Re: Do publishers want to make money?

From: Brad Jensen <brad_at_elstore.com>
Date: Mon 04 Feb 2002 10:23:41 -0500

"Jason Geraci" <jasong_at_streamcast.ws> wrote:


> Well you bring up some good points, but we are still missing
> my point here. Brand advertising is still valuable to me.
> Just because we can track how many people click-thru and
> then purchase doesn't mean this medium is any more trackable
> than any other type of media. The only reason we never
> talked like this about T.V. media is because we didn't have
> the internet to communicate with one another as efficiently
> as we do today.

Not so, I grew up in an advertising household and read Ad Age from
the time I was ten years old. They used all sorts of goofy 'do you
remember this' testing to establish the value of ads. The problem
was that they had no way to tie purchases back to specific ads, so
they wen with what they could measure and made that the gospel.

> It doesn't matter if 'branding' occurs in the advertising
> impression. If I can get sales from it, I keep doing it. If I
> can't, I don't

True. But what does it take to get you started? The number one
threshold to any sales transaction is uncertainty (given that
there is some value proposition. In this case we are talking about
the uncertainty of advertising. CPA takes at least some of the
uncertainty out of advertising.

> Once again Brad, it sounds like you are another fly-by-night
> guy and that is what this whole discussion is about.

I've been in business since 1978. I have 25 employees and 2.5
million a year in sales. See www.elstore.com, www.eufrates.com. I
have closely held companies with no longterm debt and no venture
capital, internally funded. I've never gone bankrupt. I'm not fly
by night, at least in the commonly thought of sense. (Astral
projection is another matter.)

> How is
> it that I get credit if my customers go back to your site and
> buy later than the cookie lasts??
> My biggest problem with CPA
> is the fact that there is no accountability for advertisers.

Yes, that is the uncertainty for the publisher. I can think of
some possible solutions.

> Why should I not get credit for purchases that were made by
> seeing an ad on my site just because it was made 6 months down
> the road...that is trackable too!!! I just feel that there
> are a lot of SUSPECT advertisers out there that are looking to
> use and reuse anyone who gets in their way. In my opinion it
> isn't the publishers who need to prove something, it is the
> advertisers. Period. They need to build some credibility with
> the publisher world not vice versa.

Well, the difference is who gets the money for the advertising
transaction? The publisher does.

One thing that might help in a CPA scenario, is for the action to
be the clicker putting their email in to receive something by
autoresponder. Then you can track their email address forever. You
could set it up with an independent site that would connect by
SOAP to the advertiser, and email the lead to the publisher also.

Of course, you would have the problem of the person clicking thru
you today, and someone else next month before they buy.

> On a more positive note we have switched over to Zedo as our
> ad server and we are starting to love them. Our click-thru's
> have gone up because of advanced targeting ability and it has
> made things so much simpler. I recommend to anyone who is
> looking for quality ad serving at a very reasonable price...
> check them out.

I have advertising dollars going begging. My main product is
report and image archiving systems called LaserVault, I sell
mostly into the IBM Midrange market, and now I am also targeting
mainframes. The products cost $10,000 to $75,000 depending on the
size of the customer and what they buy. I have not done optin
advertising ont he midrange email lists, because their rates are
scary. It's all CPM, and I don't even have a way to check the
actual size of the optin lists.

What matters to me, is can I convert these clicks (if they even
happen) into sales? Right now I do all of my paid marketing as
direct mail or phone prospecting. We demo the product over the
internet (see www.elstore.com/lvuc.htm for a flash of one
product). It can take 45 to 60 days to close a sale , some have
take as long as five years.

I don't have 40 to 50 thousand dollars to blow on testing these
different optin lists and tuning my web-based response. (Right now
it is pretty lame.)

However, I would pay 10% of my net sale ( we discount to create
urgency, but my average sale last year was $17,5000+) gladly as a
cost per action to anyone who brings us a customer. You are
talking about a $1750 CPA, but it is for a real action to me, a
sale. There is no uncertainty to me, I know exactly what it costs,
I'll let your CPA audit my books (on a nondisclosure basis, of
course.)

Now some of you will say, well that's your problem, Brad. Figure
out what percentage of views become clicks, clicks become demos,
demos become sales. The problems I see is that this number will
vary for me from publisher to publisher, and I don't have time to
do this, and I can't afford to bet. I have to spend my dollars
where I know the results.

I am thinking of doing some print magazine advertising now that
the web offers an easy way to respond.

My point here is not that I am a big chicken, but that I will pay
a large sum after the fact for a sale. Anyone would.

And the more actions happen, the more money I will spend. I would
expect it to be somewhere between 5 and 50 sales a month (with a
lag time averaging 37 days).

I have no idea what it would be for my elearning system. I haven't
started to advertise that at all. I have two happy customers (and
no unhappy customers), one of them has been using the system for
18 months. I'd pay 10% on that, also.

If all the uncertainty is taken out of the advertising sale, you
will sell more advertising. And more things will get sold. In the
magazine world they have an audit bureaus. It is there only to
increase the confidence of the advertisers. The publishers pay for
it.

There are 300 million people on the internet, Last year I sold 100
systems. (We get a lot of money from maintenance).

It doesn't matter how great a job you do telling me your spot will
target my audience perfectly. My wallet won't believe you.

Brad Jensen





Received on Mon Feb 04 2002 - 09:23:41 CST