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RSSSo it comes as no surprise that Google has come around to your way of thinking about the next era of performance-based marketing.
Google, welcome to the future!
For readers of this blog, those remarkably good-looking and incredibly intelligent folks who understand the value of this next generation of performance-based marketing, Google's decision to enter the cost-per-action field is a great validation of what you've known all along.
And while Google's bidding process is somewhat fuzzy (how do two companies bid for something like a newsletter sign-up?), its commitment of resources will surely accelerate the logical evolution of internet advertising.
In the end, Google is finding what we've known for years: results matter.
Whether or not you have already moved from clicks to actions, the Google announcement means that -- at some time in the not-too-distant future -- you will be, and likely in a bigger way than you can imagine.
To get out ahead of the Google juggernaut -- or to enhance the performance-based ads you're already running -- here are six steps to getting the most out of a cost-per-action program:
1. Demand accountability now from your marketing spending -- even your traditional media advertising.
2. Define marketing victory and focus all your media to working toward this goal. Is it immediate sales? Building relationships with target consumers? Educating consumers? Growing ROI?
3. Test possible actions you'd be willing to pay for. Programs available today will let you measure what converts best from a range of "actions," such as purchasing a product, opting in for a consultation, accepting a trial offer, subscribing to a newsletter, etc.
4. Test your targeting. Build a direct marketing matrix that looks at results from combinations of target audiences, offers, creative, copy, etc.
5. Use creative to build relationships. The best performance-based campaigns involve agencies and marketers collaborating with their prospects.
6. Make your mistakes now. Better to learn what works before you get into the inevitable Google bidding wars.
By following the six steps above, marketers will be a great position to make the most out of Google's new cost-per-action offering right out of the gate.
Note: For a detailed look at Google's approach, Jennifer Laycock of Search Engine Guide has written a useful how-to, and Catherine Holahan of BusinessWeek has added her analysis to the discussion (interesting to note that Laycock sees cost-per-action as a new click fraud risk, and Holahan sees it as an answer to click fraud).
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There is something to be said for an impression that doesn't lead to an action. Let's say I don't like Pepsi. I prefer Coke. So when I see a Pepsi ad, I'm not going to click it, or sign up for a newsletter. But if I go to a restaurant and they don't serve Coke, but they do serve Pepsi and let's say a "Sam's soda," chances are I'm going to order the Pepsi, because it's more ingrained a concept than "Sam's soda." So Pepsi did get a sale because of it's presence of advertising, but the advertising leading to that sale is not something the publisher got anything from.
Branding advertising should remain CPM, and ad formats that drive performance should shift to CPA. Search doesn't make sense as a "branding format" -- it's unlikely I'll be branded from seeing a company in the search results. Display advertising should maybe be a combination of CPM and CPA, with a low (but present) CPM and a high CPA, as it will both create brand impressions and is likely to also drive action. Pre-roll ads on video should be only CPM, as it's very unlikely from the ad format that it would lead to an action - I'd have to be more interested in the ad than the content I was just heading to watch in order to click on the ad and sign up for something. However, sitting through your message is certainly an impression worth paying for.
Until my purchase of a Pepsi based on ads I never actually engaged with can be tracked and compensated, a pure performance model cheats the publisher.
Larry Emsweller www.Howtogetonthesixoclocknews.com How to Get on the Six O'Clock News Public Relations/Branding/Marketing Analytics.