Gmail Advertising Showdown: Gmail Sponsored Promotions vs. Managed Placements

The Gmail platform has been evolving, and Gmail advertising options are no exception. The ongoing Gmail Sponsored Promotions (GSP) beta was rolled out in early 2013, introducing new targeting and display options for advertisers. Previously, search marketers could target an audience on Gmail through managed placements. With GSP, Gmail advertising targeting became much more advanced. Aside from your normal display targeting options via the AdWords interface (age, demographic, keywords), you can now target by more options including email address, subject line, job title and product category. The catch? A very high spend requirement, without guaranteed results.

The promos are also managed through an interface separate from Google AdWords, which can only be opened in the Chrome browser. Here’s a snapshot of the interface.

We’re always excited to try new betas as they’re introduced; some have proven successful and some disadvantageous. Due to this level of inconsistency, we tend to approach betas with skepticism, and perform our due diligence of testing. I’ve been running Gmail advertising campaigns via Managed Placements for a few of my clients and have seen success at relatively low margins. I recently launched my first Google Sponsored Promo to compare results with a Managed Placements campaign. Here are our very early observations.

Gmail Sponsored Promotions Offer Better Display Options

Rather than your generic text ad that we’re able launch via a Gmail Managed Placement, GSP allows you to deliver subject line, teasers, and full-page ads directly to your targets’ inboxes.

Subject Line & Teaser:

Email:

Caveat: Gmail ad creation is much more complex than typing in a simple text ad, and involves a bit of HTML code, among other components.

Gmail Sponsored Promotions Have Higher CTR than Standard Gmail Ads

Since the launch of the GSP campaign, we are seeing an average CTR of 11%. This is the click-through rate of visitors who clicked on our teaser or email subject line and saw our full-size ad. External clicks to the website are much lower, but still comparable to an average CTR of 0.02%.

Gmail Sponsored Promotions Have MUCH Stronger CPA

So far our average CPA with GSP is averaging around $40. This is an 80% decrease from our Managed Placement Gmail campaign, which sits just below $200.

I haven’t seen results at this scale this early on from a beta since, well, ever. Although Gmail Sponsored Promotions come with a price tag, the competition level in the space is relatively low, whereas the managed placement space has become more saturated. It will be interesting to see how performance changes with different targets, creative, and increased competitive landscape.