In part 1 of our 3-part series, we discussed the Internet’s two top search advertising companies: Google AdWords and Microsoft AdCenter. Now let’s compare the actual costs of both in raw numbers…
Comparing AdWords & AdCenter in Our 2 Campaigns
PPC Budget: $500 USD
Average Cost Per Click: $7.00 USD
Number of Clicks: 71
Average Ad Position: 3.9
Average Click Through Rate: 0.95%
Number of Conversions: 2 – 2.8% of visitors
PPC Budget: $500 USD
Average Cost Per Click: $1.50 USD
Number of Clicks: 333
Average Ad Position: 1.2
Average Click Through Rate: 0.84%
Number of Conversions: 6 – 1.8% of visitors
Although the click through rates (CTR) and conversion rates (CR) were higher with AdWords, AdCenter was able to get 469% more clicks for our budget than AdWords did. This resulted in more conversions for our budget (in our case, we consider a conversion to be when a potential client contacts us either by phone or through the contact form on our website). Even though Google has better performance in a few categories, AdCenter gives you a bigger bang for your buck.
In our $500 AdCenter campaign, we paid roughly $1.50 per click on average resulting in 333 clicks (our average ad position was 1.2). This was a 469% click increase for AdCenter as compared to AdWords for the same budget.
So side-by-side, AdCenter provided over 469% increase in traffic to the site. Nice…but look at the conversion rate; 2 for Google and 6 for Microsoft. AdCenter provided a 200% increase in revenue over its competitor. When evaluating the potential profit from a PPC program, you will only be charged for the times that the user clicks your ad. This is the number of users who click the ad divided into the number of users who actually buy the product. A rough rule of thumb for CR is 5%.
You need to project the economics of a campaign prior to launch. If you have a low cost per click, and the commission from your affiliate company is high, you can afford a campaign with a low conversion rate. On the contrary, if the commission per transaction from the affiliate company is low, and the CPC is high, you need a conversion rate that is high.
It is a matter of simple math to project the results of a sales campaign.
profit per click = ($ per sale x conversion rate) – (average cost per click)
An easy way to determine whether AdCenter has a real and considerable earning potential for you, is to figure out the conversion rate for your ad campaign and your average cost per click. These can be collected after running a campaign for a couple of months. Once you have this information, you can determine the profits that you will make by applying the following formula:
$ per sale x conversion rate – average CPC
Informed and solid assumptions can also be made if one prefers to do the math prior to running a campaign, but they need to be reality-based.
While it may have been true years ago that Google offered the highest ROI for a search marketer, this is no longer the case in many respects. Actually, it’s now possible that ads on Microsoft’s AdCenter network tend to convert better than AdWords ads.
Due to the success of our many AdCenter campaigns, we are now advising our clients to begin utilizing AdCenter for their online search marketing and invite you to do the same.
In Part 3 of our series, we will address the importance of demographics in your AdCenter marketing campaigns…