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!
That’s too bad, because lead generation offers advertisers real ROI that leads to sustainable e-media revenues.
