Hard Times

The economy is bad. The advertising market is slowing and ad rates are deteriorating . It seems like hard times are upon us. Are they? Maybe. Or maybe it is simply time for innovation.

As far as the online advertising market goes, we must remember that though the market has its own organic growth – which may have slowed down – online advertising is still a part of the whole advertising market. As such, it can generate growth simply by gaining market share over other advertising platforms.

The short nature of human memory makes us forget that online advertising’s ability to gain market share is exactly what drove the industry to its current size in the first place. Online Advertising gained market share over other advertising methods during bad economic times simply due to its ability to demonstrate better measurement and performance. The current slowdown, in my opinion, is a sign of a lack of innovation. This lack of innovation is what stops Online Advertising from growing even further.

Hey, maybe we should embrace the current crisis as a motivator for innovation. What kind of innovation? CPA, if you ask me.  And here’s why:

CPM

Let’s begin with a look at the history of online advertising. CPM was the first and most simple pricing model for online advertising. It was a copycat of the traditional offline advertising CPM model, common in TV, printed media, billboards et al. All offline advertising methods price their inventory according to a quality variable (length of the TV ad, square inches of the newspaper ad, location of the billboard) multiplied by the anticipated number of eyeballs it will reach.

And so it was the same thing on the web – only that the web had two advantages over traditional offline CPM. Eyeballs were measured in a more precise way – looking at webserver logs to count an advertisment’s exposures  is much more accurate than counting the number of cars going through an intersection at the rush time to assume the daily averages for billboard advertising.

The second advantage online CPM introduced was accurate counting for clicks. For the first time, advertisers could measure engagement through feedback from the target audience. On offline media this kind of data was only achievable using expensive market surveys with questionable results.

Online CPM was one thing that drove the online advertising market to grow. Advertisers eventually realized that they should spend their CPM dollars where they have better accuracy and engagement measurement.

But that wasn’t all.

CPC

The real thing that pushed the market forward was the development of performance advertising. Introduced by Overture in 1998 and perfected by Google a few years later, CPC was something completely different.

For the first time, advertisers could pay just for engagement. Even better, for the first time, advertisers shared the burden of goal achievement with the publisher. Gone were the days of a publisher just allocating the ad space and then forgetting about it. With CPC, publishers were motivated to increase their audience engagement for advertisers. They could change the locations of ads, their appearances, help increase their relevancy by providing keywords and so on. The more the publishers made an effort, the more they earned. A unique cooperation model was born.

Very quickly advertisers realized that CPC helps them achieve their goals. Whether it was sales, sign ups or leads, CPC took them one step closer to success. They could lower their investment in converting views to clicks – that was left for the motivated publishers – and instead concentrate on converting clicks to goals. Performance advertising was born.

More than CPM, CPC significantly drove advertisers to allocate a portion of their budget to online advertising. Additionally, Google’s method enabled small advertisers to join the game. With TV, you couldn’t even think about advertising if you had less than few thousand dollars. On Google, however, you could advertise your product with as little as 5 cents.

Of course CPC has its own problems. First and foremost is click fraud. Second, though it gets advertisers closer to their goals and helps them spend more effectively, it doesn’t bring them directly to achieving their goals the way CPA does.

CPA

CPA dates back to the same time as CPM, 1994. Thanks to Amazon, CPA gained a reputation as an essential part of the company’s growth.

CPA is the best pricing model for advertisers. It provides certainty regarding the future ROI of their whole campaign. It lessens the number of variables that are part of the calculations when determining ROI. When advertisers buy advertising using CPA, they know exactly how what they will recieve for each dollar spent. When they set their CPA rates, they are actually determining their own margins – as simple as that.

CPA is Not Scalable

However, Google and its CPC concept has taken the lead.  Not because it was a more effective method,  but because it was a scalable method. Compared to Google’s scalable CPC solution, CPA implementation was poor. Why?

The same advantage that CPA holds for advertisers turns out to be a disadvantage for publishers. While advertisers are spared from converting views to clicks to goals, the burden falls on the publishers. And as it turns out, the eCPM that publishers generate from CPA advertising is usually lower than that which is generated by CPM or CPC, hence its narrow adoption – only 7% of the market.

However, when CPA is used effectively, it generates a much higher eCPM than CPC and CPM because it is more effective by nature. When advertisers save $X thanks to CPA, a portion of this $X is passed on to the publisher’s eCPM. In fact, when used effectively CPA is such a powerful revenue generator that an entire mini industry of CPC to CPA arbitraging is prospering.

Yet, what prevents CPA from becoming a commodity for publishers is its scalability. Those who fully utilize it are only small publishers; the ones who can manually optimize their CPA campaigns, a tedious process. Optimizing Google AdSense CPC isn’t such a hassle – Google provides the contextual elements, and publishers can scale location and appearance easily. Scaling CPA in a way that both saves the manual optimization from the publishers and generates a high eCPM is not yet available.

CPA is the Future

We must develop an innovative way to scale CPA. Imagine the possibilities if such a tool existed. If publishers adopt it widely, it could drive more advertisers to use the CPA model. Consequentially, the whole market will act more effectively. Eventually, this will lead to advertisers re-allocating their offline budgets to online, and our industry will be saved!

Is there currently any innovation taking this route? Not really. Google experiments in it, and we could see something robust from them in the future. CPA networks don’t seem to be too innovative, and while there are few startups tackling this model, none of them seem to be revolutionary enough.

However, we are only at the start of tough times. The longer this downturn lasts, the better the chances are to see innovation, especially when the entrepreneurs realize that whoever succeeds to innovate in this market, might as well be the next Google.

http://www.voodoomindset.com

Do it right now, watch that 2 minute video, fill the form and download your free ebook (89pages). Good and valuable stuff.

What Are CPA Offers?

CPA stands for “cost-per-action” offers where a user fills out a form or downloads software from an advertiser. These forms can range from a single email submit (free laptop offer) to a much longer form with multiple fields (life insurance offer). Downloadable software could be for items such as toolbars, screensavers or emoticons. CPA Advertisers generally payout anywhere from $0.25-$3.50 for a single email submit, to as high as $140 for a longer form. The following is an example of an
EHarmony dating CPA offer that pays out as high as $4.75 for a single lead.
What makes promoting CPA offers so attractive is that the user generally does not have to buy anything and is just required to enter their personal information. Once they complete the lead, you earn a lead commission. What Are CPA Networks? CPA networks are companies that work as a middleman between advertisers and publishers. They host CPA offers from their advertisers and then have their publishers (affiliates) push the traffic to these CPA offers and take a percent of the lead  value.

For example, an advertiser may pay the CPA network $5.00 for every lead generated on the network and the CPA network may pay a publisher only $4.00 for every lead generated taking a $1.00 commission cut. This is how the CPA networks make money..

Also check out the useful software available on the following links.

http://www.voodoomindset.com

http://www.ppcwebspy.com/downloads/?xc13354

Affiliate managers have a vested interest in your success because a portion of their compensation is based on how much money you generate for the CPA network. Having a dedicated account manager is an enourmous asset and you will not find this type of account service when you are promoting Clickbank product. Affiliate managers are there to support you and tell you what CPA offers are performing the best on their  networks. You should also negotiate withyour CPA affiliate manager for a higher payout on the CPA offers as they all have room to increase your payout over the street price listed on the network.

You want to develop a good relationship with your affiliate manager because theycan increase your payout on the CPA offers and also give you access to private exclusive offers running on the network. They can also quickly indicate to you what CPA offers are performing well on the network and for what forms of traffic such as organic SEO, email or pay per click traffic.

I have developed a good relationship with some of my affiliate managers who now go out of there way to get me demographic profiling of who is filling out the CPA offers that I am promoting.  This is huge because it allows me to tailor my marketing using this demographic information and generate more CPA leads.

stay tuned for more information…

For essential software to guide you in the right direction follow the links available below.

http://www.cpahotspot.com/download234/cpamarketing.pdf

http://www.ppcwebspy.com/downloads/?xc13354

Where and how do i start?

The most important factor in the CPA business, is that you need to have traffic and time on your hands. Accompanied with this you absolutely need to track your clicks, sales, traffic, etc. – Very important!!

Start of by choosing a tracking system that will suit you the best. Take a look below at my recommendations…

http://www.prosper202.com

http://www.statsjunky.com

Introduction to CPA Marketing

What are CPA Offers?

CPA stands for “cost-per-action” offers where a user fills out a form or downloads software from an advertiser. These forms can range from a single email submit (free laptop offer) to a much longer form with multiple fields (life insurance
offer). Downloadable software could be for items such as toolbars, screensavers or emoticons.
CPA Advertisers generally payout anywhere from $0.25-$3.50 for a single email submit, to as high as $140 for a longer form.

The nice thing about CPA offers is that users don’t have to buy anything upfront/ provide their Credit Card details.

What are CPA Networks?

CPA networks are the middleman between the Advertiser and the Publisher. They provide you with all the creatives, like banners, emails, text links, etc. They also provide you with advance tracking capabilities. Monthly checks are usually send at the end of each month. Stay away from networks paying out every 60 days; one need to have a liquid cash flow.

Applying to a CPA Network

Almost every network requires, that you need to have a website, especially when you apply for the bigger networks.  When filling out an application, don’t give them the idea that your a newbie or beginner.  If you do get rejected by the major corporate CPA networks, phoning them might increase your chances almost 90% of the time. You should try to get accepted into the big networks, because there’s a lot of “fly by night” networks that don’t have the resources or cash flow to pay on time.

Selecting a CPA Network

It’s essential to look for high demand offers/products in the market. To determine which offers might convert above average, one needs to make use of Google’s free keyword tool…

Google Keyword Tool

You need to type in the most relevant keyword for your offer, and check how many times it’s been searched for. If you find a CPA offer does not have much search volume for it’s most relevant keywords, than I don’t suggest that you promote that CPA offer.

Combine the above keyword tool, with these other great tools from Google.

Google Insight

Google Trends

Ebay

If you go to Ebay Pulse you will immediately see what’s the most popular search terms.

Lycos Top 50

Lycos can also be a guideline, and are mostly geared towards trends and events in the search market. You then look for a related offer in a specific category. American Idols are just one example.

A few other good resources you should check out to see what is currently popular
are: Yahoo Buzz & Google Zeitgeist

Gauge Your Competition

There are software out there that can help you finding those hidden gems, but the easiest method is to type your keyword into the 3 major search engines, Google, Yahoo, MSN, and see how many sponsored ads are listed. Finding a lot of ads does not necessarily mean a bad thing. This means people are making money from a high offer that is in huge demand.

Comparing CPA Offers

My favourite free tools for comparing different offers across cpa networks are…

Offervault

Affilate spy

One can easily check which offers pay out the highest for a lead, but that does not mean it will convert better, than other offers paying less. The important factor is that the landing pages might not convert as well as the low paying offer. Split testing is essential.

Where and how do i start?

The most important factor in the CPA business, is that you need to have traffic and time on your hands. Accompanied with this you absolutely need to track your clicks, sales, traffic, etc. – Very important!!

Start of by choosing a tracking system that will suit you the best. Take a look below at my recommendations…

http://www.prosper202.com

http://www.statsjunky.com

Introduction to CPA Marketing

What are CPA Offers?

CPA stands for “cost-per-action” offers where a user fills out a form or downloads software from an advertiser. These forms can range from a single email submit (free laptop offer) to a much longer form with multiple fields (life insurance
offer). Downloadable software could be for items such as toolbars, screensavers or emoticons.
CPA Advertisers generally payout anywhere from $0.25-$3.50 for a single email submit, to as high as $140 for a longer form. Below you will find an example of a CPA offer.

Affiliate managers have a vested interest in your success because a portion of their compensation is based on how much money you generate for the CPA network. Having a dedicated account manager is an enourmous asset and you will not find this type of account service when you are promoting Clickbank product. Affiliate managers are there to support you and tell you what CPA offers are performing the best on their networks. You should also negotiate withyour CPA affiliate manager for a higher payout on the CPA offers as they all have room to increase your payout over the street price listed on the network.

You want to develop a good relationship with your affiliate manager because theycan increase your payout on the CPA offers and also give you access to private exclusive offers running on the network. They can also quickly indicate to you what CPA offers are performing well on the network and for what forms of traffic such as organic SEO, email or pay per click traffic.

I have developed a good relationship with some of my affiliate managers who now go out of there way to get me demographic profiling of who is filling out the CPA offers that I am promoting. This is huge because it allows me to tailor my marketing using this demographic information and generate more CPA leads.

stay tuned for more information…