Adwords for Market Research Cheat Sheet (DRAFT) by lszyrmer

ad spend- the amount of money actually spent on an advert­ising campaign
banner ad- a type of online advert­ise­ment, a click-able image ad which then sends the user to a specific URL, such as a landing page
brand marketing- a type of marketing based upon repeated exposure of prospects to specific marketing message, in the hopes that it will influence buying decisions over the longer term and build goodwill
clickt­hrough rate (also click-­through rate, CTR)- the percent of people who see an ad and click it. For example, if an ad is displayed 100 times and 1 person clicks it, the CTR is 1%
clickt­hrough- a click on an advert­ise­ment. useful to analyze because it's behavi­oral, and also a precon­dition for a sale in paid customer acquis­ition
cold traffic- traffic to a website that is completely unfamiliar with it. a good source of baseline testing data to analyze demand, which isn't skewed like warm traffic
conversion rate- the percent of prospects who take a desired action after arriving at a landing page. This usually refers to the prospect's buying the product or leaving an email address for further followup
customer acquis­ition cost (CAC)- the amount you actually pay to acquire a customer. While there will be an average CAC, in practice CAC varies widely on the marketing medium used, tactics, and relevance for that particular audience
direct marketing (direct response)- a type of marketing that focusses only on the behavioral response of prospects in aggregate, i.e. maximizing percent of prospects who respond to a specific advert­isment. A different approach than brand marketing.
Expected Lifetime Value (E(LTV))- the total revenue (or profit for more mature busine­sses) you expect to make from one customer. This is an educated guess until you have actual sales data after a product is launched
funnel (also: sales funnel)- An analytical technique used to organize sales efforts as a flow of potential prospects, who become leads, and ultimately become customers. Similar to how liquid flow down a kitchen funnel, many prospects drop off before they actually buy, resulting in a funnel­-like structure. The technique attempts to minimize the % of drop-off at each stage
gumball machine number (GMN)- term by Perry Marshall referring to how much you'd ideally be willing to spend, i.e. no more than X, in order to acquire a customer. It is equal to the expected customer acquis­ition cost
impression- For an an online advert­ise­ment, when one prospect views a specfic advert­isment one time. Used as the denomi­nator for CTR
landing page- in online marketing, a one dedicated webpage to welcome traffic and persuade it to take an action, e.g. sign up, leave an email address, buy a product
lead generation- In marketing, lead generation is the generation of consumer interest or inquiry into products or services of a business
lead- a prospect that has the interest, authority and budget (i.e. money) to purchase a product or service
Lifetime Value (LTV)- the actual or realized total profit or revenue generated from one customer. LTV measures of the total amount of value you generate with your products or services per customer
market testing velocity (MTV)- the elapsed time between defining a test and completing it by interp­reting the results. The lower the MTV, the faster you learn about your market
offer- the fundam­ental promise of your product or service
pay per click (PPC)- a form of online advert­ising, where the advertiser pays only for actual clicks generated, not "­imp­res­sio­ns"
quality score- In Google Adwords and Bing PPC, a softwa­re-­gen­erated estimate of the relevance of a particular landing page to the ad (and keyword in search PPC). Quality score is used to establish the placement of an ad or the cost per click
warm traffic- unlike cold traffic, any kind of traffic which has been postively predis­posed to buy based on how it arrives at a website, e.g. joint ventures, previous customers. For the purposes of testing a value propos­ition or a landing page MVP, it's better not to use warm traffic as the traffic source, as it may skew your results upwards

Your intended audience is ideally:
1. Large enough to make your effort worthwhile
2. Small enough that they all share the same psycho­graphic needs and that that you can establish big market share
3. Growing rapidly in numbers, or new demand within an existing large audience is growing rapidly
4. Easily reachable
5. Willing to spend money or already spending money to address the problem you want to solve (hungry!)
6. Next to larger, adjacent audiences
7. Has one specific problem which you believe you can solve for them

Landing pages help you to:
1. Find messag­e-m­edi­um-­market match
2. Set up tests quickly to gain insight into user behavior and actual demand
3. Force yourself to be clear and precise
4. Prove demand for your solution with a landing page MVP

assumption- a statement of opinion about the occurrence of an event or state which is outside of the control of the founders
burn rate- how much you burn per day and the implied number of days you can afford to keep trying out new business ideas
customer develo­pment- qualit­ative customer or prospect interv­iews, in order to explore their problems and understand what type of solution could potent­ially work for them
cycle time- the elapsed time between a customer request and when they get that request fulfilled. In the context of lean startup, this request will include a fully formulated experiment with a hypothesis test, so it includes MTV
latent demand- your customers want, expect, or would prefer to buy your product but they can't because acceptable goods or services aren't available or are completely out of the budget
minimum viable product (MVP)- an experi­mental form of product, in order to test a specific hypothesis and/or to generate qualit­ative learning around the customer or the business
moneybox- analagous to a timebox. Allocates a specific, typically small yet realistic, amount of money to achieving a goal. Allows you to step back and re-eva­luate progess and learning once using up the moneybox, thus generating the option of allocating another moneybox or doing something else
paid (customer) acquis­ition, also paid acquis­ition model or paid engine of growth- a strategy to acquire customers via buying advert­ising or otherwise paying for them, and treating this as a cost of doing business, while still managing to generate a profit by earning more revenue than it costs to acquire a customer
pivot- In lean startup, a change of strategy while still pursuing the overall product vision. A pivot is not a failure, as it's data driven. Failing to pivot if the data suggests it's necessary is a failure
proble­m-s­olution fit- In lean startup, a stage of startup growth where the founders have confirmed a problem exists, it's large enough to be worth solving, and that the founders are capable of delivering a solution to it. You know you have proble­m-s­olution fit when people want to buy a product that does not exist yet
signpost value also cutoff value- the predet­ermined threshold at the start of an experi­ment, to evaluate the results obtained later as to whether the hypothesis can be accepted or rejected
statis­tical certainty- a highly probable outcome based on standard statis­tical techniques
value propos­ition (also: value prop)- the reason why a customer buys from you, depends on many factors including vision, product, offer

The idea is the largest source of lost customers, not marketing or technical attributes like quality. You can make a great first impression by leveraging the following:
1. Clear contrast from other offers already in your market
2. Solves 100% the problem for 80% of your target market with 20% of your effort
3. Uses an irresi­stible (and of course true) detail to pique curiosity
4. Strikes the prospect as useful
5. Comes across as believable based on 3rd party or personally verifiable metrics