Posts Tagged 'CPA'

Cost Per Lead Model Advertising – What price to pay for leads

With more and more digital agencies mushrooming across India. Everyone is ready to sell the Online medium as 100% performance driven metric with every media property/placement/unique users reverse calculated back to cost per acquisition or cost per lead.

When an year ago we just saw Classifieds and OTA’s like Makemytrip,Naukri,Shaadi, Bharatmatrimony advertising and pushing for CPA model today agencies are pushing same to Financial entities to NGO’s.

Cost per lead campaigns on digital medium have been falling in price points from INR 400 per acquisition to INR 50 per acquisition and trust me their is no science to such except for market economics of marketplace dynamics with players coming in to pick up purchase orders under cutting each other.

At the end of it its the advertiser which is still suffering by even acquiring leads at such price points as their is higher cost to qualify them via call centre which agencies are now starting to realize with increasing number of players ready to give them leads at price points lower than their expectation.

Recent meeting with brand manager of a leading Insurance player shed light on dirty tactics of account managers at digital agencies and how they went in pitched to deliver a great scale of Leads at price point less than INR 75 which was almost 50% less than own media plan estimation of the brand manager. Once they went through with the campaign the agency failed at 2 points

i)  Scale was only 10% of what they promised

ii) Quality of Lead was very poor

As a backup the brand manager did run campaign on their price point estimation and properties back calculated from CPM,CPC buys and were able to achieve the required numbers they had estimated easily with quality of lead 10X to what came in from agency.

This brings us to very important junction where what price to pay for what lead.  Quality of Lead matrix maintained by lot of brand managers showed on an average lead acquired at price points between INR 140-160 on an media plan have higher conversion ratio to sale. As lower price points you goto for acquiring leads lower the quality of leads. Unfortunately as this feedback to quality of leads is not feed back to the media property owners or ad networks they are not able to improve quality of same and are only able to optimize upto the level of acquistion of lead.

Recently lot of advertisers are promoting use of HTML banners instead of SWF creatives which experienced media planners in agencies are quoting to be saying the biggest source of such junk leads.

In such a scenario it will be very wrong to just blame the ad agencies but even the media owners and biggest of all media aggregators like networks which are not trying to get right feedback on right properties and not optimizing their inventories for quality of leads and continuing to accept campaigns at lower price points and find way to get leads at those price points instead of resolving end advertisers problems.

Advertising Campaign Performance Management – Selection of Media

In today’s fast moving world where advertiser is interested to run campaign on pure performance to get lead or acquisition. Its become very impotant for an online marketer to select the right portal,site,placement etc to get lowest cost per conversion and highest scale possible.

But how do you determine what conversion ratio which property will get and how to standardize format or type of advertiser and CPL cost one could offer as media owner.  Lot of people will say its dependent on type of advertiser,product type of targeting used etc. But that worlds in display marketing where you get ideal conversion rate of 2.5% but lets say if we take an average campaign , average media potential is somewhere around 1.35% for the medium based on past experience.

If we take this maths as god and try to standardize type of form used which is Name|Email address| Telephone | City| Selection specific to product.  With this kind of form based HTML banner or microsite without clutter with just form and basic data on product you are able to standardize # of leads you can get and price point by this simple maths

= (#impressions * CTR) * 1.35% = will give you leads and cost per lead will be cost at which impressions are brought.

Its sounds very simple but in real world i have seen campaign after campaign this maths getting validated out. So does mean their is no scope of optimization = scope of optimization exist that to fill the gap between 1.35% to 2.5% or even higher but that is learning which a publisher brings on table. But as a marketer when selecting media this is how you should calculate as you just dont know publisher you are dealing will how much value your campaign and generate higher conversion ratio.

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July 2020