Learning through Lean Marketing

Note: This post is a follow-up to a previous post on Evaluating Banner Ads Using CPI.

Earlier this Spring we ran a short campaign for duellr (an app designed to help designers and their clients make better logo decisions) with the said goal of assessing our product’s positioning and market-fit. We did this by directing targeted ads at a landing page and collecting emails from users interested in alpha accounts. The two metrics we were measuring were the click-through rate on our ads and the conversion rate of our landing page. Initially we tested ads in two major channels: Logopond.com and Google Adwords (with a $5.00/day budget). We also complemented our paid ads with some mentions of duellr on blogs (Spin, Rapid Growth) and Twitter.

I forecasted that we would be able to collect 39 emails from our Logopond ad (with an estimated CTR of .07% and landing page conversion rate of 3%). The actual CTR for our ad was .01% but our conversion rate was 11.5%. We collected 24 emails for the $250 ad, making our cost per acquisition $10.42. Our Google AdWords campaign faired worse. The $42 we invested resulted in only two email acquisitions. Click on the image below to view the Analytics report:

What’s happened with Adwords?

The first red flag should be the paltry $42 we spent, a number far below our allotted $5/day for the one month campaign. The primary reason for going underbudget was the low search volume for long-tail keywords our ads and landing page were targeting. The problem designers are facing — stressful, drawn out logo decisions with clients — is real; the user interviewing we conducted told us that. But the question is — how are people currently trying to solve the problem? Judging by the search volume, designers aren’t googling. To generate any volume through AdWords, we had to either bid on short-tail, highly competitive terms like “logo design,” which were out of our price range, or target less competitive terms that were also not directly related to our product, like “logo contest.” Unfortunately, these targeted but unrelated keywords were not consistent with our ad copy, making a low CTR more likely.

The lesson I learned from this AdWords campaign is that search pages are probably not the best way for us to find our customers and solve their problems. A better strategy is to articulate our solution to their problem in a place they already are, in a state in the design process where we can be most effective. Which brings us to Logopond.

What went well with Logopond?

Logopond solves the problem of finding designers where they already are — a logo inspiration website. Our $250 bought us a 125px² image on their site. The constraints of this size made it hard to communicate much of anything, so we decided to make an ad that simply had the Duellr logo and the words “alpha accounts.” I think the ad is part of the reason we had success collecting emails. We weren’t targeting a particular problem, but clearly advertising our landing page. People clicking on this ad were likely more ready to try a new product, whatever it might be. The .01% CTR is disappointing but not at odds with pessimistic reports I’ve seen elsewhere. I’d like to experiment with more banner ads and see how ad copy, size and placement affects our key metrics.

Blogging

Over the course of March/April we wrote several blog posts that mentioned duellr. These were not explicit endorsements of the product but informative posts intended to track our learning and progress through the customer development journey. Our conversion rate for referrals from Spin was 10%, roughly the same as our Logopond conversion rate. While time spent blogging has its own costs, it has benefits outside of marketing duellr. It helps us distill our own thoughts into lessons and share insights with our readers. Of course, blogging about duellr for the sake of winning customers would have diminishing marginal returns over time. In future marketing initiatives I’d like to explore other forms of social media and how they could work together to bring our cost per acquisition into a range supported by our business and pricing model.

Additional Resources

These two articles offer further insight into setting up a lean startup marketing plan.

• “The 5 Minute Guide to Cheap Startup Advertizing”, by Rob Walling.
• “Using AdWords to assess demand for your new online service, step-by-step”, by Eric Ries.

Marissa Christy (19 Posts)