We had the opportunity to sit down with industry leader MediaTrust to understand the major changes in the in the performance marketing (pay-for-results) category and the challenges of developing a cost-per-lead (CPL) model.
MediaTrust began as an affiliate marketing company, but was continually challenged by the deceptive practices of many affiliate marketers and publishers. Understanding there was a better approach, MediaTrust began vetting each of its publishers and affiliate marketers to ensure the quality of its network and to better assure brands would get quality campaign results. As this strategy gained momentum, MediaTrust evolved into a software as a service platform to better serve both publishers and brands. Today, the MediaTrust platform empowers advertisers to use e-mail, display, search and social media advertising to deliver a site visit, lead or sale. MediaTrust’s success was recognized by Inc. Magazine, which named them the ninth-fastest growing U.S. company in 2009.
Pay-for-results campaigns rely on understanding average customer acquisition costs and lifetime value of an acquired client to know how to effectively build a cost-efficient campaign. According to Trip Foster, VP of marketing, “our goal is to provide opportunities further down the sales funnel because advertisers are willing to pay more the closer we can get them to the transaction.” Publishers have become more willing to work on a performance basis because they are better able to monetize their excess inventory with known brands and increase revenues on what would have normally been sold on an ad network as remnant inventory. “There is no scarcity of online inventory; the real challenge is uncovering inventory on quality sites where brand value is protected and predictable results can be achieved.”
Foster describes MediaTrust’s performance marketing platform as “trusted outsourced marketing, bringing together publishers and online marketers who can provide quality leads or transactions based on a specific cost per acquisition.” Like most multimedia approaches, MediaTrust is platform agnostic focusing more on where quality leads and transactions come from. “We spend a lot of time testing campaigns to determine how best to drive ideal cost per acquisition and are willing to seek out new publishers or affiliate marketers who can best optimize a campaign via online direct response mechanisms such as search, display advertising, re-targeting or e-mail marketing.” The recent acquisition of Bardon Advisors, an L.A.-based CPC and affiliate marketing firm, allows MediaTrust to serve the full online sales funnel with cost per click (CPC), cost per lead (CPL) and cost per acquisition (CPA).
When asked about the growth of the performance marketing category, Foster said “the majority of online campaigns will move to a pay-for-results model. Even brand advertising is tied in some way to a specific response mechanism for more precise campaign measurement and ROI. The local portion of paying only for results, on the other hand, will be a more complicated scenario given the challenges of a smaller scope of geography, more limited inventory and possibly cost-per-acquisition numbers that might not make sense.”
As marketers continue to move away from impression-based online models, performance marketing is seen as a more direct way of measuring ROI, allowing brands and advertisers to maximize spend and grow their business. While multimedia publishers possess a number of online inventory options within their own ad networks, driving significant and affordable acquisition costs requires more specialized tools and partners to build up this portion of their business. As publishers and even broadcasters look to better maximize their online inventory with brand advertisers, online performance marketing seems to be a smart play.
Plan to hear more about MediaTrust’s views on leads-based products and selling at our upcoming Directional Media Strategies conference in Dallas, Texas, where Foster will provide his views on the category on the panel titled “Leads-Based Selling: Salvation or False Hope?”