I was asked to give a talk about paid traffic sources at 500 Startups last week. The presentation is embedded below.
Although I couldn't resist diving into deep, specific, tactical stuff near the end, the three most important points I wanted to impress upon my audience were:
- Most online ad campaigns (even those created by professionals) fail
- The only foolproof way to succeed is to try (and fail) enough to exhaust every other option except the successful one
- Therefore, your objective should be to fail as quickly and cheaply as possible
It's become common knowledge among the lean startup movement that you should launch quickly, iterate, pivot, etc. But I want to take this one step further as applied to traffic (and startups as a whole):
When you launch a campaign, your objective should be to make it fail.
When you launch an advertising experiment, it will most likely fail. The null hypothesis is that it fails. This is a good thing, because it creates defensible barriers to entry for your business.In other words, once you have a successful campaign, a novice with a $100 AdWords coupon won't be able to disrupt your acquisition channels.
If chances are that your campaign fails, you might as well do it quickly and painlessly.
I know it seems crazy to set a goal of losing money. But just give it a try. Because here's what happens when a campaign fails:
- The campaign failed because it spent money without bringing in enough conversions or revenue to pay for itself.
- If the campaign is spending money, it's generating traffic.
- If the campaign is generating traffic, it's also generating data: click costs, conversion rates, ad copy and landing page split test results, etc.
And as any good marketer will tell you, data is everything. He who has the most data wins.
Don't aim for launching a campaign that's instantly successful/viral/profitable. That's a fool's errand, and it can only lead to disappointment.
Your only objective with a new campaign should be to collect enough data to validate or disprove your assumptions.
Then go back to the drawing board, use what you've learned to create a new campaign that fails slightly less than the last one, and try again.
Don't worry about the conversion rate or CPC with a new campaign. Just get the data, so you have a baseline you can optimize from.
If you get an additional data point about what works and what doesn't you win, no matter the result.
Pickup artists call this mindset outcome independence, defined as "The mindset of not focusing on a specific result, or growing attached to any outcome."
If you're not attached to the outcome of a split test, you'll never get demoralized by its inevitable failure. And you'll never risk giving up on a traffic source or acquisition strategy too quickly because your first few campaigns failed.
This can be an incredibly powerful mindset. Embrace failure. Never stop testing. And the successes will come in time.
The high rate of failure for most ad campaigns is the reason we started MixRank. We built our startup to catalog and analyze millions of split tests and campaigns so you can learn from your competitors' mistakes rather than making them all over again.
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