When JPMorgan Chase announced the company in March, only 3% of its sites were generating sales or sales for the company, and it stopped advertising on 98% of its sites. But does this phenomenon only apply to large advertisers when a few sites generate the vast majority of sales/leads? Few small and medium business (SMB) advertisers confirm JPMorgan’s revelation, so I analyzed the digital marketing performance of my own SMBs. I find it shocking – if you’re in SMB you need to do some testing.
JPMorgan may have opened a digital marketing Pandora’s box
JPMorgan announced in March 2017 that it would reduce the number of sites its ads showed on from 400,000 to a pre-approved list of 5,000 sites, a 99% reduction. The company decided to “whitelist” these sites for “brand safety” reasons, hoping to reduce the likelihood of its ads appearing next to objectionable site content such as hate speech or obnoxious videos lowest.
A few weeks after the policy change, JPMorgan chief marketing officer Kristin Lempkau shocked the digital advertising community, saying the bank “did not see any decline in our performance metrics.” The company found that it was serving the same number of ads. Impressions cost the same. The company also found that only 3% (12,000) of the 400,000 sites its ads had previously displayed resulted in a conversion (such as getting a new sale or lead).
JPMorgan’s findings have reverberated in the digital medpoint management website marketing community as it questioned the value of placing ads on millions of websites (the so-called “long tail”). For millions of sites like this, the consequences can be dire. If an advertiser concludes that ad serving can be avoided without compromising performance, its ad revenue may be reduced. At the same time, if advertisers decide to focus their ad spend on fewer sites, the cost of serving ads on “higher quality” sites may increase significantly.
What I found out about the marketing performance of SMEs
With few (if any) advertisers sharing their digital marketing results, I decided to analyze the marketing performance of my SMB company, Livionex Dental. For nearly two years, we’ve placed local ads on thousands of websites through a well-known local advertising platform. This type of advertising has effectively generated website traffic and sales.
If you’re unfamiliar with native ads, they’re EA Leads masquerading as actual content similar to an online publication, but paid for by the advertiser. Users who click on a native ad are directed to the advertiser’s website. Here’s an example of mixing native ads in an article.
I analyzed our native ad performance for the 8 months preceding JPMorgan’s announcement (August 2016 to April 2017). During this time, our native ads appeared on more than 2,500 websites. Digging further, I found that only four websites were responsible for the success of our campaign. Indeed, these four sites accounted for 85% of our total sales during this period, while the long-tail site only accounted for 15%. Similar to JPMorgan’s findings, only 6% of sites actually generate sales.