How Online Startups Can Build Audiences on the Cheap


Last week, prominent investors CHirs Dixon and Sarah Tavel declared in blog posts that two marketing tactics favored by many startups — search engine optimization and viral promotion via Facebook — were no longer viable. Investor and Hunch co-founder Dixon said he hasn’t seen any startups gain traction through SEO since 2008. The arms race between Google and the “black-hat” optimizers that build link farms and content farms makes SEO ineffective and expensive. Building off Dixon’s argument, Bessemer Venture Partners’ Tavel said she thought Facebook’s viral efficacy had been severely diminished.

The real truth is that both remain effective but neither is free, and never was. So let’s examine how a startup making consumer apps or online services can get that much-coveted first million or two users as cheaply as possible.

SEO never was free. Big companies spend thousands of dollars on optimization tools (e.g., BrightEdge, Covario, SEOmoz, Yield Software) and search specialist agencies like iCrossing and 360i. These tools and services help companies with tagging and linking, making their content and apps more discoverable and indexable by search engines. But more importantly, SEO still works.

Search guru Danny Sullivan advises multiple marketing tactics, and says he sees SEO working for plenty of companies. His own relatively new content site gets 20 percent to 40 percent of its traffic from search. Q&A sites like Quora and Stack Overflow have grown primarily through search and word of mouth. In this interview, Stack CEO Joel Spolsky concedes his sites’ user interface is so bad he depends on Google as his front end.

Likewise, while it’s true that Facebook has clamped down on free promotions, the biggest Facebook success story wasn’t built on free viral tactics. Social commerce giant Groupon’s president Rob Solomon told me in an interview that Groupon didn’t do much SEO. It bought some paid listings and display ads from Google, but most of its marketing budget went for Facebook advertising. Along with SEO, most consumer startups should continue to use Facebook, but expect to spend some marketing dollars there.

Of course, there are plenty of other tactics to consider when building an online audience. To see more, read my weekly update at GigaOM Pro.

Image courtesy of flickr user loop_oh

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