Posts Tagged 'Interactive Avenues'

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.

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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.

Does Indian Digital Media Industry need to be really scared of CPA Model??

Lately we have been seeing publishers and ad networks getting more worried with more and more traditional digital media advertisers like naukri.com, makemytrip.com etc moving towards CPA model forcing publishers and media agencies executing the plan to get paid when they provide returns on advertising revenue spend.

Lot of bloggers and publishers have talked against this model and especially in India where many publisher sales teams are still gunning for fixed slot and CPM deals not accepting even PPC campaigns makes it even harder to make learn the small publishers why they need to start taking risks to earn bigger revenues.

This lead to evolution of ad networks which are brokers which tend to hedge risk between advertising models preferred by advertisers and publishers.This is done by use of various technologies which slice and dice inventory offered by publishers identifying the best audience for advertisers where they can get conversions in return increasing value for both advertisers and publishers. In India apart  from DGM and Komli to just a small extent, none have been really successful on delivering effectively for industry to move towards CPA model.

I would not blame the publisher or ad networks but mainly the advertiser lot available. In india advertisers which are moving towards CPA model are the ones facing situation of extreme saturation. Why for CPA model to exist successfully publisher and there site audiences need lot of variety in terms of ad options etc. Lets look at category of advertisers pushing for CPA Model

* Real Estate sites – magicbricks, 99acres.com

* Matrimonial sites – bharatmatrimony.com, jeevansathi.com, shaadi.com

*  Job Boards –  naukri.com, monster.com, timesjob.com

* Travel Sites – Makemytrip.com, Yatra.com, TravelGuru.com

If you take any of the categories above mentioned there is no product differentiator or sheer difference in features which would also duplicates to their advertising campaigns. Second biggest problem being faced is most of these players have been in market for some time and casual surfers on internet where they are advertising is more likely to already know the brand and would have registered for their services(ex submitted resume on naukri or monster) further reducing chances of RoI. Though lot of people may argue that there are so many people coming online every month hence their is still scale which web advertising can provide to such advertisers. It is surely wrong to comment on the same. I believe conversion cost against the scale available to naukri or monster will be much higher on web display properties as compared to offline branding properties. For these kind of sites inventory created through other new avenues like cyber cafes or through university exam results site would yeild much higher return.  But again going back to the cause of publishers. For them to perform better in this category if they get advertiser like timesjob.com there is still chance of them getting lower conversion cost from display ad as compared to naukri or monster if they dont go for specific behavior targeting.

So how does the above statement help ??

For publishers to flourish and provide scale on CPA or CPL model for advertisers they need lot of advertisers with variety and availability of freshness. In india lot of agencies feel this is a newer model being tried out by advertisers but people are forgeting affiliate marketing has been a very old concept on internet with businesses like amazon, freebee  and commission junction have flourished.  But the main reason for them to flourish or for the model to flourish was availability of more than 500+ ecommerce ventures in US ready to fight out to grow the market and trying hard to reach out to audiences offering some thing different. Why is Google Ad words flourishing today is due to the fact small businesses are trying to reach out to the larger internet audience giving variety of option to users.

I think so digital media agencies need to teach their clients more about nuances also involved with the model rather than just talking pros of saving money. As in short term its returning them and their clients benefits but in long term its hurting the digital media industry overall.

I would also advice smaller publishers to become more about the CPA model and its advantages but they should carefully sit down and identify the right affiliate program they join otherwise they will end up loosing on precious money they could have just earned running low CPM campaigns from any ad network.


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September 2017
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