CPM: Cost per thousand impressions
CPC: Cost per click-through
Conversion Rate: The percentage of visitors who take a desired action
Customer Acquisition Cost: The cost associated with acquiring a new customer
— Internet Marketing Dictionary
Searching for Search Engine Marketing
I recently signed up for Google AdWords and started playing around with its campaign site. After twenty, or, thirty minutes, I started getting a splitting headache and through frustration, closed my Google Chrome browser and defiantly opened up Firefox. Now to be fair, I had no business signing up for AdWords, since I can’t even spell S-E-M (SEM) but, I was determined to get a better understanding of what I could be missing. Being a start-up and desperate for bootstrapping sales, it seemed only logical to investigate.
Google Sales to the Rescue, sort of
The very next day I received a call from a Google Sales Rep – Terry Dewey, who was incredibly helpful, and patient, in walking me through the site & giving me my very own S-E-M 101 Course. But, by the end of the call, there was one thing terribly obvious to both of us. If I couldn’t manage to spend $7500 a month on AdWords advertising, then there simply wasn’t any point in getting started.
WCT: Wholly Crap Through
At $7500 a month, with an average of 3% conversion rate, my customer acquisition cost was probably going to cost me more than I was going to make.
Reality Check and The Referral Engine Bibles
So needless to say, I’ve abandoned my jump into SEM and have returned to the teachings of Guy Kawasaki’s Reality Check & John Jantsch’s The Referral Engine. If I understand correctly, the key to success is sharing with those who can help. So that’s the motivation behind the :AnotherSocialEconomy Reseller and Referrer programs. Another lesson learned, is that I have to make it real easy for those folks to pass the message along and that’s why we developed the :Widget and the :Bookmarklet.
The Ultimate Cost Per Action (CPA)
CPA offers are the truest form of performance marketing. Rather than basing payouts on bulk traffic which may or may not convert, cost per action refers to compensating affiliates/publishers for real sales, leads, and other conversion metrics. This is often the most empowering method for advertisers, as they are able to gain direct results from their advertising budget. The CPA model is a risk-free approach to advertising that usually targets niche specific publishers or clever affiliates.
According to Rubicon Consulting & Online Communities and Their Impact on Business: Ignore at Your Peril, where they found 10% of the community members contribute 80% of the content. These Most Frequent Contributors (MFCs) are second to word of mouth when it comes to influencing others.
So for starters, here’s how our Widgets whip click-through and pay-per-click advertising for Influencers (MFCs).
- Prep work:
- Become an AnotherSocialEconomy Reseller
- Post an AnotherSocialEconomy Widget on your blog, or, web site. The widget can be customized to your site’s look and feel so it doesn’t distract your readers.
- Contact Retailers, suppliers, manufactuers, brands, distributors, and anyone else in position to close a sale – locally, or, online and have them register as AnotherSocialEconomy Retailers.
- Blog, review, rate, do whatever you do to contribute valuable content.
- Your readers can then fill in your site’s Widget to purchase whichever goods and/or services mentioned.
- AnotherSocialEconomy will then notify all registered Retailers within range of the Consumer’s location and ask them if they have the goods/services available for sale.
- Those Retailers with inventory on hand, then propose their goods to the Consumer via AnotherSocialEconomy.
- Once Consumers confirm, they can then proceed to the local Retailer and pick up their goods.
AnotherSocialEconomy is about connecting serious buyers with local retailers. So only those Consumers interested in buying, will click-through. And only those Retailers in a position to close the sale, need to reply. There’s no conversion rates, or, customer acquisition costs to worry about. Retailers only pay when they close the sale.
But wait, there’s more …
And what about that kind Influencer? Since they Referred the request via their site’s Wdiget, they get to share in some of AnotherSocialEconomy’s proceeds. And in this particular scenario, since they- as a Reseller signed up the Retailer who made the sale, then they again, get to share in some of AnotherSocialEconomy’s proceeds. Now that’s some CPA, eh?
I’d like to thank Michel Drouin for connecting the dots between click-through advertising and the value proposition of :AnotherSocialEconomy’s :Widget.
Stay tuned and I’ll let you know how this one works out.