Trends - Digital Marketing 101

Digital Marketing 101 - Part II

by Jay Weintraub

Lead generation, and co-registration come together in a way to make up the next area of digital marketing – incentive promotion. Advertisers might not know the sector by this name, but they have without a doubt seen the types of advertisements that companies in this sector employ. And, chances are like the millions of users that have clicked on these ads, the advertisers have given in and seen what offers for a free <insert newest gadget name here> are all about. Using a derivative of the business model employed by the infamous “Punch the Monkey” of the late 1990’s and early 2000’s, incentive promotion companies draw users into a signup process with compelling creatives and high value prizes. The incentive promotion companies do something interesting. They end up attracting users not for a particular offer but for a variety. It is similar to co-registration in that they make their money off a sign-up process, but what makes them unique is their focus on actively drawing in users. They take advantage of the fact that there are more impressions on the internet than specific advertisers who can buy them.

The typical incentive promotion site has users enter their email address on the landing page (where they go after clicking on an ad); then, users enter their shipping address; after that, users will see a variety of co-registration style offers, where if they choose they can fill out additional information to learn more. These offers do not relate to the prize; they exist to help the incentive promotion company subsidize the cost of media. The final page in the process is a set of offers that users must complete in order to receive their free prize. The advertisers listed here are all customer acquisition related, where each new customer carries a moderately high value, and has experience at valuing a particular customer’s worth. ISPs and other subscription services are two good examples. They know exactly what they can pay for a new customer.

At the end of the day, incentive promotion companies drive millions of new customers to companies. They also operate in a delicate balance. They drive new customers when that intent doesn’t initially exist. Users came looking for a free gadget, not for a credit card offer. The power of incentive promotions comes from that ability to take one and turn it into the other, but it also means that marketers will receive on the whole a lower quality user. Customers coming from incentive promotion sites will not earn the advertisers as much money and will carry with them certain higher customer service costs as users will often ask the advertiser about the gift as opposed to the incentive promotion company. AzoogleAds, Netblue, MetaReward, Membersource, Gratis Internet, and The Useful are examples of companies that offer incentive promotion solutions. It is an effective channel, but we recommend that only the most experienced advertisers should participate in this form of digital marketing.

The millions of people who enter their email address for a prize not only help drive new leads to companies, they also make up a big percentage of the audience for our next segment, email marketing. Succeeding in incentive promotion takes skill and a lot of focus. That opens the door for email marketers to help them and many other companies make money off their other assets. List management companies also exist. They offer customer retention management systems so that a company can communicate with its client. These companies do not offer a service for advertisers looking to reach consumers. That is the focus of email marketing firms. Datran and AMS Global are two of the more successful and trusted in this space. The best email marketing companies often can drive large amounts of volume for companies on a performance basis. They can be used those with moderate experience up to experienced marketers. We do not recommend them for beginning marketers as federal legislation exists that marketers must be aware of and accommodate. Additionally, successfully leveraging these companies means having a grasp of creative design so that the ads will perform well enough for both parties. As is the case with any pure performance company, a burden rests on the advertiser to create offers that will warrant the opportunity cost of running them compared to other offers.

The final section focuses not on sources of traffic for offers but on companies that help you make the most of what you have. If you have a web site, you will want to make sure that it is optimized for the search engines. Paying for traffic works, but most would prefer receiving some traffic for free; that is the focus of firm that offer search engine optimization. SEO, Inc. and Web Mama are two well known companies in that space. Once you have traffic, chances are you might want some insight into it – what links do they click on, how much time do they spend, where do they fall off, etc. Here, companies such as Clicktracks, Urchin, and Hitwise can help. Additionally, you might want to leverage a system that enables you to test between one page and the next or to easily show certain content depending on where the user came from. Omniture and Optimost have many companies using their services for that.

Despite this article’s length, it barely scratches the surface of the nuances to advertising online. The digital marketing landscape has changed significantly even in the four months that have passed since Cliff and I gave the first iteration of the presentation, and chances are, it will change again by the next time. Major companies continue to enter the space and their presence will continue to alter how it operates. Given that a smart group of people can start a business with little capital and grow it to a company generating almost one million dollars per month, it is hard to predict where the industry will go and who will still exist. The industry, while growing, is still not quite large enough to support the number of companies in it today. Expect more consolidation, and for those wanting to play it safe make sure to use companies that you have heard of as well as those willing to provide references. Also, use common sense. Digital marketing is still new and evolving but that doesn’t mean time tested rules of good business do not apply. Feel free to embrace it, as well as write with any questions with you think we can assist. Good luck to all and go ahead and click here to download the Crash Course in Digital Marketing presentation <http://www.o-a.com/nyc2005.html>.

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Jay Weintraub
Director of Market Strategy
Revenue.net
http://www.revenue.net
e: jweintraub@revenue.net
http://www.repvine.com/members/jayweintraub/

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