Back in 1989, years before Google was even a twinkle in the eyes of founders Sergey Brin and Larry Page, REVShare founder/CEO Joseph Gray developing a television cost-per-action advertising model. Gray’s model bears a great deal of similarity to the AdWords model employed by Google in its rapid rise to online search engine behemoth. And just as Google makes it easy for advertisers to work with hundreds of thousands of Web publishers, REVshare claims to allow advertisers to easily access a large network of TV media properties.
With Internet players like Google trying to expand their business model into traditional media, REVShare finds itself ahead of the game.
“REVShare has already integrated CPA with new network advertising models similar to the type that Google is still attempting to develop,” Gray said. “With more advertising dollars shifting to the Internet, we see our CPA model as a way to start bringing some of those dollars back to television.”
REVShare last month announced that its Cost-per-Action Television Network has surpassed 1,000 TV properties, and in 2005 delivered television time with an estimated retail value of more than $500 million to its advertising customers.
So how exactly does the REVShare model work?
The company bundles inventory on its TV properties and deliver that at rates that Gray claims surpasses network levels of efficiency. This 30- and 60-second spot inventory is further discounted to make it affordable for DRTV advertisers who purchase it on a cost-per-action basis at a fraction of its traditional market value.
“Stations use this model as a wholesale outlet for media that is not sold upfront,” Gray said. “They appreciate that they can sell this media off the radar and at a rate of return that is only known to them. Contrary to what people may initially believe, our network delivery skews to the top 100 markets and delivers during the most sought after day parts.”
REVShare's network of TV properties runs ads and are paid solely on responses generated. REVShare’s range of proprietary reporting tools enables networks to track the performance of campaigns, allowing them to efficiently manage their media investment in order to maximize revenue generated.
“It really flips the model so that stations are deciding the most relevant and efficient programming to invest in a campaign and their revenue hinges on making the best choices,” Gray said. “This helps ensure the relevancy of programming invested in each campaign.”
If a station puts an offer in the wrong programming, and no one responds, very little revenue will be generated. To ensure networks make profitable decisions, REVShare offers stations advice and assistance to maximize the efficiency of each campaign. In addition, REVShare tests every campaign on a small portion of its network prior to distribution to guarantee that each commercial meets the minimum criteria before it is offered to the larger network.
The benefit of REVShare’s model to advertisers is that it eliminates most of the cost and distribution logistical problems that have traditionally been barriers to entry, especially when dealing with local broadcast and cable systems.
According to Gray, advertisers who really understand the model will be more aggressive with their bid rates. Since REVShare's technology translates whatever an advertiser is bidding per lead and weighted against total response rates to report the ROI potential of each offer, stations can clearly see the opportunity involved and if necessary make the decision to invest in more media.
Once a station starts airing a REVShare offer, the company also has the ability to report actual yield per spot averages by day part so that stations can better track performance.
“We have solved the problems of management, reporting and metrics,” Gray claims. “We’ve made it possible for advertisers to extend their reach farther than ever before by using an easy-to-grasp model. Now we can look to the future where further fragmentation of television is no longer a scary proposition, but instead represents an exciting opportunity for REVShare’s advertisers.”
With television becoming more like the Internet every day in terms of the fragmentation of viewers and programming, and with the arrival of new technologies such as digital video recorders (DVR) and new forms of television distribution such as video over fiber, video for portable devices and Internet video, it’s difficult for traditional media metrics like cost per thousand to keep up.
An additional benefit is that CPA is “TiVo proof” – since advertisers only pay on a per-action basis, they aren’t paying for advertisements that DVR users skip over.
“The television advertising industry outside of CPA simply does not have the tools to make it work for advertisers,” Gray said. “REVShare’s CPA model can scale and monetize as well as provide metrics advertisers need today—similar metrics to those online advertisers have enjoyed for years.”
