CPA advertising for mobile and video

By February 16, 2007Advertising, Mobile

I haven’t talked as much about affiliate networks and our investment in buy.at as I expected when I started this blog, but I’m going to re-dress that balance slightly today.

As a refresher affiliate networks provide internet marketing services that are analogous to real world below the line direct marketing – i.e. they are more about driving transactions than building brand.  They operate on a cost per action (CPA) model and act as a broker between merchants who want to drive sales by offering a commission per transaction and affliates who can find those sales for them.  Mobile network operator ‘3’ is one of buy.at’s biggest clients at the moment and they pay up to £70 for each new subscriber our affiliates find for them.  The £70 is paid to the affiliate and an additional over-ride is paid to us (the network).  Many of buy.at’s clients and the deals they offer are listed here.

This is a CPA model because ‘3’ only pay when there is an action – a customer is acquired.

It’s a great model for merchants because it is a no-lose deal.  They only pay if they get new customers.

That has made it a great and fast growing market.

So far though it is only wired-web and static page based.  As I wrote yesterday mobile is a hot new area for advertising, and online video advertising is also opening up.  So far these have been purely on CPM deals – advertisers pay per impression.  This is standard for new media – it is easier to experiment with CPM and the owners of the limited inventory are able to get high CPMs without worrying too much about downstream conversions.  As these markets mature CPA will become a large part of the mix – it is a better deal for advertisers and owners of high quality inventory often get better returns this way too.  We have seen this move on static wired web pages and so it will be with mobile and video.

But it won’t necessarily be straight forward.  The CPA affiliate model works on the wired web because people can click through to sites and complete transactions.  That is still difficult on mobiles – tracking innovations will be required or the mobile internet experience will need to improve to make this work.  CPA/affiliate ads round the edge of video needn’t be complicated, but if the real action turns out to be in in-stream ads then enabling and stimulating click throughs will be the next challenge.

Answers to these questions on a postcard…..

  • Cool.
    I didn’t know this was in your portofolio.
    PS: I will be in london between the 16/03 and the 19. If by any chance …

  • Cool.
    I didn’t know this was in your portofolio.
    PS: I will be in london between the 16/03 and the 19. If by any chance …

  • Nic,
    I’m unsure why you want to go running off after mobile and video affiliates when there must be so much more expansion room available with existing web based affiliates.
    I’ve just been and signed up for buy.at. But even though I’ve signed up to buy.at, I have absolutely no idea of what will happen next or what I’ll have to do or why.
    And if that’s the case with me, how many potential affiliates must there be out there who will never sign up, even though they are ripe to become great affiliates?
    So why not focus a bit more on the low hanging fruit before rushing into new arenas where the whole thing makes much less sense?
    And here’s the kicker – does buy.at have an affiliate program? What’s the CPA for new affiliates? Where do I sign up?

  • Nic,
    I’m unsure why you want to go running off after mobile and video affiliates when there must be so much more expansion room available with existing web based affiliates.
    I’ve just been and signed up for buy.at. But even though I’ve signed up to buy.at, I have absolutely no idea of what will happen next or what I’ll have to do or why.
    And if that’s the case with me, how many potential affiliates must there be out there who will never sign up, even though they are ripe to become great affiliates?
    So why not focus a bit more on the low hanging fruit before rushing into new arenas where the whole thing makes much less sense?
    And here’s the kicker – does buy.at have an affiliate program? What’s the CPA for new affiliates? Where do I sign up?

  • nic

    Hey Ivan,

    Thanks for the comment. I’m sorry you haven’t been told what will happen next after your buy.at sign up. We should fix that.

    There is no payment or program for recruiting new affiliates because there is no shortage of people who come for free. If anything the problem is with too many affiliates and managing for quality.

  • nic

    Hey Ivan,

    Thanks for the comment. I’m sorry you haven’t been told what will happen next after your buy.at sign up. We should fix that.

    There is no payment or program for recruiting new affiliates because there is no shortage of people who come for free. If anything the problem is with too many affiliates and managing for quality.

  • All this talk of mobile advertising – who on earth is reading the content? I don’t know of one single person who looks at content on mobiles and I know a lot of people who have mobiles. Tell a lie, my brother checks the football scores maybe 3 or 4 times a season if we are not at the match and he isn’t near to a TV/Computer/Radio.

    Until the networks sort out transparent costs for users then I feel advertisers will be completely wasting their time. There are a lot of mobile as agencies out there but do they actually have a good client roster?

    I still think there is more which can be done on the web with affiliate marketing before spending too much time on mobile.

  • All this talk of mobile advertising – who on earth is reading the content? I don’t know of one single person who looks at content on mobiles and I know a lot of people who have mobiles. Tell a lie, my brother checks the football scores maybe 3 or 4 times a season if we are not at the match and he isn’t near to a TV/Computer/Radio.

    Until the networks sort out transparent costs for users then I feel advertisers will be completely wasting their time. There are a lot of mobile as agencies out there but do they actually have a good client roster?

    I still think there is more which can be done on the web with affiliate marketing before spending too much time on mobile.

  • @mspoke – heresy 🙂

    The prosaic truth is that the mobile industry badly wants / needs mobile advertising to work, and so the hype right now is very intense, though the actual evidence of what works and what doesn’t is far less clear.

    I think it will be quite a few months before it starts to become clear what mobile ad business models actually work, and I’d predict that there will be at least one high profile ad-supported mobile failure this year.

  • @mspoke – heresy 🙂

    The prosaic truth is that the mobile industry badly wants / needs mobile advertising to work, and so the hype right now is very intense, though the actual evidence of what works and what doesn’t is far less clear.

    I think it will be quite a few months before it starts to become clear what mobile ad business models actually work, and I’d predict that there will be at least one high profile ad-supported mobile failure this year.

  • nic

    I agree with all these points. The market is still very early for mobile content and hence mobile advertising. However, I think the market has now developed to a point that the companies who will eventually win need to be formulating their strategies and starting to place some bets. I would even say that point has passed for mobile banner advertising.

  • nic

    I agree with all these points. The market is still very early for mobile content and hence mobile advertising. However, I think the market has now developed to a point that the companies who will eventually win need to be formulating their strategies and starting to place some bets. I would even say that point has passed for mobile banner advertising.

  • CPA video advertising is good but fixed rate is a step up from CPA that's why I do prefer video marketing on sites like Adwido. My advertising budget is very limited and CPA just doesn't work for me.

  • CPA video advertising is good but fixed rate is a step up from CPA that's why I do prefer video marketing on sites like Adwido. My advertising budget is very limited and CPA just doesn't work for me.

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