How many times has a service asked you to refer a friend? How many of those times did you manage to convince more than a few friends to sign up? All too often web applications ask users to share a referral URL with their friends in order to increase the exposure of their application. Unfortunately for me, I don’t necessarily always have 32 friends who I can convince and happen to not have already heard about the product I’m referring them.
Enter Google AdWords
What better way to spread my referral URL than through a Google Adwords campaign? Using some free credit I had from a promotional code I was able to create a campaign without using money from my own pocket.
This was the only ad I created. The destination URL is the short URL dropbox provides each user for referring new users. The ad displays for keyword searches with terms such as ‘online storage’, ‘free online backup’, etc. You have to be creative here because a lot of the terms are highly competitive and require large bids to present on the first page. If a user clicks the ad, they are directed to the dropbox sign up page and from there Dropbox handles the rest. In order for me to obtain the credit, they not only have to sign up for Dropbox but install the software. Pretty simple.
Results and Analysis
For the past few hours I’ve seen small Dropbox notifications on regular 5 or so minute intervals informing that my space has increased by another 512 MB. When I woke up this morning I had 31 emails from Dropbox informing me that referrals had installed Dropbox after getting my invite.
For a total of $57.21 from my existing credit, I obtained 16 GB of extra dropbox space. Since it didn’t cost me anything, I’m pleased with the result however, if we look at the numbers, roughly 60 dollars to get 16 GB of permanent Dropbox space, is not that expensive considering it costs 10 dollars a month to get an extra 48 GB. I had obtained the maximum referral size bonus (16 GB) for a free account, overnight in roughly 18 hours.
In total the AdWords campaign accumulated 43,000 impressions and 559 total clicks amounting to a clickthrough rate (CTR) of about 1.3%. This number is dragged down significantly by what google calls it’s ‘Display Network’ which is apparently any Google service which presents ads. If we look only at the ads resulting from keyword searches, we see CTRs as high as 17% for the term ‘online backup’ and 13% for ‘dropbox’. The average cost for a click (CPC) for the term ‘dropbox’ was about 10 cents. The majority of the clicks came from the ‘dropbox’ keyword surprisingly. This tells me something I did not know about how a lot of people apparently use Google search. Users are searching for the term ‘dropbox’, and instead of going through the first result which is a link to the actual Dropbox website, opt to click my ad and sign up.
As you can see from the graph above of the clickthrough vs joined vs installed ratios, the conversion rate for a click is fairly low, at 16% joining the service. However once they’ve joined we have a 60% chance that they will install the software and give me the bonus space from the referral, not bad. I’m also assuming that some users will install the software at some point in the future as Dropbox has internal methods of encouraging the user to install the software.