Hi folks. I'm thinking of advertising my new hosting co on some of the hosting directories. I'm thinking of buttons or text links to start off. I've narrowed it down to the major one like webhostdir.com, webhosters and findsp.com. I was wondering if any of you have advertised on hosting directories (not just submitted plans, but actually paid for banners) and what type of response did you get?

Thanks,
Lux:)

In my experience, paid advertising doesn't work nearly as well as:

- word of mouth (from HAPPY customers) ;)
- contributing to forums like these

Google's adwords program is pretty good too.

Cheers!
Rob.

Advertising on web directories is very good for getting your name out there - letting people know about your company.


Good luck!

Your kidding right? Paid advertising put us (in 2 months time) from 0-600 clients!! can you get that with word of mouth?

it depends on the campaign we had some advertisers on findsp.com that had a great banner and position, got a very high click through rate and were extremely happy about it, but word of mouth could get you something like +60% monthly of customers... If your service is really good ;)

ckizer...

wow that must have been a big advertising campaign?
Care to share more info on it?

Cheers

Regards

Craig

ckizer,

If you don't mind me asking.... which hosting directories did you advertise with, which worked out best for you, and what kind of budget did you have to spend?

We have not enjoyed that kind of success with Paid advertising....

Cheers!
Rob.

I saw his page and his least expensive plan is something like $12.95.

I sell hosting from as low as $5.95. We have had a very positive response from paid advertising, but I am beginning to think that the more expensive the service the better.

I am about to conclude that customers get scared away when the see our "cheap hosting" plans. We are even thinking about raising our prices soon.

Its definitely possible to build 0-600 customers in 2-3 months with paid advertising. The cost would be quite high though. You pay a premium for volume leads.

At a guess you'd need around 30,000 - 60,000 leads to generate that many new customers.

Lets be optimistic and assume your converting 1 in 50 referrals and assume your paying on average $2.00 - $4.00 per qualified referral:

30,000 x $2.00 = $60,000

or

30,000 x $4.00 = $120,000

If the plan your selling is $15.00, and all your clients have paid for 12 months in advance........

15.00 x 12 = $180 x 600 Clients = $108,000.

If you then assume that your making 30% margin, your left with profit of:

$108,000 x 30% = $32,400

Which cost you between $60K and $120K to generate.

Personally speaking I'd go for a combination of free lead generation, which will be lower volume than paid, and some paid promotion. It will take you longer to build your business but at the end of the day you'll be in profit.

I agree with your views. We have had some success with paid advertising (small campaigns), but only enough to basically pay for the advertising we bought!

We have had much more success with free ads, and referrals. But I suppose you could look at the referrals as being paid for since they may come from customers we generated from our paid advertising!

Cheers!
Rob.

A lot of it comes down to how much your paying for a "qualified" referral.

If you look on goto.com right now the top bid for "web hosting" is £4.90!

The company bidding's top plan costs $19.95! So again assuming that they make around 30% on each plan, they've got to convert nearly every referral sent from goto.com into a sale! Not in a million years.........;)

That type of advertising is great if your selling a package for $500+ per month, but not at the budget end of the market. Our average CPC for advertisers in the budget category of our site is between $0.12 - $0.25.

My point is not that you should give up advertising because it doesn't pay. But basically buy advertising that is:

1. Highly targeted.
2. Priced in line with your products/service.

If your sensible, you can find advertising that works and builds your business faster than before.

Originally posted by ckizer
Your kidding right? Paid advertising put us (in 2 months time) from 0-600 clients!! can you get that with word of mouth?

That's quite impressive. Maybe you would let us in on how you did it? :)

The most important question is: "How much Money did you spend to get those 600 customers?" :)

Cheers!

I think I pretty much covered that in an earlier post....... A lot of money!

You gave us averages....

I wonder how much money ckizer spent.

Well I'd guess around the averages, but I'm sure he'll probably keep that info to himself ;)

His conversion rates are the key missing ingredients....

With some host directories, I paid less than $1 a click. Most of all, my cost/customer is less than $3/new customer.

You just need to raise your prices! I am going to raise them soon, you cannot afford to pay $1, $2, $3 or more for a good lead when you only profit $1 per new sign-up!

We have gone through the same experience as Rob. We get new sign-ups with advertising, but we barely cover for the advertising expenses themselves and this is just because our basic plan is only $5.95 and everyone goes for that one, so our profit margin is too low! :mad:

Originally posted by bert
You just need to raise your prices! I am going to raise them soon, you cannot afford to pay $1, $2, $3 or more for a good lead when you only profit $1 per new sign-up!

We have gone through the same experience as Rob. We get new sign-ups with advertising, but we barely cover for the advertising expenses themselves and this is just because our basic plan is only $5.95 and everyone goes for that one, so our profit margin is too low! :mad:

Isn't the basic concept of advertising to invest in the future? You will only have to pay the $3 or whatever it is per customer once, but you'll be able to keep on many customers for life (hopefully!).

I really hope you were right. I work 20 hours a day and try to keep my customers as happy as possible, but in this industry customers always come and go!

We have hundreds of very happy customers. I don't think they'll leave us soon, but I certainly can assure you that they will not be with us forever.

Another factor is the fact that customers that look for "cheap hosting" are not the very best customers. They usually lack a lot of knowledge and on top of the fact that they aren't paying you much, you have to support them more than customers who pay for the higher priced hosting plans! :)

I wonder what will luxor choose...

FindSP.com
webhostdir.com
Webhosters.com

James.. I wish you the best of luck

:)

I've never had good luck with the hosting directories. I would also recommend the google ad words program. Been using them for over 5 months now and very pleased.

Does anyone know what web hosting directories charge for advertising these days? I know that each one offers a slew of different options, but I'm really just wondering about standard 468x60 banners?

I'm really curious to know what the web hosting directory "industry average" CPM rate is for 468x60 banners... Anyone?

And at what CPM is it affordable to advertise, assuming my ad has a 1% clickthrough ratio?

You should still be able to get 1% CTR on a 468x60 banner. Before advertising, I'd ask the directory to let you know which style of ads work best on their site, and then design one along the same lines.

Rates for banners in the directories can vary, we keep an upto date ad rate sheet on the top ten directories. Your looking at between $20 - $60 CPM.

Hope this helps.

Originally posted by ckizer
Paid advertising put us (in 2 months time) from 0-600 clients!!

Where did you advertise to get that kind of traffic and that fast? I want to know so I can drop some cash on that advertising!

A certain ISP started selling domain names last year, because of advertising on our site their sales went through the roof, >60% (according to the ISP) of new and repeat custom was through us.

They eventually stiffed us for 3 months advertising charges.

Nice people !

LJ