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!
There, I said it. All online advertising should be performance based, period. For years I have been working with clients, and agencies alike all trying to make sense of their ROI online. At first we had the CPM model. During my time at Mediaplex, before it was a Valueclick company, and before the Ad Agencies saw them as a threat to their own in house media planning and buying teams, CPM was king. There were a few (to state mildly) issues with buying ads in a CPM scenario back then. Each third party ad server thought they were tracking impressions appropriately. Why was this a problem? Because if you’re an advertiser in 1999 and your using (for example) both Mediaplex, and Doubleclick to serve your ads, you may be paying $.33CPM for one and a $.44CPM to another. This may seem like pennies, but when you’re dealing with billions of impressions, the dollars start to ad up.
Back then this was OK….well sort of…that is until guys like Adam Gerber at The Digital Edge (Y&R) would start to ask questions about the impressions that he was purchasing on behalf of his very large, very demanding clients. I can recall Adam stopping me in the halls of the Digital Edge shoving a finger in my face, and saying “I want answers”….well the reality was that I had none for him. We didn’t really know if an impression was served or not. We could only assume based on certain variables. We could provide reports, but we could track that back to a sale. Some of the campaigns were strictly branding campaigns, which is great, but branding for who, how were they measured? Obviously this was a very qualitative not quantitative approach.
Then came CPC, and all was good in the world. Or so we thought. That is until fraud started to pop up.
Now we have CPA, or CPL, and this is the only manner in which an advertiser can actually track conversions. Why are you advertising online? To generate a conversion, whether it be a lead, or a sale…performance is the next step in the evolution in online marketing. Even in a branding exercises you need to track the conversions. If a click on a banner lands a user on a landing page, you want them to take action, not just view your landing page. If they view your banner, really how much “branding” is occurring? How can you quantify that? You can protect your brand by demanding you work with a transparent network, or you can protect yourself from fraud by demanding that you will only pay for a conversion after you’ve been able to confirm the pixel that’s fired, but you really can never quantify online advertising unless it’s performance based.
I cannot tell you how fired up I am about what’s happening internally here at Azoogle! Since 2000 Azoogle has been the premier performance based ad network. About a month ago we have expanded our product offering to CPM Media Planning, as well as Search AOR services. In less than a month we’ve already moved forward with million dollar media buys, and have signed Blockbuster, and Thumbplay as Search AOR clients!
Talk about wanting to get out of bed in the morning! There are so many great things going on here!
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.