Looking at the choices above, you can probably guess what my pick was. So as we headed into November with Cadee, the topic of discussion at 500 Startups was product distribution. This was an important issue for my startup Cadee since the team wants to head into demo day and investor talks with a lot of traction on our site. And what better to get traction than good ol' advertising. I figured this would be right up my alley, having worked at ad agencies in the past. Well apparently not. Because unlike past experience where clients were footing $500K media buys, we were looking at a significantly smaller budget. And by that I mean lopping off at least 3 zeros. "Well what the fuck are we gonna buy with under $500?" I said, "Some shitty Google AdWords?" Bingo. Now before I really carve this AdWord roast open, let me first say that Google AdWords do have some usefulness for startups. They're great as a quick way to draw in steady traffic so you can test assumptions, and get some analytics data to iterate on. And I don't doubt that once you have bigger budgets and a team who can monitor keyword performance, you'll be able to turn them into a profitable business. But after hearing an inspired talk about advertising from Ilya Lichtenstein from Mixrank, it became pretty clear that AdWords are not for startups like Cadee. I'll give you 3 reasons why. 1) The deck is not stacked in your favour. Google is synonymous with search. This leads TONS of businesses into thinking that any type of SEM must be done through Google to get a decent amount of traffic. So already we are dealing with a hyper-competitive marketplace. At the same time you are bidding against companies who A) have done their homework and have optimized the shit out of their campaigns over time and B) have built up a quality score that you haven't. That means they're getting much cheaper clicks than you are. Want to compete against all this? Open your wallet. Wide. 2) Do you REALLY believe in long tail keywords? (You see where this is going...) A lot of people put stock in bidding on long, convoluted strings of words that are super cheap to bid on because competition for them is so low. Let me rephrase that. A lot of people put stock in bidding on long, convoluted strings of words that other businesses have figured out through their own testing are a waste of money because 5 people in the world are actually searching for them. 3)There are cheaper alternatives This ties back to point one. Since there is so much competition, you are bidding within a very expensive ad marketplace. For larger businesses, this is likely a necessary evil -- however, if you're a small startup there are many other sources to get respectable volumes of traffic from. With an alternative like adCenter for example (yes I know, it's microsoft, calm down and stop frothing at the mouth) you can advertise in a much less competitive market. Plus they are far less strict on ad content and quality score ratings. Or even smarter, try going straight to publishers themselves and cut out the middleman entirely. Have I oversimplified the issue? Yup. Do people make good money off of using AdWords for a living? They sure do. But I think the real point to take away from this post is that despite their humble appearance and miniscule minimum spend amounts, they aren't an efficient solution for a lean startup to ramp up on distribution. So was $500 spent on AdWords a total waste? Not really. We got invaluable user data and metrics from that traffic which we've used to refine the design and UX of our site. They were quick and easy to set up and fit perfectly into our analytics, so it's not hard to see their appeal. But use them for that purpose and move on. Of course I could be totally wrong. Do you have an AdWords Strategy that made you millions? PLEASE post below, I would love to know.