LinkedIn DirectAds vs Google AdWords (Part 2)
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 LinkedIn DirectAds vs Google Adwords. Since then, I’ve implemented a comparison test between AdWords and DirectAds. My test explanation and results are described below.
DirectAds Test 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.
Ads 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:
This test has a few shortcomings. For one, the test results are “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.
LinkedIn Test Results:
| Google Adwords Normalized results |
Linked DirectAds Extrapolated |
LinkedIn DirectAds Speculated |
|
| Total Campaign Costs | $1,000 | $1,000 | $1,000 |
| Impressions | 9,500 | 62,500 | 62,500 |
| Clicks | 200 | 75 | 180 |
| CTR (Click Thru Rate) | 2.11% | 0.12% | 0.29% |
| CPM (Cost per Imp) | $0.11 | $0.02 | $0.02 |
| CPC (Cost Per Click) | $5.00 | $13.33 | $5.56 |
| Conversions (Leads) | 14 | 3 | 12 |
| Conversion Ratio | 7% | 4% | 6.7% |
| Cost of Conversion | $71.43 | $333.33 | $83.33 |
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.
DirectAds 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.
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.
LinkedIn Flashback:
This is a continuation of an earlier article where I presented the feature matrix between the two products. Read the Round #1 LinkedIn DirectAds vs Google Adwords.
Patrick OMalley
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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.
Zaki Usman
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Thanks Patrick. Wait until you see what I’ve lined up for my Facebook test results :).
clerical jobs
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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.
targetinfolabs
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@Clerical jobs – I do a run up on Facebook at http://www.2016-06-14-shoutex.mystagingwebsite.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.
targetinfolabs
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@Clerical jobs – I do a run up on Facebook at http://www.2016-06-14-shoutex.mystagingwebsite.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.
clerical jobs
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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.
targetinfolabs
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@Clerical jobs – I do a run up on Facebook at http://www.2016-06-14-shoutex.mystagingwebsite.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.
Sandra Krantz
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One comment about the value of Linkedin, I would add is you can learn more about your prospective client and view their profile. Landing pages often just request the basic information in the form and you really don’t know much about the person.
Tom Von Deck
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Once factor which may be valuable is knowing the type of product of service that you advertised in your experiment. I offer “b2b” services and products, so Linkedin makes more sense so far. Thanks for the info.
Salamander PPC
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Great source of information here! Going to bookmark and visit regularly. Thanks!
Tweets that mention LinkedIn Direct Ads vs Google Adwords | Digital Marketing Lead Generation -- Topsy.com
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[…] This post was mentioned on Twitter by David Grunwald. David Grunwald said: RT @MarketingX: LinkedIn Direct Ads vs Google Adwords – who wins? http://bit.ly/dmmJYt […]
Ed Gaz
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DirectAds by Linkedin is a scam and a ripoff. Don’t waste your time or money.
Jonathan R
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Beware! Don’t get caught out by the LinkedIn Ads promotions. – I recommend avoiding LinkedIn DirectAds.
Just before Christmas 2010 I got a $100 promotional coupon emailed to me by LinkedIn to try DirectAds. I had to register my credit card with them for a $5 initial charge to open the account. A few weeks later I checked to see how the ad trial was going and found that over $250 had been taken from my credit card account (in four separate transactions) as the $100 coupon amount had been used in just a few days! I had received no notification from LinkedIn of any of these charges to my credit card.
I have disputed this with LinkedIn and they say that the user agreement says they can charge the registered credit card for any amount at any time !
LinkedIn refuse to accept that the promotion was unclear about charging and they point blank refuse to refund any of the charges. In fact they took a final $48 more after I asked for my credit card to be removed from their system. I never had any trouble like this with Google Adwords or Yahoo Search Marketing.
Don’t fall for the marketing hype – save your money and avoid LinkedIn Ads.
Zaki Usman
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@Jonathan: I understand your frustration with LinkedIn’s team. But I also got that promotion and used it very well. The idea behind the promotion is to give new users the possibility to test the ads and continue using it.
It’s too bad you didnt find the the results you wanted – or else you would justify spending more in it. Feel free to talk to us about LinkedIn ads and we can direct you for higher ROI. Thanks for commenting and reading the post.
Zaki
Faisal Khan
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Hello
I have been involve in PPC using Goolge Since last 5 years. I have used facebook and LinkedIn. In my openion LinkedIn has been totally waste of time.
Today August 24 2011 I have put an Ad on Linked and limited to $25 with $3.15 min since I have no choice. What a waste of money. 9 click costed me $24.57. NO SALES.
I have used Facebook on the same budget $25 and I was able to get 345 clicks and 295 of them become FAN of my website. FaceBook Page was advertise
I rent $750 click on Google for August 1 to 15 – both Search Engine and Content Network with the same landing page as LinkedIn. Resulted in $8000 Sales (Aprox 450 clicks) 2 click turned out to be sale (each $4495 USD).
I have learn that it is better to use relationship building in LinkedIn to turn sales.
For Content Network Advertisment I found FaceBook to be better to Google Network. But to find the customer who are actively looking for your service, I found Google is still the KING.
I have never used Yahoo/Bing any suggestion on these two?