Clearly, Transparency Matters

I read Angie McCloskey's article "Does Transparency In A CPL World Really Solve All Our Problems?" with great interest. After reading the post, I wanted to share my personal experiences to illustrate the value of transparency and openness in enabling advertisers to deploy and scale CPL campaigns effectively.

As our industry evolves from CPM to CPC and in recent times, from CPC to CPL pricing models, one cannot help wonder, "Why didn't this happen sooner?" After all, CPL advertising gives advertisers the chance to pay for qualified leads (instead of wasted clicks and impressions). One of the biggest factors inhibiting the lack of growth of CPL advertising has been the lack of transparency. Transparency gives the advertiser significant advantages.

First, transparency enables advertisers to ensure that their brands appear in environments that protect their brand integrity. A Fortune 500 brand that we work with is very careful about the sites it appears on; its brand strategists wouldn't want their offer running on a site offering free iPods. Transparency was vital to the Obama campaign, which chose us as their lead generation vendor mainly because we enabled them to select the publishers for their ads.

"Our challenge is to reach across several different demographics (Baby Boomers, Gen X, Gen Y, etc.) and find within each demo subscribers interested in travel," says Kurt Homfelt, President and CEO, Dunhill Vacations. "Online lead generation is a lot like drilling for oil -- if you don't strike soon, then it's time to move on." The problem with the lack of transparency is that an advertiser like Dunhill Vacations, instead of drilling in, say, fifteen different oil fields, might end up buying the same oil field from fifteen different sources. And no matter, how you spin it -- that is patently unfair to Dunhill Vacations.

On the campaign back-end, transparency allows the advertiser to measure conversion metrics to sales and conversions. It's important that advertisers be able to see the lifetime value of the leads from different sources and use these learnings for future investments. It's little wonder that transparency has been critical to the rapid adoption of CPM, CPC and CPL advertising campaigns. Many CPM networks now display their member sites and surely, we remember how Google made their content network transparent not very long ago.

In addition to transparency, another factor instrumental to a successful lead generation campaign is scalability. Scalability refers to the ability of an advertiser to reach critical mass. How does an advertiser looking to generate 100,000 leads quickly achieve her/his goals using a relatively newer medium like online lead generation?

To borrow an analogy from the computer world, there are two important ways advertisers should be able to scale. They should be able to scale up - i.e. they should be able to get more leads from an existing source easily. Even more important, they should be able to scale out easily - i.e. they should be able to connect to as many publishers as the campaign requires.

The primary factor that influences the ability of the advertiser to scale out is openness. At all times, the advertiser should have access to the widest media universe possible. In an open marketplace -- not an advertising network or an agency, for example -- advertisers can easily scale their campaigns by adding a large volume network. Or they might choose a bunch of smaller sites to achieve the same lead volume. They can work with as many sites as they want, as there are no restrictions.

There are three themes that have prevailed over the history of the online advertising industry -- a move towards greater ROI, a need for higher transparency and a demand for openness. In recent times, the CPL market has made giant strides towards enabling all of the above, and this is why I am confident that we will soon see CPL advertising take the lion's share of online advertising budgets.

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2 comments about "Clearly, Transparency Matters".
  1. Gary Kreissman from Group PRM , February 12, 2009 at 1:29 p.m.

    Completely agree with this. Openness means choice and the ability to target efficiently. Opaque systems are self-defeating. CPL will triumph when even more data can be shared.

  2. Jeff Solomon from consolidated , February 13, 2009 at 12:13 p.m.

    Interesting article, but you left Generation Jones out of your list of generations.

    As many nationally influential voices have repeatedly noted, Obama is part of Generation Jones, born 1954-1965, between the Boomers and Generation X. Google Generation Jones, and you'll see it’s gotten a lot of media attention, and many top commentators from many top publications and networks (Washington Post, Time magazine, NBC, Newsweek, ABC, etc.) specifically use this term to describe Obama.

    Great op-ed on Obama as the first Generation Jones President in USA TODAY a couple of weeks ago:
    http://www.usatoday.com/printedition/news/20090127/column27_st.art.htm