Two weeks ago we spoke with Chris Patrick of MonsterAds about his unique approach to growing a world-class network. This week we bring you part II, focusing on advertiser-related issues.
BLUE BOOK: What kinds of advertisers should be thinking about incorporating CPA campaigns into their media plans? Are there certain verticals for which CPA is a must-do, and others for which it has only marginal utility?
Chris Patrick: Depending upon the metrics, CPA campaigns can work for almost anything. Almost every business needs sales, leads, mobile installs, branding and so on. The thing to remember though with CPA marketing is that advertisers shouldn’t expect to command a large margin on their initial sale. That typically goes to the publisher to pay for their media buys or traffic costs. The advertiser is acquiring a customer, not simply making a sale. If they approach CPA campaigns with that mindset, they can be very successful by crafting effective cross sales and remarketing campaigns, in addition to upsells, to grow their margins and increase customer lifetime value.
BB: What should an advertiser new to performance marketing look for when considering a new network partner? What are the critical differentiators?
CP: It’s important to get a “partner” in their campaign that has the experience to help them be successful. They want someone who has established relationships with everyone in the space and knows who they should and who they shouldn’t work with. Our own focus this year has been to develop more of an “agency model” and establish an exclusive relationship with the advertiser as the Agency of Record (AOR). That allows us to do what we do best which is deliver high quality traffic, and it allows the advertiser to do what they do best which is optimize their offer and grow their ROI. We have a great deal of experience in developing campaigns from a simple idea into a complete offer, with sales funnels that include upsells, cross sales and add-ons to maximize profits and ROI. We also have relationships established with data sources that will allow an advertiser to utilize their data when it’s appropriate to continue to increase their customer value in every way possible.
BB: CPA vs CPS for an e-commerce company. Go.
CP: It really depends upon the business model: what you can afford to pay out on a sale to make it worthwhile? You may have an offer that you can sell very effectively with good leads through a call center, so that may be more profitable than giving away a large amount of the return in CPA costs. Or, you may want to buy leads and then make the sales through other channels. Determining whether to buy leads vs sales usually hinges on whether you have a high production cost/lower margin product and you can’t afford to pay the CPA fee that would make it worthwhile for a publisher to buy the traffic, plus the cost of the item and associated costs. If you have a product with a lower manufacturing and fulfillment cost, so you can afford to pay out on a per sale basis and optimize your customer lifetime value on continuity, cross sales or upsells, it may be a better option as a pay per sale offer. Again, this is where it is good to work with an experienced Agency to determine the best flow for your product.
BB: How do you provide brand safety to advertisers?
CP: It begins with a good partner on the traffic side. This is another benefit of having a good network/agency like MonsterAds as an AOR partner. They can better control who is running the product campaign, how it might be being marketed and can ensure that terms are followed. I have seen it happen many times that an advertiser starts on their own and finds a few publishers who want to run their offer. They get a handful of traffic sources set up and then one or two start marketing in a way that is hurtful to the brand, perhaps by making false claims or maybe even using celebrities who haven’t given their approval to market the products. These examples are just a couple of the ways in which a brand can be compromised if someone with experience isn’t keeping an eye on things. Having a single authority source managing the campaign traffic – like an AOR – helps to maintain the integrity of the brand and the campaign. That brand protection also gives the campaign the potential to remain viable for a long time, reaping the financial gains of good traffic and legitimate marketing.
BB: From an advertiser perspective, how much internal resource do you like to see devoted to supporting a CPA campaign? Does a fully hands-off approach work?
CP: We love hands-on advertisers, but it is not necessary. Advertisers, especially highly developed brands that end up on retail store shelves, know their product better than we do, so it’s important to get their feedback and cooperation. However, once their campaigns are launched, we typically handle everything from there. They can let us know if there are any concerns on their side and we can monitor the CRM for sales and cancels, etc. I don’t think fully hands-off is a good way to approach it. We rarely have an advertiser that comes to us and says, “here’s our product. Go for it”. I don’t think I’d want to work with an advertiser that has no participation at all other than providing the product and money.
BB: What does the future hold for affiliate marketing networks?
CP: There are a lot of potential pitfalls for networks. We have seen over recent months that a number of advertisers lost their Merchant Identification Numbers (MIDs, used in payment processing). As a result, those advertisers had their reserves held, and couldn’t make payments to their networks. There are rumors that a number of networks may be on the ropes as a result. I suspect that in future networks will operate and control more of their own offers and broker fewer offers from advertisers.
Affiliate marketing is always changing. When we started, there was no mobile marketing. Now, the majority of conversions and website visits come from mobile devices. One thing is for sure, the networks that will be around for the next five years will be able to adapt and adjust as needed. They need to make long-term decisions and not make quick money grabs. This is the same formula that has kept us strong for the past 10 years even when business seemed down.
Thanks for the time and opportunity to share MonsterAds and my thoughts with the readers. If any publishers or advertisers would like to discuss any of my comments further or may be interested in working together, they can reach me via email at: Chris.Patrick@MonsterAds.com or add me on Skype at: Chris.MonsterAds
View Secrets to Growing a Boutique Network – Part I