As our economy worsens and belts continue to tighten online advertisers are even better off. The reason? ROI – Return on Investment. There is no other medium where the advertiser knows exactly where ads will run, and can track performance. There is certainly value in brand advertising, but in order to fully see the power of online advertising, one must only offer a CPA, or CPC and watch the magic happen. Certainly there are risks involved as there are regarding any advertising. You’ll be well suited to investigate the pitfalls – ie, chargebacks or deductions, click fraud but rest assured if you need to advertise -and you DO, then make it performance based. The worst feeling in the world is spending dollars and you cannot quantify where there went, or the purpose regarding your spend. When you have a paying customer that just paid you $30, and you paid an affiliate $15 to generate that sale, I can guarantee you’ll migrate your spend to performance driven.
Recently we’ve been seeing a lot of chatter in the media about a pending recession. Some may argue that the recession has already hit, and that it’s only going to get worse. Pending events like the US Presidential Election, coupled with the Bejing Olympics are top of mind as well.
I feel that performance based online marketing/affiliate marketing is recession proof.
Let’s think about this; if you’re currently spending money online for your company you certainly understand that there are numerous ways in which you can aggregate new users/viewers etc. You can purchase media on a CPM, CPC, or CPA. If you’re currently working in a CPM scenario and you have a budget that can handle that, great. But what happens if that budget is directly effected by a recession. You’d be forced to modify your offering to performance based only. This would entail your only paying for a paid conversion, or a user (depends on how you’d prefer to define an aquisition).
In this manner of advertising you’re still spending ad dollars, but only if you’re making money yourself. If you’ve done your homework, understand your allowable aquisition rate, and can back into the appropriate metrix….then you’re recession proof!
While I was out in San Jose for the Internet Retailer show, I spend some time with Zenith Optimedia. We had a great meeting discussing where AzoogleAds may fit into their media buys on behalf of a few different clients. The main theme of the conversation centered around what the media planners had to do in order to make working with Azoogleads make sense for their client. They were intrigued by the fact that everything we do as a company is performance driven.
What does that mean to your advertiser? Essentially what your looking at is a risk free endeavor (hard to believe, I know). But think about it, don’t you agree that this is the direction all online advertising has been heading?
Back when I was at Mediaplex we were selling CPM to large agencies on behalf of their clients. This didn’t work because the media buyers had to show ROI. This was difficult because they couldn’t quantify an impression. There are numerous limitations to tracking impressions as we all know (caching etc). Then there was a move to CPC, and this too had it’s limitations with click fraud etc. The natural progression has led us to CPA advertising, where the “A” can be anything that advertiser wishes it to be. It can be a lead, or it can be a sale. All we have to do is place a pixel on the confirmation page. This way we can track the conversion on behalf of the advertiser.
Sometimes this doesn’t really work for an advertiser. Sometimes the advertiser may have too many SKU’s, and working with us will only make sense if they are using us to drive leads for something promotional, like a sweepstakes.
Continuity Programs continue to be some of the best performing offers on our CPA network. They are tailored to convert well, and due to the monthly cost to consumer, each advertiser that may have previously purchased media on a CPM, or CPC basis can now justify a certain amount of money (allowable aquisiton cost) to generate a conversion. They know that they can afford to do so because the quality of the conversions/sales that we generate is unsurpassed. Since the majority of these conversions are happening via search, we’re finding that the advertisers churn rate is low, and therfore they can afford an attractive CPA to our affiliates/publishers.
Continuity Programs – Minimal upfront cost to register, coupled with a monthly subscription model.