There are two types of marketing today: “traditional,” with its larger budget and reliance on standard methodology and mainstream media; and “guerilla,” which relies on nontraditional tactics, alternative media and tools such as bartering and negotiating to cut costs to a minimum.
In offline direct marketing, traditional usually means sending a solo direct mail package or a catalog to a house file or rented mailing lists. Guerilla DM offline, by comparison, involves anything from a package insert and bill stuffer to per-inquiry advertising and late-night TV spots on cable.
In online marketing, traditional usually means banner ads or e-mails sent to rented e-lists of opt-in names. Cost per thousand for these opt-in lists typically is $150 to $400.
Guerilla online marketing, by comparison, seeks to generate inquiries, make sales and build files of online customers through 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.
In this regard, CPM can be expensive. Let’s say you send 1,000 e-mails, paying $200 to rent the names. Of the 1,000 people, 20 click through to your landing page offering a free white paper. If 10 percent of those click-throughs convert to a sign-up, you acquired two new names for $100 each.
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 business-to-business leads at $5 per name on a CPA deal. However, she says 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, though his site does list a number of CPA providers.
“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,” he says.
Offering the e-list owner a piece of the acquisition in a cost-per-order deal also can work. “You need to offer the list owner a generous revenue share in the range of 25 to 50 percent of each order,” Bredenberg says. “A very low price point doesn’t stand much of a chance, unless you can prove conversion rates are very high.”
Another tactic favored by guerilla e-mail marketers is co-registration. This is where a Web surfer goes to a site for one offer and is shown other, usually similar offers he can sign up for at the same time.
“Cost for co-registrations varies,” Stambler says. “At Lycos, you can pay $2 to $3 a name. Sweepstakes sites charge 50 cents a name or so.”
The benefit of 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 brings 4,000 new names.
Cost per click, 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. 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 of Worldata.
According to Schwedelson, business-to-consumer e-lists renting for $150 to $300 per thousand sometimes can be had for $25 to $100 per thousand, if you negotiate. On BTB lists renting for $200 to $450 per thousand, you may be able to negotiate a rate of $100 to $250 per thousand.
“Only pay for actual names delivered,” he says, noting that 32 percent of consumers change their e-mail address each year. He also says select fees usually can be waived.