The first part of this column covers the opportunity represented by performance-based buying: how it’s different from affiliate channels, how to think about leads and actions from a qualitative standpoint, what data hygiene methods and technologies the properties you deal with should be using, and musts to avoid, such as properties using malware, spyware, and spam. The discussion continues with how you should think about launching a performance-based campaign.
You Still Have to Track
The benefits of performance-based buys are obvious: you pay only for leads and actions. When buying this kind of media, you’d assume the need for measurement (banner click rates, cost per click, and site conversions) would go out the window because you’re simply paying for conversions. Wrong.
While cost per lead and cost per action are effective, and the attraction to the model is strong because click and conversion rates don’t matter, a program must still have the same plan, negotiate, buy, test, measure, report, and optimize process all forms of online media and marketing require. But what you really look at in performance-based deals is lead quality. Just like buying a list, the leads you get from the literally dozens of performance-based services you might test vary greatly in price and quality.
Buy on Value, Not Price
A few factors affect lead quality. One big factor is how leads are generated and whether any incentives (such as sweepstakes) are used as a hook. Then there are optional buying factors that affect price, such as how many other vendors are getting the same lead, how much info prospects got about you before they filled out the form, and what custom fields you can add to the form to qualify the lead. Both buying and data capture items can increase cost. Yet adding a few required questions to the data capture form to qualify prospects and being the exclusive buyer of the leads dramatically improve quality and greatly increase worth.
Be Generous and Protect Your Turf
You’re trying to open up a lead channel that will forever create a profitable revenue channel for your client or company. To establish a situation that lasts, it must work for the advertiser and publisher alike. This means finding that viable price point that delivers quality leads. It also means being as generous as you can to the publisher based on lead quality.
I know this sounds strange, since media buyers are supposed to get you the best deal possible, but think of it this way. You may have a good thing going getting a bunch of quality leads from a performance deal, but that publisher, and its partners, have a limited amount of inventory. They need to use that inventory for what will drive the most profit. So it’s very possible a better performing program could bump you out of your slots. The result is a precipitous drop in leads from a source you rely on. The moral of the story: protect your turf by being generous!
The Creative and the Gravy
Don’t underestimate or underthink the creative. These programs still require great ads, offers, and landing pages that convey value to the prospect. Creative is key to making this work for you and the publisher. I see more performance deals blown, not by the publisher, but by rigid clients who refuse to invest in good creative because they think it’s not required in performance deals. Nothing could be further from the truth.
Good creative is just as critical in performance deals as in any other ad campaign. Of course, the gravy here is all the impressions you get as part of these performance deals are free and help to build brand recognition, so good creative is essential for this reason, too.
Bear in mind:
Performance in the Mix
We make performance part of the mix with search and CPM (define) based campaigns whenever possible. The reality and downside is that like super-low-cost networks, you won’t get highly visible real estate on premium sites with performance deals. So if there are branding, awareness, or visibility elements in your campaign, performance is only part of the picture. Also, you often won’t have control over where you end up on a site, as publishers require a high degree of flexibility in terms of where they place your ads and offers. For many large corporate advertisers, this situation is too uncomfortable. However, performance should always be in the mix, and you should map clients’ needs to the right universe of opportunities that fits their goals, business objectives, and compliance standards.
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