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Case Study: How a Small Internet Publisher Doubled Its Email Database & Reduced Marketing Spend With Cost-per-Lead

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Company: Tripmela, Inc.
Contact: Jared Blank, CEO at Tripmela
Location: New York, NY
Industry: Travel, Internet Publishing, B2C
Annual revenue: Confidential
Number of employees: Confidential

Quick Read:

New York-based Tripmela, Inc., an online travel publisher, has found its niche in India—where the Internet population has grown from 4.9 million in 2000 to 46 million in 2007 (source: Internet & Mobile Association of India), the online travel industry was named the country's leading and fastest-growing e-commerce category, and the Official Airline Guide (OAG) reported a 62% increase in the domestic low-cost travel sector between 2006 and 2007.

Tripmela aggregates the top travel bargains available to the Indian market on its site and sends out a weekly "10 Best Deals" newsletter to its subscriber base, offering a single, user-friendly portal comparable to TravelZoo in the United States.

Like much of the Indian Internet industry, however, Tripmela was still in its infancy when 2008 rolled around. Although its Web site had been launched, advertiser partnerships established, and funding secured, the task of generating a steady stream of Web traffic remained a serious challenge. The company attempted cost-per-click (CPC) and other paid-search campaigns to grow its email newsletter list (its greatest revenue driver), but those efforts turned out to be inefficient and ultimately too expensive.


"CPC gave a false sense of control—a control of cost—but what we really cared about was the cost to acquire a subscriber," said Jared Blank, CEO at Tripmela. "To get a good cost-per-acquisition metric, we had to have two things in place: (a) a strong cost per lead, and (b) a high quality of leads that would drive higher conversion rates."

Blank found that both attributes were possible with cost-per-lead (CPL) campaigns initiated through Pontiflex's GENList lead-generation directory, which enabled the company to both best its $1.50-per-acquisition target and achieve a solid measure of predictability in its marketing results, the latter of which improved budgeting accuracy and allowed the company to more effectively market itself to advertisers.

Challenge:

Online travel publisher Tripmela's revenue is derived primarily through commissions on travel deals published in its weekly newsletter, and so its marketing revolves around building its email database and is rigorously tied to ROI metrics.

In early 2008, with the company still in startup mode, CEO Jared Blank determined that he needed to achieve a $1.50 cost per acquisition if he was going to lead this fledgling to profitability.

As it was, the company was spending over $2 per acquisition on its cost-per-click (CPC) campaigns and was limited in its capacity to improve that figure.

"We did everything we could on our side to optimize the campaigns, but ultimately we had no control over the media. The publishers had no incentive to make the campaigns do better; they just wanted to give us clicks," said Blank.

Although the company's cost-per-thousand impressions (CPM) campaigns were surprisingly more successful than CPC, they still did not meet the $1.50 mark. Furthermore, actual costs and results associated with CPM were unpredictable, making it difficult for the small startup to effectively plan ahead.

Campaign:

In April 2008, Tripmela began working with Brooklyn, NY-based Pontiflex, the provider of an open lead-generation marketplace that connects advertisers such as Tripmela with publishers wishing to promote their offers. This cost-per-lead (CPL) model permitted the company to pay only for actual leads received rather than impressions and clicks that may or may not result in a lead.

Pontiflex's GENList lead-generation directory allows advertisers to personally set up and automate their own campaigns by entering their budget, target cost per lead, target audience, and other pertinent information, which are subsequently matched in real time with publishers that fit those stipulations. However, believing that the inception of a CPL campaign in the Indian market necessitated some extra "hand-holding," Blank instead solicited the assistance of a Pontiflex account manager.

Blank specifically wanted to advertise with high-quality publishers in India, so like a media planning agency his account manager helped identify credible sites, such as Rediff and Yahoo India, that not only met that criteria but also fulfilled Tripmela's cost and volume requirements. Those publishers weren't necessarily the cheapest, Blank recalled, but "low cost and no volume doesn't really help you."

Campaigns were launched with a handful of publishers using in-banner signup, wherein interested users could enter information directly on the publisher site without being redirected to a separate landing page. All leads were automatically validated and verified through third-party TARGUSInfo and delivered in real time to the Tripmela email database.

Tripmela made only minor adjustments to its creative messaging and added new publishers approximately every three weeks. All other campaign optimization was handled by the Pontiflex Account Manager and the publishers themselves, who were made more accountable than their CPC and CPM counterparts through Pontiflex's reporting system, which clearly traced each lead to its source.

Results:

Due in large part to its partnership with Pontiflex, Tripmela doubled its email list in a single month and has beat its $1.50/aquisition goal by more than 20%.

"In terms of acquisition metrics, [CPL is] at least 100% better than getting leads with CPC," said Blank. Compared with CPM, CPL performed "somewhat better to much, much better," he said.

The leads generated through GENList campaigns were also more responsive to the company's email announcements than those brought in through CPC and CPM. "The open rate was 20% higher, and the click rate was 75% higher with Pontiflex leads," said Blank, noting that the resulting costs were therefore even lower. "These are solid names, people generally interested in the product. We're willing to pay a little more for names that perform better, and we're happy to say that we can pay a little less."

Another significant advantage was the predictability CPL provides. "CPL allows us to budget and have an understanding of exactly how much we're going to grow," said Blank. "I know how I'm going to spend my money next month and what I'm going to get for it."

Such predictability has also helped the company better market itself to travel agencies and other advertisers on its site. "We can guarantee an audience of 'x' and know that we will be at 'x' next month, which gives [our advertisers] an idea of how they can expect to grow their businesses as well," said Blank.

Lessons Learned:

  • Use ROI to determine your media buys: Although CPC and CPM appeared to be cost-effective choices at first, the metrics proved otherwise, prompting Blank to seek out a channel more in line with his needs. 

    "For us it was really about acquiring names at a given cost per acquisition. I didn't care about the medium; I cared about results," said Blank. "If you come into this saying 'we need to do co-reg, or banners, or whatever,' it's not nearly effective as saying, 'here is our goal.'"
  • Choose channels that hold publishers accountable: Paying for qualified leads, rather than random clicks or impressions, was progress, but the Pontiflex model took it a step further by using a transparent reporting mechanism to motivate publishers to optimize their own performance. For Tripmela, this resulted in better converting leads, coupled with a lot less work and worry on its en

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Kimberly Smith is a staff writer for MarketingProfs. Reach her via kims@marketingprofs.com.

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  • by Sean Wed Jul 23, 2008 via web

    God. Imagine a world where Google offered CPL in their little text ads...

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