When we are investigating a new product idea for our online business, it is essential that we perform some due diligence in checking actual demand for the product.
Let’s take a look at how we should micro-test these product ideas using Google Adwords. This will provide us with the confidence to proceed with an idea or highlight to us that the idea may not be as viable as we had hoped.
We are often terrible judges for what the customer actually wants, so it is best to test and verify potential demand for an idea, before we go investing countless hours and money into pursuing it. Limit the risk and test the idea quickly, so that you can launch or move on with the next concept.
Don’t Ask People if They will Buy, Ask Them TO Buy!
Therefore, the aim of micro-testing is to:
- Test the potential online demand for a business idea, without investing in the product upfront.
- Test the profitability of an idea.
- Test the customer’s reaction to a product and gain additional insights to your target audience.
Why Google Adwords
Google Adwords is one of the most powerful Search Engine Marketing (SEM) tools available, allowing you to place small ads in search engine results. It utilizes the pay-per-click (PPC) model, where you place bids on keywords and phrases (like in an auction), against other people bidding for the same keyword.
Google then auctions the bids against each other with factors such as the bid amount and relevancy. Based on this your ads should show in the search results in a certain position.
If somebody clicks on your ad, you will be charged a small fee for the click, hence the PPC model. It is an effective way to pay for showing your website on page 1 Google results. However, the more competition for a given keyword, the higher you typically will need to bid.
The benefits of utilizing Google Adwords over other testing or marketing methods (like focus groups for example) are:
- Your testing efforts can be specifically targeted to your audience, by bidding for the keywords they will most likely use to find your product.
- This makes the method very cost-effective, as you only pay for engagement (clicks) with your advertising, rather than the service of displaying the ads (where you may not get any engagement at all). No-clicks = no-cost, and you can move on to the next idea with your money in hand.
- The method presents a lower monetary risk as there is no need for a large upfront investment.
- The testing is quick, usually about a 1-week duration and maybe another week of re-testing if some tweaking of the product offering is required.
- Better than focus groups, because people in focus groups know they are in one. As a result, this inherently changes their behavior, potentially skewing results.
- Flexibility to test various things other than product concepts, like:
- keywords, target audience demographics
- ad text, landing page, product offering (benefits, specifications, price)
- your brand name or tag line
- your logo
- … and just about anything else (often called A/B testing, where you compare two scenarios to see which one works best for your audience)
Before We Start – Let’s Recap
Before we reach the point of setting up our Google Adwords campaign, we should have performed the following:
- Keyword Research – Initial research into search terms and phrases relating to our product or niche. We utilize Google Trends, Google Adwords Keyword Planner and a Keyword Research tool like Jaaxy to perform the initial investigation.
- Competition Research – Check out the competing websites for the search terms identified in the Keyword Research phase. How do they present the product offering? Can we do it better? What do they do well, and what don’t they do well?
- Create Your Test Website – A small test website with your product offering containing a Home Page, Specifications & Pricing Page, Back Order Page and Contact Page.
- Set Up of Google Analytics on Your Test Website – Creating a new analytics property and adding the ability to track visitors’ behavior on your website.
If you have missed some of these steps, or not quite sure what it’s all about. Please first perform the marketing researching steps in this post. It will guide you through the steps above and then refer you back to this post once you are ready.
If you are good to go, then let’s get started!
Step 1: Create a Google Account
To use Adwords, you will need a Google Account which is free for anyone to set up. Use an existing account or a new one, however I recommend keeping your personal account separate from business activities. If you already own an appropriate account, move onto the next step.
As you get more involved with online business you will find that Google provides many useful (and free) tools to assist with expanding your customer reach or running your business. Some of the most popular services are shown above.
Create an account and fill in your details.
Step 2: Signing Up with Google Adwords
OK, now that we have an account, let’s go ahead and get signed in to Adwords. Click Start Now.
Enter your email address and website URL as requested.
After this you will probably be redirect to a Google Adwords Express account. It is best if we stick with the non-express account.
To do this, click “Compare Adwords Express with Adwords“.
Then select “Switch to Adwords“. This will redirect you.
Step 3: Create Your First Campaign
Set up your first advertising campaign by configuring the settings as follows.
Set your budget for somewhere between $20 to $30 per day, which will equate to $140 to $210 for a week of testing.
You may have to increase this if you keywords are particularly competitive, but we aim to spend no more than about $500 for a week or two of testing. Assuming 1st week shows promising results and 2nd week is to refine the product offering (if required).
I needed the 2nd week for my first time, because I didn’t quite get the keywords and advertising text right. However, you will hopefully do better!
A quick side note: The currency you set here will remain the currency for your whole Google Adwords account. It cannot be changed without creating a whole new account, so please double-check before moving on.
Set the region, country or state you are planning to sell your product in. This is where your target audience mostly resides.
If “going international”, I wouldn’t recommend leaving this blank. Instead, set a few of the larger countries where your target audience will mostly reside.
On one test campaign I left it blank and it resulted in $50 worth of spammy clicks within 5mins! Probably bots or people looking to send you unsolicited messages and about their services. Lesson learnt!
For micro-testing, I just utilize the Search Network (normal search results), so uncheck the Display Network box.
Here you can enter the keywords you recorded during the Keyword Research phase.
A few cautions to note:
- Keep in mind the ‘intent’ of the visitor – You want to target keywords that more likely lead to conversions, therefore you need to utilize keywords that are suited towards commercial intent. This means “buy”, “best”, “top” or anything that is not just an ‘information’ searching phrase like “how to” or “what is”.
- Have a mix between general and specific – Mix up general search terms around your product with specific things that people may be looking for when they search for your product
Manually set your bid amount to $0.30 per click. This will need to be monitored and adjusted after the campaign starts.
Sometimes it is too low or too high for the keywords selected.
Now it’s time to write your first Ad! There are three fields for you to fill in:
- Headline 1 (30 characters) – This can be the name of your website, product or even part of your tag line or slogan. Look at similar ads when you Google your search terms, and see if you can make a more compelling one!
- Headline 2 (30 characters) – This can be whatever you didn’t include in headline 1. Make the headlines work together and easy to read. Use the Ad Preview to see how it is displayed.
- Description (80 characters) – Describe more of your offering, and what the visitor can expect when they click through. Try to include some form of call to action, but don’t ‘trick’ the person to visit, otherwise they will turnaround as quickly as they came in and you’ll be charged for it!
A few things to be aware of when writing your ad copy:
- Don’t write in full capitals (even for a single word). Google views this as spammy and is against their rules. You ad will be reviewed and rejected for this reason.
- Write the Headlines and Descriptions with capitals on the first letter of every word only. This helps to make your ad stand out.
- Do not over use exclamation marks or write your ad in a spammy way.
Step 4: Finalize Your Payment Information
The final steps of the set up includes submitting your payment information. Adwords has thresholds set for billing your account, which is every 30 days or after you have reached a certain amount (varies).
You won’t be charge until the following events have occurred:
- Your ads have been reviewed and approved.
- Your ads are showing and people are clicking through (you can pause ads at any time).
- Your balance has reached the payment threshold, or 30 days, whichever is sooner.
Step 5: Additional Settings to Configure
There are a few additional settings that you will need to configure after you account is set up and while you ads are being reviewed by Google.
Go into your campaign and access the settings menu. From here, navigate to the bidding menu, select Maximize Clicks, and set your Maximum CPC (cost-per-click) Limit to the $0.30.
As mentioned above, you will need to monitor your campaign and adjust this limit. Increase it if your ads are not showing due to bids being too low, or decrease it if your ads are showing in position 1 consistently (we aim for position 2-4 on average).
Go to you settings menu again, and navigate to the Ad Rotation menu.
Select Do not optimize: Rotate ads indefinitely. We want all ads to rotate as evenly as possible.
Creating Additional Ads
You may like to create additional ads for your campaign to test variations of your ad copy (ad text). You could vary things like your tag line, description or even product name.
This is where the flexibility comes in, allowing you to test both demand for your product, and variations of your promotion.
To create more ads, just navigate to the Ads & Extensions menu and click the large blue ‘+’ sign. Ensure each ad variation only changes one thing at a time. This will allow you to distinguish the impact the change has on your results.
A Little on Ad Groups
If your keywords are in some way clearly categorizable by some sort of theme or concept, it may pay to separate each category of keywords into individual Ad Groups. Ensure that there are no duplicate keywords between Ad Groups as this will result in bidding against yourself! (Each group must have a distinct set of keywords).
You may then create Ads for each Ad Group, ensuring your ads are as relevant to the keywords in that group. Also ensure your Ads are relevant to the page you are linking to! Multiple ads can be created to test differing titles and descriptions, and serves as a good way to see what creates the most impact with potential customers.
In most circumstances however, I have found a single Ad Group to be sufficient for the testing phase. If we utilize Adwords as a marketing tool for our business in the future, we may want to explore Ad Groups more.
Step 6: Launch Your Campaign
Start your Adwords campaign and monitor it closely for the first few hours and next couples of days. Ensure the Campaign, all Ad Groups, all Ads and all Keywords have a ‘green’ dot next to the description, signifying that they are enabled
You may need to adjust Bidding Limits and Budgets depending on average cost per click and the status of the keywords.
Check whether you keywords are receiving impressions. Analyze your keywords section and aim for an average keyword position of 2-4, which means you may need to adjust bid limits up or down.
You can check this by looking at the Keywords report and identifying the Impressions and Average Position columns. If your keywords are receiving impressions, then your ads are showing.
Also, check the status of your Ads by seeing if they are receiving impressions.
Perform the testing for a week, then pause the campaign and evaluate the performance. You may like to be flexible with how long you run the campaign for. As with many things, it does vary on the product, niche and target audience. Use your instinct, as there is no hard and fast rule, but don’t cut it off too early unless something is going wrong.
Be wary that although we are using a scientific method for testing, getting your ad campaigns right is an art. We are ultimately dealing with human behavior that is not always rational. Use your knowledge of the target audience to make your decisions.
You may want to test for another week if you got barely any clicks on your ads, but plenty of impressions. This may signify a problem with your ad text in terms of capturing your audience. Also, check the relevancy of your keywords, as it is essential that what people search for (keywords) and what you offer (ads) are closely related.
A quick side note: There is an Adwords App available for download to your mobile phone, which will allow you to check the status of your campaign while on the move. Very handy!
Analyzing the Results
To make a final decision on whether your product is commercially viable, requires a mix of analyzing your market research notes, Google Analytics data for your test website and the data from your Google Adwords campaign.
I have explained the process of deciding if you should proceed with your idea here, so jump back across and finalize your analysis.
I hope this guide has given you a clear methodology for testing your product ideas. If you have any questions about your campaign, if anything is unclear or you need help, please do not hesitate to send me a message or leave a question below.
Right, let’s get into it!
There is no Motivator better than Progress, and there is no progress without Action – Tweet This
Ensure you have completed your Keyword, Market and Competition Research, as these are inputs to you micro-testing campaign and final decision.
Execute Steps 1 to 6.
Ask me any questions you might have.
Continue your journey by analyzing your final results and making a decision to invest or divest.
Are there any other steps you take when testing your business ideas? I’d be interested to hear them, so please let me know below.
Hey guys! I have a strong passion for online business and enjoy helping people escape the 9-5 office, by creating online businesses. I want to help people build a source of income that is separate from their time, allowing them to pursue their dreams and passions. Together we can focus on designing a life we don't need to escape from! If you ever need any help or have questions, I'm here, just give me a shout anytime!