There are two types of marketing in the world today: (1) “Traditional” marketing with its relatively larger budget and reliance on standard methodology and mainstream media, and (2) “guerilla” marketing, which is reliant on non-traditional tactics, alternative media, and such tools as bartering and negotiating to cut costs to a minimum.
In offline direct marketing, “traditional” usually means sending either a solo direct mail package or a catalog to a house file or rented mailing lists. “Guerilla” direct marketing in the offline world, by comparison, can involve anything from a package insert and bill stuffer, to per inquiry advertising and late-night TV spots on cable.
In online marketing, traditional marketing usually means banner ads or e-mails sent to rented e-lists of opt-in names. Cost per thousand (CPM) for these opt-in lists is typically $150 to $400 per thousand.
“Guerilla” online marketing, by comparison, seeks to generate inquiries, make sales, and build files of online customers through CPA (cost per acquisition) deals, banner exchanges, e-zine advertising, e-list swaps, affiliate programs, co-registrations, search engine optimization, and other low-cost methods.
Cost-per-acquisition means you pay for every name that the e-mail adds to your house file. These names are captured when a recipient clicks through to your landing page, registers, and hits “submit.” The prospect may be ordering a product, or simply signing up for a free e-zine or special report.
“The idea in e-mail marketing is to acquire new names for the lowest possible cost per name,” says Sarah Stambler, president of E-Tactics, an e-marketing agency (www.e-tactics.com).
In this regard, CPM can be expensive. Let’s say you send out 1,000 e-mails and have paid $200 to rent the names. Out of the 1,000 people, 2% (20) click through to your landing page offering a free white paper. If 10% of those click-throughs convert to a sign up, you have acquired 2 new names at a cost of $100 per name.
By comparison, some e-mail marketing agencies and consulting firms are arranging CPA deals for their clients. Here the marketer pays a fixed rate per name acquired. For one client, Stambler acquired fresh B2B leads at $5 per name on a CPA deal. However, she says that CPA deals can be tricky to arrange, and many e-list owners are not receptive.
Al Bredenberg, publisher of EmailResults.com, an online marketplace for opt-in e-mail marketing, agrees, although his site does list a number of CPA providers with contact information.
“You have a much better chance of convincing e-list owners to work on a CPA basis if you can offer a track record of conversion rates established through previous promotions,” says Bredenberg. “List providers are hesitant to take a risk on an unproven product.”
Offering the e-list owner a piece of the acquisition in a cost-per-order (CPO) deal can also work. “You need to offer the list owner a generous revenue share in the range of 25 to 50 percent of each order,” says Al. “A very low price point doesn’t stand much of a chance, unless you can prove conversion rates are very high.” Stambler says offering $5 to $8 per order on a $40 product is in the right ballpark.
Another tactic favored by guerilla e-mail marketers is co-registration. This is where a Web surfer goes to a site for one offer, such as a free e-zine, and is shown other, usually similar offers he can also sign up for at the same time.
“Cost for co-registrations varies,” says Stambler. “At Lycos, you can pay $2 to $3 a name. Sweepstakes sites charge 50 cents a name or so.”
The nice thing about co-registration deals is that they can be tested on a small budget. For instance, if the cost is 50 cents per name, a $2,000 investment will bring you 4,000 new names.
Cost per click (CPC), where the marketer pays for every person who clicks through the embedded link in the e-mail message to the landing page, is also available. But Stambler warns against it: “Cost per click is too expensive.” If you pay 10 cents a click and get 1,000 clicks, you are charged $100 total. But if only two people sign up, your cost is $50 a name.
Finally, if you prefer to do more traditional online marketing and rent an opt-in e-mail list, don’t be disheartened by the high cost shown on the data card. “Price is extremely negotiable,” says Jay Schwedelson, vice president, Worldata (www.worldata.com).
According to Schwedelson, business-to-consumer e-lists renting for $150 to $300 per thousand can sometimes be had for $25 to $100 per thousand, if you negotiate. On business-to-business lists renting for $200 to $450 per thousand, you may be able to negotiate a rate of anywhere from $100 to $250 per thousand.
“Only pay for actual names delivered,” says Jay, noting that 32 percent of consumers change their e-mail address each year. He also says that select fees can usually be waived.
