Ad HustlerConfessions Of A Serial Internet Entrepreneur

When I decided to do this local online marketing series I asked my good friend Dennis Yu of BlitzLocal to write a guest post.  Since you people love case studies, I asked for it to be a case study.  He obliged.  Below is a case study on Facebook vs. Google Adwords traffic on a local level.

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For our case study we sent traffic from both Facebook ads and Google Adwords to MyEstateManager.com. Below we’ll compare the data from each source and discuss the unique advantages of Facebook, as compared to Search Engine ad networks.

• Below are graphs of Impressions vs CPM for both Google and Facebook paid traffic over a six day period. Note: Impressions are the vertical axis, and CPM is the horizontal one.
• Google traffic is represented by an “Estate” ad group that contained keywords closely related to estate management.
• Facebook traffic is represented by advertisements that were directed at the demographics we had identified as being the most common customer of MyEstateManager.

• What we found was that Google Adwords has far more competition between advertisers than Facebook Ads. On the low end of Google’s price spectrum for our targeted keywords, we were able to get 7000 impressions in a day at a $1.6CPM. Compare that to Facebook, and we were able to get targeted traffic at equal volume for under $.15CPM – that’s less than 1/10^th the CPM on Google! +1 Facebook
• The bounce rates between the networks varied a bit as well. Google Adwords maintained a bounce rate of 48.38%, while Facebook’s was 41.54%. +1 Facebook
• Elasticity of both curves is important to note as well. Facebook’s curve is exponential, while Google’s is basically linear.
• Key Factors: One reason for that is the difference between network ad space and placement. Google has 10 ad placements on the first page, while Facebook advertisements only have the chance to appear in about 3 different spots. You can steadily bid up on Google to increase your ad position, while all the inventory on Facebook is divided amongst a few placements—if you aren’t showing up in these, you aren’t showing up at all. Another factor is competition; Facebook doesn’t have nearly as many publishers competing for the ad space, so a small change in Facebook CPM will make a greater difference than the same change in Google CPM.

Facebook Targeting as an Alternative to Search Engine Targeting

• There is other value in expanding advertising campaigns to Facebook that separates it from other Search Engine ad networks. In Facebook, users self-identify (gender, age, vocation, interests, etc) and can be targeted by who they are. Search Engines, such as Google restrict you to primarily targeting keywords, which means you target people based off of what they are looking for. That can lead to some difficulties depending on what your strategy is; for example, if you are a company that does primarily B2B marketing you may have keywords that show up in both B2B oriented searches and in consumer searches—take the keyword ‘cell phone cases,’ for example, a business that makes cell phone cases that are sold through other stores (Best Buy, Radio Shack, etc) wants to get business from people who will buy from them in bulk. They’re not interested in Joe Teenager who wants a shiny new case for his iPhone. On Google, it’s difficult to to screen out Joe Teenager and get John Executive Purchaser. On Facebook, because of the self-identification data, it may be a bit easier.
• Target your viewers effectively: Below are several targeting tips to apply to your Facebook campaigns.
  • Separate your ads to target males and females separately: men and women will almost always click at different patterns.
  • Tighten your age groups: instead of targeting all males or all females, narrow it down to 4 or 5 years apart max. Different ages require varying ad copy as well.
  • Make your users feel like your product is up to date. A good way of doing this is mentioning the month in your ad copy, or even related current events.

  

The main difference between these two ads is the picture, but that makes a significant difference. The ad on the left maintained a CTR of 0.08% vs 0.03% for the one on the right. Lesson: Users are more likely to click on an image that includes a person’s face.

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I run offers in a variety of niches.  Lately, one of the niches that i’ve been running took a serious decline in conversion rates.  This niche is a product sale requiring 2 pages of information.  Page 1 is contact information and page 2 is credit card information.  Offers that converted at 9-14% were all of a sudden converting at 2% if I was lucky.  Needless to say this irritated me.  I have a lot of contacts and reached out to quite a few to see if they were running this niche as well.  Some were and I heard mixed reviews about the kind of conversion rates they were still seeing.  Since some affiliates were claiming high conversion rates and some were claiming low conversion rates this exercise didn’t prove to be fruitful.  Here are a few thoughts/theorys that were going through my head at the time (here is a peak into the mind of Ad Hustler):

• My traffic source was burning out, hence the lower conversion rates. However, this made no sense to me as the users were still clicking through the landing page to the offer.  There was really no decline in landing page to offer click through rate so this theory didn’t make a lot of sense to me.
• Some of the other affiliates I spoke to were lying. In the affiliate industry, you really never know who is telling the truth and who is lying.  People sometimes have vested interests in leading you down a certain path so I don’t believe everything I hear.  One thing that stuck with me though is that certain people in this industry who I really trust, were telling me that there were still good conversion rates in this niche.
• The advertisers are blindly scrubbing and shaving the offers. Since I saw such a rapid decrease in conversion rates I figured that the advertisers were scrubbing and shaving the profitability out of the offers.  This still didn’t exactly make sense to me as some people (that I trust) were still claiming high conversion rates.
• The advertisers are targeting affiliate ID’s or refferer URL’s to shave/scrub CERTAIN affiliates. You see this in the email submit niche quite a bit, so I was thinking this could be possible as well.  It also could explain why some people say conversion rates are still strong and others say they are weak.

To start off, I tested the last theory (that scrubbing is occurring on the affiliate id/referrer level).  I put my landing page on a new domain and sent traffic to an offer that I knew converted a few days prior but at a fresh affiliate network.  This way, I knew that my affiliate id/referrer were not on record with the advertiser.  The results were no better then previously with the old referring URL/network/offer.  This helped me shy away from this theory being the cause of my problems.

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I then decided to use the You Can’t Hustle A Hustler – Testing Method.   I ripped the advertisers landing page and recreated the offer on a domain that I own and am in complete control of.  I took out the advertisers forms and replaced them with my own.  Here are 2 good form tools you can use to do the same and replicate any form:

Coffeecup Form Builder
Logiforms

Since I was down to a 2% conversion rate, I figured this would prove once and for all if I was being shaved/scrubbed by the advertisers.  If this test proved an insanely high conversion rate I would be relatively sure that the problem was not on my end, but rather on the advertisers end.  (Please Note: I know that there are variables unaccounted for here such as merchant account declines, prepaid credit cards and fraud prevention tactics.  That’s not the point.  The point is to get a baseline of how this offer converts when I control the page and the forms)

Next Step: Drive Traffic & See How It Converts

Some Stats

Landing Page —> “Offer” Clicks: 200
Completed “Sales”: 8
Conversion Rate: 4%

So, the conversion rate proved to be slightly higher when I owned all of the offer elements but still not a great conversion rate and fairly inconclusive due to the unaccounted for variables.

BUT WAIT…..THERE’S MORE!

I purposely left out a statistic above.  Since this offer is a Page 1/Page 2 offer aren’t you curious about how many people complete Page 1 vs. Page 2?  I was and this proved most interesting.

Landing Page —> “Offer” Clicks: 200
Page 1 Contact Info Leads: 55
Page 2 Completed “Sales”: 8
Page 1 Lead Conversion Rate: 27.5%
Page 2 Sale Conversion Rate: 4%

Do you notice a HUGE problem here?  I do and it caused me to take some action.

Only 14.5% of the users who filled out page 1 actually filled out page 2.  That’s pretty pathetic.  85% of the users are bailing on the conversion funnel on page 2 where they need to enter their credit card information.  In a live situation, the affiliate never controls the conversion/sales funnel so what’s a Hustler to do?

I decided to better presell the fact that after page 1, the user would be taken to a credit card form that accepts all major credit cards to pay.  It seems stupid to have to tell the people that to pay for the item, they will need to use a credit card but apparently spelling it out helped the conversion rate.  I made the changes and set them live on the real offer.  All of a sudden I was back to 8%-10% conversion rates.

This testing in no way figured out WHY my conversion rate decreased.  It did however provide me with information to get it back to where it needed to be.  With more tweaks/testing I expect to see even higher conversion rates.  Unfortunately affiliates are never provided with sales funnel information.  Without that information I would have never seen this problem and hence never realized how to fix it.

Case Study Testing Funds Contributed By Tatto Media

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I like to maintain minimal advertising on AdHustler.com.  I respect my readers enough not to bombard you with tons of crappy offers like many affiliate bloggers do.  To be quite honest, i receive at least a few advertising offers for this blog each week and I turn most of them down.  Tatto Media approached me with an interesting proposal that is win/win for everyone.

The Back Story: Mike from Tatto Media has been a supporter of this blog (especially the case studies) since I started it.  He has sent a lot of his new affiliates to check out my case studies and has thrown a lot of support my way.  His network (Tatto) has always been very private.  The extent of their promotion has been some really classy parties/cocktail hours at Ad Tech and other conferences.  Tatto has decided that they want to open up their network to more affiliates and approached me with an interesting proposal.

The Proposal: Tatto knows that I don’t like to whore out AdHustler.com and they also know that case studies are interesting and helpful.  Tatto has offered to donate $25 for each approved affiliate into their network, for case studies on AdHustler.com.  I have agreed to take this money and do some new case studies that will be totally transparent.  Whether the case study fails or succeeds, i will post the ads, landing pages, offers, revenue etc.  You as the reader benefit with new transparent case studies funded by Tatto Media & you get to work with a great affiliate network.

About Tatto: Tatto is a private affiliate network with some really exclusive offers and a history of coming up with “the next big thing.”  Tatto Media was instrumental in bringing mobile offers mainstream and own some of the biggest winners in mobile.  They also own a lot of other exclusive offers in a variety of niches.  Tatto tests their offers in house to ensure they perform.  Tatto Media has a propietory tracking system that is really clean, easy to use and accurate (i’ve used it myself).  Sign up for Tatto Media, check out their offers and if you see something you like, give it a try.

Sign Up For Tatto Media – Get AdHustler.com $25 Towards Public Case Studies

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For the last couple of weeks I have been pretty much letting this list building and email marketing campaign run on autopilot.  As I stated in the last post I wanted to get the list up to 500 subscribers to see what kind of revenue I could generate off of it.  Let’s run through a quick financial breakdown of where I am at right now with 500 subscribers to the email list:

Number Of PPC Clicks: 2,347
Number Of Double Opt In Subscribers: 500
Click To Subscriber Conversion Rate: 21.30%
Average CPC: 25 Cents
Raw Cost For Clicks: $592.68

Clicks To Email Submit On Page 3:  377
Conversions: 136
Offer Payout: $1.30
Subtotal Revenue: $176.80

Conversions On Email #4: 5
Offer Payout: $31
Subtotal Revenue: $155

Conversions On A Seperate Email Deployment: 1
Offer Payout: $30
Subtotal Revenue: $30

NET PROFIT/LOSS: -$230.88

I am now down roughly $230 and have a subscriber base of 500 double opt in subscribers.  I essentially need to milk 50 cents per person out of these people to break even.  A few issues I am running into is that most of the subscribers have gotten through the email series so are no longer receiving content.  I plan on doing a campaign to the whole list today to see if I can boost revenue.

I’ve tried throwing a message into some of the emails saying “This Message Sponsored By ADVERISER NAME” to see if they would click that and maybe produce some sales but no one has clicked that so far.  The best results have been from emails that are straight marketing messages rather then content mixed with a marketing message.  Unsubscribe rates have not been too bad on straight marketing message emails.  I have no doubt that I can get this list to break even and turn a profit.  The question is how long will it take and is this scalable?

If you have not read the other case studies in this series, here are the links:

List Building & Email Marketing Case Study
List Building & Email Marketing Case Study Part 1
List Building & Email Marketing Case Study Part 2
List Building & Email Marketing Case Study EXTENDED

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I got a lot of positive feedback about the list building & email marketing case study i’ve been doing.  I initially planned on stopping the case study at 100 subscribers and reporting back what happens.  Since the results were not awful I decided to increase the test to 500 subscribers.  Although a list of 500 email subscribers is still a very small list, I feel like it’s at least a little more statistically signifigant then 100 subscribers.

The list should be hitting the 500 subscriber mark by the end of the day today.  I will try a few ways of monetizing the list and report back some new numbers to give you a better idea of how the case study is going.

To be quite honest this case study does excite me.  List building is really not a place i’ve gone in the past but I am seeing potential in it.  It’s totally different then straight PPC because you need to wait for the payoff.  What I’m trying to find out now is if the payoff is worth it.  Let’s find out together.

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