Entrecard’s new baby has been up for about two weeks now, so the advertiser numbers have been rolling in like clockwork. I’ve done the liberty of surfing through much of these to come to a conclusion about the service.
Since some of you probably have no clue about the service, here is a rundown:
Entrecard has members which display widgets on their blogs whom receive credits for drops on their card and drops they give. In turn, these credits are used to purchase advertising space, something in the market, or are sold back to Entrecard in exchange for money.
Entrecard then asks members to display paid ads on their websites to help the service, it isn’t mandatory, but the confusion caused during the launch of the system has made many, unfortunately, display the ads even without the blog owner’s explicit approval. The ads are shown at a random 50% rate.
The paid advertising on the owner hand is a bit interesting, for a lack of a better word. Advertisers are given two choices, to pay by CPM (per thousand hits) at $0.60 or by PPC (pay per click) which is currently $0.04. This of course, is right now. The prices are set to double sometime in the future, and the prices debuted at half these but were recently set to at their current state a few days ago.
To someone unknowing of advertising these prices may look decent, but in reality they aren’t better than other alternatives, especially if you are advertising to make a conversion.
What is a conversion?
A conversion is something you wish visitors to accomplish. An example is signing up to your RSS feed, leaving a comment, or-more commonly-buy something.
The Results
Of the results I have seen (5 separate advertisers), they are roughly the same. $20 purchases roughly around 500 clicks (this includes past results which were doubled for the sake of new prices). This comes down to almost exactly $0.04 per click, regardless of paying per click or by CPM. Of the few which were testing for conversions, none were made.
There are probably still many of you which might think this is a decent deal. $20 for 500 visitors doesn’t sound all that bad, right? Well for one, many of these visitors are most likely Entrecard widget-surfers. This means they will click on your ad without the intent of buying, but rather reading or simply gaining additional credits with the hope of an EC widget placed on your blog.
Nonetheless, I will give Entrecard the benefit of the doubt. Perhaps roughly 25,000 is too small of a number to make a conclusion or the ones which did see results are simply not telling.
Therefor, lets assume a conversion theoretically takes place every 300 paid visits. This comes down to $12/conversion, which is quite expensive. If you aren’t making more than this in return, you’re in the red.
EC Paid Ads in comparison to others
Many advertisers leave Google AdWords with a sour taste in their mouth. Many shout through the rooftops of how corrupted the system is, how clicks are faked, and how the system is just too expensive. So this should be an easy win for Entrecard, right?
With my own experience with Google AdWords and the experiences I have read, a 5-10% conversion is generally seen as average. This means, that every 1 out of 20 visits should-at the very low end of the norm-convert.
Google AdWords’ price fluctuates frequently and has many factors when it comes to determining the cost of each click. There are many SEM experts which claim to pay no more than $0.05 per click, yet still maintain the 5% conversion rate. Although this in itself isn’t much telling when certain niches cost more than others. Someone who sells their service to a specific geographical location is likely to pay much less than someone who pays to advertise their service across the globe (keywords and relevance would play a major factor). As well, someone selling a car will likely pay more to advertise it than someone who is selling designer pencils. So the prices are all relative.
Again however, in my experience the CPC (cost-per-cick) is generally around $0.20 or less with good relevance and a decent, but not large, market.
Assuming the 5% conversion rate, you will be paying $4 per conversion through Google Adwords.
So what is cheaper for advertisers? The obvious answer is Google AdWords.
Entrecard just doesn’t make sense. When a large majority of members simply trade traffic, the costs just outweigh the benefits.
To Entrecarders:
Entrecard members whom advertised did see an increase in drops during their advertising period. With the ability of cashing out, the costs will be less and possibly worth it. More testing in this manner will of course be needed. So essentially, if you are paying simply for the traffic and nothing more, the system *may* be worth it.
Written: Apr 15, 2009
Michael Aulia
April 16, 2009 @ 2:01 am
$20 for 500 visitors.. not really worth it IMO unless if 10-20% of them is converted to buy your affiliate products
News-N-Views
April 16, 2009 @ 2:58 am
Yeah! I heard this great event that has been started by Entrecard. It is really nice to heard from this website that they parting some of money to bloggers/publishers. If one can read it the Entre Card blog they can find the reason why Entre card started such campaign. No doubt they will pay. I am sure about Entre Card.
EntrePOD
April 16, 2009 @ 3:16 pm
Well Written and absolutely correct.
this is a winner. you just may find your site in the upcoming episode of EntrePOD. Great Work. btw, we’re buying an ad because we like your blog. also gonna visit more often now.
Shari Thomas
April 18, 2009 @ 10:03 pm
Good article.
I must point out though, that you don’t pick up an EC for clicking on a paid ad. Also, since the url’s are uncloaked, all you have to do is look in the lower address bar and you can see if there is a “type=paid” at the end of the url.
The logical conclusion could very well be that clicks will less frequent, as members learn not to click. Not a lot of traffic ever came to any of my blogs by non-members clicking on the EC widget, either.
Gary R. Hess
April 19, 2009 @ 1:06 am
I don’t see why it matters if you don’t pick up credits from clicking on paid ads, you don’t pick up credits from clicking on “regular” ads either. Besides, instead of looking at your status bar for the “type=paid” you can simply enable Adblock and the ad will simply not show.
Members don’t click on paid ads or regular ads, period, especially since the introduction of the toolbar. Many of the top ads would give out 50-100 clicks daily, now they give out 10, if that. So that argument is pretty moot, imo.
Chris
April 19, 2009 @ 4:39 am
Interesting article !
Thought I would give you some more numbers to work with.
I advertised for almost 2 weeks by the cost-per-click method. I ran 4 different ads … 1 for or main website (sales) and 3 for blogs.
Total cost: $ 135.00
Total Impressions: 916,787
Total Clicks 4,925
click-thru rate: around 0.54%
If I would have done CPM my cost per click WOULD have been around $500 instead of the $135. So I am glad I paid the CPC rate.
As for conversion … I cannot really tell. I picked-up VERY few new subscribers, but I may have gained a dozen or two new readers who didn’t bother to actually subscribe.
As for sales, again hard to tell as I don’t have a conversion program, but my sales did seem to go up a little.
Our drops increased from around 250 a day to close to 500 a day.
In the end I don’t believe the quality of clicks to be very good … BUT the price was low enough to run ads. If they increase the rates much more I don’t think that the quality will be there to justify it … at least for me.
I can just hop over to Project Wonderful and pick-up more qualified leads then Entrecard and I am also using Adgetize as it seems that I have picked up (percentage wise) more readers through that service.
Hope those numbers are useful ….
Gary R. Hess
April 19, 2009 @ 4:48 am
Sadly, Entrecard discontinued CPC and is offering only CPM at $0.60.
Ramkumar
April 23, 2009 @ 12:10 am
I was just passing on but found the Paid ads heading interesting and this article is really informative and well written…gr8 work