Case Study

Brief

www.Lovestruck.com is a well established online dating site. They have a global and local sections in their website; the most popular being London, Hong Kong, Singapore and Dublin.

Most dating sites have a business model that encourages users to sign-up for a free trial and then get them to register and sign-up for membership. Profitability is mainly dependent on the following factors:
 

• The cost of acquiring a sign-up for a free trial
• The percentage of users that convert from a free trial to paid registration
• Monthly membership fee (which typically range from £18 - £35 - per month)
• The number of months the user remains a member (often sites use incentives to encourage 3- 6 months registration)

Lovestruck is trying to grow in rapidly expanding and competitive market. They have to compete with a number of major players that have big budgets to spend on TV advertising, as well as other offline and online marketing campaigns.

Using pay per click to drive registrations is an effective technique but very competitive. With so many companies bidding on the same phrases, the cost per click is often £1-3 for a page 1 position, and with sign-up rates of 1-10% the cost per sign-up can be more than the registration fee. It is therefore essential to achieve a cost per sign-up of less than £10.

Strategy

During 2008 Lovestruck were already using pay per click as part of their search marketing strategy to drive registrations to the different location-specific sections of their website. However, there were a number of problems with the way this was set-up. In addition they work working to a limited budget. 

Anicca Digital Solutions were asked to restructure and manage the campaign in order to try and achieve the target CPA of <£10.

Execution

On taking over the account the following improvements were made:

Structure and set-up
• Addition of conversion tracking
• New more complex campaign structure with detailed ad groups to improve relevance and quality score
• Better use of geo-targeting – including addition of more extensive international campaigns
• Stopping the content network and taking into consideration the much lower CTR’s in the search network (eg when pruning phrases for low CTR’s)
• Addition of long-tail keyphrases and use of all match types

Ongoing management and optimisation
• Stop using Google auto-bidding (which was forcing the cost per click up). By using manual bidding the cost per click could be reduced by aiming for positions 4 -6.
• Good understanding of the importance of click through rate and quality score – this resulted in pruning phrase with low click through rate (CTR)
• Ongoing pruning of keyphrases and ads that were not converting
• Monthly reporting including provision of an online reporting system that the client could access themselves

Integrated approach
• Use of Analytics data to understand user behaviour
• Set-up of MSN and more recently Yahoo
• Use of PPC data for developing ongoing landing page strategy and integrated SEO strategy

Results

The new campaign went live on the 13th December 2008. The table below shows the results on a monthly basis with further details in December (before and after the campaign went live).

Cost per click
We were able to see an immediate drop in cost per click from 82p to 59p in the two weeks before and after the campaign started. This was due to
 

• returning to manual bidding,
• setting the max bid to aim for positions 4-7
• improving the quality score (by restructuring the campaigns and ad groups to improve relevancy).

The overall cost per click has fluctuated between 42p and 57p throughout 2009. This was very dependent on the amount of the budget allocated to the London campaign where the CPC was typically £0.80 - £1.00; whereas brand and international phrases were generally less than 30p.

Click through rate (CTR)
The previous PPC structure had all 3 networks within the same campaign. The search network had very low CTR’s, although this does not influence quality score it does make it more difficult to decide which phrases and ads are not performing well in Google and should be pruned.

Due to limitations with the budget the new campaign was focussed on the Google results. By pausing the content network and the search network, this resulted in an immediate increase in % CTR. Later in the year the search network was turned on for a number of campaigns resulting in a drop in the CTR from August, however this did result in a better cost per conversion.

Cost per conversion and conversion rate
Prior to the introduction of the conversion tracking it was not possible to calculate the conversions rates, however it has been estimated that the conversion rate would have been similar in the first part of December but the cost per sign-up would have been greater than £16.61 (due to the higher cost per click). 

On taking over the account the conversion rate was 5% - this was improved to 9.1% in October; equivalent to £4.89 per sign-up. This was achieved by ongoing:

• pruning of the poorer phrases,
• ad copy testing
• re-introducing the search network
• maximising traffic and conversions from international sites – as these have a much lower cost per click and cost per conversion

Other results

MSN has proved very effective with cost per sign-ups of between £3 and £8, however with limited traffic per month this does not allow for significant growth.

Yahoo has only just been activated and there are limited results for this period. Traffic levels are higher but conversion rate appear to be lower, and further optimisation is required to achieve similar conversion rates to the other accounts.

What’s next?

A new more extensive PPC campaign will start in January 2010 – so watch this space!