In April I wrote a piece for this blog about publishers – Thinking Like a Publisher, Thinking Like a Marketer. Those of us in the on-line advertising business tend to focus mainly on monetization when we talk to media content owners. However, we would form stronger partnerships with them if we thought about their business the same way they do. I proposed a three part framework, where acquisition, retention, and engagement all work together to support monetization.

I’ve also written a few entries about Tribal Fusion Insights Services, and how we expose our data to help people make smarter decisions on-line. If this works for our advertisers, then why not for our publishers? We’ve approached a number of them with this idea, and the results have shed some light on the ARE framework. Let’s start with an example on customer acquisition.

Customer acquisition in the digital sphere is well trodden ground, so you’d think we’d all be experts by now. Most people reading this blog know their SEM from their SEO. We’ve seen the pros and cons of affiliate marketing, and the rise and fall of click arbitrage businesses. We’ve got it down, or so one might think.

At Tribal Fusion we aren’t going to help you fix your search marketing. However, by profiling your customers with our insights data, we can tell you what you are doing right and where there is space for improvement. Here’s a question we got from a publisher recently. They are a job site, and they were wondering why, particularly in today’s wintry economic climate, people are not posting CVs. At its heart, this is a customer acquisition problem, and the costs of getting it wrong could be catastrophic in their case. Academics refer to this as a network effect. The value of the publisher’s site is directly related to the number of participants. If no one submits CVs, then employers won’t pay to post jobs there. If there are no jobs posted, then no one submits CVs. A poor customer acquisition strategy could cause their business to implode, so their decision to zero in on this one indicator was astute.

We placed pixels on their main landing page, and again on the CV submission page. We then mined our behavioural data to profile the groups separately, picking out the key differences. Graphically, it looked something like this:

Ratio of impressions to concersions

Along the horizontal axis, we have propensity to submit a CV. The vertical axis represents propensity to visit the site. So Millenials, for example, are nine times more likely than average to post a CV, but only 2.5 times more likely than average to come in to begin with. If the publisher could find more of these people, life would be grand. However, to make customer acquisition more efficient, we chose to focus on the upper left. These behaviours describe people who are highly likely to visit the site, but not at all likely to sign up. The specific data points are instructive. We are seeing a lot of senior citizens who are just not in the job market.

Whenever we see this much of a disconnection between site visitors and customers, it means that not everyone qualifies for the product (i.e., a mortgage), or that the incoming people are just irrelevant.

So why is this happening here? I’m guessing there is some low quality traffic acquisition at play. It’s widely documented that older people tend to click on ads more than average. If a publisher is faced with diminishing returns on their marketing efforts, they will often pursue a short term strategy that prioritizes getting people in the door above all else. If that is the strategy, then the tactic applied is either CPC or CPA ad campaigns. By definition, though, you do not have any control over who sees your ad or who responds to it when you acquire your customers that way. As I have pointed out in previous posts, buying clicks does not equate to buying good customers.

We recommended they do a bit of pruning. They should remove lower quality traffic sources. They should even pay a premium to make sure their ads are seen by the sorts of people who are in the market for their services, like those Millenials I mentioned earlier. In the short term this approach might mean less throughput. However, the real cost per acquisition (and not just in the limited sense that we use the term in digital media) should be lower in the long run. A focus on quality establishes the right foundation for a viable marketplace for job seekers and employers, which is what everyone wants, including the publisher.

Hopefully this all sounds sensible, and has not sent any shockwaves through the traditional marketing canon. Yet how many of us are still buying, selling, and planning CPA campaigns, even though it may not be the healthy way to acquire customers? We welcome your comments.