growth of organic traffic
• Links (PageRank profile)
• Indexed content pages
• Duration of visits, bounce
• Page load time
• etc.
some of them are
good, as Google
wants to mimic
user experience
SEO TOOLS
Tools:
• AWR Cloud
• Google Webmaster Tools
• Screaming Frog SEO Spider
• Google PageSpeed Insights
PAID GOOGLE:
ADWORDS
Definition: Paid text ads in Google.
Example: ElämysLahjat.fi
THE GOOD AND BAD
Bad Good
As soon as you stop paying,
you stop showing
The results are instant and
tend to be 10x better in
direct ROI
Competitors tend to push up
prices every year (bid wars)
Only pay for clicks
(performance)
Interest at a given point is
naturally limited; restricts
scaling
Total control over keywords:
which ones & how much
When people are not
searching for your
category…
Skills can top money
(Quality Score)
Bad for awareness building It’s always on (process, not
campaign)
HOW TO USE IT IN A
STARTUP?
Rank better for relevant terms, when people are looking for a
solution in your product category.
HOW TO START?
1. Learn the basics of A/B-testing
2. Get some money to test paid ads
3. Learn short copy
4. Read Google’s help for AdWords Certificate (and get the
certificate ;)
5. Get a good designer for GDN (display & retargeting), and plan
nice re-activation concepts.
ADWORDS METRICS
• CPC = cost per click
• CTR = click-through rate
• CVR = conversion rate
• CPA = cost per action (usually sales)
• QS = quality score.
ADWORDS TOOLS
Tools:
• AdWords Editor
• Übersuggest
• Keyword Planner
• Google Analytics.
MARKETING
Definition: Using Facebook to reach potential customers via
organic and paid means.
Example: BodyBuilding.com
FACEBOOK ORGANIC
Don’t do it. Just don’t.
(Well, the one exception is when a) you’re a Facebook marketing
superstar, or b) Facebook is really your core marketing strategy.)
(Otherwise, you can write there from time to time, but don’t expect
any results; the algorithm just fucks you up.)
THE GOOD AND BAD
Good Bad
Pay only for
clicks/impressions
Social mode is not as strong
for conversion as search
mode
Superior demographic
targeting
Fake clicks, bots, and
Banglaheshi
True Superplatform; reach
1Bn people in 100 countries!
Constant reduction of
organic reach makes you
want to look for other social
platforms
HOW TO USE FACEBOOK
MARKETING IN A STARTUP?
• Testing value propositions
• Interaction (surveys, qualitative research)
• Building an international following (you can dream, right?)
• Sales? (30/70 rule)
HOW TO START WITH
FACEBOOK MARKETING?
1. Learn A/B-testing methodology (I have a free tool here:
https://www.dropbox.com/s/ftksnotlky0ewpu/Facebook-
mainonnan%20testity%C3%B6kalu.xls?dl=0)
2. Get some money to run tests on paid ads
3. Focus on finding out if you can get 1) any conversions at all,
and 2) how well would it scale if somebody gave you 1000x
more money
MARKETING METRICS
Metrics:
• Likes
• Shares
• Comments
• Frequency of posting
• Engagement ratio
• Relevance score
mostly crappy vanity
metrics
MARKETING TOOLS
Tools:
• Facebook Power Editor
• Qwaya, Smartly
• Buffer (for sharing).
CONTENT
MARKETING
Definition: Creation of content, such as text, videos, pictures,
infographs and slideshows in order to communicate expertise in a
given field or industry, and to generate business leads.
Example: Mint.com
THE GOOD AND BAD
Good Bad
If results comes, they can
last a long long time (opinion
leader)
Expensive, because it takes so
much time (remember, your time
is not free!)
It’s easy to start if you know
about the topic
Showing direct ROI is difficult
Potential for crowdsourcing
(Freelancer.com,
Fiverr.com)
Getting results takes time; 1-2
years
Requires true passion,
knowledge, and consistency (if
you dropped college because
writing thesis was too hard, forget
about this)
HOW TO USE IT IN A
STARTUP?
• Become a thought-leader in your field
• Make buzz in social media (remember, effects carry over to
SEO)
• Generate leads by giving people something in exchange for
email addresses (and then follow-up with a proper lifetime
marketing approach).
SHOULD WE DO ”CONTENT
MARKETING”?
• Normally NO, it’s too SLOW and DEMANDING!
• Only do it if in your language/market, there is a killer cry for an
opinion leader in some topic (actually, in Finland that’s not hard
to find…)
HOW TO START WITH
CONTENT MARKETING?
1. Think if you want to start; content marketing is parallel to turning into a publishing house; it works for ~1% of startups
2. If you do want, subscribe to Colibri.io, start tracking relevant industry terms and be ready to comment in relevant discussions e.g. in Quora and Twitter
3. Join every possible LinkedIn and Facebook group in your field
4. Create a content calendar and stick to it
5. Every time you create content, post it to the aforementioned LinkedIn and Facebook groups, as well as your team members’ profiles (several times)
6. Also curate other industry players’ content and share it in your social media profiles
CONTENT
MARKETING METRICS
• Number of generated leads (#)
• Value of those leads (€)
• Content-specific metrics (shares, likes, inbound links…)
• etc.
CONTENT
MARKETING TOOLS
Tools:
• Fiverr.com, eLance, etc. (for content production)
• Colibri.io (for occasions to participate)
• Google Sheets (for content calendar)
• Google Analytics (for tracking popularity).
”GROWTH HACKING”
• Using any kind of means to get more traffic / users / leads /
customers.
• This often means using official and unofficial APIs to plug into
other, much bigger platforms.
• The wider question: what is your platform strategy? (no
startup is an island)
WHERE TO LEARN
MORE?
AdWords
• PPC Hero
• Search Engine Land
• Jon Loomer
• Fiercer Media (Marko Pyhäjärvi)
SEO
• MOZ blog
• Matt Cutts
Content marketing
• Buffer Blog
• Content Marketing Institute
Growth Hacking
• Andrew Chen
• Sean Ellis
HOW TO CHOOSE
MARKETING CHANNELS?
• It depends.
• the goal:
• in go-to-market, introducing a new product, aiming at market education: kickstarter, indiegogo; facebook; PR; blogger/influencer collaboration
• in capturing existing interest: google
• the budget:
• if no budget: use organic methods (but expect slow / no results)
• if budget: split it across only a couple/few channels, experiment and compare CPAs
• if there is a conflict between the goal and the budget, you need to adjust your goals or find money (also remember the runway!)
A ”MARKETING STACK”
It’s a selection of marketing tools, tailored to your budget and
needs.
(Next follows an example.)
THE IDEA
SaaS-based tools which integrate with one another and scale
as the company grows.
• Salesforce.com
• Intercom.io
• Desk.com
• Mailchimp
• SnapEngage
SALESFORCE.COM
(CRM)
INTERCOM.IO (MARKETING AUTOMATION)
for lifecycle emails (welcome, how-to-use, re-
activation) (here’s a practical guide:
http://docs.intercom.io/Intercom-for-customer-
communication/what-messages-should-i-send)
DESK.COM (CUSTOMER
SERVICE & SUPPORT CENTER)
MAILCHIMP (NEWSLETTER
MARKETING)
SNAPENGAGE (LIVE
CUSTOMER SERVICE)
SnapEngage with
rotating duties
INTEGRATIONS
COST OF TOOLS
• Salesforce 125€ per month (1 user)
• Intercom.io 49€ per month
• Mailchimp 75€ per month (up to 10,000 subscribers)
• SnapEngage 49€ per month
• Desk.com 60€ per month
Total: 358€ per month
THERE ARE CHEAPER
WAYS TO GO, TOO…
$9 Marketing Stack: A Step-by-Step Guide
http://robsobers.com/9-dollar-marketing-stack-step-by-step-
setup-guide/
BE VERY LEAN WITH
MARKETING TOOLS
• for example, CRM inside Gmail → Streak CMR + Rapportive
• simsalabim! you have a simple CRM system set up
• (simplicity is good)
• (and in any case, no tool ever made a company succeed.)
SHOULD I DO
EVERYTHING MYSELF?
• No, unless you have no choice.
• If you have a choice, hire specialists to handle various
channels. Monitor their performance.
• Make others grow your business. (Yes, be a good capitalist.)
• Specialists → agencies
• Generalists → in-house (marketing manager)
HOW TO HIRE A
MARKETER?
1. if you have funding, pay him
2. if you are bootstrapping, do like this:
a. determine growth goals
b. ask how he would accomplish them
c. make milestones
d. promise him equity
e. tie release of stocks to accomplishment of milestones
f. turn this process into a legal document
THANKS FOR
LISTENING!
(You can reach me at LinkedIn)