Dropping Google ads for Kiva loans – will it work?

John Simpson | June 17, 2008

Where should we invest our marketing budget to create awareness and generate leads for our product in the most cost-effective way? It’s a question we deal with every day as a growing business.

Sponsored events, email lists, online ads, paid search – early on, we invested in these standard channels, following the same marketing playbook as most vendors. No surprise, the bulk of our spend was going to Google Adwords, as high as 80% of our monthly spend.

Over time though, the costs increased as companies in our space competed over the top spots. This is great for Google, but it was crushing our performance metrics. Despite ongoing optimization efforts, the average cost-per-click and cost-per-lead metrics grew to be 2-3x our target range. We were investing a lot of money and questioning the real value it delivered back to our business.

We decided to do the unthinkable – we went cold turkey and deactivated our Google Adwords campaign – turning it off completely. Can you really drop Google ads and survive as a business – is that even legal?

We can laugh, but there’s this sense of obligation that as a business, you have to throw money into Google’s deep coffers, like it’s an online tax. We’re not bucking the Google bandwagon to just be different, we’re doing it because it simply wasn’t delivering the ROI we need to achieve our goals.

So, we had an idea.
We had been sponsoring Kiva.org for the past few months as an organization we really admire and believe in – they’re the online micro-lending site that helps entrepreneurs in the developing world. And, we wanted to figure out a way to funnel the dollars we were sending to Google ads over to Kiva loans.

We realize we can’t give away money unless we make money. So, the experiment is to see if we can raise enough awareness and trials through this indirect pr channel to replace the paid search ads on Google – If we can, we’ll make it a permanent switch.

In other words, we’d much rather help a chicken farmer in Cambodia feed her village than fund a Google billionaire’s hobby of flying to space.

Here’s how it works:

We call it the “You try. We give.” program. The more people that learn about Jama Software and do a free trial of Contour, the more new customers we sign on. The more our business grows, the more loans we’re able to give to Kiva entrepreneurs.

The program relies on the power of social networking on the Web via blogs, news articles, people passing it along to friends and colleagues in email and word of mouth. So, we’re hitting the phones, sending emails and leveraging our online community to help us see if social marketing can truly outperform search marketing. We believe it can and we need your help to prove it.

“We’re thrilled when a company like Jama Software develops an innovative program that supports both our global mission at Kiva and their own goals.  It’s such a simple  concept, but that’s the  beauty of it,” said Jessica Jackley Flannery, co-founder and chief marketing officer of Kiva.org

If you like the idea, have a need for our product, then do a free trial and pass this blog post along to your social network. Thanks!