When will be able to use cpa for buying cars?

How do we solve the offline purchase problem?

The Adtech conference a couple of weeks ago was pervaded by two smells. One was the sniff of a slowly decaying traditional advertising world, the other was the smell of adolescent exuberance from a bunch of precocious but brilliant teenagers.

Because of this the conference was brilliant.

What has stuck with me is the cleavage between traditional advertising and new generation performance marketing.

The problem with traditional advertising is that performance metrics are woolly. That’s not to say it doesn’t work.  We still see TV adverts for soap powder because of course there is a correlation between offline ad spend and revenue.

What the traditional admen didn't want to address was what will happen when web offers the same reach as tv. They seemed to retort that ideas like a monkey playing the drums will save offline advertising. I am not so sure.

At one level this is an online offline debate, but on another level this is product centric.

You can sell some products, like cameras online, and so using performance metrics like cpas is easy.

But what sort of performance ads can you use if you're Cadburys or Pringles?

How can you prove an online ad makes more people buy chocolate? Its hard.

Its not just FMCG. For example, what about cars? You can have an incredibly compelling piece of advertising that makes someone more likely to buy a BMW.
But they are going to buy it in a dealer.

Why should it matter that offline ads are hard to measure?

When you can’t measure the effectivness of an ad it should worry admen. Advertisers can get measurement elsewhere. They will go elsewhere.

It also worries small publisher sites; what if you have created a niche car blog with the perfect environment to persuade people to buy cars? You can't currently get the 5% lead-gen fee. But by god that’d be nice.

As an investor I am fascinated by this broken piece of the chain. How do you solve the problem? Vouchers? More sophisticated lead gen intermediaries?

I'm looking forward to entrepreneurs telling me.

Comments

[Dan Field]

To some extent, the problem has always been here and the traditional answer is to simply look at the increase in product sales, referenced against historical sales data.

Large companies will also research and poll their market... asking a selection of their target market if they were aware of the Ad and their comments - how many people do actually know (Or remember) the gorilla is advertising Cadburys.

Paying your advertisers on a CPA basis can be difficult in some industries though....

Tracking responses to online ads can be achieved through unique call-to-action telephone numbers, or as you say a discount code or voucher. Most things can be sold online or at least have an appointment made online (To view a car at the dealer). Links into Internet Telephony can also be useful to enable ad tracking.

Taking the buying cars example, the site has to do everything it can to take the customers enquiry and then pass it on to the dealer... this may involve the site having a specific discount arrangement or maybe offer a free gift. Some utility comparison sites are doing this today - offering cash back if you buy through their link (Splitting their commission with the customer).

Smaller items (Like a chocolate bar) are tricky, and at the moment can only be advertised on a pay per view rather than a pay per action. This is more of a branding exercise than a direct product sale.

Maybe when we have mobile phone payments they can be used to track a purchase when an advert or offer has been sent by SMS for example, or maybe some kind of global Nectar card type system where you get people to install a tool-bar into their browser so you know which of your ads they have viewed and you will know when they buy your product offline too - bit of a nightmare for privacy though so would need a pretty good incentive for the customer to use it!

Dan
CEO
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[Jon Squires]

With purchases that require longer decision time, such as cars, it is easy to use the prompted or unprompted brand recognition metrics. You might say that this isn't as comprehensive a sample as online, but online traffic only represents the marketing and viral network that your site has.

I agree with a lot of what you say about the marketing spend, but the gorilla Phil Collins above is the wrong message for a chocolate bar and probably better for a sound system. Don't let that flaw bias your opinion. A good TV commercial or cinema ad for a car will always be more powerful than a simple online delivery. A black and white Guinness ad will always beat anything that they could do online. TV advertising will be more emotive; print will lose out.

Jon

[James Penman]

Microsoft's acquisition of Jellyfish points to one potential solution. Marry the huge audience a media group can provide to a platform that rewards punters for their attention and then you'll achieve the critical mass necessary to make a CPA deal on a car *possible*. Consumers could earn a small fortune in cash back when buying shopping items (this bit has started), financial products, cars and even a house. If they knew this and there was a platform that enabled them to do it then, for me, there would be sufficient demand for the CPA deal on a car to be possible. As for your small publisher, they could use the platform to earn a % on any sale introduced etc, etc.

[Oliver Thylmann]

Another possibility is to just find something that is measurable. That would be for example a request for a test drive, and that is again something that a car dealer will pay for especially if the quality of the lead is right.

That also opens up a new market in that suddenly you can attract independent car dealerships who otherwise would have a hard time to really advertise. That is one of the possibilities we see here at Ormigo, where we attack different markets from a local market perspective, connecting consumers with fitting local merchants to help them with their problem.

[Car Dealer Finder]

Well, since the things are moving lot faster so we can see CPA been introduced very soon in the car market too

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