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How Can CPA Based Business Models Survive In The Future
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How Can CPA Based Business Models Survive In The Future

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How Can CPA Based Business Models Survive In The Future How Can CPA Based Business Models Survive In The Future Presentation Transcript

  • How can CPA based business models survive in the future?
    • a4u expo Europe 2009, Amsterdam RAI
    • Marc Stilke, Managing Director
  • Agenda
      • Performance is King: Advertisers shift digital spend towards performance and CPA
      • It´s not that simple: How does Online Advertising really work?
    •  
        • Lessons learned: How Advertiser and Publisher will be successful in the future
        • Q&As
  • The Online Marketing Mix
    • Display Marketing
    • display/video creatives, reach and mostly CPM.
    • High reach
    • Focus on Branding & Image
    • Campaign options:
    • - high-reach premium sites
    • - special-interest sites
    • - affinity channels
    • - mass reach network buys
    • Target Group Planning
    • Editorial Integrations
    • SEM
    • Search Engine Marketing is by far the strongest growing Online Marketing discipline.
    • CPC campaigns + SEO
    • keyword targeting
    • user selfidentifies his interest
    • usually close to purchase
    • Affiliate Marketing
    • The strong performance promise in various business models.
    • Measurable and fully
    • controlable
    • Purely performance-based
    • commission models
    • (CPA, CPL or CPC)
    • eMail Marketing
    • eMail Marketing to existing client base (CRM) or for client acquisition
    • Dynamic and targeted
    • Direct Marketing via
    • Newsletters, Mailings, etc.
    • Ads in Generic eMail or Paid
    • Mails
    • Socio-demographic and topic
    • specific targeting
  • Each channel has its strengths and weaknesses
    • Display Marketing
    • Combine reach with targetgroup planning
    • Strong branding effect
    • Positive image transfer
    • from premium
    • placements
    • High costs
    • Results beyond click difficult to measure
    • SEM
    • High conversion + ROI
    • Immediate realization
    • Scalable
    • Fully measurable and
    • controllable
    • High costs for top
    • keywords
    • .
    • Affiliate Marketing
    • Purely performance based
    • variety of publisher types
    • Fully measurable and
    • controllable
    • Time consuming
    • Requests experience
    • and know-how
    • eMail Marketing
    • Low costs
    • Personalized
    • communication/feedback
    • opportunity
    • Scalable
    • Quick realization
    • Spam risk: ca. 30% of
    • received mails are spam
    • Negative image transfer
  • Budgets are shifted to performance – display advertising increasingly measured on performance 2.907 Mio . 3.648 Mio. (+25%) 4.026 Mio. (+10%) (+25%) (+15%) (+10%) (+10%) (+27%) (+24%) (+15%) (+10%) (+10%) (+25%) Growth of Affiliate Marketing in Europe Online Marketing Spendings in Germany Gross!
  • But successful online marketing requires the right combination of channels Display eMail Search Affiliate Marketing
  • Agenda
      • Performance is King: Advertisers shift digital spend towards performance and CPA
      • It´s not that simple: How does online advertising really work?
    •  
        • Lessons learned: Ho Advertiser and Publisher will be successful in the future
        • Q&As
  • We need to understand the consumer journey before the purchase
  • During the journey the user has multiple adcontacts each contributing to the sale Source: doubleclick case study Clicks on an affiliate ad (pricecomparison) Clicks on a display ad Click on paid search term in Google Books a 3 night short break for 12 August Click on an display ad Click on a affiliate ad Search on Google Sale 1st June 11th June 18th June 18th June User Conversion: 2% CPA: 20 GBP Conversion: 0.5% CPA: 60 GBP
  • Why is a detailed analysis and a holistic tracking so important?
    • Eradicate duplication / double counting of sales
    • Allocate media spend to relevant channels
    • Work towards a ‘true’ online marketing ROI
    • Understand relationship between channels
    Source: doubleclick case study Measure the path to purchase and map out purchase funnels
  • purchase funnel: the steps interact with each other Source: doubleclick case study 10,000 visitors 100 sales Brand awareness Convert to sales 1% Conversion Initial brand awareness Brand engagement Product discovery Consideration Product selection 10,000 1,000 100 5,000 250 View banner ad Search Read email Click affiliate ad
  • Display ads influence consumer behaviour and have latency effects:
    • The contact to a display ad increases the site’s reach
    • The effects of online display ads are persistent
    Source: comscore, 12, 2008, HOW ONLINE ADVERTISING WORKS: WHITHER THE CLICK?
  • Display ads trigger search queries on advertiser´s brand and generic terms Source: comscore, 12, 2008, HOW ONLINE ADVERTISING WORKS: WHITHER THE CLICK?
  • Display ads also influence buying behaviour – online and offline
    • The increase of online sales after contact with a display ad is over 40%
    • Direct online effects (dollars spent during the same session as the search) only comprise 16% of the total spend
    • Purchases made online up to 60 days post-search accounted for an additional 21%
    Source: comscore, 12, 2008, HOW ONLINE ADVERTISING WORKS: WHITHER THE CLICK?
  • A combination of all online marketing activities brings a lift in sales of 173%
    • The influence of the different channels on each other is high
    • Impact of search ads alone on consumers’ buying behavior was found to be greater than that of display ads
    • However, reach of display ads is higher
    • The influence is valid for both, online and offline buying
    Source: comscore, 12, 2008, HOW ONLINE ADVERTISING WORKS: WHITHER THE CLICK?
  • Agenda
      • Performance is King: Advertisers shift digital spend towards performance and CPA
      • It´s not that simple: How does online advertising really work?
    •  
        • Lessons learned: How Advertiser and Publisher will be successful in the future
        • Q&As
  • Lessons learned for Advertisers: An integrated approach is key to success
    • Use integrated tracking systems across all channels to understand customer journey
    • Combine display, search and affiliate
    • Don´t judge display on CTR only
    • Accept postview tracking in affiliate marketing
    • Don´t deduplicate affiliate marketing against search
    • Allocate media and commissions to channels and publishers accordingly
    • Use tailormade creatives per channel
    • Use a variety of publishers per channel
    CPA based budget allocation Deduplication
  • Lessons learned for publishers: Decide on the channel you want to earn money with
    • Need for Yield management
    • Mix online marketing channels depending on your business model
    • Calculate eCPM across channels
    Yield Management Targeted content
  • Affiliate network technologies will help advertisers and publishers to improve their returns Postview Integrate postview tracking for measuring the efficiency of publisher reach and remunerate for it Cookie Hierarchies & Split Commissions Search Manager Campaigns Use display campaigns to leverage inventory for short term goals Complement direct SEM with SEM via affiliates Remunerate branding effects and second cookie, allow for hierarchical commission structures
  • Any questions? We are happy to discuss the future of affiliate marketing with you.
  • Warner Case Study: How to set-up a multi channel campaign Affiliate Networks Website Sale Paid Search Display eMail Behavioural CPM CPA Source: doubleclick case study