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Cost-per-Lead AdvertisingData ReportCPL Benchmarks across Industry Verticals

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Introduction

It is no surprise that performance advertising has grown tremendously over the past few years. In turbulent economic times, marketers are forced to do more with less. At the same time, audiences are more fragmented, making engagement and brand loyalty more di�cult to accomplish. Advertisers are faced with the dual chal-lenges of both increased scrutiny over ROI and a more competitive marketplace through which to reach their target consumers.

To address issues of measurability and audience engagement, marketers have turned to pay for performance pricing models, wherein media is purchased based on a de�ned success metric or speci�c action - instead of impressions. As a result, Cost-per-Lead (CPL) advertising has gained signi�cant traction across verticals.

This �rst quarterly report provides a detailed overview and measure of the market, including:1. CPL Advertising Overview2. Ponti�ex CPL Benchmark Study

a. How Advertisers Engage Marketing Leadsb. Average CPL and Sample Lead Engagement Strategies by Industry

i. All Industry Verticalsii. Consumer Packaged Goodsiii. Traveliv. Non-pro�tv. Healthvi. Entertainmentvii. Online Retail & Catalogviii. Technology

3. Methodology

Cost-per-Lead Advertising Overview

Online lead generation is a broad term used to de�ne the acquisition of consumer contact information through digital advertising. Cost-per-Lead (CPL) is the pricing model through which advertisers ask consumers to provide contact information and pay only for the contact information, or lead, collected.

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When advertisers think of lead generation, they often picture consumer contact information sold through list brokers and lead generators without strict opt-in policies. This category of lead generation is known as “sales leads.” Sales leads are generic leads that are often resold to multiple advertisers.

However, the emergence of marketing leads has changed the online lead generation landscape. A marketing lead is the contact information of a consumer who has explicitly signed up to receive communication from a speci�c brand. Marketing leads are collected on a strict opt-in basis and are never resold.

In a marketing leads CPL campaign, advertisers gain exclusive marketing rights to individuals who want to hear from them, and pay only for valid sign ups. As a result, marketers from all major industry categories have adopted CPL advertising, including The 2008 Barack Obama Presidential Campaign, Kimberly-Clark, Disney, Blockbuster, Blackberry, UNICEF, Travel Nevada, NewEgg and Graco.

The Ponti�ex CPL Benchmark Study

Ponti�ex is a marketplace that connects companies to interested consumers (i.e., marketing leads) through a CPL pricing model. Over the past year, Ponti�ex has compiled research on how di�erent industry verticals use marketing leads and how Cost-per-Lead prices vary based on the industry sector and the number of �elds collected as part of a lead.

How Advertisers Engage Marketing Leads: Overall

As shown in the following graph, advertisers commonly engage marketing leads through social networking groups and community sites. Examples include the Kimberly-Clark Facebook widget, the Obama Community (across multiple media vehicles) and the Graco Nation community site. A signi�cant percentage of advertisers also use e-newsletters to engage marketing leads. Examples of e-newsletters include the Dunhill Travel Deals newsletter and the Coldwater Creek Exclusive O�er e-newsletter.

Typically, brand marketers use marketing leads to build engagement vehicles such as community sites, e-newsletters, social networking groups, and loyalty programs.

Direct response marketers use marketing leads to build e-newsletter lists and direct mail lists to drive revenue.

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Source: Ponti�ex Internal Research, July 2009

Average Cost-per-Lead and Sample Lead Engagement Strategies by Industry

At the most basic level, the Cost-per-Lead varies according to the information collected in a lead. A lead is com-prised of di�erent �elds that give information about an end user – Name, Email Address, Postal Address, Twitter username, etc.

There are two levels of information that can be collected as part of a marketing lead:

1. Basic �elds: This is the information required to contact a consumer who has signed up for an advertiser o�er. Basic �elds include First Name, Last Name, Email Address and Postal Address Fields.2. Premium �elds: Premium Fields o�er more detailed information over and above the basic consumer �elds. Premium �elds include:

a. Telephone numbersb. Twitter usernamesc. Custom questions such as, “Have you traveled to Hawaii in the last year?”d. Geo-targeted information

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Source: Ponti�ex Internal Research, July 2009

As shown below, increasing the number of �elds increases the Cost-per-Lead.

As is true for landing pages deployed in banner and search campaigns, collecting more information increases drop-o� and reduces lead volume.

For that reason, CPL advertising best practices recommend capturing basic information during the �rst contact with the end consumer, and capturing additional information over time as the brand builds a relationship with the consumer.

The following charts represent the costs of a marketing lead by vertical—i.e. the cost of acquiring the contact information of a consumer who has signed up for an advertisement, and granted the advertiser explicit permis-sion to contact them with future messages.

The verticals included in the report were selected based on the patterns of demand for marketing leads. While a wide variety of industry sectors are represented, this is not an exhaustive list of all verticals using CPL to date. Ponti�ex will expand this study to include more industry verticals in future reports.

Source: Ponti�ex Internal Research, July 2009

Source: Ponti�ex Internal Research, July 2009

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Consumer Packaged Goods (CPG)

Lead Engagement Strategies: CPG

Reynolds engaged acquired leads through a “Special Deals” newsletter, while Kimberly-Clark drove users to a pregnancy countdown widget for the HUGGIES brand.

Travel

Lead Engagement Strategies: Travel

Dunhill Vacations used marketing leads to build a travel e-newsletter list while interactive agency Ruf Strategic Solutions used marketing leads to build a direct mail list for the Travel Nevada campaign.

Source: Ponti�ex Internal Research, July 2009

Source: Ponti�ex Internal Research, July 2009

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Non-Pro�t

Lead Engagement Strategies: Non-pro�t

In the non-pro�t/political advocacy vertical, the 2008 Barack Obama Presidential campaign used marketing leads to build a community around the Obama brand, while WeCanSolveIt.org engaged marketing leads through its website for advocacy purposes.

Health

Lead Engagement Strategies: Health

In the health vertical, iGuard used marketing leads to educate consumers about prescriptions, while Gold’s Gym engaged marketing leads at multiple touchpoints to increase new members at locations across the country.

Source: Ponti�ex Internal Research, July 2009

Source: Ponti�ex Internal Research, July 2009

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Entertainment

Lead Engagement Strategies: Entertainment

The critically acclaimed documentary I.O.USA used marketing leads to build a community of fans in the months leading up to the release of the movie. Blockbuster engaged acquired leads via an e-newsletter and mobile apps to promote their 14-day free trial.

Online Retail and Catalog

Source: Ponti�ex Internal Research, July 2009

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Lead Engagement Strategies: Retail and Catalog

Retail marketers are usually more focused on direct marketing. The generally accepted best practice in the retail industry is to keep the initial costs low to maximize ROI. As a result, most marketers collect only basic �elds in the retail segment. Then, they engage leads through repeat mailings to maximize ROI.

Coldwater Creek used CPL advertising to build a list of interested consumers that signed up to receive catalogs from the premier apparel brand. Online retailer NewEgg used CPL advertising to build a list that they could email product and season speci�c discounts to.

The Direct Marketing Association estimates the ROI from an email address to be $43.52, while noted direct marketing expert Stan Rapp estimates it to be as high as $118.

Technology

Lead Engagement Strategy: Technology

eFax used marketing leads to drive adoption of its free fax service, while Samsung used marketingleads to keep potential customers updated about upcoming product launches.

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Research Methodology

The Ponti�ex CPL Benchmark Study was compiled for the time period August 1, 2008 to July 31, 2009 across a sample of 709 publisher websites. The leads for campaigns included in the report were non-incentivized, opt-in and purchased on a Cost-per-Lead pricing model. The consumer sample includes adults 18+ in age who live in North America. Data for this report was compiled from campaigns that had a minimum spend of $5,000 over the aforementioned one year time period. The lead data in this report does not account for the recent adoption of CPL advertising by emerging media. Please note that the CPL for these media may be higher or lower than the data included in the report depending on intent, content and media type.

About Ponti�ex

Ponti�ex o�ers advertisers a single point of connection to the entire performance advertising market. Through Ponti�ex, advertisers can run ads on websites, social networks and mobile apps, and connect to the right people no matter where they are.

Ponti�ex enables advertisers to run ads on a Cost-per-Lead (CPL) pricing model. Advertisers pay only for people that have signed up for their advertisements, and not for wasted clicks or impressions.

Advertisers engage acquired consumers in a variety of ways. Examples of engagement vehicles include the 2008 Barack Obama Presidential Campaign e-newsletter, the Graco Nation community site and the Kimberly–Clark “Enjoy the Ride” loyalty program.