Wonder whether advertising is worth it?

I did!

I wondered for the longest time how many of my sales of my Seamless Texture Generator were due to word of mouth, and placements on hundreds of download sites, and how many were due to the ads I placed on google.

I didn't know if I was being foolish spending 50% of my profits on advertising, because if all my sales were coming from non-avertisign sources, then that would be a huge waste. (50% being the break-even point where diminishing returns meets increased sales according to what I've read on the subject.)

Well now I know... Cause on Dec 27th, I resumed an old pay-per-impression campaign I was using before I switched to the current pay-per-download one which got more impressions but did roughly the same number of sales.

The result was that sales spiked. I did 2x as many sales in January as I did in December!

Unfortunately... at the same time as I made the above changes... I also reduced the amount I was paying per download from 22 cents to 11 cents.

And because sales spiked, I assumed that I was still getting the same number of downloads through that campaign. But it turned out that sales from that campaign plumetted steadily throughout January, and this became apparent when all of a sudden in Febrary, sales ground to a screeching halt.

The drop in sales was due half to my mistake with the pay-per-action campaign, and half to a website I had relied on through the pay-per-impression campaign accidentally shutting off image ads, and to my adding a whole bunch of less texture-specific websites to my ad campaign which may have caused many impressions (and lots of $$$) to be spent on those, while not resulting in many downloads.

The good news is that as a result of my campaign coming crashing down it got me off my ass and I made a bunch of new ad banners of different sizes, since I only had the large leaderboard before. Now I have small banners and square banners of several sizes.

And for the pay-per-download campaign particularly, after resetting my bid to 24 cents per download, (which I calculated will give me the 50% spending on ads which I'm aiming for, after determining that I need around 46 downloads of my program to generate one sale) these new ads should result in many more impressions than I was getting originally, so my sales will hopefully go back up to where they were, and beyond.

You need a blog ;-)

2% CR, cool. Thanks for the info, interesting read.

so your conculusion is???

My conclusion is that advertising does have a huge effect on sales, even for a little application like my own.

My sales wouldn't have spiked or dwindled down to nothing as a result of changes to my advertising if advertising had little effect on sales.

It might seem obvious that advertising would have an effect on sales, but it's not always obvious how much of an effect it has, especially on people who have likely seen your ad hundreds of times already.

I would have thought that after two years of advertising that a lot of my sales were coming from people who'd heard about it a long time ago and were just now getting around to buying it. If that were the case, the changes I made to my ads would not have had such an immediate and striking effect, at least, on sales dropping like a rock. I'd expect sales to jump suddenly with a new ad, for a little while at least.

The point I'm trying to make is, if you're selling a game or an app, don't expect it to just sell itself through word of mouth. Spend money on advertising.

But be careful. You can spend a lot of money advertising and get no results. You need to advertise to people who actually would be interested in your product. If you just spam your ads everywhere then you'd better have a product like Coke which just about everyone is interested in buying. My texture generator isn't like that at all, and to get to where I am with my ads took a lot of tweaking and careful site selection... At least until pay-per-action ads came along.

The nice thing about pay-per-action is that you can let any site that wants to show your ads, and you only have to pay them when someone actually downloads your application or game. Advertiisng with that method is relatively safe. It's advertising with keywords and paying per thousand impressions on sites you select yourself which you need to be careful with, cause you can spend $500 a month easily and get only 20 clicks with that.

You can also now do pay-per-click campaigns with google as well, and those should also be pretty safe.

Grey:
Do you think a 2% conversion rate is good? I don't really know. I thought I read once it should be more in the 10% range. But maybe that's more for games.

Probably tools conversion rate is supposed to be higher than games - but I have no data to support that assumption. For games many people have 0.25% or less! and 0.5% to 1% is considered good. Some of mine have converted at 2.5% and Fairway much higher, but that's very rare.

I used GoogleAds last year to sell DVDs from a site and we spent hundreds on google ads but made thousands on DVDs, it definitely worked BUT needed a LOT of fine tuning.

Thanks for the info, it makes sense that if you want people to use your stuff they need to know it exists, which means taking your product out to where the people are, which is what advertising is for.

Wil Shipley ("Delicious Library") talked about this a while ago:

http://www.viddler.com/explore/rentzsch/videos/4/

I strongly caution against per-click campaigns. My experience with Google was very bad. I called them and told them I refused to pay the bill for what was mostly spam bots flooding my forum with porn.

Okay, that doesn't make any sense.

Why would you be running google ads for your own product on your own forum?

And why would spam bots fraudulently click YOUR ads, on YOUR forum, where presumably YOU would be the recipient of any revenue that resulted?

Or are you saying that it was your forum, but hosted on some third party forum site?

But that still does not make sense. Because if spam bots were clicking ads for your products there, then the money would be going to the forum owners, not the spam bot owners, and you'd know exactly who to sue for said fraud. You would also have been wise to set up forums on your own web server.

And I don't see where porn comes into all of this. How do spam bots flooding your forum with porn result in you having to pay more money for your per-click ads? Why would spam bots post porn ads on your forum, and then go to the trouble to click your ads while they were at it?

The only way a spam-bot can make money from fraudulent clicks is if your ads are being displayed on their site, and they're clicking the ads over and over. And in that case I'm pretty sure you'll know which sites are generating those fraudulent clicks, since you have to pick the sites yourself which you want the ads to run on, and you can see how many conversions result from said clicks.

Oh, and I know I've had some fraud occurs with my ads, because google's credited my account a few times, but that fraud was with pay-per-action ads, where you don't select the websites the ads get displayed on.

But I wouldn't even know there was fraud if google didn't send me credits every few months, and the credits usually aren't for more than $50 which is like 3% of my advertising budget for that time period.

It's crazy to stop advertisng because there's a little fraud. If you ran a retail store and you were making a million dollars in profit a year, but were losing $30,000 of that to shoplifting, would you close the store? No, that would be stupid.

>It's crazy to stop advertisng because there's a little fraud. If you ran a retail store and you were making a million dollars in profit a year, but were losing $30,000 of that to shoplifting, would you close the store? No, that would be stupid.


Yes Halo is that creazy, he probly also never heard of mods governing the forum, he's one man army gone creazy :P

I think it was Ted Turner who attributed his success the the following motto: "Early to bed, early to rise and above all else, ADVERTISE!"

Or at least that's the way I heard it :)

I honestly believe that your product is 1% and marketing is 99% when it comes to business model.

Good products don't need any advertising. People will tell eachother about it.

Lumooja:
Which is why we're all chatting here via linux machines, right? :-)

I've lost count of the number of businesses which went under based on this mistake. Outside of Kevin Costner movies, "build it and they will come" is largely untrue.

sswift: The global Linux migration has started today. I burned the CD today, which will replace all our Windows servers in the world. Next step is to make games for Linux only (or maybe have some config setting like DontRunOnWindows=1), since it's hard to make Linux only games on Linux, they are all damn cross-platform.