Just few days ago, I
was looking for a rental car to attend CBS Summer Outing at Beneduce Vineyards. Upon googling for “rental car nyc”, I stumbled upon a
car-sharing site, Turo, which basically is the
AirBnB for cars. Car owners list their cars on the platform, and renters can
browse and book those cars through the platform. Turo monetizes the platform
through booking fee, which is around 10% of the rental rate.
As I browsed through
the site and read past reviews, I was convinced to sign up and start using the
platform. Conventional wisdom has taught me that businesses typically set aside budget for acquiring customers via sign up and/or referral promotion. Thus, I googled for “turo referral”, and was presented with a sponsored ad below.
I didn’t think much
of it, but $50 sounded great for a sign-up credit. When I clicked the ad, I was
brought to Turo’s referral page as shown below. Upon seeing the webpage, it hit
me, “Oh my god, some guy used PPC strategy to guide Turo’s sign-up traffic to
his personal referral page!”.
I thought to myself, “What
a creative idea!”, and started analyzing the ad and the economics of this
strategy.
- The ad actually offers $50 even though Turo only offers $25 credit. This could be explained in two ways. First, the ad may simply be outdated as Turo changed its promotion offering, and the advertiser doesn’t bother to update the ad. Second, the advertiser purposely market the credit at $50 so that the ad has higher chances to be clicked compared to other sites i.e. see the third result in the SERP which only offers $25. Speaking of competitive advantage!
- The economics is actually quite awesome. The advertiser would receive $25 referral credit for each friend who signs up and rents a car, or $75 referral credit if the friend lists their car and it get rented. Compare the $25 upside with average cost of PPC of $1-$2 with minimum of $0.05. Put it simply, on a successful conversion, the advertiser would get at least $25 for an investment of $0.05-$2, a ~10x return!
- Lastly, the ad is presented when consumers already have the intent to sign up for Turo, which means close to 100% conversion rate.
All in all, I found
this simple yet unexpected example brings the SEO concepts we learn in class
together in particular on: focusing on the target consumers (users who want to
sign up and looking for promotion), designing a creative ad (ads offering $50
to separate from competition), and calculating the economics of the strategy
(PPC average cost vs potential return).
NOTE: Post writing
this blog, the ad is no longer shown. This is likely due to me clicking on the
ads multiple times which exhausts the advertiser’s PPC budget.
Reader, do you know of any other unexpected and creative
ideas people do using digital marketing strategy we learned in class?
Sources:
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