[Hey folks...this is Dan, not chicken hat Dan, but venture capital Dan. I managed to hack into PPP's new blogging platform (hint: Ted's passwords are names from his Littlest Pet Shop collection) and access the Advertiser blog. I wear various PPP hats -- advertiser, postie, investor -- so I'm hoping to hack into all the blogs eventually. Until then, I'll share some thoughts, perspective and experiments for advertisers here. Shhh...I think I hear Mark reconfiguring some firewalls or something...]
As an advertiser and investor, I draw a lot of analogies between sponsored search and sponsored social media. GoTo/Overture was the PayPerPost of sponsored search and pioneered the multi-billion dollar pay-per-click (PPC) search revenue model that funds most of the “cool stuff with no revenue model” that Yahoo, Google, MSN and others provide today. Early adopters of the two platforms were also similar — with measurement-minded direct marketers leading the way for broad-based online marketer adoption.
Although PPP offers a broader ROI than sponsored search (like the branding benefits, viral opportunity and ROI growth over time from persistent posts), it’s worth monitoring best practices in the PPC field for PPP insights. One that hit my inbox recently, was a MarketingExperiments (MktgExp) report on the importance of relevance in paid search campaigns. The folks over at MktgExp reported the results of two case studies:
1) Click-thru-rate (CTR) Impact of Ad Title Relevance, and
2) Conversion impact of Keyword Relevance
I’ll leave the detailed process/results to MktgExp, but takeaways from each case study were:
1) The ad title that including the purchased keywords generated 147% more
clicks than those that did not, with CTR almost two and a half times
that of the next-highest treatment. For example, “Encyclopedia Britannica” had much better CTR than “Brittanica Sets” and “2007 Brittanica Set” for visitors searching variations of “encyclopedia” and “brittanica”.
2) Purchasing indirectly related keyword terms yielded a higher CTR than directly related keyword terms.
However, the conversion rate decreased from an average of 0.8% for
directly related terms to less than 0.01%. So, despite increased CTR,
the indirect key terms performed much worse where it counts: conversions.
So, how could these results improve PPP ROI? It comes back to relevance: both in the opp description and the link text. Bloggers, readers and searchers are the same people, so the psychology of rewarding relevance remains. All else being equal, opp descriptions that are more relevant to your product or business may garner more interested bloggers (higher opp-take-rate, OTR). Sponsored posts driven by relevant opp descriptions and relevant link text may garner more interested readers (higher click-thru-rate, CTR). And, last, click-thrus driven by relevant opp descriptions and relevant link text may garner more conversions.
My experience has been that CTRs for sponsored posts are already significantly higher than banners and sponsored search. That makes sense given the reader’s interaction with sponsored posts versus other online advertising. However, it never hurts to review PPC lessons to optimize PPP efforts. Relevance is relevant!
Guest blogged by Dan…an entrepreneur in venture capital clothing