NONE: RE: ONLINE-ADS>> Sales commission vs. ad revenue
RE: ONLINE-ADS>> Sales commission vs. ad revenue
Adam Boettiger (ab_at_exposure-usa.com)
Mon, 22 Sep 1997 12:51:53 -0700
At 03:20 PM 9/19/97 -0700, Kristine Loosley <kris_at_concentric.net> wrote:
>My company is interested in exploring the "pay per sale" model.
>However, there will have to be an incredible amount of either
>trust or record-keeping/sharing, though, for the web site host is truly
>at the mercy of the site that is tracking the sale. And what happens to
>the gal who visits you today, direct from my site -- thinks about the
>purchase and/or comparison shops -- and comes back to you directly
>tomorrow because she bookmarked your page?
Kristine is right in that this type of a model requires
a trusting relationship, and this is but one of the reasons
why this type of "pay per sale" model is not as popular as
advertisers or site owners would hope it to be.
If I am promoting Kristine's product, and here I am
only using her as an example - I'd want to make sure
she has a good tracking system in place and I'd want
some way of monitoring sales. But in reality what it
boils down to each month is how many widgets Kristine
"says" sold from my marketing efforts. In regards to
her question of delayed sale, this can easily be overcome
by the use of cookies - if the visitor decides to accept
them. Other problems she may face are accounting,
paying hundreds of resellers and what Mark Welch mentioned
- that you don't know how these people will promote you
or portray your company. They may be more headache for
you than sales.
I have never accepted any promotional job or sold any
advertising based on the "pay by sale" model, mainly
because I have no control over whether or not there
is a market for widgets on the Net, nor do I have
control over whether visitors decide to buy a widget once
they are on sites like Kristine's. It is a combination
of product/service price, demand and presentation
that will determine the sale, and since I have no
control over any of these, why should I be paid
based on whether or not someone else's product sells?
A more reasonable approach, aside from the
"Working for free or peanuts" model, would be to pay
based on traffic *and* sales. i.e. You pay me X dollars
for every thousand visitors I deliver to your site and
an additional commission if any of them do buy. This
would be much more lucrative and fair to both parties.
In any case, I'm seeing more and more firms seek this
type of a pricing model (pay by sale/results) and I can
understand why. Hell, who wouldn't want to invest zero
dollars in advertising and marketing and pay only when
a sale comes in?
In reality, however, it would be like my posting an
ad in USAToday and telling them on the phone that
I would only be willing to pay for the ad if my product
sold from their ad. They'd laugh at me because in most
instances that's not how it works at all. In most
instances businesses would never *ever* open up without
a monthly budget in place for marketing expenditures and a
monthly budget in place for advertising expenditures to
promote the business.
It's fine to use the "pay per sale" model to *augment*
an existing campaign, but to use that model as the
only means of promoting your site is like diving off
the deep end when there is no water in the pool...
Adam Boettiger, Moderator
The Internet Advertising Discussion List
http://www.exposure-usa.com/lists/
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