Expensive SL Classified Ads Ineffective – Save Your Money
by Alphaville Herald on 06/01/08 at 9:10 am
Scientific Metamorph Sky Shop experiment shows increased traffic without matching sales
by Michelle Morphett
THE QUESTION:
As the proprietor of the successful Metamorph Sky Shop retail store, I’ve always been curious about how Second Life’s search engine affects my business. Does paying for an expensive classified ad increase teleports from it, and does it increase my in-world shop and SL Exchange sales?
THE METHODOLOGY:
In addition to my regular $L76 Metamorph Sky Shop ad ($.28 US), I placed a duplicate ad for $L1002 ($3.71 US) to run at the same time, from Friday 12/28/07 at 9 pm PST to Friday 1/4/07 at 9 pm PST. This timeframe should be a fairly busy period, since people are still on holiday break but generally back home from visiting family, and have Christmas money in their pockets.
The $L1002 figure was chosen because it places the expensive ad a little above halfway up the first page in a search for “skybox” in the old classifieds search under the “Shopping” category, with “include Mature content” unchecked. Search engine studies have shown that “about 90 percent of searchers looking to shop rarely venture past the first page” (http://www.wired.com/culture/lifestyle/news/2005/03/66893). The same search brings the cheap ad up on the second page, about 2/3 of the way down. The new search in the “Classifieds” category doesn’t show either ad in the first five pages, which is the most results possible currently.
THE DATA:
The cheap Metamorph Sky Shop ad had 7 teleports during that timeframe. The expensive ad had 20 teleports.
No sales came in after 9 pm PST on 12/28/07, so for simplicity’s sake we’ll look at Saturday to Friday as the time period for easier comparison to previous weeks. Those numbers were:
12/29/07 – 1/4/07 (New Years & expensive ad week)
Store Sales 28; Store Freebies 170; SLX Sales 7; SLX Freebies 3
12/22/07 – 12/28/07 (Christmas week)
Store Sales 50; Store Freebies 83; SLX Sales 10; SLX Freebies 2
12/15/07 – 12/21/07
Store Sales 36; Store Freebies 156; SLX Sales 10; SLX Freebies 1
12/8/07 – 12/14/07
Store Sales 12; Store Freebies 65; SLX Sales 10; SLX Freebies 6
12/1/07 – 12/7/07
Store Sales 16; Store Freebies 167; SLX Sales 5; SLX Freebies 3
11/24/07 – 11/30/07
Store Sales 33; Store Freebies 68; SLX Sales 6; SLX Freebies 5
11/17/07 – 11/23/07 (Thanksgiving week)
Store Sales 18; Store Freebies 82; SLX Sales 8; SLX Freebies 4
cost effective advertising is important for business
THE ANALYSIS:
The expensive Metamorph Sky Shop ad had 3x the teleports of the cheap ad.
SLX freebies were about average. Normal ranges are 1 to 6 while that week’s were 3.
SLX sales were about average. Normal ranges are 5 to 10 while that week’s were 7.
Store freebies were on very highest end of normal. Normal ranges are 65 to 167 while that week’s were 170.
Store sales were about average. Normal ranges are 12 to 50 while that week’s were 28.
THE CONCLUSION:
The expensive Metamorph Sky Shop ad got a lot more teleports, and those people did pick up the freebies in the store, but they didn’t actually buy anything. The increased traffic at the store didn’t translate to increased sales on SLX, either.
At 13x the price of the cheaper ad, the expensive ad probably isn’t worth the ongoing expense as far as immediate results go. It might be worthwhile to run a few times during the year at especially high-traffic times to bring in new “window shoppers” who might later become customers, however.
The new search makes the expensive classified even less attractive, because it’s impossible for casual browsers to actually find either ad through a general search (the way they were able to with the old search) no matter how expensive the ad. This actually suggests that it would be a better strategy to go with the $L50 minimum ad fee when the old search is eventually disabled, and that being extremely careful about key words is even more important than before since most ads will only ever appear in the results for highly specific multi-word searches.
Michelle Morphett
Metamorph Sky Shop Proprietor
SL: Dogfight Atoll (81, 95, 34)
SLURL: http://tinyurl.com/2csuuk
SLX: http://tinyurl.com/ysbufl
Penny Sautereau
Jan 6th, 2008
I agree. I pay a measley $301L a week for my Builder For Hire classified and it seems to be easy enough to find, since I get on average about an inquiry a day on building projects. I don’t see any point in wasting over a grand a week to get more inquiries, since I’m comfortable with the pace I already keep.
Eris
Jan 6th, 2008
My suggestion, for what it’s worth, would be – don’t waste your time advertising a PLACE using the classifieds, advertise a specific PRODUCT. The best way to use them is possibly as part of a new product launch. People come to see your new product and might buy it or landmark it for later, they might pick up another item too. There’s a lot of ‘oneupmanship’ in SL, everyone wants to be the first with the newest thing – use that to your advantage and promote your newest products.
To help people find your place make sure your land listing is informative, assuming you own the land you’re on (or have a thoughtful landlord) and keep it up-to-date, it’s the best L$30 per week u can spend.
Advertise in the classifieds the way people search in them – for specific items.
HatHead Rickenbacker
Jan 6th, 2008
The job of ads are to get more people into your store and it is then the store’s job to sell. I haven’t been to your store but the question now is why aren’t people buying your goods when they are inside your store? You need to check your product placement, prices and other retail type stuff as the ads were doing their job delivering more people while your store failed to capitalize on the traffic. If this study was handed in at a retail management course it would fail because the assumptions are flawed.
Corona
Jan 6th, 2008
there is of course free advertising in the sL herald
wonder how much your visitor index (and thereby sales) will increase after this free publicity?
cant be bad im sure lol
it does suggest this would be the most cost effective advertising form
Prokofy Neva
Jan 6th, 2008
Thanks for posting your data, I think it’s a great discussion.
The fact is, it can be different for different people, however, and different sectors of the economy, and your sample is just too tiny to draw conclusions, except for you.
I can have that many teleports (27) in an hour in my system on various lots or even on one parcel, and I’ve been tracking these things for ages. In fact, I was getting ready to do it more scientifically and post the results when the classifieds began to get borked up. Now it is impossible to track, because if you change the location of your ad after one rental or product sells, or simply because you want to try something different, a new store location, whatever, the old teleports in the metric don’t dump out, and the new ones are added, giving false results unless you manually sort it.
Here is the distillation of what I have found:
1) $30 Search Ads work the best of anything there is. The new Search has mightily eroded that and forced people to contort themselves into pretzels to find the right words and positioning and there are annoyances like constantly having to recheck items to show in search if they are for sale, but there’s no question that $30 Search Ads work the best.
of course, there are a tiny, determined grouplet of geeks who keep telling you that they “don’t use search” and “search doesn’t work” and “traffic is gamed” and they go by “word of mouth” for their widgets. Ok. But we know better, because we make most of our sales from $30 search. Everyone in business in the sectors of land, rentals, clothing, vehicles, clubs, etc. SL knows that $30 work. A few FIC who have the cash to buy $100s of US dollars of classifieds believe that’s what works for their niche. That’s great, but that’s not what the majority have found out through experience over and over.
2) Classifieds do work, but you have to decide why you are spending more than $500 or for that matter $50 on them. A $50 classified can get you about as much as a $500 or even $5000 much of the time. In fact, you really have to ask why not have a $30 search instead of a $50 classified?! Except…you have to compete with others using classifieds.
Because the way the pages turn, not going to the second half of the first page, but the first half of the second page, a $500 ad is almost as good as a $5000. But there’s no question that buying the first 10 slots will get more TPs. It may not get more sales — or if it does, you’ll feel like you still didn’t make up the cost of the ad. But it gets you “market share” and eyeballs as they say and that’s part of the mix. Word of mouth can’t happen unless people flipping through ads see a logo and brand and think about it at some level in comparison shopping.
3) You have to steel yourself with a budget for advertising, and stick to it and monitor it. You begin to flail when you realize you’ve blown $10,000 on a classified, SL was down almost entirely on one of the days; somebody bought a flashier add for $10,001, the sim where your item is can’t seem to be brought up from constantly crashing by the Lindens — whatever. But if you say “I have $25 US budgeted for classifieds. I put them in every week. I check off the “repeat” button. And if I don’t get X teleports leading to Y sales I tweak it.”
4) There are other innovative ways to get advertising besides search/classifieds or camping or God forbid, ad-farms, which should be punishable by law. These include buying 512s and putting up little stores or displays inside an attractive home especially in new sims and continents as they come up as people won’t chance to see you on the older continents; renting mall space to put up displays; holding events; sponsoring live music or other types of activities in exchange for logo/notecard display, etc.
5) How can you deal with the problem of people who come to your store but don’t buy? Well, you can’t at one level, but you can also try things like polls asking them whether they were satisfied and then start to respond to concerns, i.e. if a lot of them clicked “too confusing” or “couldn’t find large enough parcel,” then you adjust your notecard explanations and your holdings, etc. etc.
I think because SL is so interactive and accelerated in the marketplace, you have a great opportunity to constantly adjust and try new things and check the results.
The Lindens need to fix the damn metrics on the classifieds and stop intruding with their own geeky understanding of how it should work.
Please come and vote for this on the JIRA:
http://jira.secondlife.com/browse/VWR-3739
The Grid Live
Jan 7th, 2008
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Darien Caldwell
Jan 7th, 2008
if you think 1000L for an ad is ‘expensive’, you are a bit out of the loop. I’m afraid this experiment is a bit flawed. A better experiment would have a larger gap between the ‘low’ and ‘high’ priced ads, and run much longer. One week isn’t enough to overcome the statistical variation one sees in business. A month minimum. I was a bit skeptical of expensive ads before I started running my 32k ad. Now I wouldn’t give it up for the world. Business is good.
SqueezeOne Pow
Jan 7th, 2008
Classifieds are useless for most businesses unless you provide specialty services like custom scripting or building. I ran an experiment of my own with classifieds back when I was focusing on boosting my business and came to the conclusion that it’s not worth the money spent…unless you like paying for people visiting.
If you get down to it the actual best sellers are events and word of mouth which are synonymous. I put together an event with DJs and had people go to busy, non-camper areas and hand out flyers and landmarks and ended up with about 20-30 people at my land consistently for 5 hours.
Once there I had a give-away contest for some specially made promotional items. I also gave everyone there a free robot avatar for showing up. I had scripted objects handle giving all that out so all I had to do was sit back, drink beers, chat with friends and watch the money come in! I rode a wave of publicity from that one event for about a month. “Hey where’d you get that?” carries you a lot farther than wasting $100.00 on an advertisement for a series of 1s and 0s.
I haven’t spent RL$ on SL in over a year and am able to finance my other fun projects (SL and otherwise) with ease. I could potentially live off of this if I tried harder but that would be pathetic and ignorant of me as I would like medical benefits and to have a resume that would be taken seriously.
Fuck what you heard, you have to actually WORK and PLAN if you want to have a successful business. It’s just as true in SL as it is in RL.
Kristoffer Juneau
Jan 9th, 2008
This is one of the biggest things I am constantly giving thought to. I spend generally about 5000L for the ad for my furniture store. I have tried spending 10,000L + some weeks and did not see much of an increase in traffic or sales. I usually try to position my ad towards the bottom of the first page of a classified search for ‘furniture’. Trying to get much higher gets very expensive, though I have toyed around with the idea of placing a 25,000L ad for a week.
I think a lot of my business comes from word of mouth, trying to be creative and holding different promotions and aligning with other business to cross promote. It does amaze me when I see the amount some businesses spend on ads 100,000L+, I have even seen over 250,000L. But I guess what that means is they are making tha much money to afford that kind of expense. I guess if I spent 25,000L on an ad and I saw an increase in over 25,000L a week in business, it was worth it.
I agree with what one person said, you have to work and plan to be successful. Its not easy, which is why a vast majority of businesses fail in sl. So many people think they can make a crap product, put it for sale and make a ton of money….I remember a year ago when I was naive like that.