Search engine marketing firm Clicks2Customers is using an arbitrage model, to offer small and medium enterprises (SMEs) guaranteed Web traffic or their money back. The model is similar to that used by financial markets traders.
Clicks2Customers business development manager Jonathan Gluckman says the model takes advantage of the fact that US search engine giant Google offers all the tools necessary for anyone to create their own Internet advertising campaign. However, if it is not done properly, the cost of the traffic channelled to a site increases.
One of the keys to the model is the view that every keyword used in a search has an inherent value that has to be determined on a continuous basis. This method is not unlike determining prices of instruments, such as derivatives or share prices, in financial market trading.
Spend accountability
The model is also based on shared risk. This means clients are billed on success rather than time.
“We are offering this service to a couple of large advertising agencies already and we can see that we are getting them traffic at prices that are far lower than they can,” says Gluckman.
Taking this model to the SME market started with Clicks2Customers signing up online directory Easyinfo, which already has about 1 000 customers.
Easyinfo will pay Clicks2Customers to fulfil the guarantee to drive traffic to Easyinfo clients such as Mutual & Federal, McCarthy Call a Car, Patio Warehouse, Toshiba and Landsdowne Investment Properties.
“The new service was developed after it became clear that clients wanted absolute accountability on their Internet spend. The Clicks2Customers offering does just that and our clients have already seen a massive reduction to their own cost of client acquisition - this is a situation which is pure science and everyone wins,” says Alan Lipschitz, Easyinfo MD.
Keeping track
The audit trail of delivery means Easyinfo customers have 100% access to data that proves how traffic arrived at their sites, as well as the return on investment for each rand spent with Easyinfo.
“Many SMEs have tried to do their own pay-per-click campaigns and, while this is certainly possible, there have been instances where we have dropped the cost of traffic by 40% for some of the Easyinfo clients,” Gluckman says.
Lipschitz says this offering was in reaction to growing online budgets, due largely to precise analytics, as well as the shift in how South Africans are consuming media and using the Internet as their first port of call for retail research.
Although Clicks2Customers has traditionally focused on large international clients (running campaigns of a million search terms and upwards), the local division maintains the SME deal makes good business sense.
“We believe the economies of scale make this worthwhile for us. We have a dedicated team, which focuses on Easyinfo clients, and this means we can rest assured it is run seamlessly, while the rest of the development and management team continue to focus on our blue-chip local and global clients,” Gluckman says.
Arthur Goldstuck, MD of Internet research firm World Wide Worx, says Clicks2Customers can offer such a deal as it is not dependent on the 16.5% commission the traditional advertising agencies charge for placing advertising.
“It is also indicative of their confidence in being able to leverage the Google model,” he says.
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