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Web 2.0 Lacks Converts
While Web 2.0, user-generated content sites perform less well than traditional sites when it comes to advertising conversions, the cost of using such sites is proportionally low.
Research from US firm BlueLithium has shown that while Web
2.0, user-generated content sites perform less well than
traditional sites when it comes to conversions, the cost of
advertising on such sites is so low that they are nonetheless
more competitive when it comes to the cost-per-conversion:
When comparing ads shown on non-UGC sites to UGC sites, the
ads shown on non-UGC sites had a 32 percent higher conversion
rate. However, due to the lower cost of advertising on UGC
sites, the cost per conversion for non-UGC sites was 58
percent higher. Therefore, on average, UGC sites generally
provide a considerably lower cost per conversion.
A companion study based solely on the top 250 most-trafficked
sites in the US found similar results:
The study showed that the conversion rate of ads shown on
non-UGC sites from the comScore top 250 was 175 percent higher
as compared to UGC sites. However, given the significantly
lower cost of the UGC media, the non-UGC comScore 250 sites
have 7 percent higher cost per conversion as compared to UGC
sites.
Dakota Sullivan, CMO of BlueLithium, said that, "Based
on the results of this study, we believe that UGC is worth
exploring, since it appears to provide a better place to invest
your advertising dollars to drive conversions. However, since
performance varied across sites and categories of advertiser,
make sure that you work with a network to test various messages
on different types of sites to see what works best for your
specific product or service."
However, the low rates of response from such sites (UGC sites
would presumably include such high-profile properties as
MySpace, YouTube and Facebook) suggests that they will need to
keep their rates low to attract any advertising at all.
MarketingSherpa's Anne Holland believes
that the results are to be expected:
This is actually no big shock (except perhaps to Madison
Avenue.) Human beings are all about *THEMSELVES*. Web 2.0 is
incredibly appealing content because it's all about you.
Ads are generally not all about you. They are about the
advertiser.
The research was based on the performance of campaigns that
included 716 ads and more than 1.7 billion ad impressions
between August 2006 and April 2007.
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