X10: What Counts, Though You Might Not Like It

In the roar of controversy about X10 and Jupiter Media Metrix visitor counts, the smell of Internet advertising is clear. Right now, Internet advertising stinks. Except for X10.

X10 is making sales with pop-up ads and affiliate programs. I hate pop-up ads. It’s likely that 80 percent of the 34 million visitors to X10 in June 2001 hated that pop-up, too. A funny thing happened, though: 20 percent kept it open. And of those, Media Metrix estimates that 1.2 million spent three minutes at the X10 site in June.

Since 1998, I have built my business on affiliate programs, emails, and recently pop-ups — or interstitials, for the Madison Avenue folks. Now I’ll be sharing tested strategies of superaffiliates with ClickZ, focusing on proven methods of direct marketing that have been developed over 100 years.

Internet marketing is a game of old-fashioned direct-marketing numbers. When you see numbers like X10’s, you suspend simple faith in advertising and start focusing instead on the results.

Which is why I’m writing about X10. For those who haven’t run into an X10 pop-up (are there any of you left?), here’s the scoop.

X10 runs a pop-up campaign, popping its ad “up” on top of Web pages, or popping it “behind” Web pages, so it must be closed (and therefore first viewed). It has soared to its current No. 4 ranking on Jupiter Media Metrix with 34 million visitors.

Sure, you’ve seen it on MSN, weather.com, and the New York Times; even Yahoo has run it. What you might not know is that much of this campaign was run on performance, with advertising paid upon sales of the product, a small video camera with no brand name.

Ask most experts, and they would say that such marketing would not work. Imagine if you could combine the old cost per thousand (CPM) metrics (X10 got placed on Yahoo, MSN, weather.com, and numerous other sites through Fastclick.com, often through performance deals that paid only when a sale was made, and it got 34 million visitors.) with the new performance measurements that count.

The real gold is in the new metrics:

  • 1.2 million people spent more than three minutes at the site (traffic generated on performance and for low-cost CPM deals, negotiated after proving sell-through ratios to justify the ad buy).
  • Sell-through was 4.2 percent of 1.2 million people who stayed three minutes.
  • If I do the math right, that’s 50,400 customers at $79.99 a unit, for a total of $4,031,496.

Does that justify using pop-up ads?

People are buying product at rates that blow away click-throughs on banner ads. What you are seeing with X10 is indicative of a new approach that has worked. Whether it works for you depends on your ability to convert, not just on the ad itself.

Look at the rest of the Media Metrix top sites that worked with X10. Think MSN and Yahoo had anything to do with this success? Affiliate programs are about good partnering, and this site picked the best and likely paid part CPM and part on performance — that is, when a sale was made.

Most important, X10 performed for its superaffiliates. They made sales. It Goes Back to the ActiveMarketplace formula:

Existing Traffic + Effective Conversion = Net Profits

Pop-ups are the next best thing for the moment, because they help focus your message on converting right now. Until people really get used to them. But now, they make so much sense.

Are pop-ups moral? Do they uplift humanity? I don’t know. This is advertising, not literature. The old days of the Net are being buried by a smart game of numbers.

It’s not about pop-ups, or pop-behinds, or pop goes the weasel. Internet marketing is about dollars and cents. X10 ran this campaign with a smart affiliate program that paid upon sale of the item, then it sold that item in tremendous numbers.

Superaffiliates make sales; the company makes sales and pays for advertising only when it performs.

Sure, X10 bought some advertising. That’s a sign of a next-generation affiliate program, centering media buying on a performance-based network tracked through affiliate software.

Wouldn’t you buy ads when you know that you are getting at least a 4.2 percent conversion? At those numbers, it would be cheaper to buy CPM. That’s what an affiliate program brings to you, if you convert like X10 has. The real secret is in the conversion, in knowing that, and in doing your media buying based on this number.

So you can be like the critics and argue for months over the suitability of pop-up advertising. Or you can follow the numbers. It’s always your choice. Be sure to check out how X10 converts you to a sale. Instead of watching visitors, watch the sales process. Either way, if you don’t convert, you are out of business.

I look forward to sharing some more strategies soon.

Peace,
Declan

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