Commentary

Azoogle in the Market

Last week I misidentified Azoogle as the list sender of the pseudo JibJab ad, when in fact it was sent by an affiliate that has done work with the Azoogle ad network, but not with this ad. As much as I hate making a mistake, it did give me a chance to talk to Joe Speiser, co-founder of Azoogle and learn more about what they are up to these days.

The history of Azoogle is really a microcosm of the whole subculture of affiliate marketing, lead generation, and ad networks technologies. Speiser and his partner began life as publishers of bargain and coupon offer Web sites were they were cogs in the affiliate marketing wheel, so to speak. Feeling that the game was skewed towards the advertisers who could reject leads as unqualified and cut dramatically into the publisher's margins, they decided to form their own affiliate ad network.

According to Speiser, their own experience as publishers made them sensitive to the needs of their affiliate members and they made their business model more publisher friendly. As a result they now have over 2,500 publishers in their network and 150 advertisers. Publishers have the choice of banners, e-mail, or pop-ups to deliver and their advertisers are carefully chosen. "We get 20 pitches a day," Speiser said. "Of those we only accept perhaps one a week. After years in this business we have a good sense of what is going to work and what won't." And referrals from current key advertisers are key in deciding to accept a new advertiser into their network.

Diversification has also been key to their growth. They went from 85 percent of their marketing channel being e-mail to 50 to 55 percent and have expanded into other revenue streams, including lead generation and something called BlueTime, which mimics the Advertising.com model of buying inventory on a CPM basis and selling it on a CPA basis.

On the lead generation side of things they own lead generation properties for loans (Rapid Cash Provider, Car Loan Provider, Loan Rate Advisors), satellite dishes (My Dish Provider), online education (Education Provider), and dating services (Where Christians Meet, Find Romance), among others.

This whole area of lead generation, when done correctly is a one of the real areas of growth in the online marketing sector. Take dating sites for instance. The attrition rate of paying customers for a typical dating site is reportedly staggering. To fuel growth, dating sites are locked into a spiral of paying more and more money for leads. Lets say you want to show 5 percent growth a month and 50 percent of your growth is driven by leads generated by companies such as Azoogle (by the way, I'm making these numbers up. I don't know the exact numbers but the concept is accurate and what these kinds of sites are experiencing).

Month one you pay for 2.5 percent of your growth through lead generation providers. The problem is your attrition rate is 10 percent a month. Next month you need to buy the 2 ½ percent again plus the 10 percent you lost to stay even and another 2.5 percent to fuel growth. Now, you are constantly being sucked down and need to spend more and more money to generate leads.

Here is a chart showing the increase in the volume of dating-related e-mail ads we have tracked over the past 30 days:

As you can see, it is a steady movement upwards (the blue line represents the volume of e-mail, the red bars represent unique e-mail lists and affiliates sending out e-mails). That is a 210 percent increase over the last 30 days alone.

I guess if people were smart, they'd start dating someone from Azoogle instead.

As you can see, it is a steady movement upwards (the blue line represents the volume of e-mail, the red bars represent unique e-mail lists and affiliates sending out e-mails). That is a 210 percent increase over the last 30 days alone.

I guess if people were smart, they'd start dating someone from Azoogle instead.

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