Trends Report: The $.50 Pay Per Lead Phenomenon
by Sam Harrelson
A booming surprise in the online direct
marketing world of 2004 has been the rise of the short form
(usually just email or name/email) pay-per lead. Although
the format has been around for at least three years in one
form or another, the model has recently been incorporated
into a large number of direct marketers campaign budgets,
either for in-house lead generation or for third party lead
referrals. The model is amazingly simple and easy to
replicate, evidenced by the large number of such sites that
abound. However, the model also includes a large amount of
complexity that can determine the ultimate outcome of
campaigns associated with a particular one. Like any part
of online marketing, there are companies looking to make a
quick profit by closely replicating what others are doing.
Their registration paths are bungled, hard to follow and not
consumer friendly. However, there are companies hosting
short form ppl sites that are honorable, long-term minded
and highly creative in their branding and modifications to
the basic idea.
The short form ppl model can be studied on
three basic areas; the affect on media buying, the use of brands,
and the quality of leads produced and advertisers retained.
When using these three areas to evaluate various short form
ppl offers, a marketer can quickly determine the benefits of
using a particular one for their campaigns, whether as a
publisher or advertiser.
Media buying has become a highly valued and
needed skill in the online direct marketing sphere. Once
thought of as an entry position, many in the space now
realize that having a staff of highly qualified media buyers
can be the difference between revenues and shortfalls. The
short form ppl has affected media buying in some segments of
online direct marketing, and has the potential to affect a
large portion of the industry if its growth as a model
continues. Essentially, the short form ppl model is a
blessing and a curse for media buyers looking for traffic.
While placing an offer on a more reputable short form site’s
reg path can greatly increase traffic, a model like this
makes it more difficult for those searching for low priced
cpa leads based on shorter fields. As more publishers
incorporate the model into their email drops or site
placements, media buyers become out-priced and are forced to
either utilize the model into their own in-house solution or
partner with a company that has already developed one.
Brand use is definitely a consideration
worthy of investigating in the short form ppl model. Some
of the sites using the short form ppl model have gotten
permission to use specific brands in their offers and some
haven’t. The situation becomes quite cloudy when a consumer
is led to believe that a particular brand is actually
associated with an offer. Most of the reputable short form
ppl offers clearly distinguish that this is not the case,
however. Nevertheless, it is important to watch for those
sites that give consumers an improper incentive based on a
particular 3rd party brand.
Finally, the most important component of the
short form ppl model is its long term quality for
advertisers and the amount of advertisers a particular short
form ppl offer can retain. Those who are able to retain
more advertisers are able to make a healthier profit on
their backend through the registration process. The quality
of leads being driven to advertisers on the registration
path is important to consider. In this area, the question
of incentivized leads roars back to life. Although some
advertisers have problems with incentivized leads, the model
has given rise to the discussion over their place in the
industry as a majority of the short form pay per lead offers
gives consumers incentives for going through their
registration path. However, some sites have modified the
format and offer other creative ways around the incentivized
path.
Sam Harrelson is the Co-Editor of the Digital
Moses Confidential. He can be reached at
sam@digitalmoses.com
