Posted by Bart on November 25, 2010
When we think Online Advertising we think Banners and Buttons. But Text Links are a very important part of online advertising, and even more now that Google and other Search Engines have developed the “sponsored results” and other text placements.
Text Links are not as visible as images and may not catch the visitors eyes as easily. However they integrate perfectly in the website and visitors may not even notice that they are actually advertising placements.
The message with Text Links has to be shorter and therefore more accurate, more straight to the point.
Text Links are usually used for Cost Per Click or Cost Per Lead/Action, but not for Cost Per Impression.
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Posted by Bart on November 24, 2010
Previously we talked about Cost Per Lead and Cost Per Action.
Other Performance Advertising Payment methods include Cost Per Survey, Cost Per Order, Cost Per Engagement, Cost Per Subscription, Cost Per Download, etc.
They are all different kind of Cost Per Lead or Cost Per Action, with a very specific Lead or Action, but the process is the same.
A Lead can be a very simple act (like entering an email address) or a more complex one (like answering 10 pages of questionnaires). An Action can be as simple as asking for a brochure or as “complicated” as buying online or opening a bank account.
Therefore, unlike CPM or CPC, it’s does not make sense to consider only the cost (the price tag) of a Cost Per Lead or a Cost Per Action. It’s important to clearly understand what the Lead is or what the Action is, before deciding whether it’s a good price or not.
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Posted by Bart on November 19, 2010
Cost Per Lead (CPL)
Cost Per Lead or CPL is an online advertising pricing model, where the advertiser pays for an explicit sign-up from an interested consumer interested in the advertiser offer.
In a CPM (Cost-per-Thousand) pricing model, advertisers are forced to pay for wasted impressions. CPC (Cost-per-Click) pricing models, commonly found on search engines, compel advertisers to pay for clicks from people that might never sign up on the advertiser landing page. In complete contrast, advertisers can pay only for qualified sign-ups using CPL pricing models. CPL pricing models are at the pinnacle of the online advertising ROI hierarchy.
This definition by Wikipedia is pretty clear and good, although the last paragraph might be considered as a personal opinion. I am sure CPM promoters and large advertising agencies that make a lot of money with the CPM model will beg to differ.
CPL advertising is also commonly called online lead generation.
Example of CPL: an advertiser pays $1.00 for each unique internet user who subscribes to his newsletter. The publisher will put the ad banner on his website but he will only get paid for the new registrations coming from his website. If at the end of the month he has generated 150 registrations to the advertiser’s newsletter, the publisher will receive $150.00. If there is no registration, the publisher will not get paid.
Cost Per Action (CPA)
Cost Per Action or CPA (sometimes known as Pay Per Action or PPA) is an online advertising pricing model, where the advertiser pays for each specified action (a purchase, a form submission, and so on) linked to the advertisement.
Direct response advertisers consider CPA the optimal way to buy online advertising, as an advertiser only pays for the ad when the desired action has occurred. An action can be a product being purchased, a form being filled, etc. The desired action to be performed is determined by the advertiser.
Example of CPA: an advertiser (a bank for instance) pays $50.00 for each unique internet user who sends an application to its services. The publisher will put the ad banner on his website but he will only get paid for the new applications coming from his website. If at the end of the month he has generated 10 applications to the advertiser’s service, the publisher will receive $500.00. If there is no application, the publisher will not get paid.
The Difference Between CPL and CPA advertising
In CPL campaigns, advertisers pay for an interested lead – i.e. the contact information of a person interested in the advertiser’s product or service. CPL campaigns are suitable for brand marketers and direct response marketers looking to engage consumers at multiple touchpoints – by building a newsletter list, community site, reward program or member acquisition program.
In CPA campaigns, the advertiser typically pays for a completed sale involving a credit card transaction. CPA is all about ‘now’ — it focuses on driving consumers to buy at that exact moment. If a visitor to the website doesn’t buy anything, there’s no easy way to remarket to them.
There are other important differentiators:
1. CPL campaigns are advertiser-centric. The advertiser remains in control of their brand, selecting trusted and contextually relevant publishers to run their offers. On the other hand, CPA and affiliate marketing campaigns are publisher-centric. Advertisers cede control over where their brand will appear, as publishers browse offers and pick which to run on their websites. Advertisers generally do not know where their offer is running.
2. CPL campaigns are usually high volume and light-weight. In CPL campaigns, consumers submit only basic contact information. The transaction can be as simple as an email address. On the other hand, CPA campaigns are usually low volume and complex. Typically, consumer has to submit credit card and other detailed information.
CPL advertising is more appropriate for advertisers looking to deploy acquisition campaigns by re-marketing to end consumers through e-newsletters, community sites, reward programs, loyalty programs and other engagement vehicles.
CPA is sometimes referred to as “Cost Per Acquisition”, which has to do with the fact that most CPA offers by advertisers are about acquiring something (typically new customers by making sales). Using the term “Cost Per Acquisition” instead of “Cost Per Action” is not incorrect in such cases, but not all “Cost Per Action” offers can be referred to as “Cost Per Acquisition”.
You will meet advertisers, publishers, agencies or other Online Advertising professionals who use CPL or CPA without distinction. It’s not a problem as both models are very similar. What is important is to clearly define what is the Lead, the Action or the Acquisition the advertiser will pay for.
More about Online Advertising? Visit the Training page!