Let’s face it, most people don’t track their advertising at all and therefore don’t know where their leads or sales are coming from. I’ve talked with dozens of business owners about which online advertising vehicles work best for them. What I usually hear is that they are impressed with the sites that give them the highest number of clicks. Sure, clicks are encouraging, but do they tell the whole story?
No, the number of clicks or the cost per click (average CPC) does not tell the whole story. Not even close. At the end of the day, it’s not how much you spend per click that really counts – what’s important is how much you spend PER CONVERSION (a truly qualified prospect). And finally, of course, it’s the cost per sale that really matters.
I have been doing pay per click campaigns for some time now. The following are my findings after testing pay-per-click campaigns from September 2006 through February 2007 on the following search engines: Google, Yahoo, MSN, Mamma, Lycos, 7Search and GoClick.
When testing, I chose the same keywords for each campaign and used separate but exact duplicate lead capture pages. This allowed me to see which keyword buys would give me the highest % of qualified prospects. My focus was the “Cost of Conversion” which was the percentage of people who requested more information about my program (a good prospect). My goal was to get clear indication as to the quality of the traffic coming from each search engine.
By taking the average cost-per-click and looking at the % of prospects that requested more information (Name, Phone # & E-mail Address), it gives me the real cost of a qualified lead. Following are the results:
7Search -$0.67 (CPC) $4.04 - (Cost of Qualified Lead)
Google -$0.83 (CPC) $5.46 - (Cost of Qualified Lead)
MSN- $0.70 (CPC) $6.30 - (Cost of Qualified Lead)
Mamma -$0.34 (CPC) $7.39 - (Cost of Qualified Lead)
Yahoo -$0.81 (CPC) $8.45 - (Cost of Qualified Lead)
Lycos -$0.12 (CPC) $17.14 - (Cost of Qualified Lead)
Go Click -$0.28 (CPC) $20 - (Cost of Qualified Lead)
For a spreadsheet view, follow this link http://www.myedconline.com/Adstudy.html
The study was conducted over several months. After trying to tweak the Lycos and Go Click campaign for about a month, I decided to drop them both. It is also important to note that my conversions decreased over time. This underscores the importance of changing the look and feel of the lead capture page from time to time. After fine tuning these campaigns, I must say that both 7Search and Google are my favorites. When looking at actual sales, Google does beat 7Search by a 30% margin (which means that the actual cost per sale is about the same – not pictured on chart above), but both work extremely well.
As you can see, if I just looked at the cost per click but ignored conversions, I could have wasted a lot of money on the wrong vehicles.
The lesson here is – clicks are good, but conversion and sales are even better! Take the time to gather deeper information on all aspects of your advertising vehicles. If you do, your marketing dollars will bring you five to ten times better returns.
The article is brought to you by Peter Grundner at P&T Enterprises
For more information please visit www.myedconline.com or call 818-887-0896
