Know-How Exchange : Strategy

telemoxie-- the end user does not have to download anything to use the media player.

Does this impact the approach to modeling a cpl pricing strat?

I'm not an expert on video, but it seems to me that if the software is server-based, then everyone would see the ads, but if the software was optional user downloadable software (a media player such as QuickTime) then only end users who chose to download and use the software would see the ads.

In a way, it sounds to me like your solution is like a next-generation version of survey monkey. The survey monkey software prompts for user input with text prompts, while you are prompting for user input with video prompts. You might want to look at survey monkey and similar tools to see how they price their services, and to compare your data collection techniques with their techniques. Good luck.

ChrisB--

At the moment, it is solely a standalone tool/platform similar to the Youtube vid player. Thus, the onus is on the user to incorporate this tool into their media/lead gen strategy-- there is no distribution network... for now. Also worth nothing, there are some other unique elements to the media player, beyond lead gen, that I cannot disclose. So,the lead gen element is only part of the media player's value prop.

In Q1 or early Q2 2010, I am looking to integrate some level of network, as I see that not only adding value, but also making for a more revenue-friendly pricing approach.


Sorry about some of the ambiguity here, but certain things I cannot disclose until product launch.

For now, it looks like I have three options:

1. No fee for lead gen (most unappealing of the options)

2. Allow for a very limited amount of leads/mo for free accounts, but increase the leads allowed for premium accounts

3. Assign a single price per lead... Perhaps a number that is survey-driven or an arbitrary number that passes the "sanity test".


Without additional info, it's pretty daunting to overcome the unknown variable of "what is a lead worth to company x".


Thanks for the replies and questions thus far though.

Sorry but my Latin isn't as good as it used to be - You mentioned Pontifex – Isn’t that the king of bridge builders, also the name of a huge bridge building company which produces a software game called Pontifex. Then there's Pontifex Marketing and Communications who do a line in DIY on-line advertising tools,

To which one were you referring?

Steve

Dear Akosa23

You asked telemoxie if his question impacted on the pricing model of a PPL campaign. It does but only in terms of how you deliver the software and the costs and overheads you are looking to recoup. If it is a case of using browser access only to the “Player” then you have a centralised software and hardware cost to cover in addition to the need of your client’s needs to recoup the investment they have put into the product’s development.

If it were to be another Windows Media Player or Quicktime Player, then you have the cost of giving away software and supporting people through the installation procedure. As it appears to be web based and server orientated, it must have some means of getting sounds to come out of the PC loudspeakers, so what’s the catch here?

I mean if you browse to a wav or an mp3 file, the file will only play if you tell one of your applications to kick into action or unless you have a Java applet to auto-start the sound itself. Regardless of the format, and regardless of the browser only view, they are going to have to play on anyone’s PC with any operating system and through any browser. If your product had achieved that you have a sizeable investment to recoup or your client is a genius.

Is my understanding of the product anywhere near to what you are looking at?

If I’ve got that bit right then it appears that you are looking at two distinct marketing operations. One is to find clients who will buy or rent of pay per lead generated, your client’s software so that they can then do their own marketing of their own products to their customers but use your “player” as their means of attracting enquiries. You bill the clients you sold it to either as cost for the application, a subscription cost or a price per lead.

Am I still on the same planet?

If perchance I am, then you will need to bear in mind the value of a lead to a customer for your software will vary hugely depending on their market and their own pricing structure. To any of those said customers, it is going to be patently obvious that your “Player” costs the same to deploy for a life insurance product where Google ad-words >$100, as it is for say, specialist books where a Google ad-word costs <$0.1)

As this is turning out to be a bit multi dimensional, then I’m going to wait until I have further clarification from you regarding my assumptions or until you can guide me more accurately to what you are talking about.

What seems to me at the moment to be the biggest problem to your pricing is the fact that you will want to levy a variable charge per lead to users who operate in different markets. The only reason why a sales brochure for a Bentley costs 100 times the cost off a sales brochure for a toy truck is that the Bentley Sales Material is glossy, well bound and quite thick. The brochure for the toy is small and cheaply produced. Bentley can justify paying $49 per brochure because they have approximately $150,000 margin available to secure each sale and they can afford to support a lot of window shoppers at that margin. The toy truck on the other hand probably has $10 margin in it, so the brochures must be inexpensive and have a good call to action in their copy to get, say 1 in 5 readers to buy. Substitute your player for the printed brochure and I’m sure that you can see my conundrum on differentiated pricing for different products in different markets for what is essentially the same proposition. You can’t use PPC as an analogue of this because that is and example of a market setting the price amongst competing users of words. You “Player” customers will not bid the price up for a “Player” Investment Products and down for a “Player” for Dog Chews. So they will wonder why you are charging one more than another!

Best wishes for now


Steve Alker
Xspirt

PS, The Bentley user hand books also cost about $50 to print but if they were anything like me, they paid for themselves by acting as a secondary advertising medium, through the owner conspicuously showing off by “accidentally” leaving it all over the place just so his pals would know that he drives one! Same goes for Ferrari key rings, but they actually charge you £70 for a new one.

stevea-- Thanks for giving this question your attention.


To answer the technical questions simply... Think of a YouTube player & then add the ability for data collection (i.e. lead gen)... For all other tech elements (how does the sound play, etc, etc....), assume the tech is just like a YouTube player but with lead gen & everything else is worked out.

RE: Pontiflex-- I'm talking about https://www.pontiflex.com/. The CPL lead gen company.

RE: Bentley vs Toy Truck example-- Yep. That goes back to the "unknown variable" issue that a lead is worth something different on a company-by-company basis.... & therein likes the main issue here.

However I just found some research (provided by Pontiflex of all people) that reports a study on the CPL benchmarks across industry verticals. I'm likely going to use their benchmarks to guide my CPL pricing initially.

BTW, here's the link to the CPL report: https://www.pontiflex.com/research/whitepaper/cplreport.jsf


Thanks all. Unless there are some more thoughts on this in the next day or so, I'm going to close this question.

The input you folks have provided has been helpful.

Dear Acosa23

I think that with the limited information you are able to divulge we are going to struggle with a truly relevant answer, but here goes.

Just one more technical question – If this Music Player with a form built in is to provide an advertiser with a lead for their product, what incentive does the end user have to fill in the form? Is it a case of fill in the form and then the player will work or is it something where there is an exceptionally good reason why someone should fill in the form and thus qualify themselves, not as someone who likes the music provided but someone who likes the products or services displayed on the advertiser’s website?

I’ve just read the Pontifex report and assuming that the information was correct (It was after all written by them about their service of PPL!) then the variability of cost per lead would appear to be the cost of a specific marketing action, divided by the number of people who filled in a form. The mechanism for filling in the form for basic details and advanced details is not mentioned.

Can I assume that you are intending that the “Player” is the mechanism to get members of the public to respond to an advertising message on a website and therefore fill in the form?

If this is the case, it is not a true example of PPL which seeks to follow the PPC model of Google which as we have said before is driven by market demand. Indeed, the Pontifex paper goes so far as to state that they create a marketplace and presumably in doing so they assume that they have ubiquity of demand to ensure that competing advertisers will bid to pay a market price and that marketers of different products will pay a variable rate because that is what the lead is worth to them.

I can’t see how your client or their music player will go about creating a free market from what you’ve said. Even the Pontifex model only appears to set a price per lead by assuming that if they run an advert for a $200,000 Bentley they might get 2 enquiries but if they ran the same advert for a $5000 car of Indian manufacture they would get perhaps 20 for the same cost of origination.

I do think that you need to be very careful when talking about marketing and markets. You can use sales and marketing within a market to influence demand, but the price and volume achieved is determined by that demand and the limits on supply.

Before the credit crunch came along there were people who were selling futures and options on Google AdWords and you could place a spread bet on their prices without using them yourself. I’m sure that there will have been some people who were selling or trying to sell derivative instruments based on the future price of Google AdWords and I dare bet that like traders of Enron and traders of Consolidated Debt Derivatives, they are now living in a tin shack or are in jail!

I’ve more thoughts but would appreciate further clarification regarding the above. If you truly want a PPL product it must be in a free market. If you just want to pretend that it’s PPL then the Pontifex model will work as will a subscription model for your client. If on the other hand you chooses to charge only per qualified lead, then your client must be prepared to tell their customers what the cost per lead will be – a somewhat monopolistic proposition.

Best wishes


Steve Alker
Xspirt

PS
Here’s another problem. Assuming that the customer uses the player and runs it in their own web-space and it is successful at incentivising consumers to supply their details, what is there to stop an advertiser buying a player for a cheap cost per lead product and then using it on an expensive cost per lead site?

I would assume that this would be against your terms and conditions, but who is going to enforce it if they are successful/ Will they be expected to arbitrate between the fact that a Hershey bar priced player has been used for marketing Belgian chocolates?

At least with PPC, there’s no arbitration needed, the marked decides and Google is only guilty of hype

Hi Steve-- Thanks again for your response.

RE: What incentive does the end user have to fill in the form?

The assumption is that the content would drive the viewer to fill in the lead. For example, a cause-based organization is looking to generate signups. They utilize a video to explain the cause and stir emotion. There are calls to action to “join their mailing list” or whatnot… the user then joins via the form available in the video.... Thus, you are correct in assuming the "Player" (or rather the content it is delivering) is what will generate the lead generation.


RE: Marketplace

The client does not have a "marketplace" for lead gen yet (planning on late Q1 2010 or early Q2)... so I agree that "pricing to market" is essentially a crap shoot guided by limited data points.

It's looking like the pricing is going to be one of the two options:

1. A limited amount of leads for free, then a subscription upgrade is required for high/no limit of leads

2. A vertical-specific cost per lead-- guided by Pontiflex study numbers & flexible to consumer feedback & elasticity tests...

Regards,
-Akosa