One of the major components to a successful performance marketing campaign is the optimum pricing for leads. Pay too much and the expensive conversion rate you could drive you out of business. Pay too little and the low quality leads could force such a high number of needed conversions that the result ends up the same.
So how do you understand a lead’s true value?
We decided to pose that question to one of the industry’s experts, Lee Aho of Clickbooth. Lee serves as Vice President of Advertisers at Clickbooth, overseeing the department’s strategic marketing, sales and business development, client relationship management, and new product development.
Revenue Performance: How are advertisers missing the boat on quality performance marketing?
Aho: Advertisers either operate as though all leads are created equal, or advertisers fail to understand a lead’s true value. In doing so, advertisers naively pay the same amount for all of their Cost-Per-Action lead generation.
Cost-Per-Action advertising, in which advertisers predetermine a payable action and its corresponding payout, eliminates uncertainty associated with antiquated forms of advertising and realigns performance with marketing spend. The upside of Cost-Per-Action advertising, however, sometimes creates a false sense of security because advertisers equate action-based payouts with value-based affiliate pricing. Unfortunately, most advertisers operating in the Cost-Per-Action space mistakenly optimize their pricing strategy on a global level, that is, the same for all traffic partners. Only the most successful CPA advertisers implement an effective right-pricing strategy, one which requires them to not only correctly recognize actual lead value, but also price lead sources in accordance with value delivery. The end result of a successful right-pricing strategy is increased scale, ongoing traffic consistency, and maximum ROI.
Revenue Performance: What are the main benefits of “right-pricing” for advertisers and affiliates?
Aho: Right-Pricing allows advertisers to position their campaigns for optimized traffic delivery, increasing ROI. There is a value associated with every lead an advertiser receives. To maximize lead return, advertisers focus on scaling their most profitable lead sources. By increasing payouts to specific, high-performing affiliates/sources, advertisers are able to increase affiliates’ returns, increasing the likelihood of those affiliates investing additional resources to scale premium traffic to their offer.
Right-Pricing allows increased scale for affiliates by matching their traffic with the advertisers who are best suited to monetize that traffic. Quality affiliates receive increased payouts, resulting in improved performance and maximum ability to ramp traffic volumes. Alternatively, right-pricing also helps affiliates improve performance, if at first, they aren’t hitting an advertiser’s metrics. Rather than being removed from an offer entirely, right-pricing affiliates enables them to run at a rate that is profitable for the advertiser. This allows the affiliate time to optimize and ultimately work toward payout increases when the lead monetization improves.
Overall, right-pricing positively impacts advertisers and affiliates by aligning performance and creating a smarter marketplace. If your traffic providers are discouraging granular pricing strategies, they’re preventing you from effectively optimizing your traffic.
Revenue Performance: What are most important things an advertiser needs to know to be successful in maximizing their performance marketing returns?
Aho: In the highly competitive world of performance-based CPA marketing, there are no shortcuts. Advertisers seeking traffic quality, quantity, and consistency from their performance-based lead providers, will benefit from asking themselves the following questions:
– Do I know the lifetime value associated with every lead?
– Can I track each lead back to its source?
– Am I setting my payouts based on volume opportunities and customer lifetime value I’m receiving from that source?
If each of those questions can be answered with a resounding, “yes”, advertisers can use traffic data to make sound business decisions and profitably scale customer acquisitions.
As a helpful practice, when advertisers identify like-minded traffic providers who they’re interested in turning on, I’d also recommend test-driving the provider’s affiliate approval process. To do so, sign up as an affiliate with all current or prospective networks. What is the affiliate approval process? Be mindful that the approval process experience is equal to that of potential affiliates. At Clickbooth, we deny more than 95% of affiliate applicants. Choosing partners who screen heavily on the front-end will align your campaigns with experienced affiliates and enhance your lead quality.
Revenue Performance: How is Clickbooth different than its competitors?
Aho: Clickbooth advocates smarter buying and selling of online advertising. The industry-leading volume generated on the Clickbooth network is a direct result of the network’s traffic quality. Working within a closed-loop environment in which exclusive campaigns receive traffic from a top-tier, exclusive affiliate base, traffic control leads to long term sustainability and scalability. It’s common for advertisers to pay increased CPA/CPL amounts on the network, however, the increased values are calculated decisions that result in significantly higher ROI. We don’t believe all leads are created equal and we believe the “performance” element of “performance marketing” is maximized when advertisers understand and execute right-pricing traffic strategies.
Clickbooth is the exclusive Cost-Per-Action Network that allows advertisers to reach vast new audiences by accessing the largest base of exclusive affiliates specializing in all online traffic types. Where performance is power, we focus on providing top proven offers and the highest quality traffic. Clickbooth’s Exclusive Affiliates guarantee our Advertisers the ability to scale smarter and faster. With No Haggle Payouts Affiliates are guaranteed the highest payouts and the best offers. Want to join the #1 Affiliate Network in the world? Visit us at www.clickbooth.