Mediadroit blog

Why hosted lead-generation solutions provide better ROI than in-house solutions

January 17, 2010 · Leave a Comment

As publishers begin 2010 and emerge from one of the worst years in media history, they do so no doubt much leaner than when they started 2009. Publishing staffs have been decimated, including many IT and e-media staffs.

At the same time, many publishers know that to move beyond the banner they need to implement lead-generation technology because it is a better way to monetize low-trafficked Web sites that are common in B2b media. Still, lead-gen continues to lag at most media companies.

The argument was never very good to implement a home-grown lead-gen solution. We’ve heard stories of major B2B publishers who have invested tremendous (and scarce) internal resources into home-grown lead-generation solutions, only to scrap them 2 or 3 years later. After all, publishers are in the media business, not the software business, and can’t be expected to build and support complex software.

To recreate a hosted solution such as LeadWise involves multiple obstacles.

First is sorting out how centralized registration would work. This gets especially tricky once you’re talking about multiple, disparate web site domains.

Another problem is reconciling traditional print circulation databases, which are typically batch-focused, with real-time activity on the Web, and web-registration databases.

A third problem is developing an advertiser-friendly ad portal where advertisers can upload lead-generation ads that are specific to a publisher’s web site or e-newsletter property. To date, I have not seen one viable solution on the market in this particular regard, save our own. And we continue to hear from advertisers who love our ad portal for its power and ease of use.

A fourth issue is developing an advertiser-friendly reporting system that provides the capability to filter out duplicates, competitors, internal clicks, and classify and deliver names to different constituencies at the advertiser or distributor.

There are many, many more gotchas involved. To build such a system is at least a six-figure, 12-month investment, and given the complexity of today’s e-media climate, even more.

That’s why a hosted solution makes such sense. You can be up and running in 30 days with a powerful lead gen solution for your advertising base, well on your way to increasing e-media revenues.

Publishers can no longer afford to devote scarce in-house resources to lead-generation when hosted solutions such as LeadWise exist and have solved the problem of lead-generation. Publishing executives must always be on the lookout for hosted solutions that can take the heat off the development pipeline, and know when it makes sense to buy versus build.

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What is the ideal way to monetize lead generation?

November 14, 2009 · 1 Comment

Even before Folio: Magazine’s recent article on Mediadroit and how customer Restore Media uses our Web-based lead-gen software, we’ve had discussions with several well-known B2B media companies about how best to monetize lead generation.

We have several answers to this, which I’ll cover in this blog post.

But first, for those who read the Folio: article, it’s important to note that Restore Media, a publisher of traditional-building and period-home magazines, web sites and conferences, isn’t what we think of as the typical use case for LeadWise. Although Restore is using our technology to power their e-newsletters, their main application of our software is on their Web sites, to power lead generation on their extensive product buyers guides and directories.

While LeadWise can certainly be used for that type of application and was the best fit for their market, there are a number of other ways to monetize lead generation using LeadWise. First, let’s look at Web site lead gen campaigns.

Web site lead gen campaigns run through the content management system

To me, this is the best-kept secret for making money on low-trafficked niche Web sites. You serve up high-value content items that people are willing to register for (white papers, videos, eBooks, sample offers, and the like), but instead of serving them up through your ad server, which limits how much you can sell, serve them up through your content management system (CMS). First, advertisers who buy this way aren’t really looking for impressions. If they want impressions, sell’em a banner ad! But if they want leads, there’s one metric they care about — leads! Look how this Web site serves up multiple items from multiple sponsors on one category page:

Serving up ads in the content area of the category page, via the content management system.

These ads can also be served via “related link” mechanisms inherent in any modern CMS. Very powerful way of delivering targeted advertising in a contextual way! Minus the ad server or complicated technology!

There are a number of advantages to this approach:

You can raise prices — up to 3x or more. These campaigns can and should carry higher price tags than typical banners, because you’re delivering real leads. Depending on how you structure it, you can easily charge $7500 to $15K per year per campaign–we’ve seen these prices supported in several markets. Compare that with, say, a $30 CPM banner campaign. (We’ve seen higher and lower CPMs.) Let’s say your selling banners with a 15,000 impresson-per-month guarantee. That means you can sell a 12-month campaign for $5,400 per campaign per year at most, as little as one-third the price of a lead-gen campaign.

You can sell up to 10x the inventory compared to banners. Here’s a real-world example. Let’s say you have a site with 30,000 unique visitors per month with an average of 2.5 pages per visit — typical numbers for a B2B site (your mileage may vary). So that means you’ve got 75,000 pageviews per month. If you’re selling 2 banner ads on each page (of any size), that means you’ve got an inventory of 150,000 impressions per month. Let’s say you’re guaranteeing 15K impressions per month. That means you can only sell 10 campaigns before your inventory is sold out! That’s bad. We’ve seen sites with this same traffic level support as many as 80 lead gen campaigns per month. Since you’re no longer selling by the impression model, you simply monitor performance (which the LeadWise/AccelaWorks combo makes it easy to do). As long as those campaigns continue to perform, keep selling! So regardless of price, you can simply sell MORE.

They perform better than banners. Way better, depending on how well you coach your advertisers to offer something of value and write good ads. Of course, that’s not a hard threshhold to beat, with clickthrough rates on banners rarely exceeding 0.5% these days. I like to tell advertisers — If done correctly, your content offering should be every bit as compelling, even more so, than anything our editors write. And the leads will follow.

So here’s where the math of lead gen becomes really compelling. If you sell, say, 50 campaigns at $10K each, that’s $500K in revenue, compared with selling 10 banner campaigns at $5400 each, which is only $54,000 in revenue — without sending a single email. That’s a 10x advantage for lead generation! That’s what I call scalable revenue. Of course, the beautiful thing is you can sell both! If you deliver the lead gen campaigns through the CMS, you can continue to monetize your traditional ad positions.

There are other creative ways of monetizing online, but to me these are the most compelling ones. Now let’s take a look at e-newsletter advertising.

Lead-generation ads in E-newsletter advertising

Again, we recommend departing from the traditional banner approach. Consider this approach, which consists of ads running down the left side:

Example of a lead-generation ad in an e-newsletter

This format can support multiple ads from one advertiser, or a single ad from multiple advertiser. It doesn’t matter, and the economics are the same. So how to monetize?

You can raise prices. If you are successfully selling e-newsletters today, regardless of the price, you should be able to charge a premium for lead generation. (Otherwise why bother?!) So if you’re charging $1500 per newsletter insertion, try $3,000 with leads. We’ve seen 20K circulation newsletters deliver 50 to 150 leads per send.

You can sell out your existing inventory. If demand is soft and you’re having trouble selling out your inentory, your newsletters will get a lot more attractive with lead generation. Even if your particular market dynamics prevent you from raising prices, you should make more money simply by selling more insertions!

You can expand your inventory by launching new e-newsletters. If you’ve sold out your existing inventory, then you should be able to expand your inventory by launching additional e-newsletters–with lead generation, of course.

So we’ve covered monetizing lead generation on Web sites and e-newsletters. The third huge area for lead generation is custom publishing. We’ll cover this another day, because it is important enough to deserve its own separate blog post!

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Tagged: Monetization

Lead generation ad copywriting best practices

October 31, 2009 · Leave a Comment

As media companies shift to a lead-generation model, a tremendous cultural shift needs to take place both with the media sales reps as well as with advertisers on how to craft copy for maximum response. I continue to be amazed at how advertisers just don’t understand how to craft copy for lead gen.

The ads they write tend to be generalized information, meet-and-greet information, or product/feature/service/benefit information.

And it seems like most of the ads I see advertisers submit don’t have any sound call to action.

As such, we’ve crafted this handy powerpoint for media companies to use and adapt to their own purposes. I’ve also added it to the links bar on the right.

Our sales people use this on calls as leave behinds, or to help current customers get more out of the lead-gen advertising they’ve already bought.

Enjoy!

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LeadWise pricing model shifts — plus, new field trial option now available

October 3, 2009 · Leave a Comment

After we developed our original pricing model, our good friend Mitch Rouda sat down with us and showed us how our multiple-title pricing could work against larger publishers. Plus, our old pricing was so complicated, we had to engineer an Excel pricing calculator just so publishers could see how much our service would cost. The other problem with our pricing was the setup fee. Because we were relying on an external web development firm to set up new customers, we were being charged an expensive setup fee, which we had to pass on to customers.

Bottom line: Too complicated, and too expensive!

So Jim and I went back to the drawing board and reworked our pricing model. Plus we hired our own in-house developer, who is now at work enhancing the product. Bottom line: The new pricing makes it much easier to set up one brand. And for multi-title publishers, the setup fee is several orders of magnitude cheaper!

Field trial option

When we first launched Mediadroit, publishers asked us if there was a way to try out LeadWise without committing to it. The answer was always no, because of the setup involved. But we’ve been asked this enough now that we’ve figured out a way for a publisher can “try” LeadWise extremely inexpensively with very little risk. So we’re delighted to announce our new field trial option.

For $2,500, we will deploy LeadWise in a three-month test. The trial includes:

Setting up LeadWise for TWO different newsletter templates
Take a one-time dump of your reader data
You can send these two newsletters as often as you want in the three-month period

What the trial doesn’t include:

Ongoing daily sync with your database
Lead gen for Web site campaigns
Newsletters can’t be in two different brands groups; have to be part of the same brand group with the same database

This limited trial still demonstrates the full power of the product in a real world situation, without incurring the full cost of setup. If you decide you love LeadWise, we’ll of course set up the full product and remove these limitations. Plus, your $2,500 is deducted from the setup fee! So you really have absolutely very little risk.

Old versus new pricing comparison

So how much does LeadWise cost to use if you decide to buy the real thing for a 12-month contract? The new pricing is pretty straightforward. It’s similar to a cell phone model. You buy only however many leads that you think you’ll need for the year. And unlike the old model, you can now share those leads across however many brands you want to setup with Leadwise.

I’ll show two examples — a single-title publisher, and a multi title publisher.

Single title publisher

$4,000 – Setup fee

$1,500/mo – ongoing fee

Fine print: This would include up to 1,500 leads per month. (All contracts are 12-month commitments except for the field trial as delineated above.) The setup fee assumes our standard package of 3 newsletter templates and 3 web ads per brand group. And if the publisher is upgrading from a $2,500 field trial, they’d only have to pay $1,500, since the $2,500 applies toward the $4,000 fee.

By the way, a Brand Group consists of a mothership publication and Web site and e-mail newsletters, but can also include ancillary Web sites and microsites, and ancillary publications, so long as they share a common database format and field structure.

Single-title publisher–adding a second brand group

What if that single title publisher wanted to launch a new title and add it to LeadWise? The additional fees would be:

$1,000 – one-time setup fee (vs. $8K to $12K previously!)

$100 per month additional (vs. $1,500 per month more previously!)

Multi-title publishers save much more

Where the real savings come in is for multi-title publishers. Let’s say a publisher wanted to launch with 10 titles. The previous setup fee would have been $80K to $120K which is obviously a non-starter in this or any economy. But now, because we’ve dramatically shifted our own internal cost structure, we’re able to set up and run 10 brand groups much more cheaply:

$8,000 – one-time setup fee

$4,675 – monthly fee (vs. $15,000 per month previously!)

The monthly fee would really depend on how many leads that publisher would think they’d need. In this example, I chose 100,000 leads per year. The nice thing is, the publisher can spread these leads out across all 10 brand groups. In this example, you can see that lead generation would cost less than $500 per month per brand group.

And if a publisher sees they’re on pace to use up their leads too quickly, we make it easy and painless to shift into the next higher plan.

The return on these investments is indisputable. We see over and over that the best way to monetize low-trafficked Web sites (which are typical of B2B sites) is not banner ads, but by lead generation. Why not use the best tool on the market to make it painless to scale lead-gen across multiple web sites, newsletters and hundreds–even thousands–of advertisers?

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Lead generation still lags at most media companies

September 18, 2009 · 1 Comment

Folio: published its latest survey on e-media trends at publishing companies, and I’m surprised to see that lead generation still lags as a revenue generator. Only 25% of publishers reported that they earn money from lead generation. Where publishers generate revenue from e-media That’s too bad, because lead generation offers advertisers real ROI that leads to sustainable e-media revenues.

The top category? Banner advertising. Not surprising, but the fact is that banner ads are the least profitable form of e-media. From the Folio: article:

Banner advertising was also cited as the least profitable e-media revenue stream, with 32 percent of respondents saying they see profit margins of less than 10 percent from banners.

There are several reasons we like lead generation, but here are the top few:

It scales beyond impression-and-click constraints. No pageview inventory constraints to worry about. With tools like AccelaWorks, you can monitor the performance of all your advertisers’ campaigns, and optimize as necessary.
Publishers can charge significantly more for it, greatly increasing profitability.
Advertisers, seeing real value for their ad dollars, are much more likely to renew.
You can make a lot of money with low-trafficked sites; we’ve seen sites with 35,000 unique monthly visitors bring in $700K to $1 million per year. Those kinds of dollars are simply not possible with banners!

The best way to monetize through lead gen is to offer lead generation throughout a publisher’s entire portfolio of offerings, including Web sites AND newsletters, all in a single platform.