Interep Interactive Units Shun CPA CampaignsEquating cost-per-acquisition advertising campaigns with theft, John Durham, chief operating officer of Interep Interactive Inc., said his company's online marketing units have stopped accepting CPA campaigns that do not offer a minimum cash guarantee.
"Our sites do not want this business," Durham said. "This is not advertising, this is outright thievery."
Interep Interactive, a firm specializing in advertising and marketing for the broadcast industry, operates Winstar Interactive Media, a Web property representation company, and Cybereps, which specializes in streaming media sales to content sites. Both companies represent about 100 Web sites and perform brokerage services for dozens of e-mail lists.
Durham said CPA campaigns require large amounts of content and that clients see little return and are forced to pay the ad-serving costs themselves. In an e-mail message to his sales force, he said the company decided to take a stand for the industry and refuse CPA business.
"CPA campaigns hurt our clients several ways," he said. "They take up an incredible amount of inventory for which our clients receive no compensation, and the sites have to eat ad-serving costs. With these campaigns we take 100 percent of the risk, and the rewards are few and far between."
CPA campaigns allow the client to pay the Web site or representation firm only if Web site visitors click on an ad or link and take a specific action such as signing up for a subscription to a newsletter, clicking through to another Web site or filling out a survey.
"We are professionals, and we should generate real dollars for our sites," Durham wrote to his sales force. "We will take a stand for the industry and refuse this business. They are simply not worth the blood, sweat and tears."
However, Interep Interactive may be in the minority in its refusal to accept CPA deals without a guarantee.
ValueClick, a Westlake Village, CA-based ad-serving firm, has built its business around CPA and cost-per-click campaigns. The company reported $56.7 million in revenue for 2000. Analysts forecast 2001 revenue at $42 million to $43 million. They noted that its emphasis on CPA campaigns is one factor in its success and has helped it ride out the economic downturn better than competitors like DoubleClick Inc., Engage and 24/7 Media, which rely more heavily on a cost-per-thousand metric.