7 Marketing Secrets from 500 Startups Demo Days

Have Fun, Get Deals Done – The Future of Marketing is the Brand Experience

Pitching to top Silicon Valley investors like Tim Draper is nerve-racking. It helps when he’s dressed in a superhero costume.

From Valentine’s Day-Themed (Batch 19) to Summer of Love-Themed (Batch 20), 500 Startups Demo Day is more than a pitch day, it’s a festival where everyone has fun and gets deals done.

Here’s a look back at lessons we’ve learned from the last 7 Demo Days, and how 500 Startups stumbled upon creating the unique pitch day in Silicon Valley.

1. Listen to Your Audience

Back in the day, 500 Startups Demo Day was pretty basic (see Batch 8):


500 Startups Founding Partner, Dave McClure, speaking at 500 Batch 8 Demo Day (back when the most colorful thing at Demo Day was Dave’s language).

During Batch 13 Demo Day, things got a little bit more interesting.

It all started when I bought Dave a unicorn hoodie for his birthday, which happened to coincide with the Batch 13 Preview Day (an invite-only sneak peek to Demo Day). To our surprise, many investors and founders in the audience loved Dave’s unexpected fashion statement, talking and tweeting about it.

Dave noted the audience engagement and decided to wear the unicorn costume again on Demo Day. He also encouraged Founding Partner Christine Tsai, a former ballerina, to wear a rainbow tutu. Again, the response was extremely positive at Demo Day. Silicon Valley Business Journal even dedicated an article to Unicorn theme.

The lightbulb turned on, and we saw the potential marketing value in bringing creativity to our Demo Days. But it wasn’t a mere fluke — we listened to the audience feedback, saw the marketing value, and applied it.

 

2. Turn Challenges into Creative Advantage

When planning for Batch 14 Demo Day, we found out the only day the venue was available was the day before Halloween. We were not happy. Typically we tried to plan our events around major holidays, like Halloween, assuming people would be busy attending their own company parties. We were worried about not having enough investors attend our event, but we couldn’t change the date. So we decided to exploit the timing instead. Thus, Demo-Ween was born.

In our past Demo Days, we always focused on the pitches, not wanting to take away from the big day of our batch companies. However, the thematic timing forced us to look at the Demo Days from a different angle. We decided to make Demo Days more entertaining. We added the Halloween theme to our Demo Day, aka “Demo-ween” — presenting the content in a new form. The new form of Demo Day allowed startups and investors to dress up, have fun, and get deals done together.

As a result, the Demo-ween not only helped us maintain the previous demo day attendance, it also attracted more international investors than ever before (50% increase). By presenting the content in a more engaging format, we turned a challenge into our competitive advantage.

The first Demo-ween was so successful, we decided to make it an annual theme. 




3. Use Product-Launches to Rejuvenate Your Brand

In 2016, we started adding speciality tracks to our seed program, starting with a Fintech track in the Batch 16 program.

In order to highlight our new Fintech focus, we made the Batch 16 Demo Day poker themed. In order to create an authentic experience, the 500 events team hired a top poker player to give attendees poker lessons and play blackjack. Founding Partners Dave McClure and Christine Tsai also dressed up for the poker theme.

Partly in thanks to a successful Fintech-Themed Demo Day, we saw a 23% increase in Fintech applications to the following batch.

4. Embrace Company Culture

During the Batch 17 program in June 2016, the 500 team and batch companies attended the San Francisco Pride Parade. Pride inspired us to redefine the meaning of “unicorn” at 500. In tech, a unicorn company means a billion dollar company valuation. We decided that being a unicorn also brings about a sense of love and unity. We are not only about making profits and increasing portfolio company valuations but also about celebrating people and culture.

The momentum of the Pride Month continued into our Demo Day planning process. We wanted to use the upcoming Demo Day as a platform to promote 500’s company value of embracing diversity and inclusion. We chose the theme “Beauty & the Geek” based on our B17 tracks Fashion & B2B and decided to break down gender stereotypes by having Dave dress up as the “Beauty” and Christine the “Geek”.

After Demo Day, Microsoft offered to sponsor our efforts to advocate diversity in tech by supporting our Unity and Inclusion Summits. Our open and embracing culture has attracted a very diverse group of companies. In our latest batch, Batch 20, 36% of our batch companies were international (from 10 different countries), 20.5% of companies had at least one female founder, and 25% of companies had a black / Latinx founder.

 

5. Make It About Your People

At the end of the Batch 17 Demo Day, a flash mob of the 500 team appeared from the audience and started dancing on stage with Dave. The big screen started playing videos of venture capital investors and founders of successful 500 portfolio companies around the world wishing Dave a happy birthday. The B17 Demo Day happened to be Dave’s 50th birthday and our 500 family planned a surprise for Dave.

The Demo Day birthday surprise is just one example of the many things that we would do simply because we care about people. We build the 500 brand by connecting with people on a personal level.

6. Create Positive Emotion

From the previous Demo Days, we began to see that themes created a supportive environment for founders and investors to develop relationships. For Batch 19, we chose a Valentine’s Day theme because we wanted to bring more emotion into the experience.

We dressed up our founders as Cupid (Christine) and the Queen of Hearts (Dave) and decorated the stage with all shades of pink and hearts. Investors could give batch companies Valentine cards that said, “I have my eyes on you!”.



 

7. Leverage Culture & History

Our Batch 20 program was based in San Francisco around the same time as the city’s 50th anniversary of the “Summer of Love” – the 1967 summer event that drew nearly 100,000 young people to the city’s Haight-Ashbury neighborhood. Starting from early spring 2017, streets in San Francisco were decorated with the “Summer of Love” theme. We decided to do the same theme for our Demo Day to pay tribute to the city’s history.

With flowers, rainbow-colored lighting and our emcee in a Grateful Dead bear costume, this Demo Day brought a sense of nostalgia to the city many 500 Startups team members call home.



Conclusion

Our Demo Days are instrumental in building the 500 brand. We strive to create an organic ecosystem of investors, founders, and corporate partners by providing meaningful and engaging content to our audience.

If your goal is to stand out from the crowd and flaunt your unique brand to the world, don’t forget to incorporate these 7 Marketing Lessons from 500 Startups Demo Days:

  1. Listen to the Audience: Gather feedback from your audience, catch the opportunity, and act on it
  2. Reframe the Challenge: Look at the problem from another perspective and turn challenges into advantages
  3. Inspire with your products: Rejuvenate your brand with new products
  4. Embrace Company Culture: Integrate the company values and culture to create a powerful marketing message
  5. Focus on People: Build a people-centric ecosystem to organically grow your business
  6. Engage your audience with Emotions: Create Positive emotions to Drive Connection and Awareness
  7. Integrate Art into Business: Leverage the power of culture and history in your marketing

500 Batch 22 begins July 24th, 2017 in San Francisco.

Click Here to apply for our the Batch 22 Seed Program.

More from Yiying Lu: 


yiyinglu-profile-square

Yiying Lu is award-winning bilingual (English & Chinese) artist and designer. Born in Shanghai China, Educated in Sydney Australia & London UK, now based in San Francisco, Silicon Valley, she currently is a Design Lecturer at the NYU Shanghai Program on Creativity & Innovation. She is also an individual creative consultant who provides talks & workshops for global startups and corporate innovation teams on design thinking, entrepreneurship & creativity. Her projects have been featured in many publications, including The New York Times, Forbes, NBC News, TIME, CNN, BBC, San Francisco Chronicle, TechCrunch, Mashable, and The Huffington Post. She was named a “Top 10 Emerging Leader in Innovation” in the Microsoft Next 100 series. For more from Yiying, you can follow her on TwitterLinkedin and Medium.

 

7 UX / UI Design Tips to Improve Your Startup Growth

Below is a collection of my tips and feedback from a creative branding workshop I led during the most recent 500 Startups’ seed accelerator program, Batch 19. The goal was to teach startups to apply design thinking methods to improve their UX/UI , and thus increase user acquisition and market growth.

Did you know the human attention span is shorter than a goldfish’s?
[Fun Fact about Attention Span] Goldfish: 9 seconds > Human: 8 seconds. 😱

Yep, your website has a lot of work to do in a short amount of time to get your key message to your audience.

How do you do it? Here are 7 Design Thinking Tips to Improve Your Growth Rate 🔑:

1. Integrate

Combine a strong marketing message (content) with effective visuals (form).

My Feedback for Bstow: Bstow rounds up your spare change to charity.

Below is the original design for the top half of Bstow’s  home page. It has a simple marketing message, “Donate spare change to charity”. However, at first glance, the website looks like it’s featuring an analytics product.

Neither of the key visuals, the app interface on the phone nor the blue background, reflect the marketing message – “donation” and “charity”. How does the graph on the phone have anything to do with charity? Why the blue background?  They are disconnected. There is no integration of the form & the content.

bstow-old-top

I asked the founders to look at their analytics and see which part of the website gets the most engagement. They told me the most engagement comes from the “causes” section, which on the website you have to scroll all the way down to find:

bstow-attention

Yep, that’s a lot of scrolling… By the time you scroll down to the causes, those Goldfish have already lost their attention – let alone humans!

I suggested the Bstow team integrate their charity causes into the homepage visuals by using the iPhone screen as a frame, showcasing charity partners’ content one by one.

Homepage After Feedback: Team Bstow came back with the new home page designs below: Boom! 💥

bstow

2. Manifest:

Present your company with a short, punchy tagline & visual, make it clear and obvious to the mind. This helps people remember who you are and what you do.

My Feedback for Scopio: Scopio is a search engine to find and license images on social media.

Homepage before Feedback:
scopio-homepage-before

Get a short and effective tagline (6-8 words) that conveys both HOW your company works and WHY you do what you do (your purpose, cause & belief).

Combine the original two lines on your website homepage,“Search engine and licensing platform for trending photos & videos on social media” and “Discover Moments and Tell Stories”, into a simple and effective one-liner.

Homepage After Feedback (version 1):

“Real Images Engage Audiences” is a much more effective tagline. Now how can we show (even better) that these photos are taken by real people?

scopio-1
When using very light weight text over the video, it’s VERY hard to read the tagline and explanation. I suggested changing the text, “A cutting-edge platform…,” into a one-liner.

The more clear and obvious you can make this, the better.

Homepage After Feedback (version 2 – current): Team Scopio came back with the new home page designs below. You can view the full site here.
scopio

3. Portray:

Depict your product/service vividly, let it come to life through visual storytelling.

My Feedback for ShearShare: ShearShare connects salon owners to stylists to fill empty salon chairs.

Below is ShearShare’s original Homepage:

shear-share-before

On the home page, a static image of a phone with the app search bar text, “Where do you want to work?,” is not the best use of the precious space.

Let’s make it more vivid and engaging, by actually showing the audience how this app works. Embed the Demo video on your demo page as an animated .gif or video on the phone.

You can see my above feedback into the mockup below.
shearshare-after

After the Feedback: Team ShearShare came back with a much improved homepage animation seen below. You can view the full site here. 👊
final_home

4. Reuse

Whether you are a new or established company, branding consistency always matters, because your brand is reflected in your logo and messaging. One of easiest ways to improve your branding consistency is by examining the visual consistency of your site/app. Reuse and reapply your branding colors and elements throughout the site and app, to create a unified look and feel.

My Feedback for ChangeJar: ChangeJar is a mobile cash platform optimized for small retail payments.

This is ChangeJar’s current logo:
changejar-logo

But if you look at their icon page, the main branding has not been maintained. It’s completely different with white on a purple background.
changejar-icos_before

To remain consistent across your whole site (and aid in brand recognition), add the green color from your brand/logo and/or the “jar” icon to the design of these icons below:

I made the mock up below to highlight the dollar signs in the green color from your brand logo. Now these icons look more consistent with your brand:
changejar-icos_after

Also, the current Favicon is hard to read when it’s white on green gradient. Its design/color scheme is not consistent with the current logo.

Current Logo:
changejar-logo

Current Favicon:
changejar-favicon-before

I suggest making it the same design & color scheme as the current logo. See the mockup below:
changejar-favicon-after

Similarly, here is Scopio’s current logo and it’s current set of icons (more on Scopio below):
scopio-icon-before
I suggest you reuse the Symbol from the logo/brand as much as possible like below:
scopio-icon-after

5. Organize

You can organize content by color making it easier for people to remember your brand name or for the audiences to differentiate the business.

When it comes to content marketing, color can help you stand out from the crowd. According to NeuroMarketing, “if a good color sells, the right color sells better.”

Color is an important emotional cue in content marketing. Different colors and their combinations will evoke different emotions and feelings. It is vital to choose the right color(s) which represents your identity truthfully and effectively.

According to CoSchedule, people make a judgment about your content in 90 seconds or less. And up to 90% of the judgment in that 90 seconds is influenced by color. Marketer Neil Patel gives further proof of how colors affect conversion rate, revealing that 85% of consumer-based buying decisions comes from color and that full-color ads in magazines get recognized 26% more than black and white ads. Color helps people recognize your brand by up to 80%. It’s important to choose your brand color carefully and stick with it.

My Feedback for Aumet: Aumet allows medical suppliers & distributors to do business with companies no matter where they are.

Here is Aumet’s current website:
aumet-before

Since “Aumet” is a made-up name, I recommend highlighting two different syllables, using two different colors, to help users learn how to spell and pronounce your name

Also, because your target audience is both medical suppliers and distributors, it makes sense to use the same two colors to highlight the two different target audiences.  

Since your brand is targeting the medical industry, the current mint green works well as the main color. I would suggest your additional color be something like blue to compliment the green. Here is a simple mockup of how this could be done:aumet-after

If your business market is facing both B2C and B2B, like Aumet and ChangeJar, I would also suggest using two different colors for the two different consumer audiences.  


6.
Visualize

A picture is worth a thousand words: Applying effective visuals helps to arouse emotion within your audience, creating an instant connection with your company.

My Design Feedback for TalentBase: TalentBase is an HR software for growing enterprises in Africa.

Below is their current website homepage:

talentbase-before

Very straightforward website with all its functions. My overall feedback with your current branding & logo is: It’s too plain and there’s a lack of engagement.

If you are a B2B company, remember the foundation of business is still human. I love what Jack Ma suggests, whether your business market is B2C or B2B, it’s all about P2P, People to People.

I suggest you either add a secondary color that works with the existing blue color or add a set of colors inspired by your market, African HR (Human Resources) professionals. Start with Africa, and its people!

I have mocked the site with photos of real African professionals,  with the same text/content from the current site. Do you see and feel the difference?
talentbase1
talentbase2
talentbase3
talentbase4
talentbase5
talentbase6

Showing the faces of the workforce arouses emotion within your audience, thus establishing trust and loyalty between your audience and your company.

7. Elaborate

“Elaborate” means provide more context and add additional details, which can help others (e.g. your users or investors) to have a better understanding of what your business is.

My Feedback for ChangeJar: ChangeJar is a mobile cash platform optimized for small retail payments.
changejar-logo

The width of the logo type and the symbol in the current logo looks a bit too thin, especially when it’s being scaled into a smaller size. It’s hard to see. Keep “change” in white, but change “jar” to green.

Also, add a dollar sign or currency symbol in the logo. At the moment the logo only conveys the notion of a jar, but it doesn’t indicate money. Adding a money symbol will help your audience subconsciously digest what your company (a payments provider) does. As you scale internationally, change the currency symbol. You can already create multiple mockups with a dollar “$” sign, pound “£”, euro “€”, and Japanese or Chinese sign “¥”, etc.

I mocked up the above suggestions below:
changejar_after

If you want, you can even animate it with the different currencies, like this:
changejar-logo-animated

To summarize, here are the 7 Design Thinking Tips to Improve Your Growth Rate:

1. Integrate: 
Combine marketing message with effective visual content
2. Manifest: Make your message clear and obvious to the mind
3. Portray:
Depict your product / service vividly, let it come to life
4. Reuse:
Re-apply visual elements to achieve visual consistency
5. Organize: 
Categorize content by color to help users read & remember better
6. Visualize: 
Use visuals to engage and establish emotional connections
7. Elaborate: Provide context to help users understand your business better

And if you are paying close attention, you will notice the initials of each tips make the word “IMPROVE” (I know, so nerdy 🤓 right? But admit it, this just made your day!)

💰🦄🔑

500 Batch 22 begins July 24th, 2017 in San Francisco.

Click Here to apply for our the Batch 22 Seed Program.

 

See also:

7 Marketing Secrets from 500 Startups Demo Days
7 Design Hacks to Improve Your Startup Logo Designs


yiyinglu-profile-square

Yiying Lu is award-winning bilingual (English & Chinese) artist and designer. Born in Shanghai China, Educated in Sydney Australia & London UK, now based in San Francisco, Silicon Valley, she currently is a Design Lecturer at the NYU Shanghai Program on Creativity & Innovation. She is also an individual creative consultant who provides talks & workshops for global startups and corporate innovation teams on design thinking, entrepreneurship & creativity. Her projects have been featured in many publications, including The New York Times, Forbes, NBC News, TIME, CNN, BBC, San Francisco Chronicle, TechCrunch, Mashable, and The Huffington Post. She was named a “Top 10 Emerging Leader in Innovation” in the Microsoft Next 100 series. For more from Yiying, you can follow her on TwitterLinkedin and Medium.

 

WMD ’16: Post-Conference Q&A with Brian Balfour

Guest blogger – Brian Balfour, Founder & CEO, Reforge

The below article is comprised of audience questions asked to Brian Balfour during his presentation at Weapons of Mass Distribution 2016. Brian took the time to answer the questions in detail post-conference.

 

“How do you determine your platform?”

One of the most powerful things I’ve done in my career is to build my blog. The blog acts as a platform for me to distribute my work, thoughts, and creations. The reason having this is so powerful today is because I believe we are moving towards a world where credentials matter far less, and it is more about your actual work/output. My blog is the way I do that but with tools like Dribbble, Github, Medium, Slideshare, and so many others there are a lot of ways to build a platform for yourself. Deciding on which one to use depends on two things. One, your fit with the medium. Different people do better with different mediums. For me, it is writing and therefore the blog works. Others are better suited for video, audio, etc. Two, fit between the medium and your type of work. Different types of work are better displayed in different mediums. My recommendation is to try a few, see what feels the most natural and go from there.

“Would you pay a growth marketer a base salary or revenue share?”

No definitely not. I might consider performance bonuses based on a balance of criteria, metric performance being one of them, but never a direct revenue share or commission. A few problems with that approach:

1. They aren’t in control of their own destiny. The growth of a metric like revenue is almost always a team effort, not an individual effort. Therefore one individual can’t be in control of their own destiny when it comes to generating revenue.

2. People will always look for ways to game the system typically in the form of doing the least amount of work for the largest amount of gain. You see this on sales teams which are why a comp is often always restructured on a yearly basis to plug holes. You want your growth team pursuing authentic growth. Authentic growth is more than just quantity, but also quality. Revenue shares focus on quantity which can lead you to trouble.

“Hiring tips to find an awesome Growth Marketer?”

I participated with a few other growth leaders such as Andrew Chen at Uber, Elena Vern at SurveyMonkey, and Shaun Clowes at Atlassian on some of our tips to hiring for growth. A few notes:

1. Depending on the specialty you want them to focus on, I often find great people from nonmarketing backgrounds. Since a large component of growth is quantitative I find that people coming from math, statistics, or finance backgrounds to have the right foundation to be really successful.

2. In terms of sourcing, I have found places like AngelList and Hired to have the best candidates. You can also search for Reforge alumni on LinkedIn as we are pretty selective in our programs.

3. The most important thing is making sure growth/marketing isn’t a second (or third) class citizen within your company. A lot of companies turn their nose up internally at marketing. Product, engineering, etc look down on marketing/growth. If your marketing/growth talent feels like a second class citizen, they will seek out better places. Make sure other teams within your company understand the importance and philosophy towards growth to the point that they respect it.

“How would you work with “growth” before PMF?”

The first thing you need to do is understand if you are in the traction, transition, or growth phase for your company. The traction phase is typically pre-product market fit. There should be a few goals:

1. Generate as much growth that is needed to prove out retention which is the best indicator of product market fit. To prove out retention, you need to generate a certain amount of new customers. There is no reason to step on the gas until you’ve proven this retention out.

2. Start testing and building proof around your long term growth hypotheses. In the early days you need to “do things that don’t scale” to get traction. But you also need to start forming an educated hypothesis about how you are going to grow long term. There are only a few truly scalable channels and to grow into a huge company you will need to play in one of those channels. So a large part of your early efforts should be starting to understand which one it is.

“How long do you think it takes to become an expert at something? How do you know?”

First thing is to be very wary of the term expert. I don’t like the term because it implies you have nothing left to learn about the subject. That is a dangerous thought to have because growth is never done and the moment you believe you are an expert is the moment right before you become obsolete. Your learning is never done.

There is no specific timeframe to go “deep” on something. It depends on the capabilities of the individual, the project they are working on, the people around them that they can learn from, and much more. Going deep on something to me means you understand it at a level where you are in the top 20%. Some indications that you have gone deep on something:

1. Almost everything you read about the subject on the web feels intro level or just skimming the surface to you. You have a set of knowledge that isn’t being written about and regurgitated by every content marketer out there.
2. You’ve been forced to solve a problem that you haven’t been able to answer with some google searching and a couple easy conversations.
3. You find yourself being sought out for advice from other smart and experienced professionals in the space.

View Brian’s full presentation at WMD ’16:


Thank you to Brian Balfour for contributing to the 500 blog. For more insights from Brian, follow him at his blog, Coelevate, or on Linkedin or Twitter.

The Yin & Yang of Marketing and Innovation

Guest Blogger – Jascha Kaykas-Wolff, Chief Marketing Officer Mozilla 

“Business has only two functions—marketing and innovation.”

I have heard this quotation attributed to Peter Drucker, a.k.a. “the father of business consulting” (talk about a guy with some dubious children), as well as Czech novelistMilan Kundera.

Citations for Drucker usually extend the quotation, adding, “All the rest are costs.”

Kundera. Drucker. Novelist. Consultant. Marketing. Innovation.

The Circular Interplay

There’s a wonderful, circular nature to the relationship between marketing and innovation.

First, I should say I do believe everything other than innovation and marketing in business is a cost—a necessary cost, usually. But the only thing that produces business profit is innovation and the discovery of a market need for that innovation—or, conversely, the discovery of a market need and the creation of an innovation to meet it.

Accounting, human resources, customer service, operations—all of these things are imperative, but not the reason we are in business. We are in business to figure out how something works (innovation) and to figure out who would find it useful (marketing) and then provide it at a profit. Marketing and innovation are intricately linked in that endeavor, and the interplay between the two is like the yin and yang of the business world, the result of which is the determination of price.

One creates the other, and the more they feed off each other, the better their net contribution to the business grows and the more profitable the price, where:

Gross Revenues – Costs = Net Marketing & Innovation Contribution to Revenue

Anything that lowers costs—from cost of goods sold to financing costs to labor costs—increases net marketing & innovation contribution to the business. Anything that increases revenue—either number of units sold or price per unit or both—increases net marketing & innovation contribution, as well.

In all cases, it is the interplay between marketing and innovation—innovation and marketing—that creates a situation where customers are willing to pay above cost for a good or service.

(Of course, there are other ways to make a profit by monopoly or oligopoly, legislation, and price manipulation. These are not the kinds of business practices I’m talking about, because, however pervasive, they are outside the scope of what agile marketing and true competition are all about.)

Did Marketing Emerge From Innovation or Vice Versa?

In his book Incomplete Nature: How Mind Emerged From Matter, Terrence Deacon, neuroscientist and chair of UC Berkeley’s Anthropology Department, discusses in great detail the integral connection between presence and absence in our world, how each caused the other to be. He explains the interplay between materialism and consciousness, between the present and the emergent, has created all the world we see around us and within us.

However complex the book’s science and philosophy, it was Deacon’s simple description of the first organic replicators that struck me as a direct conceptual parallel to the connection between marketing and innovation—and indeed the connection between many things in life.

A Creates B Which Creates A

When Deacon discusses the misconceptions surrounding DNA and RNA replicators, he writes,

“Although it is generally believed that polynucleotide chains like DNA and RNA molecules constitute life’s replicators…they do not replicate themselves. To be more explicit: polynucleotide A cannot directly produce another exact duplicate of polynucleotide A. Instead…polynucleotide molecule A can produce a complementary polynucleotide molecule B, which in turn under the same conditions can produce polynucleotide molecule A.”

The reason this is the arrangement we see today is that, in replicators where A made itself in exact duplicate, the instability of the system doomed it to fail. That is, anytime A made a bad duplicate of A, the system would break down and not survive.

However, when A makes B which in turn makes A again, the stability of the system is exponentially more robust, because a mutation in B doesn’t necessarily doom the cycle to failure if the small change in B doesn’t destroy its original ability to make A. In fact, it makes adaptation possible.

I find this idea to be a profoundly useful for agile marketing:

Stability and adaptation come not from self-duplication, but from the interplay of complementary opposites.

This idea is in many ways apparent and intuitive. Think: positive/negative, up/down, light/dark, form/entropy, male/female—one doesn’t exist without the other, and strength is the result of the complementary nature of the relationship, not the imposition of sameness or domination of one by the other.

Our problems in business between innovation and marketing occur when this need for opposites gets thrown out the window in favor of one steamrolling the other.

“Marketing Is Too Important to be Left to the Marketing People.”

That’s what David Packard of Hewlett-Packard fame once said. I think the humor of Packard’s statement shouldn’t be overlooked, but I find within it a glance at the innovator’s outright dismissal of marketing’s role. And I think he’s referring to traditional Mad Men-style, sell-the-sizzle advertising and marketing, a dismissal which may be deserved.

But with agile marketing—small iterations through test and measurement, responsive work in tandem with product development, trying anything once but not failing at it twice—marketing has moved more into the world of scientific approach and hypothesis testing, the world engineers and innovators know and respect.

In a complementary-opposite response, innovators must now move more toward understanding what marketing is and what the market says and does. That is, innovators have to let markets guide their innovation, rather than making something and trying to foist it upon the market. When innovators make things that markets do not want—or when they don’t listen and adapt to changing market sentiments—marketing has to get too reactionary and “sales-y” to try to sell products people don’t want.

When marketing gets too sales-y, the complementary-opposite relationship with innovation loses it’s strength and balance and falls apart.

Sales Is Not Marketing. Sales is the Cost of Bad Marketing.

To use another quotation from Drucker, “The aim of marketing is to make selling unnecessary.”

I absolutely believe the more hard selling a business must do indicates how poorly it has studied the market and how poorly it has created products to match the market. Selling—like other functions of business outside marketing and innovation—is a cost, a necessary cost, perhaps, but one like all costs to be minimized.

Innovation creates agile marketing, which creates innovation, which creates agile marketing, which creates innovation, which creates agile marketing, ad infinitum.

  • Doesn’t the need for too much selling indicate a breakdown in the relationship between innovation and marketing?
  • Doesn’t the iterative and complementary activity between marketing and innovation require that one department not usurp the other?

I think it does.

And the profound concept of A makes B makes A bears this out in a bigger way. When marketing goes agile, it’s reaching out to the innovators for stability. Innovators have to reach out to marketing, as well, without turning marketing into something unstable and subservient, where A makes A.


Thank you to Jascha Kaykas-Wolff for contributing to the 500 blog. Jascha will be a speaker at this year’s Weapons of Mass Distribution 2016 conference on Nov. 4 in San Francisco. Get 20% off tickets with code: JASCHA or Buy your ticket HERE

For more insights from Jascha, follow him on Linkedin or Twitter.

This article was originally published on Jascha’s Linkedin

Hooks: An Intro on How to Manufacture Desire

Guest Blogger – Nir Eyal, Author “Hooked: How yo Build Habit-Forming Products”

Type the name of almost any successful consumer web company into your search bar and add the word “addict” after it. Go ahead, I’ll wait. Try “Facebook addict” or “Twitter addict” or even “Pinterest addict” and you’ll soon get a slew of results from hooked users and observers deriding the narcotic-like properties of these web sites. How is it that these companies, producing little more than bits of code displayed on a screen, can seemingly control users’ minds? Why are these sites so addictive and what does their power mean for the future of the web?

We’re on the precipice of a new era of the web. As infinite distractions compete for our attention, companies are learning to master new tactics to stay relevant in users’ minds and lives. Today, just amassing millions of users is no longer good enough. Companies increasingly find that their economic value is a function of the strength of the habits they create. But as some companies are just waking up to this new reality, others are already cashing in.

First-to-Mind Wins

A company that forms strong user habits enjoys several benefits to its bottom line. For one, this type of company creates associations with “internal triggers” in users’ minds. That is to say, users come to the site without any external prompting. Instead of relying on expensive marketing or worrying about differentiation, habit-forming companies get users to cue themselves to action by attaching their services to the users’ daily routines and emotions. A cemented habit is when users subconsciously think, “I’m bored,” and instantly Facebook comes to mind. They think, “I wonder what’s going on in the world?” and before rationale thought occurs, Twitter is the answer. The first-to-mind solution wins.

Manufacturing Desire

But how do companies create a connection with the internal cues needed to form habits? The answer: they manufacture desire. While fans of Mad Men are familiar with how the ad industry once created consumer desire during Madison Avenue’s golden era, those days are long gone. A multi-screen world, with ad-wary consumers and a lack of ROI metrics, has rendered Don Draper’s big budget brainwashing useless to all but the biggest brands. Instead, startups manufacture desire by guiding users through a series of experiences designed to create habits. I call these experiences “Hooks,” and the more often users run through them, the more likely they are to self-trigger.

I wrote Hooked: How to Build Habit-Forming Products to help others understand what is at the heart of habit-forming technology. The book highlights common patterns I observed in my career in the video gaming and online advertising industries. While my model is generic enough for a broad explanation of habit formation, I’ll focus on applications in consumer Internet for this post.

Nir Eyal Hook

Trigger

The trigger is the actuator of a behavior—the spark plug in the Hook Model. Triggers come in two types: external and internal. Habit-forming technologies start by alerting users with external triggers like an email, a link on a website, or the app icon on a phone. By cycling continuously through these hooks, users begin to form associations with internal triggers, which become attached to existing behaviors and emotions. Soon users are internally triggered every time they feel a certain way.  The internal trigger becomes part of their routine behavior and the habit is formed.

For example, suppose Barbara, a young lady in Pennsylvania, happens to see a photo in her Facebook newsfeed taken by a family member from a rural part of the State.  It’s a lovely photo and since she’s planning a trip there with her brother Johnny, the trigger intrigues her.

Action

After the trigger comes the intended action. Here, companies leverage two pulleys of human behavior – motivation and ability. To increase the odds of a user taking the intended action, the behavior designer makes the action as easy as possible, while simultaneously boosting the user’s motivation. This phase of the Hook draws upon the art and science of usability design to ensure that the user acts the way the designer intends.

Using the example of Barbra, with a click on the interesting picture in her newsfeed she’s taken to a website she’s never been to before called Pinterest. Once she’s done the intended action (in this case, clicking on the photo), she’s dazzled by what she sees next.

Variable Reward

What separates Hooks from a plain vanilla feedback loop is their ability to create wanting in the user. Feedback loops are all around us, but predictable ones don’t create desire. The predictable response of your fridge light turning on when you open the door doesn’t drive you to keep opening it again and again. However, add some variability to the mix—say a different treat magically appears in your fridge every time you open it—and voila, intrigue is created. You’ll be opening that door like a lab animal in a Skinner box.

Variable schedules of reward are one of the most powerful tools that companies use to hook users. Research shows that levels of dopamine surge when the brain is expecting a reward. Introducing variability multiplies the effect, creating a frenzied hunting state, activating the parts associated with wanting and desire. Although classic examples include slot machines and lotteries, variable rewards are prevalent in habit-forming technologies as well.

When Barbra lands on Pinterest, not only does she see the image she intended to find, but she’s also served a multitude of other glittering objects. The images are associated with what she’s generally interested in – namely things to see during a trip to rural Pennsylvania – but there are some others that catch her eye also. The exciting juxtaposition of relevant and irrelevant, tantalizing and plain, beautiful and common sets her brain’s dopamine system aflutter with the promise of reward. Now she’s spending more time on the site, hunting for the next wonderful thing to find. Before she knows it, she’s spent 45 minutes scrolling in search of her next hit.

Investment

The last phase of the Hook is where the user is asked to do a bit of work. This phase has two goals as far as the behavior engineer is concerned. The first is to increase the odds that the user will make another pass through the Hook when presented with the next trigger. Second, now that the user’s brain is swimming in dopamine from the anticipation of reward in the previous phase, it’s time to pay some bills. The investment generally comes in the form of asking the user to give some combination of time, data, effort, social capital or money.

But unlike a sales funnel, which has a set endpoint, the investment phase isn’t about consumers opening up their wallets and moving on with their day. The investment implies an action that improves the service for the next go-around. Inviting friends, stating preferences, building virtual assets, and learning to use new features are all commitments that improve the service for the user. These  investments can be leveraged to make the trigger more engaging, the action easier, and the reward more exciting with every pass through the Hook.

As Barbra enjoys endlessly scrolling the Pinterest cornucopia, she builds a desire to keep the things that delight her. By collecting items, she’ll be giving the site data about her preferences. Soon she will follow, pin, re-pin, and make other investments, which serve to increase her ties to the site and prime her for future loops through the Hook.

Super Power

A reader recently wrote to me, “If it can’t be used for evil, it’s not a superpower.” He’s right. And under this definition, habit design is indeed a super power. If used for good, habits can enhance people’s lives with entertaining and even healthful routines. If used to exploit, habits can turn into wasteful addictions.

But, like it or not, habit-forming technology is already here. The fact that we have greater access to the web through our various devices also gives companies greater access to us. As companies combine this greater access with the ability to collect and process our data at higher speeds than ever before, we’re faced with a future where everything becomes more addictive. This trinity of access, data, and speed creates new opportunities for habit-forming technologies to hook users. Companies need to know how to harness the power of Hooks to improve peoples’ lives, while consumers need to understand the mechanics of behavior engineering to protect themselves from unwanted manipulation.

What do you think? Hooks are all around us. Where do you see them manufacturing desire in your life?

Here’s the gist:

  • The degree to which a company can utilize habit-forming technologies will increasingly decide which products and services succeed or fail.
  • Habit-forming technology creates associations with “internal triggers” which cue users without the need for marketing, messaging or other external stimuli.
  • Creating associations with internal triggers comes from building the four components of a “Hook” — a trigger, action, variable reward, and investment.
  • Consumers must understand how habit-forming technology works to prevent unwanted manipulation while still enjoying the benefits of these innovations.
  • Companies must understand the mechanics of habit-formation to increase engagement with their products and services and ultimately help users create beneficial routines.

Thank you to Nir Eyal, Author or “Hooked: How to Build Habit-Forming Products,”  for contributing to the 500 blog. Original article found HERE. Get 20% off tickets with code: NIREYAL. Nir Eyal will be a speaker at this year’s Weapons of Mass Distribution 2016 conference on Nov. 4 in San Francisco. Buy your ticket HERE

The 4 Components of a Winning Direct Mail Campaign

image

Direct mail is part science, part art—there is no single best solution. Innovative technologies allow us to customize mail in new ways, and the USPS continually changes rates (usually raising them) and rules. However, a couple of things stay constant: Any direct mail campaign will include the four key components of list, offer, creative, and delivery. And at every stage, consistently A/B testing what you send and who you send it to will improve recipient response and lower your costs.

Let’s take a closer look at the four main components of direct mail:

  1. The list: You need to mail the right audience, who are interested in your product.
  2. The offer: You need to provide the right offer to motivate them to action.
  3. The creative: You need to have engaging creative that gets seen, not tossed.
  4. The delivery: You need to get that creative into mailboxes.

1. The List

image

There are two types of lists, house lists and rental lists. House lists are ones that you own, which generally include existing customers and potential leads (e.g., people who signed up for a white paper online). Rental lists are compiled addresses from third-party vendors. They are typically one-time buys or subscriptions, and allow you to select certain audience segments. The average cost for a rental list ranges from $50–250 per thousand records, depending on the quantity purchased and criteria selected.

A well-targeted list is important. If you’re selling infant products to retired folks, no matter how good the offer is, none of them will buy (unless of course they’re shopping for their grandchildren). A clean list with deliverable addresses is also key. If the list is old, then you will send undeliverable mail—never seen by a potential customer—which is a waste of your time and money.

If you happen to run a real estate company, check out our post on direct mail list building for real estate.

2. The Offer

image

An offer is the incentive that the recipient will receive, and what they have to do to receive it. It’s the call to action that motivates the prospect. A great offer is valuable, tangible, unique, and clearly related to the company offering it. It should also be straightforward and easy to understand. Avoid lots of fine print. No one likes to read that.

For example, your direct mail might include an offer for:

  • Free trial
  • Free gift
  • Free shipping
  • Dollar discount
  • Percentage-off discount
  • Buy one, get one free
  • White papers
  • Case studies

Be sure to test your offers to learn what best motivates your audience. And remember, the offer isn’t merely enticement for the consumer—it’s also a great way to include a custom code or URL in your creative to help track your campaign’s results.

3. The Creative

image

Test multiple designs and layouts, as there is no one approach that works for every campaign. A fancy letter may perform well for a high-end business product, while a simple postcard in a “handwritten” font may work best for a casual neighborhood service. Regardless of the creative, be sure that your call to action is clear and direct.

On the format side, there are endless options to choose from. However, sticking with the standard ones will typically save you time and money in production and mailing. The two most common formats are letters and postcards. Contact your mailing vendor or print house for their standard sizes.

4. The Delivery

image

Most companies spend more than they need to on postage, but there are multiple ways to lower your costs: For example, cleaning your list and adding USPS address bar codes will get you lower rates, as will sending more pieces to smaller areas (“saturation mail”). You can also earn discounts by shipping your mail closer to its final destination (e.g., dropping mail designated for San Francisco at a nearby Oakland postal center). Finding the optimal mailing strategy can save you 20–50% on postage costs.

However, because all of this can be difficult to coordinate, many companies use a mail consultant or service for a seamless mailing solution. After all, the biggest way to lower the cost of a direct mail campaign is to save your and your employees’ time. Lob, for example, takes care of printing, mailing, and postage for a single straightforward price—so you can send print mail on demand, as easily as you’d send an email. Lob even tracks mail at every step, so you know when your campaign lands in mailboxes.

 


Thank you to Adelyn Zhou, Head of Growth and Marketing for TOPBOTS  for contributing to the 500 blog Original article found HERE. Get 20% off tickets with code: ADELYNZHOU. Adelyn Zhou will be a speaker at this year’s Weapons of Mass Distribution 2016 conference on Nov. 4 in San Francisco. Buy your ticket HERE

10 Ways to Make Your Video Go Viral

Guest Blogger -Karen X Cheng, Founder/CEO Karen X LLC.

I almost didn’t write this post.

Because I wanted to keep the magic behind my viral video to myself. Because of my ego. Because I would have loved to brag that I just sat back and it took off on its own. But that’s not what happened.

I did a ton of marketing, and it started long before the video was released. Going viral was not an accident — it was work.

I tried a lot of things. This is what worked for me.

1. Don’t be “too good” for marketing

I almost didn’t put together a marketing plan. Because what if I did all this marketing, and then the video still flopped? That would’ve been embarrassing. Then I realized how stupid that was.

It’s better to try your damnedest and fail than to hold back and always wonder what if.

If you put all this effort into your video, why would you rely on luck for the last leg? Swallow your pride. Give your work a fighting chance. Put together a marketing plan. This article will show you how.

2. Understand how things go viral on the internet

You see videos on YouTube with millions of views and you wonder — where did they all come from?

Here’s how my video, Girl Learns to Dance in a Year went viral:

Views per day on Girl Learns to Dance in a Year

Day One: 80k views

Day Two: 800k views

  • Bloggers who had seen it on Reddit the day before started publishing articles about it. First Kottke. Then blogs like Mashable, Jezebel, andHuffington Post.
  • Blogs drove a ton of traffic. Each blog is a giant marketing engine with millions of readers and twitter followers. It’s in their interest to get the article as many views as possible, because each view is an ad they can serve up. Understand how the money flows. It’s all about clicks and advertising dollars.

Day Three: 1.8 million views

  • It made the YouTube frontpage. I’m not sure how it got there, but I suspect the blogs were sending it so much traffic that YouTube’s algorithms picked up on it.

Try many things. You only need one of them to pay off in order for your video to go viral. For me, that thing was Reddit. Your thing might be different. Your goal is to get major blogs to write you up, because their marketing power is ridiculous.


3. Release on Monday or Tuesday

People watch YouTube videos when they’re at work. They read the news at work. Release your video on Monday or Tuesday to give it the whole week to gain momentum. Weekends are speed bumps.

I chose Tuesday because people are busy catching up with email on Monday. I got lucky with the timing because there wasn’t any major breaking news that day. Releasing on a slow news day will help you.

Mind your holidays, too. Don’t release when people are not at the office.

4. Figure out who has a stake in your video

If your video takes off, who are all the people and companies who might want a piece of the action? These people can help market you.

My YouTube description was full of links to possible sponsors — to theLululemon and American Apparel clothes I was wearing. To the Lift app I used to track my dancing. To the BART train station I danced at. To themusic I danced to. They’re all things I genuinely believe in, so I was happy to send traffic their way.

I contacted all these companies and asked them to share the video. Some of them shared, some of them didn’t. Try them all.


5. None of this matters if your video isn’t good

You can get your friends to share. But only the strength of the content can get their friends to share. If you are serious about making good content, readMade to Stick.

Why will people share your video? People share things when they feel emotion. What emotion will your viewers feel?

Some emotions spread better than others. Emotions that spread: awe, excitement, amusement, anger, anxiety. Emotions that don’t: contentment, sadness.

6. Tell a story

I’m a decent dancer for a year of practice but I’m nothing compared to the pros. There are thousands of dancers way more talented whose videos didn’t go viral.

Girl Learns to Dance in a Year went viral because it wasn’t just another dance video with cool moves and cool camera angles. It wasn’t about how good the dancing was. It was about how awkward I was when I started, and how I got better with practice.

And it’s not just a story about dancing. It’s about having a dream and not knowing how to get there — but starting anyway.

People want stories. That’s what all TV, movies, and books are. Tell a story.

7. Make your video shorter

The first thing people do when they play a video is check to see how long it is. It helps them decide whether to watch it. 10 minutes: forget it. 2 minutes:I’ll give it a shot. 30 seconds: Heck, might as well.

Make your video as short as possible while still keeping the heart of the story. The editor and I literally spent hours shaving off seconds to get the video down to 1 minute 51 seconds.

Short videos spread better.


8. Write a viral title

Here’s a quick test. How would you finish this sentence:

“Hey did you see the video of __________”

Fill in the blank. That’s your title.

Here’s a bad title: My Journey of Dance, a Year of Movement

Better: I Learned to Dance in a Year

Even better: Girl Learns to Dance in a Year

Best: Girl Learns to Dance in a Year (TIME LAPSE)


9. Know what you’re willing to compromise

What are you willing to do for views? Are you willing to compromise on your beliefs? If so, which ones?

I made a compromise. I believe that grown women should not be referred to as girls. Then I named the video Girl Learns to Dance in a Year. It rolls off the tongue better than Woman Learns to Dance in a Year. I had decided I could live with that compromise.

I almost named the video Asian Girl Learns to Dance in a Year. I’m really glad I didn’t do that.

You have to decide what you can live with and what you can’t. Figure this out before you release because once you hit publish, you can’t take it back.


10. What to do once you go viral

People will criticize your work. This is good because it gets them talking. There are lots of comments about how I’m a terrible dancer, or how I got worse on Day 365. People left racist and sexist comments. They even debated the definition of time lapse. Try not to let all this get to you. Controversy is good.

Viral videos have a short shelf life. You have 15 minutes of fame, and your job is to open as many doors as possible in those 15 minutes. Create as many opportunities as you can. Ironically, the week I released the video, I barely danced at all. I didn’t go out and celebrate. I went home and responded to as many emails and tweets as I could.

Make sure the media can get a hold of you, and it’s not hard to find your email address. Media interview requests will start coming in. Accept them. National TV may contact you. Feed the media beast.

Know where you want to direct your traffic. I linked to my blog, website, andTwitter from the video. They were all ready to go. One thing I messed up was I didn’t have an email signup form ready on the Dance In A Yearwebsite. I’ve fixed that now, lesson learned. Be prepared.

Why I did it

I wanted people to see the video because it represents what I believe in.

When you watch a professional perform, you’re seeing them at their moment of glory. It’s intimidating because you don’t see how you could ever get to where they are. You don’t see the moment they started, when they were a beginner just like you. I wanted people to see the beginning.

The best response to the video has been all the people who reached out to me, newly inspired to learn. Learn dance. Learn guitar, Korean, beatboxing, drawing, parkour. That brings me a lot more fulfillment than the video view count numbers.

After hearing from so many people, I’m now working on a site for people to make their own learning time-lapse projects: 100. I’m really excited to see other people level themselves up in all sorts of skills.

None of this might have happened if I had decided to sit back and just hope it went viral.


Thank you to Karen X. Cheng for contributing to the 500 blog. Get 20% off tickets with code:KARENX. Karen X. Cheng will be a speaker at this year’s Weapons of Mass Distribution 2016 conference on Nov. 4 in San Francisco. The Who’s Who of the growth marketing world are coming together to help you IGNITE your startup growth. Buy your ticket HERE

For more viral video tips, follow Karen X. Cheng on Facebook or Twitter.

Thanks to Cedric Dahl, Alex Debelov, Nikolay Valtchanov, Lynn Tao, and Orion Hombrebueno for marketing help and advice for the video.

This article was originally published on Fast Company.

More Users, Less Spend — 10+ ways to Trim the Fat & Save 5-figures on Adwords (and beyond)

You need to put your Adwords Display Network Campaigns on a Diet.

Actually, not a diet… just trimming the fat with aggressive liposuction surgery might be better.

Google Display Network (GDN for acronym lovers) is AMAZING.

With over 2 million Display Network sites that reach over 90% of Internet users worldwide (Source: comScore), there are a lot of opportunities to reach customers.

But with that power… there just as many dangers.

In fact, it’s so dangerous that I rarely meet a startup that’s doing everything I’m going to share with you in this guide.

Let me be clear….

The ENEMY in any Performance Marketing Campaign is one and only one:

WASTE.

If you eliminate WASTE — defined as Impressions, Clicks or Any Action that doesn’t perform  the way you want — you’ll only end up with just the things that work.

If nothing is working, then your problem is a bit more serious 🙁

But if you are post-product market fit, and find that GDN still isn’t working for you — then it’s because you are not aggressively cutting the waste or trimming the fat.

How Did I Learn All This?

Over my life as an online publisher and entrepreneur I’ve generated millions (3M+ and counting) of leads with Adwords, and 90% of those have come from the Google Display Network.

Those leads weren’t free.

Not sure if you’ve followed GOOG stock lately but with billions of dollars in revenue they seem to charge for the traffic.

And because I’ve never been “venture backed,” all that ad spend was my own money. I needed to come back quickly with a positive ROI.

I could never afford to spend $5 to make $1 because the 2 little guys in the picture below needed to be fed, sent to school, etc.

Felipe (2) and Pedro (4) are my sons. If I waste money on adwords they get less diapers, toys and chocolate 🙁

So I needed to figure out a way to make the GDN work for me…

Why?

  • Because Google Search sometimes can be incredibly competitive and expensive
  • And not only that… I can be limited (more on this on my article about 23+ campaigns that every startup should run)
  • I wasn’t going to allow my company not to use one of internet’s biggest channels

I knew that the way to tame the GDN beast was to Slice and Dice the data patiently and with discipline. Go into the account and do the boring stuff. Exclude placements, raise/lower bids, exclude devices, keywords, etc.

But there was a problem …

Every time I’d go into my Adwords account… the sheer amount of options, tabs, etc. was a bit overwhelming and for someone that like any other entrepreneur was always in a hurry -and kind of ADD- I never got nothing productive done.

So I remember the following story from my childhood. Yeap, I’m the nerd that used to read Greek myths for fun. Here is the full story but the relevant part is this:

Theseus announced to King Minos that he was going to kill the Monster, but Minos knew that even if he did manage to kill the Minotaur, Theseus would never be able to exit the Labyrinth.

Theseus met Princess Ariadne, daughter of King Minos, who fell madly in love with him and decided to help Theseus. She gave him a thread and told him to unravel it as he would penetrate deeper and deeper into the Labyrinth, so that he knows the way out when he kills the monster.

Theseus followed her suggestion and entered the labyrinth with the thread. Theseus managed to kill the Minotaur and save the Athenians, and with Ariadne’s thread he managed to retrace his way out.

Theseus took Princess Ariadne with him and left Crete sailing happily back to Athens.

Here’s how you kill the monster, the minotaur… THE WASTE.

So I built a little “thread” and algorithm that allows me to go in my adwords account (or my employees) do the optimizations, kill the monster, trim the fat… and go back without getting lost.

Here’s how to cut the waste from your PPC campaigns, step by step.

1. Remove Adsense For Mobile Apps

How Does Google Pay for Acquisitions?

They make it a default option on Adwords.

Most people will never take the time to optimize and they’ll trust it to the conversion optimizers. But you know what… when I sell education courses I have enough info to know that most of the traffic from adsense in android comes from games and rarely converts.

Most of the clicks are “accidental clicks anyway” so if you are on a budget I strongly suggest excluding the following placement from your campaigns.

Again, do this only if it makes sense for your market… but in most markets it does.

The guys at “Wordstream” make a good case here.

START HERE OR GROW INTO THIS?

You can start your campaigns with this setting or give it a go and if then you see that mobile apps are not converting you exclude them after.

2. Exclude Particular Apps

Suppose you still want to appear on mobile apps, well now go ahead and see what apps are converting and what apps are not! Then exclude those.

Look at the last 2 … less than 1% conversion rate after more than 600 clicks!! I know for a fact that this traffic is not going to convert and is giving me expensive signups!

So if you don’t want to exclude Mobile Apps all together at least use this type of exclusion to remove the apps that are causing WASTE in your account.

START HERE OR GROW INTO THIS?

This one’s not for beginners. For this one, you need data in order to know which apps to exclude. This is one you need to grow into — don’t start here.

3. Add Site Exclusions

Do you really want your ads showing up in pages where there are Crime, Death and Tragedy, etc.?

Well… if you sell coffins that might be a good idea, but not for everybody.

Do you really want your ads showing up in parked domains?? Maybe in remarketing campaigns you do, cause you are following the prospect/client around no matter what… but as your first acquisition touch point?

The point is… use Site Category options to exclude types of sites that won’t fit your advertising goals.

This is especially true if you are on tight budget. (Who isn’t?) Do this from the get go.

Lots of people don’t exclude this and they end up spending large portions of their budgets on parked domains 😉

Sexually suggestive? Think about that twice… Look at the guys at Eat24

START HERE OR GROW INTO THIS?

You can start your campaigns with this setting or give it a go and if then you see that mobile apps are not converting you exclude them after.

4. Create a Black Book or Black Ledger of Placements

This one is one of my favourites.

We analyze data from all of our campaigns in all of our websites and we figure out what sites did not convert for ANY of our websites or products. With that data we create a “Black book or Black ledger” that we exclude from EVERY campaign we run.

I don’t need to spend money twice on torrent, software, ebook site or coupon site that it’s keyword stuffing and SEOing everything just to show adsense ads.

So after you have enough data… go ahead, create your Black Ledger of Placements and add it as site exclusions in all of your campaigns. That way you won’t spend the money twice to find out that there are some pretty shitty internet sites.

START HERE OR GROW INTO THIS?

You’ll need months of data probably to build a good black ledger… but once you built it I always start my campaigns EXCLUDING those placements that never worked for me. No need to spend money twice to learn my lesson.

But if you want, and you think your campaign is completely different and this time will work on the spammy coupon site… you can exclude it afterwards.

5. Remove Demographics That Don’t Make Sense for Your Product (Age, Sex, Parental Status)

This one seems “so obvious” that I don’t get why more people aren’t doing it. All the more reason why you should implement, now.

There are some websites and products who clearly target a specific demographic. In other words, there is no chance in hell that people NOT in that demo will ever become customers.

For example… if you are selling a product to women, you can “Exclude” people that GOOGLE KNOWS FOR FACT are male.

Yes, sounds extremely simple, but many of your competitors aren’t doing it.

Here’s another example:

If you are selling something that requires a Credit Card Transaction, then you would want to EXCLUDE all leads that don’t have a credit card.

For example, in LatAm, people under the age of 24 typically don’t have a credit cards. Likewise, it’s equally unlikely that a 65+ retired guy will enter his credit card on my website.

Same if you are selling diapers… probably a lot better to exclude people that Google knows ARE NOT A NEW PARENT.

These are all ways that you can use simple demographic segmentation to do nuanced exclusions and save a LOT of money.

If you are less risk averse, then you can leave “unknown” on… but if you are on a tight budget you can exclude those also!

[?] Unknown: This group includes people we haven’t been able to associate with any gender/age/parental status.

START HERE OR GROW INTO THIS?

You can start your campaigns excluding (or targeting) some specific demographics or see how it goes and exclude them later.

But, if you are selling to specific demographics and your budget is tight, I recommend starting with this settings.

6. Remove Your List of Leads/Customers

This is another “obvious” one that I also don’t get why most people are not doing it.

Let’s say you are “Groupon”… you need to get “Leads” / “Email Addresses” to your list so you can offer them something. Cool.

You set up a Campaign SPECIFICALLY FOR THAT and it’s working.

So, if someone becomes a lead and signs up… shouldn’t you EXCLUDE THEM from seeing ads that send them to SIGN UP AGAIN?!! Of course you should.

Yes, you can set up Remarketing Campaigns to get them to come back, to buy more… but not to SIGN UP… because they already did that.

In another scenario, let’s say you are a cool SaaS company growing at “Slack Rates” (good job!).

Thanks to your excellent acquisition campaigns, people are becoming paying customers left and right.

Shouldn’t you exclude those paying customers from seeing your ads to buy and your Christmas Promo with a discount?!! Of course you should.

You can target them to come back, to use the app… but please (please!!) exclude them from the original campaign as soon as that campaign serves its purpose.

The screenshot below shows you exactly how to do it.

START HERE OR GROW INTO THIS?

I normally start with this settings. If someone signed up for my “Offers Newsletter” or my “Free Trial” No need to keep showing them ads to do that “again”.

I might show them ads to “come back” or “buy” or something else… but I’ll exclude this guys from the campaigns from the start.

7. Remove Geo Targets

Living in a “Developing Country” (3rd World is a term that our friend Donald Trump would use… ignoring that it’s the “same world” we live in) I can tell you that not all “Markets” or “Countries” are created equal.

I know for a fact that people in Venezuela and Cuba (although things may change from now on for Cuba) will have problems paying for my product.

They’ll sign up for the free trial or the free lessons, but then they won’t pay. So I exclude those type of countries from the start.

Also if you are selling physical goods and you don’t ship to some countries or cities in your country… is better to exclude them!

START HERE OR GROW INTO THIS?

For the obvious cases (leads in that country can’t pay, or you don’t ship to that place) I start with excluding those geo targets from the get go. Depending on your risk tolerance if you “think” that something is not going to work you might wanna exclude it too.

8. Hours/Days of Week

Not every day or hour performs the same for every product. In my case the performance is quite stable for days of week.

But again, if you don’t ship or sell on some days… you might wanna stop the campaigns those days. You’d be surprise how many people don’t look at this!

START HERE OR GROW INTO THIS?

Whether you start here or grow into this depends on a few factors.

For the obvious cases (you have a local store and you are not open on Sat, Sun) maybe you want to start here and use time exclusions right away. But, then again, maybe someone goes to your website on Sat, Sun and then they visit your local store on Mon. So you have to try.

9. Devices

Technically some people won’t consider “devices” a dimensions because some of the settings to exclude them are at the bid level … but I don’t care.

Be aware that people in computers, mobile and tablets convert at different rates!

I’m amazed at how many people:

a) still don’t have a mobile responsive/friendly fast website

and

b) even if they don’t (because they did not have time to build it or whatever)… that they don’t exclude mobile users from their paid campaigns!!

So please… if mobile traffic is not converting for you — for whatever reason — just make sure you exclude it!

In AdWords you can do that that by bidding -100% for mobile.

START HERE OR GROW INTO THIS?

If your site is not mobile friendly or fast, you should exclude mobile from the get go. If not, try it out… and see how it goes. Instead of killing mobile right away (huge traffic is there) you can also make some effort to optimize it before turning it off.

10. Other Ideas

I don’t want to make this longer than I should. I think you get the point.

There are a couple more dimensions you can look in GDN but I feel these most people do.

Basically you can:

  • Remove Topics that are not Working
  • Remove Specific Placements with bad performance
  • Remove Keywords (or put them as Negative) that bring placements with bad performance, etc.
  • Remove Ads with Bad Performance

But these most people do these. On the other hand… the ones I talked here I see very few startups doing it regularly.

Some Statistical Thoughts and Numbers to Take Into Account When Optimizing

But how many clicks, conversions, etc. do I need to wait BEFORE I exclude something?

Well… I’m glad you asked.

Of course the answer to this falls in the category of “It depends” but let me give you some useful guidelines.

Depends on what? Basically on your conversion rate and the statistical confidence that you want to have.

But let’s think about it in the following way.

If your average conversion rate of a campaign from click to free trial signup is 15%… and if you got 30 clicks and no signups.

To get to 15% conversion rate … the next 5 clicks should be a signup.. Possible, but highly unlikely. So I’d kill that.

I never kill something BEFORE 30 Clicks.

Now if you are optimizing towards something that has a 1% conversion rate on avg. You expect 1 sale every 100 clicks. But you know… that’s the avg. So in that case I normally wait up to 4X to 5X the clicks. So if I had 400/500 clicks and no sales or just 1 or 2 with a negative ROI then I turn that dimension off.

This is not 100% based on math but it’s good common sense.

Applying This To Other Platforms (Facebook, Taboola, Outbrain, Bing…)

Of course this approach to reducing dimensional wastage is not only for adwords. You’ll find that this can work in Facebook, Taboola, Outbrain, Bing, Yahoo and many others.

I just wanted to give you a sense and dive deep in Google Adwords cause I believe GDN is one of the most underutilized traffic source in startups because of these pitfalls.

Here’s a simple Facebook Example… You can go to:

Male and Female

Countries

You get the point. With Tools like AdEspresso (a 500 company… I love you guys!) you can zero in into a lot more details.

Note For Startups With Agencies/Freelancers/Outsourcers Running Their Adwords Accounts

I get you are founder with A LOT going on. I still think marketing should be a core skill inside ANY company and outsourcing it I believe it’s a mistake… but I get it… sometimes you do what you can. But… Make sure you delegate things to knowledgeable, hard working people.

If they are not doing these things… Time to have a serious conversation with them 😉

My Last Ask…

If you’ve got any value out of this blogpost… please share it.

On Twitter

Share on Facebook

Share on LinkedIn

Email it to people: http://500.co/more-users-less-spend-10-ways-to-cut-adwords-wastage/

Upvote on GrowthHackers

Upvote on Inbound

You’ll not only save them 1000s of Dollars by doing it and probably open one of Internet’s Biggest Channels To Them (The Google Display Network)… you’ll also make me super happy 😉

So yeah… please share it and feel free to reach out on twitter @juanmartitegui specially if you did some of these analysis on your account and you found some REAL WASTE & SAVING OPPORTUNITIES.

How to Grow a Startup, Marketing Hell Week Edition

Today’s post comes from guest author Lauralynn Stubler, a growth marketer who’s been helping out 500 Startups’ brand new Batch 17 survive our Accelerator program’s (in)famous Marketing Hell Week.

Batch 17 Marketing Hell Week is over, but the learnings from our startup resources have just begun….

Today we’re sharing some key takeaways on how to grow a startup from our recent Marketing Hell Week roster of speakers.

HOW TO GROW A STARTUP – THE QUICK TIPS

“Start with running A/A tests to test your tools.”

Hiten Shah on A/B Testing

Click-to-tweet: http://ctt.ec/hK6zd

A/A testing is often overlooked but it’s an excellent method of double-checking the effectiveness of your A/B testing software. A/A testing is the tactic of using A/B testing to test identical versions of a page against each other. In an A/A test, the tool should report no difference in conversions between the control and variation after enough conversions have been logged.

“Optimize ad spend for power users to maximize ROI with a limited budget.”

(Daniel Riaz on Customer Segmentation)

Click-to-tweet: http://ctt.ec/16N6t

By identifying and understanding your power users, you can optimize your marketing spend by targeting those who match their profile.

YOU ARE YOUR COMPANY’S BEST GROWTH HACKER

 

“Growing users without having those users complete the core action is the empty calories of growth. It feels good but it’s not good for you.”

— Sarah Tavel on B2C Engagement Hierarchy

Click-to-tweet: http://ctt.ec/ySc2c

If they nibble it doesn’t mean they are hooked. It’s not enough to drive traffic to your website, you actually need your users to take a specific action. And not just any action, but the ones that are in line with your objectives.

“The most important part of your dashboard is the janitorial work. The janitor updates the data every day and keeps the data clean. If you are going to build a dashboard and not keep it clean, don’t build a dashboard.”

— Susan Coelius on Remarketing

Click-to-tweet: http://ctt.ec/hyQeC

Pretty dashboards that tell all-the-things are great, if you need to know all-the-things. If not, it becomes a bloated daily chore that you begin to de-prioritize. Which makes the data, at worse, useless. And at best, something you need to spend time updating before you can see the whole picture. Keep it simple so you can update it on a regular basis.

INSIGHTS ON COMMON STARTUP RESOURCES

“People don’t go to FB to make decisions, they go to FB to avoid making decisions. Educating customers/generating leads is a better use of FB ads – give them value to build relationships instead of being aggressive and trying to make a sale.”

— Armando Biondi on Facebook Ads for Startups

Click-to-tweet: http://ctt.ec/H66d2

While our ultimate goal with paid acquisition is to land the deal, it’s a truth that most consumers need more than one touch before making a decision. Providing valuable content to your Facebook audience, rather than pushing a product, is a great way to nudge them through your activation funnel quicker.

“Avoid money in Referrals: Bringing up money changes context for users from social norms to market norms.”

— Ivan Kirgin on Referral Marketing

Click-to-tweet: http://ctt.ec/xVaNf

If you’re unclear about social vs market norms, consider this from a different angle. What would happen if you asked your dinner guests to bring a specific cash donation instead of a bottle of wine?

So, in other words, by offering money your referral incentive goes from “I share because I’m a caring person” to “Is this worth taking advantage of my network?” Figure out the best motivation for your customers to share your product, and capitalize on that thing. Sharing is actually a pretty big ask, and not everyone cares about a couple of bucks off.

Case in point: Twitter. If you don’t fix retention, you’ll run out of Internet to acquire.”

— Casey Winters on Retention

Click-to-tweet: http://ctt.ec/inwH7

There has been a shift in focus recently from acquiring new users to retaining existing users. It’s more costly to convince a new lead to become a user, and it’s downright agonizing to reactivate a churned user. Keep your customers, find out what makes them happy about your product. Then you can focus on acquiring new users who will undoubtedly stick around longer.

In the coming weeks, we’ll be publicly releasing all our Marketing Hell Week videos.

>> Sign up to be notified when the videos are available <<