Group buying deal revisited: Was it successful?

With any promotion, especially a new one, you always have to wait to find out whether it was successful or not. Despite the fact that with group buying site promotions you pay per voucher sold, and despite the fact that you receive payment from the advertiser (Teambuy in this case), there is still an enormous cost and risk associated with this type of promotion.

Finding out whether or not the promotion was truly successful or not may take months but it is important to track its effectiveness afterwards, and not just for  a few months, but for years (take look at a cohort analysis if you haven’t already before). For this scenario we are only a month-and-a-half in and we a are new company, which makes it difficult to compare and really measure our success so far but this doesn’t mean we can’t start analyzing it. Here are a few things that we’ve considered already:

  • Have our revenues increased?
  • Have our revenues less discounts increased?
  • Do we have repeat customers?
  • Are we covering increased costs?

Our answers for the first three are all ‘yes,’ but our costs may take more time to solve. We’ve smashed our record for revenues even with discounts and we have repeat customers. As many as we would like? No, but it may be too early to tell still.

When we dig deeper we realize that previous customers did not increase spending at all. Almost, all of our increased revenues came from new Teambuy customers putting more emphasis on a successful campaign thus far.

Does the campaign cover its cost? Have we increased our customer base? Have we received a sufficient amount of repeat customers? Has this been profitable?

Until our vouchers expire in December these are all questions we will not be able to fully answer but analyzing the deal before it ends is just as important as analyzing it afterwards.

Here is some extra reading if you’re hungry for more ways to analyze group deal success:

http://mashable.com/2011/07/11/measure-group-buying-deals/

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Facebook Ads vs Google Ads: Why they could both be losers!

There is an abundance of online advertising to choose from but the two most well known options are Facebook Ads and Google Ads. I’m not going to tell you how I created ads that cost me $0.05 per click and how I got a click through rate of 20%. I’m not even sure that this is possible, in fact I had the opposite experience. I had very few clicks from Facebook and no return on investment from Google. Although, this is obviously not everyone else’s experience mine might help you better prepare for your own ad campaigns.

The difference between these two forms of advertising is not technical but rather who  the audience is. You might tell yourself: “How can they be different? Everyone uses Facebook and Google!” The difference is that most of the audience on Facebook doesn’t yet know that they want your product or service, whereas on Google they do (at least you hope they do when they punch in those search terms).

Facebook ads are similar to that of a billboard, potential customers are going about their daily life when they notice your ad on their Facebook page. They weren’t looking for it but you posted it up in the hopes that you reached your target audience. The more defined that target is the more likely you are to get the right person clicking on your ad (the same goes for Google ads in this case). The point to remember here is that on Facebook viewers do not know they want your product until they view it. You are letting them know, or reminding them, that it exists. The Google ads audience, on the other hand, does know that your product exists and are trying to find it by searching for it. This is something similar to looking in a Yellow Pages book.

The problem with Facebook ads is that you have very little control over who your ad is placed next to or going up against. Although there are implications on the bid price you are paying for, there is a much greater threat to your business here: your ad could be right in-between two ads for scams. Yes, scams! If you’ve worked hard to build an image for your company and you are offering a legitimate service or product how do you think this looks to your potential customers? Well, the answer is not good if you’re not a well known brand with an existing reputation.

An example of advertised scams are the penny auction ads. These literally link you to a phony news site, which is covered in news and links for the auction site (I even tried clicking the links at the top of this site, it was just an image!). I’m not going to go into how these sites are scams, a small amount of research will prove this.

Google ads can also have a stigma attached to them. Often searchers avoid them, I know I often do. I’ve noticed the color of the background behind these ads has become lighter and lighter to blend in, now it doesn’t even seem like there is a different shade behind them at all.

Although, neither of these methods worked for us they may still work for you. We had significantly more clicks on google ads but we didn’t generate any new business from them. This may have a lot to do with our industry, most people just don’t search for dry cleaners they just go to them nearby. Ultimately, if you don’t have increased business from these ads it doesn’t matter what your click through rate (CTR) is. As both are very cheap to try out (Google often hands out $100 start up coupons for new customers and there is a $20 activation fee whereas Facebook has no promotions I know about and no activation fees) I would highly recommend giving them both a try regardless of my experience because they are so cheap and I have heard of success stories. Who knows, with the right campaign and service/product, your ad could be a huge success and for such a low start up cost it’s worth the try.