July 23rd, 2010 2 Comments

Testing paid online advertising

Advertising, when done correctly, is part art and part science. Unfortunately most small businesses only consider the art – they spend money on design services, copywriters, color selections and logos. Completely ignored is the science: documenting and measuring user actions, analyzing results, feedback loops. Today’s guest contributor, Sara Morgan, is an author and marketing consultant. She recently conducted several online advertising experiments for her own business and has kindly offered to share her experience and conclusions.

Is Paid Advertising a Waste of Money for (My) Small Business?

I am a former corporate web developer who now focuses on producing easy to follow technical guides for small business owners. Through the years, I have tried various paid advertising campaigns using Google Ad Words, but always met with no success. I had pretty much given up on Google entirely, until the day I got an e-mail from LinkedIn. They offered me $50.00 off one of their Direct Ads and it was at that time that I decided to do a little experiment.

I wanted to determine whether identical Google and LinkedIn Ads would produce different results. My experiment was short, and was documented in a recent post I did on a social network called BizNik, called “LinkedIn Direct Ads vs. Google AdWords: Which one is better?

Round One

The first round of the experiment involved the creation of two ads on both LinkedIn and Google Ad Words. The first ad was general and pointed to the main page of my website as a landing page. The second ad was more specific and pointed to a landing page for a web design guide.

I set a $25/day max for both ads on both advertising sources and ran the ads for a total of five days. During that time, I made several changes, not only to the wording of the ads, but to the landing pages as well.

During the entire run of the experiment, I had no sales of the web design guide and only a slight increase in traffic to my website. Both LinkedIn and Google, respected my $25/day limit and in the end, I spent a total of $250 USD. While some people may argue that results do not always come in the form of direct sales, I am pretty sure that the $250 was not a good investment for me personally.

My conclusion at that time was that neither advertising method was worthwhile to me. I was blown away when the [BizNik] post generated a swarm of interest from other small business owners on the BizNik website. Most people thanked me for sharing my results. A few people were critical of my experiment and felt that I did not invest enough money towards it. A few other people suggested that the problem was due to my website landing page. I even had some people suggest that I do another experiment using Facebook.

Based on the response, I decided to do a follow-up experiment, in which I would incorporate much of the advice included in the comments of the original post.

Going Back to the Drawing Board

Despite my disappointment from the first round, I decided to try again with another round of experiments. This time, I made more changes to the website and even came up with a different angle, in which I would offer a free online copy of one of my printed books to people who signed up for my weekly newsletter. A successful result would not be measured in a sale. Instead, it would come in the form of a sign-up to the newsletter, a new membership to the website, or contact of some other kind.

I spent two weeks working carefully with fellow BizNik member, Robert Stoeber to re-design many of the pages on my website, and more specifically the landing pages for the ads. The changes were extensive and Robert was extremely generous with his time and advice. I was very excited about all the changes that were made.

Rather than run the campaigns on LinkedIn or Google, I opted for a couple of Facebook ads, in conjunction with an e-mail campaign. I use an e-mail service called AWeber to manage my e-mail campaigns and luckily for me, AWeber includes an arsenal of statistics, which allowed me to analyze the results of both the Facebook and e-mail campaigns.

The Facebook ads ran for a total of five days and despite a few changes to the wording of the ads, the overall cost was much less than the total cost for the LinkedIn and Google Ads. In fact, I only spent a little over $25.00 for the entire campaign and ended up with close to the same amount of web traffic that I got when running both of the LinkedIn and Google Ads.

At the same time, I ran an e-mail campaign, in which I sent a broadcast message to all 71 members of my social networking website. Since not all the members of this network were subscribers to my weekly newsletter, the message informed them of the free offer and gave them a link to where they could sign-up on my business website (which is where I sell my technical guides).

Because of the excellent information available from the AWeber service, I was able to determine that all of the new e-mail subscribers were members of my social network. Even though none of the new subscribers came from the Facebook clicks, I am still considering another Facebook campaign. The overall price for the campaign was so much more affordable and I think with time, I may be able to find an ad and landing page that gets a better response.

An Interesting and Notable Result

The overall time frame for this experiment was a little over a month. During this time, I was also doing work towards promoting my own social networking website and posting articles on various websites. In that same month, web traffic on my social networking website more than doubled, even though none of that traffic (according to Google Analytics) appears to have come from my business website (the one where all the paid ads were pointed towards).

In addition to the technical guides I sell on my business website, I also do consulting work. Each time I am contacted about a job, I ask the person how they found out about me. The result I find most notable is that during the month that the experiment ran, I was contacted by two people regarding consulting work that I will be starting soon. Both of these contacts came from my social networking efforts and NOT from any of the paid advertising.

My Overall Conclusion

In case you did not notice, the title for this article questioned whether paid advertising was a waste of money for MY small business. Based on the results I attained from this experiment, I have concluded that LinkedIn and Google Ads Words are a waste of money for MY particular business and the particular product I am selling at this time.

I am still considering doing additional experiments on the Facebook platform. I think their pricing is more affordable and that I have not tested the full potential of this medium. Let me be clear that I do NOT think that all paid advertising is a waste of time and money. In fact, I think for certain businesses and products, this form of marketing may be essential to their success. However, I firmly believe that I can attain better results by focusing my time and energy towards social media efforts such as the generation of this article, my own e-mail campaigns and the continued creation of quality content for my web sites.

Take from this experiment what you will and leave the rest. Consider it only as one source of information and consider doing your own limited experiment to determine whether it is a viable option for your particular business. I know we all want fast and easy answers, but when it comes to the success of your business, you really should spend the time to ensure that you are going in the right direction.

For anyone interested in a more detailed account of changes made to my landing pages, contents of the actual ads, and specific statistical numbers, I am considering creating a document which includes this data. I may give this document away for free, but I am only willing to dedicate the time to its creation if I know enough people are interested. If you are interested in a detailed document such as this, go to my website at http://www.custsolutions.net and send me a message.

Sara Morgan photographBIO:
Sara Morgan is the author of “No Limits: How I escaped the clutches of Corporate America to live the self-employed life of my dreams.” She is currently producing easy to follow technical EBooks, which walk an individual through utilizing high-end, web-based technologies to promote their business or cause. You can find out more about Sara and her EBooks from her website at http://www.custsolutions.net or her social networking website at http://nolimitsthebook.ning.com.

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2 Responses to “Testing paid online advertising”

Tracy

July 23rd, 2010 - 12:20 pm

I truly enjoyed your post & experiment. Have you determine if email or mail is more beneficial for your business – http://www.fullcirclesolutions.com/blog/email-vs-mail-%E2%80%93-which-is-better-in-the-automotive-industry/

Sara Morgan

July 26th, 2010 - 2:37 pm

Hi Tracy,

In my business, which deals with technology and information ,e-mail works best. Most of my customers are always online. But, I can see where it would not necessarily be that way in other industries, such as auto sales. Thanks for the link.

Sara

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