This is a continuation to the blog entry from a few days ago where I compiled a comparison matrix between the two advertising platforms.
You can read round 1
here.
Since then, I’ve implemented a comparison test between AdWords and DirectAds. My test explanation and results are described below.
The Methodology:
I’m always using Google AdWords in conjunction with landing pages to capture leads. I will use my last 30 day data from that campaign to represent my Google AdWords data for this test. It’s just that I’ve statistically normalized it to represent a arbitrary budget of $1,000. Using the exact same Ad text and landing pages, I ran a similar campaign at LinkedIn DirectAds – but this time with a significantly smaller budget. I extrapolated the LinkedIn DirectAds performance data to represent a campaign of $1,000.
Measured Milestones:
The chart above shows the milestones set for the campaigns. The main milestones are the number of impressions that were generated by both campaigns. Then count the number of prospects that clicked thru the ad to visit the landing page hosted on my website. Once at the landing page, the number of conversions were measured – i.e. people who signed up for the demo. In this test – signing up for the demo was the end goal. The best performing campaign should get the most number of demos for the $1,000.
Drawbacks and Shortcomings:
I’d like to point out some of the flaws known in the test. For one, the test results were “normalized” to $1,000 for Google AdWords. This probably skewed the performance metrics. The test results from Google™ were obtained for a US/Canada whereas a global market was used for LinkedIn®. Data collected from Adwords included a time frame of 1 month, where as only a few days were used to collect DirectAds data. There were insufficient sample points for LinkedIn® (since the budget was very small) leading to data extrapolation. This I believe to be the most serious flaw in this test because LinkedIn® data is not correctly represented.
Also, this test is only concerned with lead generation. For a true performance picture, it should go a step further and correlate generated sales revenue with the campaigns.
Test Results:
The above table shows the performance metrics for my normalized Google Adwords Campaign with the extrapolated LinkedIn DirectAds. The conversion ratio is higher for AdWords (7%) than for DirectAds (4%). Which makes sense – since the Google prospects are actively seeking the keyword, they are also likely to “act” once at the landing page. At the end this means that Google generates almost 5x more leads within the same campaign budget as LinkedIn®.
Taking those metrics into account I speculated on a fantasy campaign for LinkedIn® which I labeled “Speculated”. My logic behind this scenario is simple – since I haven’t used LinkedIn that much, my performance metrics are likely to improve. Keeping that in mind, I wanted to see what results I could expect from DirectAds when I reach “peak conditions.” The following assumptions were used to justify the peak results:
- Target market is intelligently selected (based on Industry, Gender, Job title, Age, etc). This selection will help “strike a chord” with the audience – leading to higher click thrus of 180 (plausible considering Google Adwords generated 200.)
- I used 6.7% conversion ratio to generate 12 leads from the campaign. This ratio is between the ratio generated by my actual Google™ and the extrapolated LinkedIn® campaign.
Based on these assumptions I can see that my LinkedIn® Speculated campaign could yield a result of $83.33 a lead. Of course this number is driven through a speculated framework, but it seems within reason to expect good lead conversions with LinkedIn® if I do my homework and get all my ducks in a row.
Conclusion:
Just playing the numbers game then it seems that Google AdWords yields lower cost of leads than LinkedIn®. But that’s only a small test sample with a number of embedded flaws in data collection and analysis. Taking a step back and looking at the big picture, I can reasonably conclude that with the right marketing hook and target market, DirectAds can be just as competitive as AdWords.
Take-home Value/Food for thought:
The type of leads that were generated from LinkedIn DirectAds may have been a different breed as opposed to Google AdWords. That’s an important point to consider when designing advertising campaigns for LinkedIn. I think AdWord Leads are more “active” ” than DirectAds leads – AdWord Leads are more likely to commit/convert at the landing page. So the key is designing a hook/landing page that engages the passive leads from DirectAds. Some examples of such a hook can be:
- Download whitepaper (academic research type leads. They are keen to know/learn about the solution but don’t have an urgent need to buy.)
- Listen to podcast/view flash demo (business lead that wants to quickly learn more about the market.)
- Instant download of software (techy lead that wants to get tangible toy to play with.)
DirectAds being a beta product is priced very cheap to penetrate the market. It’s a good way for anyone to test the waters to see if it makes good sense for them. So it’s better to learn now (when there’s more room to error) before the DirectAds market gets too cut-throat.
Flashback: This is a continuation of an earlier article where I presented the feature matrix between the two products. Read the previous part here.
Nov 23rd, 2008| 
December 1st, 2008 at 19:34
Great stuff. Nice to see someone with some real numbers about LinkedIn ads.
Your numbers verify what I would have guessed, which is that most LinkedIn users won’t click on their ads, and will get more “blind” to the ads over time, making them less useful.
LinkedIn probably realizes this, too, which is why they don’t give you a pay-per-click model. Shame, because the PPC model might be valuable.
December 5th, 2008 at 12:20
Thanks Patrick. Wait until you see what I’ve lined up for my Facebook test results
.
November 16th, 2009 at 20:26
This is a very interesting discussion. I am looking into doing Adwords, but I am not sure it is worth my time. It would be great if you could also ad FaceBook advertising into this mix. I like that with FaceBook, the ads can be shown to people based on very specific criteria.
November 16th, 2009 at 21:37
@Clerical jobs – I do a run up on Facebook at http://www.targetinfolabs.com/lead-gen/facebook...
I did that review about a year ago. Since then Facebook has introduced better targeting, but the interface and the ad metrics are the same.
November 17th, 2009 at 01:37
@Clerical jobs – I do a run up on Facebook at http://www.targetinfolabs.com/lead-gen/facebook...
I did that review about a year ago. Since then Facebook has introduced better targeting, but the interface and the ad metrics are the same.