Product Startup Podcast Episode 181: Digital Ads for Hardware Products

00:00:00 Kevin Mako: Hello, product innovators. Today we learn about direct-to-consumer hardware product selling from someone who worked for many years at Google on AdWords

00:00:05 Kevin Mako: and is now leading a team at Meta advertising.

00:00:08 Narrator: You're listening to the Product Startup Podcast, a show to learn from top leaders in product development, product selling, and everything in between.

00:00:16 Narrator: Hosted by Kevin Mako, the leading expert on product development for physical product startups, sponsored

00:00:21 Narrator: by PTC's two best-in-class, 3D CAD product development software solutions, Onshape, and Creo, and produced by Mako Design + Invent, the original firm providing world-class,

00:00:30 Narrator: consumer product development services tailored specifically to startups, small manufacturers, and inventors.

00:00:36 Kevin Mako: Welcome back, everyone. Today I'm very excited to introduce Neha Bansal to the show.

00:00:40 Kevin Mako: Neha's project manager lead at Meta from Ads Manager reporting. Before this, she spent five years with Google in a number of roles, including Google Analytics Manager and head of

00:00:49 Kevin Mako: merchant growth.

00:00:50 Kevin Mako: She also invests in a number of startups. Today, Neha is going to share some valuable knowledge for inventors, startups, and small manufacturers on what direct consumer

00:00:57 Kevin Mako: digital marketing is, best practices for leveraging organic content prepare for ads, and how to maximize

00:01:04 Kevin Mako: the efficiency and effectiveness of paid digital advertising for amplifying your new hardware products growth. Now on to the episode.

00:01:13 Kevin Mako: Hi, Neha. Welcome to the show. Thank you so much, Kevin, for having me here. Well, we appreciate you jumping on the show today. Excited to talk about selling direct to customers

00:01:21 Kevin Mako: for hardware products. So you've developed this great invention idea. Well, how do you actually get it to market. How do you advertise?

00:01:28 Kevin Mako: Get in front of the eyeballs of your prospective customers and then convert those into sales. It's a big thing that's on the mind of hardware startups, obviously,

00:01:34 Kevin Mako: is how do they sell and how they sell more. Direct to consumer is a very important part of that

00:01:39 Kevin Mako: because, of course, you get to capture all of your margin and you get quite valuable feedback from especially those early customers and even just simply getting access to them.

00:01:47 Kevin Mako: So it's all a big deal. Now, you've worked both for Google ads and now you're working at meta on actually building the

00:01:52 Kevin Mako: platforms that everybody should be using in any case to sell direct consumer using digital

00:01:58 Kevin Mako: advertising. So before we get into best practices, tips and tricks to selling direct to consumers,

00:02:03 Neha Bansal: just give us a bit of a background of how you got to the success story that you are today. Absolutely. So Kevin, I have been building products for a decade now.

00:02:11 Neha Bansal: I've always focused in the analytics space. And then I started with building beautiful complex dashboards for C-suite and large banks.

00:02:19 Neha Bansal: Wanted to do more and see what else is out there. So I went to pursue my MBA at Columbia. And that's when I learned about the digital marketing industry.

00:02:28 Neha Bansal: It was growing back then. The problem that the digital marketing industry was solving was so complex, it seemed very attractive.

00:02:36 Neha Bansal: Therefore, after MBA, I joined Google, where I built multiple digital marketing products such as Google Analytics, brand lift, search lift, and then I moved

00:02:44 Neha Bansal: on the delivery side to work on B2B shopping ads. After five years at Google, very recently, I moved to meta to lead the meta ads manager platform.

00:02:54 Neha Bansal: I have thoroughly enjoyed this experience a lot, and I've found value in sharing my learnings with the community, especially as I have seen

00:03:04 Neha Bansal: both big, larger brands, as well as early stage brands trying to scale. And I'm able to

00:03:10 Kevin Mako: share learning similarities between the two. And I hope your listeners enjoy that today.

00:03:15 Kevin Mako: Such valuable insight from the inside, as well as the fact that you've done a lot of work with

00:03:19 Kevin Mako: hardware startups and all kinds of different types of startups, both as an angel investor and a consultant.

00:03:25 Kevin Mako: So you see how the systems work at the biggest advertising platforms in the world, but you also understand startups and their needs. So I'm really looking forward to

00:03:34 Kevin Mako: this show today. To kick it off, let's just start big picture thinking, what is direct to customer

00:03:39 Neha Bansal: advertising through digital platforms? Absolutely. Before I start, I just want to do one mandatory disclaimer. Whatever I share with my personal opinion and does not represent

00:03:49 Neha Bansal: Google, meta, or any other entity that I'm working with or have worked with in the past. Okay, now you're all clear.

00:03:57 Neha Bansal: So what is direct to customer advertising? The way I would define it, it's a marketing approach in which

00:04:02 Neha Bansal: companies promote and sell their products or services directly to consumers, bypassing the

00:04:07 Neha Bansal: traditional distribution channels and intermediaries like wholesalers, retailers, retailers, distributors, et cetera.

00:04:13 Neha Bansal: So this allows the companies to establish a direct relationship, a connection with their target audiences. And it also allows them to preserve a lot of their

00:04:23 Neha Bansal: margins. With the rise of the internet over the last two decades, this obviously has become huge mainstream. Companies like Google, meta, next door, TikTok, all of them provide

00:04:32 Kevin Mako: the tools and platforms to enable hardware founders reach their target audiences. Now, what I want to talk about today is, especially for hardware startups that are on a budget,

00:04:41 Kevin Mako: How do they effectively get into the world of digital advertising and do it efficiently and effectively so they can learn how to get some early

00:04:50 Neha Bansal: success and then figure out how to scale that success to sell to more and more people around the world? Yeah, absolutely.

00:04:57 Neha Bansal: So I'll start up by saying that typically my advice to early stage companies is that focus on organic content until you have sold

00:05:06 Neha Bansal: a certain number of units like maybe 100 to 500 depending on the complexity of your product. This will help you be established that you have a product market fit.

00:05:16 Neha Bansal: And once you have a cheap PMF, that's when I would say go invest in ads. Now, how do you be efficient to drive scale?

00:05:24 Neha Bansal: First of all, staying on trend, the cost of generating organic content has lowered significantly due to generative AI.

00:05:30 Neha Bansal: For example, if I'm launching a book this fall, so I wanted to create a content calendar, all I did was I just typed into chat GPT that create a daily content calendar from

00:05:40 Neha Bansal: June 1 to November 15th, for my Instagram that will promote a book for toddlers. And I literally got a daily level content calendar put it out, right?

00:05:49 Neha Bansal: And that's where I saved my marketing agency cost by at least 50% because now all I was paying for was creating some of the assets.

00:05:57 Neha Bansal: So I highly encourage founders to go ahead and give a shot at the generative AI tools to try to reduce the cost for creating organic content.

00:06:06 Neha Bansal: I also use these tools for writing my captions, for generating pictures and videos. if I'm generating pictures that do not use living things like people

00:06:15 Neha Bansal: or animals, I think platforms like stable diffusion and dally work really well.

00:06:19 Kevin Mako: So now I'm using the agencies only for creating pictures which has human in it, like a dad reading a book with a son. So I would use an agency or illustrator for that.

00:06:28 Kevin Mako: That's really good advice. And the beauty boat organic content, especially as the early days of a hardware startup, is it's free and you can do it yourself.

00:06:35 Kevin Mako: And it can be authentic. People love authentic natural content. So I know one of the major

00:06:39 Kevin Mako: roadblocks or fears, especially from a new business person that's trying to get into the space

00:06:44 Kevin Mako: of getting content out there is, what do I write and how do I craft it perfectly? Or maybe I don't have a marketing background, so I don't know what to write.

00:06:51 Kevin Mako: Society, especially buyers, especially in new innovative products, they don't really care. If you're your authentic self and you're

00:06:56 Kevin Mako: providing value to them with the product that you've created, you're either solving a pain point or creating an opportunity for those people, just talk about it.

00:07:04 Kevin Mako: At first, you can just talk a little bit infrequently. And as you're running into content blocks, or if you really want to start

00:07:09 Kevin Mako: packing the organic content calendar, as Nehout mentioning, you can now start to use these tools to really start amplifying the reach through much less expensive content,

00:07:19 Kevin Mako: easier to create, faster, generative, all the sort of stuff that AI is helping build out so that you can almost become a content machine with very minimal resources.

00:07:27 Kevin Mako: And that's how you can start selling products without even putting a dollar into advertising by access and essentially the world market that people

00:07:33 Neha Bansal: are looking for on SEO, looking to solve the problem or find the opportunity. of the very thing your product is hopefully solving for them. Absolutely.

00:07:40 Neha Bansal: And speaking of SEO, Google recently changed its ranking algorithms to include experience and expertise as a core factor for SEO ranking.

00:07:50 Neha Bansal: So even there, another big lever to use is interview experts and experts in the area that

00:07:56 Neha Bansal: your product is in and then post them and make them available online. So I've been doing the same for some of my products and working with some of the companies

00:08:04 Neha Bansal: that I'm investing in to do these things. And we've again reduced the cost there significantly, right?

00:08:08 Neha Bansal: You can automatically generate questions, like what questions to ask and export during the interview?

00:08:13 Neha Bansal: And you will get a list of questions to ask that saves you a ton of time as you're preparing. And then you can obviously add your flavor and color to it.

00:08:20 Neha Bansal: And then also another big level to use is as you're writing blogs, blogs are still helpful, right? But their consumption style has evolved.

00:08:27 Neha Bansal: You would still want to write content language blogs and then video blogs. And all of that can actually be generated these days. So I strongly recommend using the tools.

00:08:36 Neha Bansal: out there for generating ideas and then also for generating the actual content and then adding your layer of imagination to that.

00:08:44 Neha Bansal: And you'll see, I'm not talking about ads yet because I think there's a lot you could do before you start buying ads, right? My favorite thing is

00:08:50 Neha Bansal: reviews. If you're a startup, reach out to all your customers. Find out who is a fan and ask them, why did they buy your product?

00:08:56 Neha Bansal: Tell their story in your network and on your social media. Get your employees and their families to share why they like being associated with your product and how

00:09:04 Neha Bansal: they built it, et cetera. My favorite story is about the founder of mixed styles back early in the

00:09:10 Kevin Mako: day, Ethan, he used to make videos with his family all the time and share those. And that really spoke to me and I adopted mixed styles way early in its journey.

00:09:18 Kevin Mako: Wow, that's all really great advice and all this stuff is free. So now let's talk about it. If you've done the stuff that you

00:09:23 Neha Bansal: can do to generate some early content, how do we start migrating that into paid content to really amplify the reach and the volume that we can scale to?

00:09:33 Neha Bansal: Yes. So once you know, that yes, you have a product market fit, you want to start boosting the content that you have. I recommend going with experimentation.

00:09:42 Neha Bansal: A lot of the customers that we talk to, we see that there's this default behavior of just running a certain type of ad format and staying put. The advice is run

00:09:50 Neha Bansal: experiments, try multiple versions of the same ad. You could change the assets, the captions,

00:09:56 Neha Bansal: the call to action, et cetera, and see how the behavior shifts. Also try different audiences for

00:10:02 Neha Bansal: targeting and see which audience does what type of ad resonate the most with. All of these

00:10:06 Neha Bansal: tools are actually available for free on most of the ads manager products that you would be buying ads from. So I highly recommend using that.

00:10:15 Neha Bansal: And again, I have to do the AI plug. Use AI to generate the alternate options for you, right? Because I understand that creating multiple options

00:10:22 Neha Bansal: seems like a lot of work, but then you could just use the generative AI tools for generating the alternate options for AB testing.

00:10:29 Kevin Mako: And finally, when it comes to SEO, you could also use chat GPT for suggesting keywords that you could run your search ads against. There's lots and lots of use cases out there.

00:10:37 Kevin Mako: Such a key word there is experimentation. That really is the essence of digital advertising. Coming up with the most perfect ad up front is not actually how successful ads are run.

00:10:47 Kevin Mako: Successful ads are run by trying a number of different ads that are believed may or may not work and then starting to A, B, test against each other and then against new ads.

00:10:56 Kevin Mako: So as you start finding your best performing ad, you start pumping those a little bit more. But then you want to continue to

00:11:02 Kevin Mako: introduce new formats, new ideas, things that AI is giving you, things that your customers are giving

00:11:07 Kevin Mako: you feedback that's happening from any different stakeholder in the product development cycle or within your various stakeholders of your business.

00:11:14 Kevin Mako: All of those people can give you ideas as to maybe where the next golden nugget is in terms of return on ad spend. And return on ad spend is really critical.

00:11:22 Kevin Mako: Every dollar you put out, how many dollars of revenue do you get back? And the whole idea about Ad spend is really looking to perpetually, A, be able to find that customer

00:11:31 Kevin Mako: base and improve your return on ad spend a dollar and are getting $5, eventually as you get better, you get $10 and $20 and so on. So you get really efficient with your ads.

00:11:41 Kevin Mako: And that is what you can then start scaling to get massive volume, knowing that the correlating

00:11:45 Kevin Mako: revenue is going to come in because of the experiments you run and the fact that now you've got the confidence in your best performing ads.

00:11:51 Kevin Mako: So given what we've talked about, let's jump into the weeds a bit.

00:11:54 Neha Bansal: What are some of the technical details, some of the more advanced things that hardware startups especially need to know as they grow out their digital campaigns?

00:12:03 Neha Bansal: Absolutely, Kevin. So let me try and pull some examples of things that large companies do really well, which has been successful for them.

00:12:11 Neha Bansal: I would like to share that with our hardware startups that they could also follow. There are four things. First is customer segmentation.

00:12:18 Neha Bansal: Large companies invest considerable resources and understanding the target audience. So my recommendation is that for startup founders, you have

00:12:27 Neha Bansal: to spend time to understand what are your customers' needs, preferences, and pain points, and then tailor your digital marketing strategies to those customer needs.

00:12:36 Neha Bansal: Some vectors for doing customer segmentation are things like you could look at your spend profiles. What is the spend profile of the customer that you

00:12:44 Neha Bansal: are targeting? What's the potential to spend? And then you could also build personas based on the job to be done or the skill level. So let me give you.

00:12:52 Neha Bansal: give you an example. Let's say your product is an electronic drill. Your personas could look like

00:12:56 Neha Bansal: professionals in plumbing or carpentry who need high durable instruments. Or it could be DIY hobbits who care more about price and efficiency. Or it could be companies that are

00:13:06 Neha Bansal: buying these products, your products in bulk. So having that nuance understanding that who are the different personas and then targeting your distribution channels and

00:13:15 Neha Bansal: your marketing to that specific persona is always very effective. Because imagine showing an ad of a DIY hobbits to a professional flumber. It's not going to stick.

00:13:24 Neha Bansal: The next aspect is branding and positioning. So traditionally, it felt like you need a lot of money to build a brand, but now it's not true

00:13:31 Neha Bansal: anymore. If you can tune in with your customers, the brand can be built through word of mouth. My two favorite stories are, one is of Kevin Plank.

00:13:39 Neha Bansal: He played college football and knew how much cotton shirts sucked while playing football. So he designed something that would absorb sweat and handed it over to his teammates.

00:13:48 Neha Bansal: And then slowly the word spread out and then teams across the varsity started using it, and soon that company grew to become under armor, right? So word of mouth

00:13:57 Neha Bansal: is so powerful. It does its own magic without putting in too much effort. Another one is by Blake.

00:14:04 Neha Bansal: So Blake saw difficulties faced by children with naked feet on a trip to Argentina. He decided to start Tom's as the vehicle for a shoe giving movement.

00:14:12 Neha Bansal: So the company has grown on this charitable angle that for every shoe purchase, they will donate one. This has helped customers like me justify the massive pricing per shoe.

00:14:22 Neha Bansal: It just makes me feel better that I'm actually donating a shoe as well. So having a story and having more clarity on what is the customer nerve you want to hit will help

00:14:31 Neha Bansal: with driving brand popularity with less spend.

00:14:35 Neha Bansal: Third is data-driven decision making. Big companies rely heavily on data analytics to measure the effectiveness of their spend and looking at

00:14:43 Neha Bansal: KPIs like traffic, conversion rate, customer engagement, etc. I highly encourage founders of

00:14:48 Neha Bansal: startup as well to invest that time in looking at your numbers on a regular basis and identifying what are the core insights that can help you make the right decision for

00:14:58 Neha Bansal: your customers. And the last part is influencer marketing. There are tons of stories of how influencer marketing

00:15:04 Neha Bansal: is much cheaper than traditional forms of marketing and resonates much better with the customers these days.

00:15:11 Neha Bansal: So for example, Blue Apron, they partner with poor influencers to build brand trust and increase awareness.

00:15:17 Kevin Mako: The first 100 readers to click on the blog links got two meals free from the brand. So just being creative on how can you actually drive

00:15:25 Kevin Mako: customers to listen through the voice of influencers who are regular people. It's always more powerful. That's amazing advice. Four key points

00:15:33 Kevin Mako: there that every hardware startup can implement into their plan for developing a product moving

00:15:38 Kevin Mako: forward. So given your experience in building measurement products for advertisers, what advice would

00:15:43 Neha Bansal: you give to founders here on getting high return on ad spend? We talked about return on ad spend earlier and how important it is to continue to improve that.

00:15:49 Neha Bansal: So again, getting in the weeds here, what are some of the best practices you've seen from behind the scenes on how hardware startups can really nail return on how it's been?

00:15:57 Neha Bansal: So there are a few things. First is if you have an e-commerce website or a physical shop, set up digital tracking early on. Every customer

00:16:06 Neha Bansal: touchpoint should be recorded and stored in a secure database that you can easily query to pull out insights. Highly, highly important.

00:16:15 Neha Bansal: I have seen customers scale really fast and in the journey not set up tracking that's required.

00:16:22 Neha Bansal: And then at later stage, realized that that was not a great idea and spending thousands of dollars to fix the event tracking across their websites or for their offline conversions.

00:16:31 Neha Bansal: So prioritize setting up tracking early on. Second is we already talked about this running A-B tests.

00:16:36 Neha Bansal: So here the advice I always give, I can underscore enough, is to run A-B-Test for your website and your ads and then block time to identify the insights.

00:16:45 Neha Bansal: You might feel like, oh, I need to hire an agency, spend a lot of money. But that's not really true. You could even hire a high school

00:16:50 Neha Bansal: kid or your babysitter or someone who is just interested and curious to learn. And I know it works because I've been doing this myself.

00:16:56 Neha Bansal: And high schoolers love these internships. So you could just really lower your cost because it's not rocket science at the end of the day. If I had to tell you

00:17:04 Neha Bansal: three things to look at and be mindful about. First would be camping objectives. Be very mindful about

00:17:09 Neha Bansal: the campaign objective that you select when you are setting up an ad, such as brand awareness or reach or traffic or conversions, etc.

00:17:17 Neha Bansal: Having that clarity is important so that you get the desired outcome. Second is audience targeting. So target the right audience for maximizing the effectiveness of your ads.

00:17:26 Neha Bansal: Most products provide numerous targeting options, such as demographic filters, interests, behaviors, and you can also create custom audiences.

00:17:33 Neha Bansal: By defining a specific target audience based on your product, you can increase the likelihood of reaching. the right people who are very likely to engage with your ads.

00:17:43 Neha Bansal: And finally, ad performance analysis. So monitor and analyze the ad performance to optimize your campaigns.

00:17:50 Kevin Mako: Pay attention to metrics like click through rate, engagement rate, conversion rate, and return on ad spend and cost for actions.

00:17:56 Kevin Mako: By regularly reviewing those metrics, you can identify what's working well and then make data-driven decisions to refine your ad targeting, creative elements, and overall strategy

00:18:05 Kevin Mako: for better results. Neha, this is amazing. So many pieces of actionable nuggets. I think this

00:18:09 Kevin Mako: is one of those podcast episodes that if you're listening in on, go listen to it again at home.

00:18:13 Neha Bansal: When you're at your desk or your computer or whatever else, take down some of these notes.

00:18:17 Kevin Mako: Because these are the key elements, the primary structure pillars in order to have successful hardware product sales, direct to consumer using digital marketing avenues.

00:18:27 Kevin Mako: So, Neha, thanks again for all your words of wisdom today. And I really appreciate you being on the show. Thank you so much for having me. This was fun, Kevin. Thanks.

00:18:34 Kevin Mako: Look forward to talking again. Take care. Take care.

00:18:36 Narrator: Thanks for tuning into this episode of the Product Startup Podcast. If you found some value in the show, please do us a huge favor and leave us a quick five-star review.

00:18:44 Narrator: If you have any questions, guest suggestions or anything else, feel free to reach out to us anytime at our email, podcast at MakoDesign.com. That's podcast at MakoDesign.com.

00:18:53 Narrator: This show is hosted by Kevin Mako, North America's leading expert on product development for physical product startups.

00:18:59 Narrator: Huge thanks to our sponsors, PTC, and their two best-in-class 3D CAD product development software solutions, Onshape and Creo, and Mako, design, and invent.

00:19:07 Narrator: The original firm providing world-class consumer product development services tailored specifically to startups, small manufacturers, and inventors.

00:19:14 Narrator: Thanks for joining and see you next time.