Online campaigns can be divided into two main groups - branding and sale-oriented, in practice very often both of these types are combined.

In the internet where everything can be measured you need to keep in mind and understand several variants of advertisement pricing before starting negotiations, let’s describe them briefly.

  1. Cost per time
  This is the worst variant, because you pay for a certain period of time and don’t

  get anything guaranteed like clicks or views, or leads.

  2. Cost per view
  It’s also called CPM or cost per thousand views. This is better
  then paying for time, because you know at least how many people
  will theoretically notice you ad.

  3. Cost per click
  Getting even better, with this one you are sure that you pay for
  visits to your website or landing page, that the user not only
  ”could have noticed” but indeed noticed, got interested and
  clicked.

  4. Cost per sale
  This one is near impossible to negotiate, usually no one will
  agree to work on such basis, but it’s the ideal variant, you
  know how much your product costs, you know how much you will pay
  to a website for a sale, one minus the other and you get
  guaranteed ROI. This is usually the model of affiliate programs
  where the vendor pays commission to affiliates from each sale.

  Small tip, in any of these types of payments, knowing such things as traffic on the page you are advertising on, CTR of the ad and CTRs on your landing pages and shopping cart, you can make a simple mathematical model to estimate the cost per sale even if you are doing a cost per time campaign, you have to note though that going up from point 4. to point 1. the accuracy of the model drops, because you can never know for sure the figures in the model, but at least you can make a decision of whether it’s worth the try or not.

Every company selling corporate solutions is doing lead gen, so the ultimate question is, what’s the maximum cost per lead in a marketing campaign which can bring positive ROI?

Here’s a quick guide how we count the initial numbers needed to do successful lead gen:

Methodology

In the analyses outrageously large sales are omitted because they can sufficiently change the ratios.

We count as one lead sale – one product name, because most of the leads that generate sales – sell only one of the revised products.

We then count the number of products sold in every contract and the sales price for one product.

Then we multiply the number of products by their sales price and write that down for every contract.

Average sale price (ASP)

We count the total sales from all the contracts by each product and divide this figure by the number of contracts. Thus we receive the average sale price (ASP) for one contract.

Maximum cot per lead (CPL)

We take x% for each average transaction sum and thus receive the maximum CPL which we are ready to pay in a marketing campaign.

Average sale per lead (ASL)

We take the total sum received from specific leads for a period of time and divide this figure by the number of leads received in the same time range.

How to count the x%

To prove that the x% assumption is the right figure for counting the maximum CPL, we count the average sale per lead (ASL) confined to a specific product, i.e. the figure which would give a $0 ROI in a campaign in case it is taken as the CPL.

Because on average an even number of leads sell each of the revised products, we divide the total number of leads received by the number of products in the analysis and receive the average number of leads dedicated to each product.

Then we divide the total sum received from each product by this figure and receive the same maximum CPLs, so performing everything the other way around, you will get the x% which you can use for future analysis.

To quickly summarize WebProfiters point of view - don’t buy them, they don’t work.

A lot of companies have their own subscriber bases which they use like mules, sending poor customers tons and tons of emails with “buy this” and “buy that” and suprisingly these work to a certain extent, providing that you don’t send too much and too often.

So when you want more you might think to yourself - maybe I should buy/rent a list consisting of my target audience people and I will have the same success. You write a couple of emails to different vendors, they respond, give you price quotes, you pay, try and… it doesn’t work - either your cost per lead is (waaaay) higher than usual or your ROI is negative.

Why?

• List rental providers don’t show you the names, they don’t show you the demographics of these names and emails, so if they say that they selected the audience you want, it means nothing because you have no proof. Liste rental providers can possibly not have this informations at all and just send your email with no selects and filters.

• Your subscriber base is familiar with your brand and products, they may have bought something or tried something and when they receive an email from you it means that they agreed to receive this email and take it positive. When a user receives an email from something he is subscribed to but the subject is about some vendor which they don’t know of, they may not open it at all. They don’t know you, they aren’t waiting for you to say hello, they certainly aren’t waiting for you to try and sell them right from the start.

It’s like watching a TV commercial - a user is sitting in front of the tv watching his/her favorite prime-time movie (same as the user is scrolling through his emails in Outlook) and then the commercials start (your email arrives). A lot of marketers have said many words about commercial-blindness and I won’t repeat them, but the thing is that list-rentals are no different.

Save your company a couple of dollars - don’t buy list rentals.

You have a geek or semi-geek product and you think the time has come to market it to the masses, how do you do it?

One way to do it is throw money into promotions on resources which don’t exactly or don’t at all correlate to your product and hope that the masses will pick it up. It won’t work because even if people notice it - they won’t get it, they won’t understand that it’s important or interesting because they won’t spend their time on your product, even if they can try it before they buy.

Another way is to sit and hope that your existing customers, the “geeks” will spread good news about your product to the masses. It works to some extent but only some, for example the “mass” wants to buy a digital camera, they make a search based on their criteria, find some variants and go to ask their friends which one to choose. Or they may visit the forums and ask geeks whom they don’t know. The geeks will give them opinion, but this opinion won’t be just about your product, because there are some many competitors and as a result - so many goods and bads as regards to your product, so the chances are that the mass will buy your product is 50% if you have one competitor, 30% if you have 2 etc. what if you have 5 or 10 competitors?

The way which might just work is to make a very simple version of your geeky product, which will work without fail and which a 2 year old can master - a click of a mouse and the job’s done. Make this version free or extremely cheap, again so that anyone can get it. Then empathize that you don’t charge money for the idea of your product, but you charge for all those geeky interesting extras that are there for the full price, some won’t need it but others who like what you give them and who are interested in those extras or just want more - these guys will buy and become the geeks of your product.

How many times have I used the word “geek”? I think too many=) but a **** product is unfortunately only for ****, and either you turn the mass into them, or your niche of the market will be very limited.