Re: PPC/PPI Brokers - Does The Model Make Sense?
Hi RawTop.
This is exactly the type of discussion that we want and your questions are very well thought out and I thank you for bringing them up. If you don’t mind I’d like to address some of those questions about GayAdPros.com
There was a seminar at the Phoenix Forum that basically asked is the affiliate model dying? While there were some that believe it is, I just think it is evolving. Take for example blogs and review sites. These type of sites will always rely on affiliate sales. When you blog about or review a paysite’s content your intent is to send them to that sponsor and earn that commission.
But what do you do with banner advertisements or text ads that aren’t relying sponsor content to draw the surfer? Many publishers don’t make the same rate per click each and every month. One month they may make 10 cents, one month they may make 5 cents. So this model affords publishers consistency. Additionally, how many threads popup from affiliates complaining about not getting paid by certain sponsors? They don’t have to worry about it in this model.
You also said that if you normally make .07 per click that you would have to charge 12-14 cents per click to get the same rate. True to a point. Let’s look at the broader picture. Having just one static sponsor banner in the same spot month after month isn’t going to get the same amount of clicks as a banner that is rotated between several to a few dozen different sponsors (banners). So if your click through rate (CTR) on your static banner is .50% and your making 7 cents a click… with GayAdPros.com if you charged 9 cents per click and your CTR is .75, which is low-balling it… you’re already making the same amount. In all actuality you should expect your CTR to be double or more on GayAdPros.com over time.
Keeping on that topic, I want to bring up the cost of labor. Labor costs, especially in this industry, is the largest cost that many companies undervalue. How much time is spent collecting fresh banners, uploading those banners, checking and recording stats? If you sell advertising directly, how much time is spent recruiting advertisers, billing advertisers and collecting unpaid bills? Time, most certainly is money. Also, because the banners are hosted by GayAdPros.com you’re saving money on bandwidth too. Therefore, publishers realize they can accept less on the front end and still increase their bottom line due to decreased labor and bandwidth costs.
Regarding our suggestion of charging .01-.10 a click, this needs clarification. You are referring to our bulk network ads. We offer two options for what to display whenever your ads are not sold that still earn you money. One is that you can enter custom html code - i.e. the <img src> and <href> tags. Bascially you can enter a default sponsor banner and link instead of just the words ‘Advertise Here’. The other option is to utilize network ads. This is for advertisers who want to buy in bulk rather than cherry picking each individual banner space. By entering a price for network ads you are allowing bulk advertisements to display whenever the ad is not sold outright. Bulk advertisers enter a cost per click and then their ad will display in spots that meet their price or lower. Thats why we suggest .01-.10 for the spot because most bulk advertisers will never enter an amount higher than that. Generally your bulk rate (network rate) should be a little lower than your direct or outright rate.
Now I’ll address how this model works for advertisers. As an owner of an affiliate program, I would absolutely love if every single gay website on the Internet ran my banners. Until that happens, I’m not going to hold my breath. So I buy ads on websites that would otherwise not be utilizing my affiliate program. I choose to not let sales lay on the table, while my competition picks them up.
While I do buy ads directly from the source that is all larger well-known sites. I can’t spend my entire day surfing the internet and looking for small-medium sized websites to advertise on. Not only is that labor intensive, its not instant gratification. With buying directly from the webmaster, I have to first find them, then email the webmaster, wait a few days to get the rates and info. Wire them money which takes a day or two. Send them the links and banners. Then finally in a few days after that my ads are running. With GayAdPros.com my ads are usually live on the publishers site within 24 hours. So I save on labor plus I start making sales almost immediately.
Also, sponsor programs have been increasingly aware of how their products are promoted and want more control in that. GayAdPros.com affords the advertiser just that. Sponsors can choose exactly what they want their text ad to say. They obviously have access to their most recent or even upcoming content. So their banners advertisements are always fresh and they don’t have to worry about looking like a dated site because a publisher hasn’t updated their banners in the last 5 years.
Finally, paying per impression is actually a scary prospect for many sponsors. They prefer to pay per click because thats a fixed rate that helps them monitor their Cost Per Aquisition (CPA) more definitively. However, what about start up free sites? Theoretically their banners are going to get clicked on more so it makes more sense for them to pay for expsores rather than clicks. Same would be true for a sponsor that specializes in creating awesome banners and routinely sees very high click through rates. This is why we suggest that publishers offer a CPC rate and a Per Impression (PPI) rate as well. Eitherway, the publisher should make the same amount of money, but the advertisers are empowered to control their CPA or overall ad budget.
If you have any followup questions feel free to post them here or email us directly. Thanks again!