In January of this year I made a bet with members of our team. The bet was that dollar for dollar the long tail and sponsored posts were a better advertising investment than display ads on an "A-List" blog. I knew what the performance was through our network and had seen what the "A-Listers" were charging for display ads. I decided to plunk down some money and see if I was right.
I first tried to buy advertising on TechCrunch to prove my point, but when Mike Arrington declined I went looking for a comparable property. I thought about Mashable and even Calacanis.com, but we ultimately purchased a one month campaign on the ultra popular tech website ReadWriteWeb.com, of which I a personally a fan and consider to be "A-List" material . We decided to promote the then new IZEARanks.com website we had recently launched. The one month 125x125 display ad ran us $3,000.
We also purchased 220 Sponsored Posts at a cost of $2970 including all the fees an outside advertiser would pay. The PPP Opportunities for this comparison were Run of Network, allowing virtually any blogger to write about us, no matter how small the blog. All posts included in-post disclosure badges and no-follow links.
Here are the results:
ReadWriteWeb.com
Over the one month period our media buy on ReadWriteWeb delivered 725 visits according to Google Analytics.
PayPerPost.com
Over the same one-month period sponsored posts on PPP network blogs delivered 696 visits from the no-follow in-post links, and an additional 136 visits from the required disclosure badge. The PayPerPost total for the same first month was 832 visits.
One of the benefits I have touted about sponsored posts is the fact that they deliver value long after your posts are paid for. I made two purchases on PPP, one on February 5 and one on February 7th. Those media buys are still paying dividends three months later, adding another 105 clicks for a total of 937 clicks so far. When my money ran out on my ReadWriteWeb media buy I stopped seeing the benefits immediately.
This is a graph from SocialSpark demonstrating CPC over time for a Sponsored Post campaign.
If you equate Visits to CPC we can start to compare our two media buys. ReadWriteWeb ran $4.31/click while PPP has run $3.16/click to date (realize that this will continue to go down over time). I will admit, those PPP numbers are some of the worst I have seen in a sponsored post campaign. Typically we see a CPC in the range of $.60-1.20 after the first 30 days, but I decided to do this RON without any segmentation. I should have been more selective and chosen some segmentation.
While creating SocialSpark we recognized that there is a fundamental flaw with advertiser value representation in PPP. We allow advertisers to create opportunities in the system and drive traffic to their site, but only report back clicks received from sponsored posts. The result is a lot of free traffic for the advertiser that is never reflected in their PPP stats or in their site analytics. In addition to the 937 clicks above, a bare minimum of 220 bloggers were exposed to the site (most likely 500+). That adds at least another 220 clicks to our numbers (TOTAL 1157) and drops our CPC lower.
Engaging the Blogger
Clicks are one thing, but engagement is another. 220 Bloggers took the time to write 250 words or more about our Opportunity. They had to visit the site, explore it, potentially sign-up and write an educated post about their findings. Display ads will never drive that kind of engagement.
Engaging the reader
Not only did we directly engage 220 bloggers, but our blog reader engagement was much higher as well. On average a reader delivered from ReadWriteWeb spent 2:58 on our site, with a 38.90% bounce rate. A reader delivered from a PPP network blog spent 5:39 on our site, with a 21.26% bounce rate. This is because people clicking links in sponsored posts have a genuine interest in the site they are clicking through to.
Conclusion : The LongTail Rules
While "A-List" blogs may be able to deliver high volumes of display advertising inventory, sponsored posts on hundreds of "longtail" blogs are capable of delivering advertisers a stronger value short term, and offer a long term value not available through any form of display ads offered by the A-Listers.
Well..... Maybe. Here is The Real Question.
The thing I still don't know is what happens when you mix an "A-List" blog with sponsored content. ReadWriteWeb could very well have blown these numbers out of the water with a single post on their ultra-popular blog. Its a great blog with great content, I would probably click on an honest sponsored post with clear disclosure.
If any "A-Listers" are up for a little experiment I would love to hear from you. Robert Scoble, Pete Cashmore, heck.... Jason Calacanis drop me a line. Maybe it's the network, maybe it's the ad unit. Right now we only know that display ads on big blogs suck just as bad as they do on other big sites. I am more than happy to drop $3,000 on a single post and see what happens compared to a $3000 SocialSpark Campaign launched at the same time.
Technorati Tags: a-list, arrington, longtail, mashable, pete cashmore, readwriteweb, techcrunch
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Comments (RSS)
Dawn @ Coming to a Nursery Near You said...
Great post (heh - no drinking for you) - Seriously, interesting post and something for all of us, not just the big sites, to think about when considering buying ad space. Thanks.
May 8, 2008 9:19:49 PM
JoeSales said...
Great post! This should totally be a case study.
May 8, 2008 9:22:13 PM
eddings said...
Very well thought out, informative post that was supported by data not just theory.
May 8, 2008 9:33:04 PM
Greg Rollett said...
Wow, great analysis and it totally makes sense. I am always clicking through from honest blog articles and really tune out ad blocks on sites. Add that to the fact that I read 80% or so of blog posts in Google Reader and I never even see the ads.
This scenario makes total sense, and really you don't even need to spend $3,000 to turn a decent investment around into some great publicity and online recognition.
Thanks Ted!
May 8, 2008 10:14:03 PM
Dan... said...
Great, data-rich post!
The numbers don't lie, BUT you glossed over one of the most powerful parts of leveraging Social Media Marketing via PPP -- scalable segmentation. You applied none, but even a minimal set of segmentation/targeting filters could have multiplied the PPP ROI.
I'd also note that your paragraph on engaging the blogger only scratched the surface. Not only was the blogger more engaged with the brand, but the brand got a twofer: marketing and product/brand feedback.
I look forward to a follow-up post comparing elite vs. long-tail sponsored post ROI. I would only suggest that the elite blogger share the $$ they would expect for a sponsored post outside of an experiment (it may be >$3000/post). My bet is still on the long-tail winning if a true market price is used for elites to calculate ROI...
May 8, 2008 10:16:41 PM
Andy Beard said...
The numbers are poor mainly because for best benefit you really need to use tracking links that will count clicks from feed and email subscribers.
With a recent affiliate promotion on my blog that is actually still the top story, though that is going to change in a few minutes, I sent through 103 clicks from my blog.
That might seem a lot in the space of 3 or 4 days, but when I look at my affiliate stats, it tells a totally different picture.
I have actually sent through 575 clicks
Now I didn't use unique tracking IDs for individual links within the post, and I was a little sneaky with a graphic, so some of those clicks might have been repeat clicks.
In addition some of the clicks might have been caused by robots, depending on how the affiliate software handles various bots.
I must admit this is probably a record for recent times, I used a great headline, and gained a couple of good links to the post, but it is important to track RSS clicks.
IzeaRanks also wouldn't perform as well on postie blogs because many of the readers may have already heard a lot about PayPerPost and Izea. It is in many ways preaching to the converted.
I think one thing advertisers need to do is offer a strong reason a reviewer is writing about them, and a very strong reason to click through.
I had such a high number of clicks because I was encouraging people to watch a 54 minute educational video about SEO and PPC. I had watched the video before I wrote anything, and gave it a strong testimonial because it gave such a huge amount of value.
I am just glad display advertsing on my blog is more worthwhile than on RWW - depending on how you track it, it could be close to a factor of 10.
May 8, 2008 10:25:42 PM
Kyle James said...
The one thing you don't account for here is time. I'm sure it took MUCH less time to get your add out on RWW than the multitude of smaller sources and believe it or not but this is an important attribute. If you could spend $3K and it takes you five minutes to get your stuff out on RWW but you spend a week getting out to a multitude of smaller blogs then that's a definite sunk cost not accounted for and really screws with your data.
How much time was spent to advertise on the two options?
May 8, 2008 11:08:01 PM
techie said...
Interesting comparison Ted. This would be interesting to test with a different product. Product often determines which advertising is more effective.
Kyle James,
You obviously have never done a Social Spark campaign. Creating that campaign in social spark would really not take much more time than a well done RWW ad.
May 9, 2008 1:17:35 AM
John Reese said...
Great case study, Ted.
The real metric that's missing here is concerning CONVERSION DATA and, ultimately, VISITOR VALUE over any chosen period of time. CPC means very little when it comes to ROI. 50 visitors from one source can yield $10,000 in revenue while 50,000 visitors from another might yield $1,000 in revenue.
It would be incredibly valuable to see a similar test run using some sort of conversion benchmark and by promoting a non-Izea related product; to avoid any sort of bias. (i.e. a postie having more interest due to the existing relationship.)
If you can run such a test and prove that the "postie distribution" yields a higher ROI for the same advertising investment (i.e. in comparison to an ad on a larger blog) then you've definitely got an absolute home run on your hands and, ideally, a NO BRAINER position in which to 'sell' your services.
The "long term" trickle of ongoing traffic is definitely a fantastic advantage.
-John Reese
May 9, 2008 1:48:49 AM
PsychoticApe said...
I don't want to sound rude, but for the price you paid to advertise on ReadWriteWeb - you got a very low amount of traffic. If $3000 can only net you 725 visits, that's quite a rip off. I mean you would think a big site like that would be able to send over much more traffic from sheer direct clicks on the ad (we're not counting rss click throughs etc which may not even convert as well as one would expect). That price doesn't seem justified.
May 9, 2008 1:40:52 PM
Cindy Szponder said...
What value does this information have for those who don't own/manage a blog network? It shows the value of building relationships with other bloggers, the value of guest posting on related blogs, the value of social media outlets. These become the blogging network of the blogger with only a single blog (or even two).
How are you building your blogging network? Have you done anything to build your online relationships today? Read the article and learn. Then apply it to your own situation.
May 9, 2008 9:44:28 PM
shi said...
True. And a great point.
May 10, 2008 6:17:34 AM
Mrs. Mecomber said...
A very informative post. I clicked on the links, too! ;)
I cannot remember if you mentioned feed readers and email subscriptions as a variable in your computations... I have a number of subscribers who read my posts (including the sponsored ones) but never see the TLAs in the sidebars. I do believe sponsored posts are the wave of the advertising future. Thus the market is ready for good, quality writers of blogs. I'm ready and waiting...
May 10, 2008 12:56:33 PM