Citibank has decided to use a different strategy in advertising its person-to-person (P-to-P) payment system, c2it.com, on the Internet. Instead of the traditional flat rate campaign, Citibank has moved to the pay-for-performance model offered by Commission Junction.
No one ever said advertising was a perfect science. In the past, companies often would simply embark on a campaign and hope consumers liked what they saw. Measuring the results from these campaigns was never easy, either. Once the Internet entered the equation, this model was completely turned on its head, and advertisers realized there had to be an easier way of marketing themselves online.
"The Internet is a direct-response medium," says Lex Sisney, co- founder and chief executive officer of U.K.-based Commission Junction, which has U.S. headquarters in Santa Barbara, CA. With his pay-for- performance service, advertisers can "get their product out to the consumer at the point of interest instead of creating a campaign and tracking the results after the fact."
When advertisers join the Commission Junction network, member Web sites (or publishers) are informed of the new participant. The publishers are given data on what the advertiser offers and can then decide if they would like to run that ad on their site. Publishers receive a commission for every new customer the advertiser gains from that Web site. Referral data is tracked through the Commission Junction system, allowing for payment to the publishers.
"Instead of paying up-front, our advertisers only pay publishers when they get a lead or a sale," Sisney explains.
Jim Rose is the chief marketing officer for c2it.com, and he is no stranger to Commission Junction, having dealt with the company in a previous job with IBM. "Conventional advertising was not working well on the Web," he explains. "With c2it, we're trying to create a category for P-to-P separate from online auctions. We're trying to get more exposure for P-to-P, and a big campaign where you have to wait for the results doesn't work in this economy."
With the Commission Junction service, companies are given updated statistics on the progress of their advertising in real-time. As a result, says Sisney, advertising becomes a more dynamic operation, where changes to campaigns can be made on the fly.
Before Citibank enrolled in the pay-for-performance program, it needed to be certain that proper privacy laws were followed. "The trick for us with Commission Junction was to guarantee consumers' confidentiality," says Rose. "Commission Junction made enough modifications so that we could comply with privacy laws."
As part of protecting consumer data, c2it does not permit publishers to view the click-through data, says Rose. "We tell potential advertising affiliates that we won't tell them who clicked through. Some sites mind; some don't. Those that do mind are probably sites we'd rather not have dealt with in the first place."
c2it has been using Commission Junction since October, and Rose says the c2it ads are displayed on a couple of thousand sites. Publishers are paid a $5 referral fee for every new c2it customer generated from their sites. Rose explains how the process works. "The consumer sees a c2it banner ad on the affiliate Web site and clicks on it. They're then brought to a 'splash page' that explains the c2it service, and then they're taken to an enrollment page. Once someone is enrolled, we can track which affiliate gave us this person."
Commission Junction's service is not exclusively for companies; individuals also can join. "There are some sites that rely solely on our program for revenue," says Sisney.
Sisney is a former Web site publisher himself. He started Commission Junction because tracking advertisers the traditional way was extremely frustrating since advertisers rarely used the same systems. "Advertisers would have different performance systems, different payment systems and contracts," he says. Commission Junction was designed to simplify all this with one advertising server for all advertisers with whom a publisher works.
"This is guaranteed return on investment for advertising," Sisney says, "because an advertiser only pays when the system works."
