Small Business Man's Blog: AdWords

Showing posts with label AdWords. Show all posts

22 Apr 2011

Struggles of a novice entrepreneur

Diagram of the typical financing cycle for a s...

Image via WikipediaIts not easy starting your own business, never mind making a success of it. According to a recent BBC news report, four out of every five business start-ups ends in failure and one of the main reasons comes down to either poor planning or a total lack of it.

That's quite a startling failure rate! How can one avoid being in that 80% and instead be in the 20% who make it? Certainly, our first year has been a struggle. I am not going to divulge every last detail of the first 12 months of our business, nor will I give details of our financial performance. Rather I want to focus on some general points based on our experience.

First, the biggest problem we have faced has been capital - raising enough of it to invest in the business. We made a conscious decision at the start not to get into debt with the banks. Instead, thanks largely to some friends willingness to invest in our business, we started off with a small amount of capital and have financed the business with that initial investment and two further small injections of capital. All told, we have invested less than £5,000 from friends and our own resources. However, the downside of not going to the banks has been the fact that the initial capital investment has been relatively small. With hindsight, we should have started off with a larger initial investment. This would have helped us invest in marketing and in stock instead of waiting for profits from sales to allow us to buy more stock and market the business.

Another problem has been what is best described as a lack of planning. As te BBC report points out, poor planning is a major factor in a business failing. In all honesty, a lack of planning has been a factor in our struggles. Bearing in mind that when we started out we only knew one thing, that we had a great product and that it had high profit margins. However, what we needed to do was market that product and that is where we had no idea how best to do this. We had no desire to open up a physical store and instead we were going to focus on online sales. The question was, how to go about. Of course, there was eBay, but also Amazon and the option of building our own ecommerce store. In the end we started off with our own store (built using RapidWeaver) and an eBay Store. Later on we added Amazon to our channels. We also tried advertising in a computer magazine, as well as local advertising.

However, we faced several issues:

Both eBay and Amazon charge monthly fees (as does PayPal, who process our payments)
We had problems with the shopping cart plugin on our own site (fees were small but the plugin didn't work properly when it came to discount voucher codes - something we needed to work)
Advertising doesn't come cheap - especially AdWords and the like. We tried Facebook Ads only to find them very expensive and not very effective. This meant we were using most of our profits on advertising, hampering our attempts to introduce new products.

We made a mistake in not sticking with our original product and instead adding new product lines in a mistaken attempt to attract more customers. All it did was reduce our cashflow. We weren't patient enough to wait for the business to grow with just one product. Adding additional products meant that funds were unavailable, being locked up in slow-moving stock.

So, that's just an insight into our tribulations in the first year. Hopefully, it will help soem of you avoid making the same mistakes.

10 Nov 2010

The steep learning curve that is Google AdWords

Image representing Google Analytics as depicte...

Image via CrunchBase

If you have been reading this blog since the start then you will know that I sell electronic goods (mainly computer related ones such as the Wi-Fire). I do so mainly through my own online store (hosted by BigCommerce), although I also have an eBay Store and an Amazon Store.

Marketing is mainly via Google AdWords though I have dabbled with eBay's version (initially known as AdCommerce). Now as anyone who has ever run a Google AdWords campaign for the first time, it is fiendishly complicated and enough to turn the most sane person into a mindless and emotional wreck. It's not just the steep learning curve of doing it yourself, it's also the veritable plethora of 'experts' out there offering to make it all simple and effective, all for a King's ransom of course.

So I did what a lot of people do and read a lot, especially blogs and online articles, especially Google's own. In addition I dabbled with running my own campaigns and tweaking them in an effort to improve my click through rate (CTR) and conversion rate, whilst keeping the cost of each click as low as possible.

Now, it doesn't take a genius to realise that I made many mistakes. Expensive ones too. However, I have certainly learned a lot and improved my performance. In the early days I was seeing CTR's in the region of 0.1 - 0.5% (yes that low). However, by the end (I recently finished my last campaign) I was seeing CTR's in the region of 2.25% on some keywords. (I saw CTR's at times of up to 100% on some keywords but I am not counting those as their total impact was minimal due to very low number of clicks).

As to what I learnt and how this improved my performance, here it is for what it's worth.

I kept search and content campaigns separate.
I only had 2 adverts per ad group and only 2 keywords per ad at the start.
After each keyword has reached at least 100 impressions I stopped the worst performing one and added some more.
Once a keyword passed the 100 impressions level I kept only the best performing ones and paused the rest, adding new keywords again and repeating the experiment.
Likewise with adverts in an ad group, I would check which was the best performing one and pause the other. I would then duplicate the winner and tweak it slightly and wait and see whether this improved or worsened it's performance. Once it was obvious which was the better ad I repeated the process, all the time trying to up the performance of each ad group and ad.
I kept my budget low initially, at about £10 a day, only increasing it to about £15 a day once my CTR starting climbing.

In addition, I monitored my site in Google Analytics for its performance as regards ecommerce, having previously set up sales as one of my goals.

I am no way an expert but I think I have learnt some valuable lessons and so I wanted to share them here. I feel that come my next campaign I have a much better idea of what to do and that my limited funds will go that much further. I intend to post later about my experience with Google Analytics, once I get the hang of setting up conversion tracking.

12 Apr 2010

Early days yet but first sales start rolling in!

I finally took the plunge with my switch over to BigCommerce and now my site has seen its first sales!

Visitor numbers are up but still at a low level. However, to have sales is encouraging and once I switch my advertising to point at the new site I am hoping things will be even better in a few weeks.

I finally managed to get my products listed on the Google Shopping site so that they show up in searches, with many of them appearing on the first page! All I need to do now is work out a keyword strategy for AdWords and build some reciprocal links.

I'll keep you posted on how it goes in future posts.