• by Christopher Petix , October 22, 2009

Right now, every dollar in a marketer's budget has to stretch even further and show even more ROI than ever before. Email marketing is now the method of choice for marketers, because it's grounded on the cost per acquisition model.

New research from Clash-Media shows that email marketing is the most popular form of online lead generation in America: 75% of organizations use it. In addition, the Center for Media Research believes that 81% of businesses plan to increase spend on email by the end of the year.

At this time of increased pressure on every budget, it's in an advertiser's best interest to take as much risk out of its campaign costs. With this is mind, moving to a CPA model is the natural solution. Added to that, CPA doesn't exist in other advertising outlets, such as TV or print. This means that advertisers who typically spend large parts of their budget in these media are now more likely than ever to enter the CPA arena - for its guaranteed ROI and minimal risk.

The CPM model still exists, although it's very much in a decline. It can still be beneficial to niche advertisers, who know their numbers and can afford to take an initial loss -- if there is one -- on the campaign because they get can become profitable through repeat business. These may include companies that sell diet products, for example, which can achieve profitable CPM campaigns because their customers typically make multiple purchases. Similarly, companies that are very specific with the types of leads that they want can make CPM work. However, even these companies can benefit from the guarantees and immediate profit that CPA models bring to the campaign.

The industry is now more client-focused, reversing the trend of ten years ago, where everyone operated on CPM and many marketers struggled to make the campaigns profitable because the model didn't suit their business.

There are now online lead generation and customer acquisition organizations for whom executing email campaigns is one of many specialties. These companies can provide high quality lists of interested consumers that have been generated from a variety of sources.

In a hostile environment, where online branding and sales are both harder than ever for small and medium businesses, it's a risk for marketers to spend their budgets on anything that doesn't have the guarantees of a CPA campaign.