This is further information to a post I did on the 25th Sep called “The Unseen Pitfalls of Google Adwords Marketing” (http://julian101.com/2007/09/google-marketing-pitfalls) where I talked about the unseen downside to Adwords. The rising bid price and lowering conversion rate. It’s slowly changing for the worse and if you didn’t measure it, you wouldn’t know. I have been tracking this for some time now and hope this research saves money and time for companies thinking of, or using Adwords or other PPC marketing.
There are many FREE marketing methods we use that bring good traffic, convert to sale well and are no hassle. In fact about 90% of all ProActive Software’s traffic, trials and subscriptions come from FREE marketing methods and customer referrals!
GOOGLE ADWORDS & PPC INFLATION!
(it’s worse than oil price increases!)
Firstly, as a disclaimer, I think Adwords is a fairly good concept, and I’m not wanting to speak out against Google, rather it’s the general PPC (Pay Per Click) advertising model that’s got me concerned. I’m just using Google Adwords as an example and we’ve been tracking a limited sample campaign for 12 months.
Download our PDF analysis sheet and take a look for yourself.
Here’s the link: Google_Adwords_Analysis.pdf
My concern is simple:
Software vendors like ProActive Software (and competitors) can’t raise prices faster than the speed that the cost of advertising on PPC services such as Adwords is increasing.
There are 2 main problems:
- Bid Price – In the past 12 months, the average ‘Bid Price’ for keywords (to retain the same position) we’ve been tracking has increased from $1.50 per click to $3.46. An increase of 230% in 12 months! This is due to people continually outbidding each other for position, driving the price up.
- Conversion Rate – We have noticed for some time that the “Quality” of the leads coming from the Adwords campaigns has been decreasing. The “Average Conversion Rate” to Trial accounts has dropped from 5.8% to 4.5% and Subscription account conversion has dropped from 11% to 9%.
During this time the conversion rate of other (Non-PPC) methods such as: Natural Search Results, Blogs, Image Ads, Referrals, Newsletter campaigns etc have either remained constant or increased.
The Cost to Advertisers is Alarming!
We’ve tracked a 12 month independent Google Adwords campaign based around the following service we offer. These are our baseline numbers (small subscription account example).
Product: ProWorkflow – Subscription Account (Project Management Solution)
Cost: $15 per user per month
Av. Users per account: 10 Staff
Subscription value: $150 p/m
Note: More figures here: Google_Adwords_Analysis.pdf
So here’s the deal!
When we started tracking this particular campaign 12 months ago, as shown in the PDF download, it took 2.3 months of revenue on average to recoup the $344 Adwords cost to make an average $150p/m subscription sale. Then you’re in profit – Which is good!
Now? 12 months later the picture is different. In the last quarter it took 9.9 months of revenue on average to recoup the $1,487 Adwords cost to make an average $150p/m subscription sale. That’s definitely not good!
Google Adwords and other PPC advertising appears to be spiraling up in cost, lowing in conversion and shrinking advertisers margins/profits as they can’t lift prices as fast the cost of advertising is increasing!
Pretty clear picture really Isn’t it! It’s not all bad though. Over the last year we’ve have to look for other marketing methods and we’ve now got to the point that 90% of all ProActive Software’s traffic is from FREE sources.
FREE IS GOOD! TELL ME HOW!
Firstly, understand that whilst free marketing is good, it does cost you in time to put content in place. And as opposed to paid campaign traffic where traffic is delivered high and only for the campaign length (then disappears), free traffic tends to deliver lower amounts of traffic but constant and ongoing. So you need to put in place LOTS of small free traffic streams. Here are just a few ideas we use successfully (there are many more)…
Blogs are the MOST powerful methods of free marketing. Setup a few blogs for your company or key personnel. Fill with relevant and useful content and cross link between blogs where applicable. In addition, promote your RSS feeds and subscribe to a syndication service such as: http://www.feedburner.com. Submit blog posts (and articles) to http://www.digg.com, and track the blog posts and responses on http://technorati.com. If well written and interesting, the word will spread and traffic will build naturally.
Also allow content from your blogs to be republished on other websites as long as a footer with link to your website stays on the article.
- Blogs: Corporate – Company news releases. Example: http://www.proactivesoftware.com
- Blogs: Product Updates – Have customers subscribe and be notified of product updates. Example: http://www.proworkflow.com/clients/dsp_login.cfm
- Blogs: Personal – Offer tips, articles and advice. Example: http://www.julian101.com
- Blogs: Commenting – Comment on other peoples blogs. Don’t spam on them, but offer helpful comments (Have your link in your signature)
- Blog: Reviews – Ask or pay for people to review your product or service. Use only reputable unbiased bloggers and ask for honest comments. Try these sites: http://www.reviewme.com and http://www.sponsoredreviews.com for a start.
Write articles and post them on your blog (or a dedicated one). Allow your article to be republished on other websites as long as a footer with link to your website stays on the article. Also, for a very small fee, you can also upload the article to ‘Content Directories’, for example: http://www.goarticles.com, http://articlecrux.com, http://www.isnare.com – there’s heaps more (free and paid). Here are some article topic ideas:
- Tips and Techniques – Share your technical knowledge and write tips articles.
- Tell a Story – Talk about business lessons or experiences.
- Product/Service Reviews – Review some products. If well written it’ll get well syndicated.
Write a press release every 1-2 weeks. Make sure it’s not a ‘fluff’ article and that the release has some depth to it. For the free method of distributing the release, you can email it to the editors of 20 of the ‘smaller’ online news websites. I say ‘smaller’ rather than ‘mainstream’ as there is often a better chance of getting published.
If you don’t mind paying a few dollars for syndication, use ‘Press Release Syndication’ services such as http://www.webwire.com and http://www.prnewswire.com.
Another free source of traffic is ‘Forum Commenting’. Keep in mind though that most forums are monitored and if caught spamming, you’ll be banned. The rule is ‘keep the content clean and relevant’. Sign up for a few high traffic industry forums, make sure your website link is in your signature, and pick just a couple of threads a week to comment on (don’t overdo it). Make sure your comments are constructive and helpful to the thread.
Although the world has changed in regards to ‘spam’, well written, relevant newsletters sent to people who want to receive them (ie: they signed up) is still a highly effective method of free marketing. There’s a knack to it though. Too many newsletters and they’ll unsubscribe, too few and it won’t have the result you need. Also, make sure when you collect emails from your website, it’s permission based, for example: http://www.proworkflow.com/PWF_assistance_privateDemo.cfm.
Make sure you NEVER spam people who didn’t sign up for the newsletter and NEVER sell or give away mailing lists!
I hope that this gives readers some ideas. On one hand you can spend big money on PPC campaigns, an increasing expense, and on the other hand you can put in the FREE hard yards, like all good successes and invest in FREE marketing. There are many more ways do market for free… This is just a few to get you started and the rest is up to you – get creative!
Anyone is welcome to republish this article as free online content, provided that the paragraph below is included in the full form as shown.
About the author:
Julian Stone, CEO – Project, Task & Time Management specialist for: ProActiveSoftware.com, ProWorkflow.com & Julian101.com
About The Author:
Julian Stone begin_of_the_skype_highlighting end_of_the_skype_highlighting is the CEO of ProActive Software, developers and creators of the leading web based project management software http://www.proworkflow.com.