Google AdWords -- A Marketer's Case Study

| About: Alphabet Inc. (GOOG)

By Carl Howe

For the last couple of years, I've been a pretty big skeptic about email marketing. Yes, it is cheap, but because of spam filters and general tyranny of too much email, it seems like a very poor way to reach people.

But recently, Blackfriars decided to do an experiment. We've currently surveying for our Q2 marketing research, and we wanted to drive US business executives to our survey. So, we thought, why not rent a list of 10,000 business executives, email them an invitation, and see what happens?

So we did. We rented a US business executive list from InfoUSA.com for $300/M, or $3,000, did the email blast, and waited for the survey responses. And as of about six days later, we got the following results:

Emails sent: 11,261
Bounced: 342
Removed: 302
Net sent: 10,919
Emails opened: 1,783
Click throughs: 30
Cost: $3,000
Surveys completed: 10

That's a 0.3% response rate off the net emailing. Each click-through cost roughly $100, and each survey about $300.

Now our experience and our research say that online advertising should be a lot more cost effective, so we decided to give that a try. So over the weekend, I pulled together a simple text Google Adwords campaign, and launched it on specific sites such as seekingalpha.com, cestockblog.com, and several others. Our results there are quite interesting:

Impressions after two days: 4,598
Clicks: 4
Surveys completed: 4
Cost: $16.29

Our response rate on the advertising is only 0.08%. However, our cost per completed survey is just $4.07 instead of $300.

My conclusions are pretty simple:

  • Broad-based direct email is a bad bet.. The killer for me in the email campaign was that 4/5ths of the people we emailed never even saw our invitation. What was billed as a $300 per thousand list rental was actually more like $1,400 per thousand for opened invitations. While better lists and better targeting than those provided by InfoUSA would certainly help, the proliferation of spam and the broad use of spam filters have turned direct email into a very poor marketing tool.
  • Google ads are hugely efficient. With a cost per completed survey nearly two orders of magnitude better than direct email, Google proves itself to be hugely cost-effective for marketers, easily justifying why it was able to pull in $1.7 billion in revenue this quarter. It's simple, it's easy, and it works.

    I think we can safely predict that we won't be doing a lot of broad direct email invitations any time soon.