Julian Grainger

Head of SEO at Unique

When CPA is silly

On the advertising side of the business we were recently asked whether we would allow an advertiser on under a cost per acquisition basis. This means we get a fee if we source a sale for them but we don’t get paid for the space they take up with their advert. Fair enough you’d think except not with our audience. So we gracefully declined having a leading travel brand advertise on the website.

Much has been written about the engaged, digitally savvy consumer to know which demographics will buy online and which will not. It can be extremely profitable for both advertiser and publisher with the right demographics to operate CPA . However, if you have the type of demographic that doesn’t like to buy online then CPA becomes stupidity for both publisher and advertiser.

The current trend of one NZ advertising agency, Zed Digital, is to try and force publishers of targeted websites to accept placements based on a CPA fee. This, in the instance of one client, House of Travel seems less than smart. Zed ignore the brand benefits of being on a targeted websites. Yes, most campaigns are for sales lead generation and heavily targeted websites should deliver this. But it cannot be ignored that you are exposing the brand to the very group of customers the advertiser is trying to reach.

Every campaign has a lot of work behind deciding the placement in terms of demographic and behavioural targeting. The creative has very strict management of how that brand is displayed. As a result, the business placing the advert will receive some long term brand benefit from that placement.

CPA further ruins opportunity by only optimising future placements based on the online acquisition. This ignores the fact that most businesses still have a much more significant offline customer base. In the case of a travel brand it is easy to establish that older clientelle and business clientelle will be more profitable to the brand than the digitally savvy, younger audiences. However, business people rarely book their travel by themselves. They’ll hunt the deal but a busy CEO has staff to do the detailed bits of work. Older travellers will view deals on the net but behaviour clearly shows a preference to go to the travel agency in person to book the trip. So optimising a campaign purely for its online acquisition ignores these highly profitable segments. And online opportunities are going begging that the competitors are mopping up.

Part of the issue is the belief in many advertising agencies that you cannot build a brand online. Ipso facto, you can only promote for sales lead generation. If this is correct then what about 42 Below, Trademe, Ebay, Zillow, Amazon – need I go on. The real issue is that many agency creatives still have difficulty in dealing with digital. They lack the skills and control because they have to deal with programmers to get things done. Another part of the issue is that digital will also find a creatives limits. You have to distract before you can engage a user online whereas TV always has passive viewing. So you have to be up to your game to make an advert work otherwise it will not be seen and a brand story will not be told. These two factors mean there is very little done online in a true branding sense.

I think part of the problem is also ‘the latest expert’. I’ve met many in the 12 years since my first exposure to online advertising. Many have only notional experience of whether their theories work. Others are pushing an agenda, whilst others are having a hard time convincing clients to go online because they really have little understanding of it themselves. It builds a lack of credibility as a media option for brand campaigns.

So the latest big thing, CPA, is a very good illustration of that lack of understanding of online as an advertising channel. The expectation that every demographic will convert online and then the optimisation away from potentially profitable segments that only convert offline, does nothing to grow it as an advertising option. In reality, it has the potential to reduce real opportunities for the business while it completely ignores every placement being a long term investment in the brand.

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