AG Interactive, the Internet and wireless business unit of American Greetings Corporation (NYSE: AM), is a leading provider of electronic greetings, graphics, and other content for the digital marketplace.
Range Online Media, the agency of record for AGI, has been aggressively marketing AG Interactive to the MSN audience since adCenter first launched its pilot program in late 2005.
For the demographic targeting test, AGI and Range identified the following objectives:
a) Improve conversion rate
- Prior to the test, MSN delivered a conversion rate within the range of the other two major search engines.
- Range wanted the test to improve the rate.
b) Increase the number of subscriptions
- AGI’s business model is a subscription-based model.
- AGI has three subscription levels, the highest being $29.99.
- AGI’s analysis led them to believe going into the test that the primary audience is females 25+ with a core female 30-55 audience.
c) Improve ROI
- MSN’s acquisition cost was in line with the average CPA across AGI’s entire search marketing efforts.
- Range wanted the test to improve the rate.
Range, in consultation with AGI and Microsoft’s Search Media Operations team, designed the following methodology:
- Created a test account to replicate all current active campaigns/orders.
- Applied demographic targeting to active orders in the test account through incremental bidding for females 25-35, 35-50 and 50-65.
- Paused current account during test period.
- Used data collected from September 2006 as the baseline comparison.
Range determined that the best approach for this initial test was to be conservative. Because demographic targeting is incremental, not exclusive, Range maintained baseline bid amounts to sustain average bid positions and safeguard against impression shortfalls. To protect and manage tight budgets, bid boost percentages were set to a conservative 10 percent.
The targeting test exceeded the objectives:
a) Improved overall conversion rate
- Campaign produced a 3 percent improvement in overall conversion rate.
- 6 percent reduction in overall CPA.
- 7 percent increase in the average daily revenue.
b) Increased engagement with targeted demographic
- 25-65 demo saw 5 percent increase in estimated impressions.
- And 8 percent increase in estimated clicks.
c) Increased the number of subscriptions
- Targeted demographic produced 31 percent increase in highest revenue-generating subscription level ($29.99).
- Total subscriptions increased by 4 percent at a reduced cost of 2 percent.
d) Improved ROI
- Drove 42 percent lift in incremental ROI.
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