Per Inquiry Gets Tangled in the Web
This Internet stuff is starting to give me a headache. Why, you ask? Well, everyone's been asking me the same question lately. It goes something like this: Joe, I want you to take on this Internet client of mine and run them on a per-inquiry basis.
You're a smart computer guy; how can we do this? As you read this, you may be wondering what the heck "per inquiry" means. Don't take it personally; most smart computer guys don't know either. Per inquiry is a direct response industry term that describes a manner in which advertisers acquire media on a guaranteed fixed cost per-lead basis.
So, as the story goes, I have to explain that per-inquiry television advertising is not ideal for dot-com companies, since you can't really keep track of which stations are generating hits when you are advertising a single Web address.
For years, direct response advertisers have used different toll-free numbers to keep track of such things. I propose that if direct response advertisers were limited to just one number, most would have gone out of business a long time ago. Come to think of it, even with the ability to measure media effectiveness on a station-by-station level, many direct response companies have gone out of business in recent years due to the higher media costs.
Even though dot-com advertisers are at a disadvantage, it sure isn't stopping them from buying up every bit of media that the politicians don't grab first!
As the appetite of hungry Internet investors is apparently boundless, I think it fair to assume the rationale for their use of television has more to do with bolstering the value of their stocks then generating direct response sales.
Unfortunately, they masquerade as direct response advertisers when negotiating for rates as if they can't afford to buy media like every other publicly traded company engaged in public relations. This only serves to hurt real direct response advertisers.
Well, we all knew this was going to be a tight year, with the elections and the Olympics, but few of us could have foreseen this dot-com onslaught in tandem with the recent growth in direct-to-consumer pharmaceutical ads. Pity the poor direct response advertiser, on top of everything else, now tangled in the Web!
As I reminisce and think about the good old days, when the cable industry was in its infancy and per-inquiry media was plentiful, I realize that like cable, the Internet represents a major new source of per-inquiry media. In fact, I think it is safe to say that per-inquiry or revenue-share advertising will be one of the major components driving Internet profitability in this century. Kind of makes one smile to think that there might actually be a silver lining in this dot-com cloud!
But here is where direct response advertisers are really getting tangled up. Instead of treating this new medium like any other, many leading direct response companies are partnering with the dot-com boys, making exclusive deals.
Even though the dot-com boys are financially dressed in red, they've got the green, so it seems everyone is signing up! Speaking of exclusive, I can't ever recall a direct response advertiser making an exclusive deal in any other advertising medium, such as TV, radio, print or retail. So I find myself confused.
Why would a direct response company limit the sale of its products to one Internet venue? The answer is a quick cash infusion from a dot-com company, and while I can appreciate it being a good financial decision, I see it as a disastrous marketing decision.
It seems to me that many of us are forgetting who we are, where we are and what got us here. We are marketers; we stand at the dawn of one of the biggest marketing opportunities ever; and good marketing instincts and decisions got us here. Let's cut through the Web of confusion.
The power of Internet direct response marketing will be fully realized through per-inquiry/revenue-share placement of your product on countless Web sites, not just one! If you sign an exclusive with any dot-com, it will come back to haunt you as one of the worst marketing decisions your company has ever made.
Be aware that new platforms are being built right now that will make it easy for direct response advertisers to sell their products on a per-inquiry/revenue-share basis through hundreds of thousands of Web sites. Savvy direct response marketers are gearing up for the future, while short-term thinkers are cashing in today at the expense of tomorrow. My advice? Keep your options open.