NONE: Re: ONLINE-ADS>> Ad Banner Campaign Jam
Re: ONLINE-ADS>> Ad Banner Campaign Jam
Robert J. Woodhead (trebor_at_animeigo.com)
Thu, 6 Aug 1998 06:45:03 -0500 (CDT)
"Jennifer Ruffin" <jnobles_at_cweb.com> wrote:
>I'm in quite a Jam...I've been running ad campaigns on 2 major search
>engines and the way we measure results is by the cost per click...now...It
>is my goal (and my bonus is also attached to it) to keep the cost per click
>(cpc) down to $1.50...is that unreasonable? To attain this I usually have
>to receive about a 10-12% click through rate (which I am receiving on one
>search engine but not on the other) and a low cpm (which I'm already
>receiving $30-40cpms) My questions are:
Jennifer, you may be using the wrong "CPC". Instead of cost-per-click, the
better metric is "Cost-Per-Customer". How many of those clickthroughs are
idle viewers, and how many of them are actually generating income for you?
Can you define this?
If 10% of the clickthroughs result in a new customer/consumer/user for your
site [which, in some way, generates a revenue stream], then $1.50
cost-per-click becomes $15 per new customer. If only 1% do, then it's $150
per customer. This is wonderful if you are selling cars, lousy if you're
selling bubblegum.
Bottom line, if spending $40 on 1000 exposures generates $60 in income from
the clickthroughs, great. If it generates $20, you're in deep doo-doo.
You've got to have some way of determining if a particular investment in
promotion, be it banner ads, search engine ranking, etc., is paying off for
you. Fortunately, in many cases, you can get a pretty good measurement of
these things.
If there's one thing, it is that while all men are created equal, all
clickthroughs definitely are not. In rough decreasing order of quality:
Newsletters and Lists (like this one!)
Links on other sites with topics related to my site
Categorized Indexes (Yahoo, NewHoo, etc)
Links on other sites (general)
Search Engines
Banner Ads
Free For All Pages
So, to me, by itself, "cost per clickthrough" is meaningless. I would much
rather get 10 clickthroughs from people reading Online-Ads [this is what we
call a subtle hint, by the way!] than 1000 Free-For-All clickthroughs, for
example.
'Nuff said about that. On to some practical suggestions for optimizing
your return on investment.
If you are going to target search engines with banner campaigns and ranking
campaigns campaigns, it makes sense to do some research to make sure you
are targeting the right things. A good place to cheaply test things out is
http://www.goto.com/ They get a lot of flack for selling top positions in
search returns, but I find them a wonderful resource. Rather than mess
around trying to capture lots keywords on all the search engines, goto.com
lets you quickly test which keywords work, and how well they work.
I run a shareservice URL registration site, and by doing a test using
goto.com I quickly found out that by far the most important keyword for me
was "add url", for example. I was surprised. I thought it would be
something like "register site" or "promote website". Nope. 80% of the
clickthroughs came from "Add URL". What I also found out, equally
important, was whether or not it was worth the expenditure of time and
effort to try and capture a high position for that and other keywords.
For example, if keyword A gets 2 times as many clickthroughs as keyword B,
but B has a conversion rate 3 times better than A, B is the keyword you
want to target; it's clickthroughs are more valuable to you.
If you are paying high CPM rates, this kind of information is crucial to
determining when you want your ad shown. I personally would never pay on a
CPM basis, btw; only on a per-clickthrough or per-conversion basis. And
don't let the sites bull you and say they only do CPM deals. If your
budget is big enough, they'll do cost-per-clickthrough deals as long as you
sign a non-disclosure in blood and promise your firstborn if you blab.
Back to goto.com. Their clickthroughs cost typically 1-2 cents (not
dollars!) each, dirt cheap! The only problem is that they don't have the
volume yet. So even if I only get a 1% conversion rate into paying
customers (mine is a shareservice, people get to use it for free and then
decide), I'm getting them for a buck or two each -- less than you were
paying for individual clickthroughs!
If all of this sounds reasonably cogent, you might enjoy reading a couple
of articles I slapped together, at http://selfpromotion.com/research.t and
http://selfpromotion.com/paranoia.t
Also, long range, I suggest that people invest time and money into "link to
me" campaigns. The next big metric for search engines is going to be how
many "important" sites link to you, because it's much harder to spam, and
it works well. So you may be better off long-term spending some of your
marketing dollars in making sure that every site on the net that has
anything peripherally to do with your focus links to you. You can read
some interesting papers about this technique at http://google.stanford.edu/
-- and check out their research search engine, it really works well!
Bottom line, if you can set up a situation where an expenditure of $X
brings in $X+1, you're "in like flynn," as they used to say. If you can't,
then you'd better hope your boss buys the old "we're investing in branding"
line, else you're "out the door." The great thing about the net is that,
even more so in some cases than junk mail, one can quantify things that in
traditional advertising were just wild-assed guesses. But the flip-side is
that this puts the campaign-designer's feet to the fire; there's much less
"fog of war".
Me, I try to make sure that every ad I pay for (or swap) generates more
income than it costs, and that they all have my incredibly memorable domain
name mentioned on them. That way, any branding mindshare is gravy.
Best
R
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