as the next big thing for the CPA/CPL marketplace. But does it really address all of the problems associated with a CPL model: brand control, quality of lead sources, context of offer placement, etc.? I think the issue of transparency brings up a few important questions for both advertisers and publishers alike: 1) Is this scalable? , 2) Is it really possible, given the truth of network models and 3) what specific problem does it really solve for advertisers in this channel? Open and transparent networks seem to be popping up everywhere today; there's Pontiflex and Opt-Intelligence; last summer, Hydra Network launched Hydra Elite, a transparent network offering advertisers the selection and control of publishers on a CPL model. The transparency model promises that advertisers will remain in control of their brand, selecting trusted and contextually relevant publishers to run their offers.
For roughly the last five years, any advertiser familiar with the lure of marketing their products and services on a fixed CPA or CPL model has dutifully accepted the inherent risks and the "unknown factor." The unknown factor is the mysterious details on what sites and where within the site your ad will be placed. Up until now, most advertisers clearly understood that in exchange for no upfront media risk, they were giving up the right to control media distribution. Fair trade, right?
Here's the problem. We all hope to rid ourselves forever from rogue CPA/CPL affiliates. But, and there is a but: The overwhelming majority of advertisers that really want to leverage this channel are doing so because they need an extremely scalable lead channel. In these cases, lead volume will come from the high-volume producing CPL/CPA networks (Permission Data, ValueClick, Co-Reg Media, etc.). It is an impossibility that advertisers will really ever know the identity of the lead source from the hundreds of non-branded Web sites that make up these networks and at the same time be able to deliver the very thing that advertisers in this game seek: volume.
There is also the potential for missed opportunities for advertiser. As an agency, we are sometimes surprised by the lead sources that actually convert for particular advertisers and offers. One great example: After three years of optimizing and testing a home security lead generation campaign, a network with promotional paths including free TVs or laptops used as an incentive drove the best LTV for this particular client. If we were narrow-minded, pre-selected publishers, we would never have have tested this placement. In the end, the client would have missed a strong and scalable acquisition opportunity.
The rules of sound direct marketing still apply and don't change with this new transparency model. If you are an advertiser and you choose to utilize the CPL or CPA marketplace to support your new customer acquisition efforts online, you still need to adhere to the same rules you did before, whether you know the lead source or not. Ask the same questions:
What is the lifetime value of the customer or lead acquired? Is my backend system set up to provide real-time lead disposition reporting, either internally or to publishers? As a company, do I know the success metrics and economics threshold for a good lead? Am I in a position to follow up on leads when delivered, and have an understanding of the true consumer behavior of that lead from a particular source?
If you are working with a reputable partner and have been answering these questions, it becomes less relevant if you are tracking Publisher 123 (by a unique source code) or http://www.publisher123.com. The name of the game is the same. Make sure you are driving quality leads that are converting into profitable long-term customers for your business, regardless of the publisher source.
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