How to Determine the Effectiveness of your Advertising Campaign

This post was guest blogged by Gyutae Park of Winning the Web, an Internet Marketing blog.

Are you getting the most bang for your advertising buck? For those of you that don’t know, I recently bought advertising space on JohnChow.com and JohnCow.com to promote a crazy contest on Winning the Web for free reviews worth $500. I did spend quite a bit of money to launch the campaign, but the contest saw huge success in getting Winning the Web noticed and up to new levels. If you’re wary of spending money to promote your site, this post will detail all of the financial formulas and information used in determining the effectiveness of my advertising campaign. You’ll then have all of the tools necessary to manage your risk and spend your hard-earned money with confidence.

All in all, I spent a total of $1,625 for promotion of the Winning the Web contest. Below is a breakdown of all of the individual components:

  • John Chow review to promote contest $400
  • John Chow review contest prize $400
  • John Chow 125×125 $500
  • John Cow review to promote contest $100
  • John Cow review contest prize $100
  • John Cow 125×125 and 300×250 $125

Now you may think that that’s a lot of money to be throwing at the promotion of a blog. Was it all worth it? Let’s analyze the results of the contest after 2 weeks:

  • Gain of about 225 subscribers
  • 400+ comments
  • 1,646 referrals from JohnChow.com (12/1-12/27)
  • 191 referrals from JohnCow.com (12/1-12/27)

If we calculate some of the important financial metrics using the information we have available, we find the following:

Each subscriber cost about $7.22

Judging from previous sales of blogs in the ‘make money online’ and ‘internet marketing’ niches, the value of each subscriber is worth approximately $31 in intangible value. Paying $7 is quite a bargain if you ask me.

The cost per click for referrals from JohnChow.com was $0.79.

$0.79 is probably double what I would have paid had I advertised using Google Adwords. However, the referrals from JohnChow.com are much more targeted since the prize for my contest was a John Chow review. Sure, it was more expensive but it was definitely worth it considering the results. I wouldn’t have reached the same level of success if I didn’t do it the way I did.

*Editor note – Gyutae forgot to take into account that JohnChow.com has nearly three times as many RSS readers as it does readers who visit the blog. If he received 1,646 referrals from JohnChow.com he would have received three times that from the RSS feed. That would reduce his CPC down to 24 cents.

The cost per click for referrals from JohnCow.com was $1.70.

The referrals from John Cow were much more expensive at $1.70. However, this is mainly because the review went up 5 days after the John Chow review so many of the readers had already heard about or seen the contest. The John Cow review still gave more exposure for my contest and started a snowball effect onto other sites blogging about Winning the Web.

If you break down the numbers, the $1,625 I spent doesn’t seem like much at all. Traffic to Winning the Web has increased by 500% and the intangible value of my brand has skyrocketed. The contacts I have acquired and the interest levels that have been sparked as a result of my promotion are absolutely priceless. Are you tactfully spending money to promote your sites? If not, you might want to consider doing so.


74 thoughts on “How to Determine the Effectiveness of your Advertising Campaign”

  1. krazl says:

    John Chow,
    Is there good example on Internet Trading?

    -krazl-
    http://www.krazl.com

  2. Jamie Harrop says:

    Of course, low CPC and low cost per subscriber figures are worthless numbers unless you have the tact to build a return on investment. You could have the lowest cost per click and lowest cost per subscriber figures in the land, but unless you know how to profit from those low figures and profit from the readers gained, then in financial terms, you’re still out of pocket.

    But I’m sure Gyutae is able to profit from them, and good for him. 🙂 Gyutae, it would be nice if you could write another guest post for John in a few months time to see how things stand then. You’ll be able to share your ROI. You’ll be able to see how many readers stayed subscribed to your blog etc. I’m sure it’ll be interesting to compare the long-term results to the short-term results published in this post.

    1. Gyutae Park says:

      Hey Jamie. Thanks for the feedback. You’re right, ROI is a much more important metric that CPC. My blog isn’t just some shabby one night stand.. I believe in the quality of my content so I think this contest promotion was just the right thing to jump start the blog.

      1. Jamie Harrop says:

        Absolutely, Gyutae. I believe there’s far more to contests that just the contest. For a contest to be truly successful, it must be surrounded by a solid marketing and branding campaign. That means you have content to keep your new readers interested and excited. It means you have content to use for guest posts (ahem! Like this one), and it means you position yourself so that potential readers see you as a blogger who isn’t here for a one night stand, but rather for the long term relationship.

        I think far too many bloggers jump in to competitions without putting much thought in to what they’re going to do with the extra readers they bring in, or what they are going to do to maintain those readers, or what they are going to do to maximise the competition potential (such as brand awareness through guest posts, like Nicholas speaks of below).

        I think you’ve done a solid job on all those points.

        Here this, here this! If you’re thinking of running a contest, take a look at how Gyutae has run his contest, and you’ll be somewhere close to perfection. :mrgreen:

        1. Gyutae Park says:

          Great comment. Very well said. Next step is maintaining the momentum…

          1. Faisal says:

            I think the best way to advertise on This blog is the review me. Even though it last only for 12 hours on frontpage, that is where everyone will read, who else go to this blog but not read the post right? 😛

      2. Contest Beat says:

        Yeah work out what you make per visitor/subscribor then see how it worked out

  3. Although you can measure it by cost per click i’d rather talk about the brand retrospective as you’ve built yourself a brand. And in that respect that is worth its weight in gold, you’ve been discussed on many other popular blogs because, of being featured on the above blogs mentioned as well as being fortunate enough to be able to guest post on John Chow too 😉

    1. Gyutae Park says:

      Hey Nicholas,
      You’re absolutely right about the brand aspect that is priceless. I probably would not have been able to write this guest post had I not made a big commitment to promotion.

  4. BuzzBoy says:

    Out of curiosity, how long would you estimate that it would take to reach these numbers using only free methods of marketing and promotion?

    1. Gyutae Park says:

      Well that all depends on how creative you can be to distinguish yourself from the rest of the crowd. More time doesn’t necessarily mean more subscribers and visitors. You’re going to have to do something exceptionally well – only then over time will the numbers come in your favor.

    2. Gyutae Park says:

      If I did things “organically” relying solely on my content and free promotional methods, I think I would have gotten the same numbers in about 3 months (compared to 2 weeks).

  5. Alan Johnson says:

    Gyutae, I’ve said this on your blog as well: the ball is in your court now. Your stats are not bad at all, but it is important to realize that your efforts as far as this particular competition is concerned shouldn’t end just because the contest is over.

    At this point, convincing your subscribers to become loyal readers instead of thinking that getting them to subscribe was enough and just letting them forget about your blog is the name of the game and that my friend is, once again, entirely up to you and everything will depend on the value you will be able to provide through your blog posts from now on.

    Wishing you the best of luck with your website,

    Alan Johnson

    1. Gyutae Park says:

      Alan,
      Thanks for the feedback. The ball is in fact in my court now but I’m confident that I have what it takes to maintain my subscribers and increase the momentum that I already have going for me. We’ll see what happens!

  6. TiTland says:

    Well I guess I’ve still got a way to go. I’m still at the stage of actually building traffic. I won’t give up though!

    1. Gyutae Park says:

      That’s a great attitude. Keep at it.

  7. Jimson Lee says:

    Sometimes you have to spend money to make money.

    Just don’t make a buck and spend two!

    1. Gyutae Park says:

      In the Internet world, I don’t think it’s as essential as in the “real world”. However, spending money for promotion can definitely speed up the process. Risk management is key, like you said.

  8. Shaun Carter says:

    Wouldn’t the visits via the RSS feed show as a JohnChow referral in the stats? I don’t see how all the RSS visits to his page went uncounted and therefore lower the CPC by two-thirds.

    1. Gyutae Park says:

      I think what John meant was people viewing the John Chow review post in a feed reader and then clicking through to Winning the Web straight from the feed reader. This would show as a Google reader (for example) referral rather than a John Chow referral.

      1. While that’s true, I don’t think you can automatically assume that people who read it in their feed reader would click through at the same rate.

  9. Michael Talk says:

    I don’t think spending that much money is worth it. Dude, you can do all sorts of amazing stuff with $1500+! Totally pointless. 👿

    1. Gyutae Park says:

      Well, it was an investment for the future. Sure, I can blow $1,500 on a new computer or something of that sort, but that will depreciate to nothing and do me no good in 5 years. $1,500 in promotion now can potentially lead to $15,000 in profits later on.

      1. Michael Talk says:

        If you are doing it for an investment in the future, not bad then.

    2. John Chow says:

      I’ve been told spending $4,000 on a first class plane ticket is pointless when $500 will get you on the same flight. What they don’t understand was spending $4,000 on a ticket was the point!

      1. Michael Talk says:

        What I mean John is that spending that much money just to get some traffic is pointless. And I would have through that the ad and the review of your blog would have given more traffic to Winning the web.
        And spending $4000 for a plane ticket – That is another crazy thing to do! 😈

        1. You can’t really say it is pointless, unless there is no point for you. But for the guy who did it does have a precise point and he did mentioned his goals (raising RSS reader base and traffic). Those are his goals and he achieved them (apparently).

          1. Michael Talk says:

            Well, I still think that he got very poor results from the money he spent

  10. larry says:

    Hey Gyutae,
    Well done man. Thank for sharing. I find your method of advertising interesting and informative. Right now, I am learning how to milk money out of blogging. Hope to hear more of your sharing in the future.
    May you have a healthy, wealthy and happy 2008…

    1. Gyutae Park says:

      Thanks, I appreciate it. I’m glad you are finding value in my posts. Good luck with your blogging projects. 🙂

  11. bloggernoob says:

    You paid 1500 for 2 reviews on johnchow and 2 reviews on johncow. And you got a guest post showing your results. what else? cause 1500 is a lot of money to spend on promoting a make money blog. Wouldn’t it have been wiser to spread out your investment to create a move gradual rise in traffic and rss. I think your di vinci code type contest was pretty unique. If u featured it on 10 medium blogs, wouldn’t have been a better investment. It would have cost less too right? cause 400 for a post that last for 1 day seems very over priced. Am i alone on this?

    1. Time will tell. If he can continue to generate great content that will keep his visitors engaged, then what he paid was well worth the subscribers he got. If he runs out of things to say next month, it was overpriced. 😉

      1. Gyutae Park says:

        Yep, this was more of an investment for the future than a get rich quick sort of thing. I always have a lot of say about Internet marketing so hopefully my readers will be intrigued to listen.

    2. Gyutae Park says:

      Hm, what else did I get? I got 225+ RSS subscribers, huge amounts of traffic and exposure, a ton of links with SEO value, new contacts and opportunities (such as guest blogging on JohnChow.com), and people like bloggernoob talking about me. That’s well worth $1,500 if you ask me.

      If I wanted to do it slowly, I would just do it organically without paying for promotion. But what’s the fun in that? 😎

      1. bloggernoob says:

        if you’re happy with it, this campaign was a success. U noted that if you wanted to build up slowly you would just do it organically without paying for promotion. So you think reviews on medium blogs are not worth it? i think most people think that way. that’s what keeps jc problogger and shoe at the top while medium and smaller struggle to make much with their blogs. you see cashquests quit, blogging fingers quit. this is a very hard niche cause ad dollars only go to a select few.

  12. Bill says:

    No…I agree with you Noob.

    If Guytae is happy with his results then great…but for 1500 bucks I would want to see a whole lot more than 200 RSS subscribers.

    The contest idea was AWESOME….but I think it should have been done in stages.

    You always, always, always test your methodology…..before spending all of your money. I would have run the John Chow contest first….measured the results and learned what I would do differently.

    I then would have applied what I learned from the first, to the second, and so on and so forth.

    Bottom line is it doesn’t matter what we think though…if Guytae is happy then that is the bottom line.

    We also all have the benefit of hindsight too, which always allows you to look at something differently.

    Gyutae…in no way is my comment meant in a negative way…I think your contest was awesome, just in hindsight, I would have done it a little differently.

    If you could go back in time…would you do it the exact same way?

    1. I still don’t think you can say a definite yes or no yet, and a lot of it will depend on Gyutae.

      Think about this….Gyutae continues to write great content, those 225 subscribers all have blogs of their own, they occasionally quote Gyutae’s posts, thereby sending him link love, traffic, and more subscribers. He’s done a great job hitting the ramp, now he has to continue it (which is frequently the hardest part!)

    2. Gyutae Park says:

      Hey Bill,
      Great points you bring up. But I am happy with the results and I think the 200 subscribers is huge for a blog that basically started with 0. The more subscribers you have, the easier it will be for you to attain more in the future. That in itself is worth quite a bit. Also, if I were to sell the blog today, it would surely sell for more than the amount I’ve paid in promotion – probably closer to $5,000.

      If I could go back in time, I would have added even more promotion to the mix. People have short attention spans, and the more you pack into your window of opportunity the greater returns you’ll see.

  13. I’m afraid the editor’s note isn’t necessarily accurate. The number of RSS readers wouldn’t translate into 3x the number of clicks. While I understand your desire to lower the cost per click, you can’t just assume numbers like that. I’d guess the cost per click is somewhere in between the $0.79 and the $0.24.

    1. Gyutae Park says:

      I agree. My analytics definitely does not show any indication of a huge influx of RSS readers clicking through to the site. Rather than 3x, I would say something like 1/4x is more accurate in this case. Still, the CPC isn’t bad.

      1. Even if the CPC were $0.50, that’s not all that great really. You could probably do much better with site targeted AdWords ads or several sponsored posts on smaller blogs.

  14. David Chew says:

    I currently using some free method to help me gain more visitor but it does not seems to be a lot of it. Well my blog has been started around 2 weeks ago and now i have a number of visitor. Looks like John blog has a lot of readers and that he must have promote himself very well.

  15. Zee says:

    interesting article. I may have to invest some money in some advertising if I want to get my blog out there.

  16. Zee says:

    wish I had money for advertising so I can get some readers to my blog

  17. bloggernoob says:

    are you getting paid to guest post on this blog?

  18. Etienne Teo says:

    The marketing strategy you use was a strong note to those who wants to market a certain product or blog popular, and it does not need much introduction than to use Johnchow’s service.

  19. Slamboard says:

    You said that subscribers have an intangible value of $31…

    I have to wonder if any subversive entities have tried being the middle men in a system that pays people to subscribe. That wouldn’t be worth $31.

  20. rodel says:

    advertising it here would be great but .. ouch!
    just wandering here gives me a good traffic though not that big but i find it still effective.. 😀

    1. Um… how does this comment apply to the post topic?

  21. seo audit says:

    You promote in the right place 🙂

    1. David Chew says:

      Well he did a good job of advertising.

  22. $0.79 CPC is too high in my opinion. Although it’s true that advertising for a “make money blog” on a “make money blog” = super targeted traffic for the advertised site.

    1. Etienne Teo says:

      it is high but too many other this is a worth paying for price.

      1. David Chew says:

        Is worth paying for people who want to advertise. 😀

  23. Great post for the newest bloggers. It’s interesting to see different point of view on this.
    I am myself new to the blogging world. Or better said I’ve just become active started writing with a mission.

    I guess any blogger out there is looking for ways to improving traffic whatever his reasons. Whether one is looking just for someone to read his everyday thoughts or one wants to start a blogging business, one will do almost anything possible to get that traffic.

    From what I read in Gyutae Park’s post and after checking out his blog I’d say this campaign could be summarized in MasterCard way:
    Setting up your blog – $xxx
    Getting traffic from JohnChow.com – $1500
    Having 200 RSS subscribers – priceless! (for now at least) 🙂

  24. Justin says:

    Only well established brands like John Chow can afford to pay around $7 for each new subscriber. It is possible to recove that cost from these subscribers much easier as compared by those bloggers/brands which are jsut trying yet to establish.

  25. Steve! says:

    WoW. That was really good. I just don’t think I could throw that kind of money at traffic though…

  26. Gyutae, I think the money was very well spent. John wrote an article a while back about called the Art Of The Ramp and I think you just got a ramp from all your efforts. You will see resluts from this campaign for a long time to come and should more than earn your money back in the long run.

  27. Alan Johnson says:

    It all boils down to your ROI. And, in my opinion, if you do your job right and convince your subscribers to become loyal readers then you will easily obtain results which will make $1.5k seem like pocket change down the road. There’s more to such a campaign that just the short-term traffic it generates. A loyal reader tells others about your blog, a loyal reader contributes to your community with comments and suggestions, it’s not something you can just put a price tag on.

    Alan Johnson

    1. True great point! 🙂 With an “opt-in” list like that, you should be able to get some good affiliate commissions and such. 🙂

  28. DotDriven says:

    I am a bit biased for obvious reasons but I think it was a great turnout. The contest was fun, a lot of people took part and it helped get eyes on Gyutaes’ content which stands on it’s own. If he had the contest and influx of traffic but didn’t have the content to back it up it may not been worth as much. But he really does have some great post and great material which is why it’s now one of my daily reads.

    So many people are saying they would have done something else with the investment but even looking at their blogs now, I don’t see a reason to go back so hopefully they would have spent some of that imaginary cash on content because in the end, that is what keeps people around.

  29. Alan Johnson says:

    That’s true, a lot of people seem to worry too much about advertising their website and end up neglecting the most important aspect: content. Without a solid foundation, all of your advertising efforts will be in vain.

    Alan Johnson

  30. mahdi yusuf says:

    wow if only now i could fly, the world would make perfect sense!

  31. Ady says:

    wish I had money for advertising so I can get some readers to my blog :mrgreen:

  32. Ady says:

    wish I had money for advertising so I can get some readers to my blog

  33. Contest Beat says:

    I think for what you got $1,600 is a helluva lot

  34. Great post! Money Well Spent!

  35. Alan Johnson says:

    Contest Beat, every advertising campaign is an investment and statistically, if you’re $1 ahead, the campaign is profitable, if you’re $1 behind, the campaign is not. As far as I’m concerned, let’s just say that the $1.6k campaign will do more than pay for itself in the long run 🙂

    Alan Johnson

  36. Thanks for this post. It was really insightful and gave me some good ideas.

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