Jun 12, 2018 9:00:00 AM / by Matthias Ankli
Last week, we launched CPR™, a cost-per-revenue marketing platform that redefines online-to-offline (O2O) performance marketing. With 100% attribution of in-store sales generated from online ads, CPR takes the guesswork out of calculating advertising ROI.
How Does CPR Work?
CPR stands for Cost-Per-Revenue and that means an advertiser only pays for in-store revenue that is generated by the ads. With CPR, advertisers never pay for the clicks and impressions. The key ingredient here, and why it’s possible, is card-linked technology. Through card-linked technology, Empyr’s CPR platform can track real-time debit and credit card transactions (i.e., sales) without any POS integration or staff involvement.
Let’s assume I’m the director of marketing for an automotive maintenance business and launch a CPR campaign with the goal to drive more consumers in my stores. Here is a step by step process:
- First, I create an offer. My offer is Get 10% Cash Back On All Oil Changes and I advertise it online (there is a plethora of sites and apps where advertisers can buy CPR campaigns, including Yelp, Coupons.com, Swagbucks; etc.).
- Consumer sees the offer online, links any debit or credit card, visits the store, and gets an oil change.
- Consumer pays with their linked card and gets an instant cash back notification. No coupon or QR codes required, it all happens behind the scenes.
- As the advertiser, I only pay a fee when an in-store sale happens. The fee is shared between the consumer (in the form of cash back), publisher (website or app where the consumer saw the offer and linked a card) and Empyr.
And, that’s how CPR works, it’s just that simple.
Top 3 benefits of CPR
- Reach 250+ million consumers when they use their favorite websites and apps but only pay a fee when they visit your store and buy something
- The whole program is automatic meaning there are no keywords to manage, no marketing material to create, no staff training, no POS integration, no hassle, period.
- The holy grail of digital marketing reporting. You’ll see how many online impressions you got, how many of those people bought from you and exactly what they spent, down to every single transaction. Not only that but you’ll also be able to see incremental lift in spend, for example if you ran a campaign in Q1 2017, you can see what that same customer cohort spent in Q1 2016 before you ran your CPR campaign.
CPR’s Role in a Growing Mix of Digital Marketing Options
CPR is not here to replace any of the established members of the digital advertising family. Quite the contrary. CPR is another tool in a marketer’s arsenal and nicely complements the family when integrated into an overall digital marketing strategy. When planning what inventory to purchase, advertisers must take into consideration the product being advertised, target audience, and campaign goals. To better understand how CPR fits into the digital marketing mix, let’s take a look at how other members of the advertising family got their start...
CPM - Cost-Per-Mille
CPM is a common way for pricing online ads and it has existed since the dawn of online advertising. It was in October 1994 when Hotwired (Wired Magazine) introduced a new monetization concept to pay their writers. The team at Hotwired created special sections on their website for banners to be displayed and sell placements to advertisers. And, that’s when the term ‘banner advertising’ was born.
One of the first companies to buy ads on Hotwired was AT&T. AT&T paid Hotwired $30,000 for a 3-month campaign, and the first AT&T ad had a whopping 44% click-through rate (CTR). To put that in perspective, the average CTR on display ads across all formats today is closer to 0.05%. CPM became widespread around 1995 when it was adopted by Netscape and Infoseek. It eventually became the defacto standard pricing model for display advertising when DoubleClick, acquired by Google in 2008, adopted it.
CPC - Cost-Per-Click
CPC or PPC (pay-per-click) is commonly used by search engines to generate revenue by monetizing their search traffic through keyword bidding. By the late 1990s, the online advertising industry had already reached $1 billion and the number of websites had increased to new heights. It was during this time when search engines like AltaVista and Lycos introduced services that helped users find their way around the internet.
In 1998, Bill Gross, founder of GoTo.com, pioneered an early form of the CPC pricing model in an attempt to make internet advertising more effective. Goto.com later became Overture and eventually got acquired by Yahoo. This was around the same time that Google launched its search engine (1999) but its advertising pricing was all based on CPM and CPC wasn’t included until later in 2002. Today, Bill Gross is widely credited as the inventor of the CPC model while Google simply adapted and perfected it.
CPA - Cost-Per-Acquisition
The CPA format (a form of performance marketing) used by most affiliate marketers can be very appealing as there is relatively little risk involved for the advertiser. In the early days, performance marketing models such as CPA faced serious challenges and lost advertisers’ trust due the lack of transparency, unreliable data and widespread fraud. Probably one of the most prominent examples is eBay that paid out an affiliate marketer $35 million for false online sales.
Since its inception in 1994, CPA has come a long way. It has overcome shortfalls such as fraud and poor analytics, to eventually introducing innovative technologies such as online attribution and targeting.
One Big Happy Advertising Family
Today’s expanded family of complementary advertising models -- CPM, CPC, CPA and now, CPR -- makes it possible to build a finely tuned digital advertising strategy, aligning each format’s strengths with your campaign goals and your media budget. And because CPR allows you to measure your advertising performance at the point of sale, you’ll be better able to plan future ad spending, benefiting your overall advertising mix.
For questions about CPR or how to get started, visit https://www.empyr.com/advertiser#pay-per-sale.