Lean Startup Challenge: Weekly Reflection 4

AdWords
Last week, some members of the Lean Startup Challenge (including me) attended an AdWords workshop by Google. We were told some basics about how to use the ads, that it helps to group the keywords into categories with other similar words, and that a good click-through-rate to aim for is 1%. This week I started using Google AdWords. I’ve also managed to learn a few important lessons about the AdWords system that weren’t covered during the workshop.

For example, the ad “quality” for a given keyword (which is actually more like a keyphrase) seems to depend on how many words from the keyword appear in the ad itself. At first I didn’t realize that, thinking I’d bundle all diagram-related keywords under my diagram add, figuring that the people seeing the ad would understand that UML is a type of diagram. Unfortunately, Google penalized my quality score heavily for not having “UML” in the ad. I now have 3 different ads with 51 enabled keywords (a good rule of thumb is to have about 15 keywords per group and a unique ad for each group) and seem to be doing better in terms of my quality score. For those unfamiliar with Google Ads, quality score factors into the ads position on the page. Bid amount is the other component that factors into the ad position. So if you want your ad to appear at the top (where it’s much more likely to get noticed), you can either improve the ad quality or throw a lot of money at it. However, if the quality is too low for a given keyword, no amount of money will force the ad to show up (McDonald’s for example, will never show up when you’re looking for a new laptop).

While the quality score depends on your ad alone, the position of the ad also depends on quality of the competition (as well as the size of their pockets). As a result, I started sometimes ignoring the quality score if my rank is in the top 3 and I am getting clicks from the keyword. Other times my quality score is high (7/10) but I get no clicks and Google throws me in position 11. In those cases it’s time to disable the keyword before the quality score drops. Playing with AdWords is a lot like tweaking the skill points of a character in RPG, you don’t control the damage output directly but it’s a combination of dexterity, strength and a number of other factors that you might not be able to control. The trick is to test out your build in a real environment and analyze when you’re seeing diminishing returns.

There are also some important gotchas I stumbled into that hurt my click-through-rate quite a bit. First of all, don’t use generic single-word keywords, no matter how high your rank/quality is for them (there are probably exceptions, just that this didn’t work for me). For example, somehow I got a quality score of 6/10 for the term “graphics” and I also had position 3 for it (despite it seemingly being such a popular search term). I was very happy about this and let that keyword run for the first day. When I checked my campaign the next day, this keyword got over 8,500 impressions, but only 20 clicks (about a 5th of the 1% Google recommends). My other keywords were barely shown at all since this one was so much more popular in search terms. Out of those 20 visits, I’ve received no sign ups. Needless to say, that was the first keyword to get disabled.

The second gotcha I ran into is display network. These are the ads that appear on other people’s blogs, websites, and news stories. Google recommends leaving them on for inexperienced AdWords users (so that your ad can appear in those places as well), and I did just that in the beginning. I was told at the AdWords workshop that the click-through rate for display network is lower, somewhere around 0.3%, so I was expecting less clicks there. I figured that whatever clicks I get there would just be a bonus. So the next day (after disabling “graphics” and other generic terms) I noticed that the number of impressions for my other terms on Google has not increased too much, but I managed to get about 9000 impressions on display network, with only 1 click-through. That’s when I decided that display network needs to go before it hurts my quality score on Google as well. My guess is that the click-through rate is this low because people are actively engaged in the website, whereas with Google they’re still searching for something to engage in. It’s a lot easier for the ad to be more interesting than other searches than the article that the person already clicked on.

After addressing those issues, my campaign started doing a lot better. I get less impressions now, but my click-through rate is way higher, not to mention that visitors actually sign up to use Grafpad. I still check my AdWords account every day, disabling words for which my position is low and tweaking my ad wording if I see a trend of all keywords getting a low quality vallue compared to my other ads.

App and Website
There haven’t been major changes to Grafpad this week, I have been slowly fixing bugs and other annoyances however. I also observed several first-time users play with Grafpad, which was even more revealing than reading the feedback. I noticed, for example, that several users got confused with how right-click works. They expected that right-clicking outside of right-click menu while it’s active would close the menu instead of opening it in a new place. Perhaps I need to replace the right-click menu with “figure” menu that becomes active when a figure is selected (the menu can either appear inside the selection box or above the two other menus).


Metrics
Acquisition: 0.17%
There were 34 visitors to my website this week out of 19,878 who saw the ad impression. As I mentioned earlier, it was the use of generic terms and display network that hurt me the most (costing me about 17,000 impressions with virtually no clicks). I believe next week I will be getting much closer to the 1% click-through Google recommends. Already I’m seeing 2-3% click-through for some search terms I’m using.

Activation: 14.71%
Since I haven’t done anything this week to improve activation, I would say that last week’s experiment is confirmed. Giving people free storage and comparing free account to paid one on main page does improve activation rate.


Retention: 40%
Out of 5 people that signed up this week, 2 used their account more than once within the same week. I still don’t want to draw any conclusions since the percentages are marginally different between the weeks and the number of people is in the single digits.

Referral: 0%
No referrals again, although I do seem to be getting more and more people following me on twitter. I’m not sure whether it’s my blog, Grafpad, or simply common interests.

Revenue: 0%

Plans for Next Week
I started trying to add touch-gesture support to Grafpad last week, to make Grafpad usable with iPad and Android devices. So far I’ve been unsuccessful (I tried to add it cleanly via Pyjamas, the same way mouse and keyboard handlers work). Next week I might try adding it via a hack, a Javascript hook that triggers Pyjamas mouse handlers. I’ve been getting a lot of feedback about making my app iPad-compliant. If I can at least add partial support for that, I can gauge the popularity of that idea. I do believe iPad market could be its own niche, and I want to try concentrating on it since many people don’t seem to like drawing with a mouse.

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About Alexander Tsepkov

Founder and CEO of Pyjeon. He started out with C++, but switched to Python as his main programming language due to its clean syntax and productivity. He often uses other languages for his work as well, such as JavaScript, Perl, and RapydScript. His posts tend to cover user experience, design considerations, languages, web development, Linux environment, as well as challenges of running a start-up.

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