Comparing Co-Registration to Pay-Per-Click

Use both as part of an effective internet marketing strategy

A client we had’s highest source of revenue (about $27 over 12 months) was from subscribers acquired through pay-per-click advertising. That’s because about a third of the subscribers acquired through pay-per-click purchased on their first visit to the publisher’s website.

 

With pay-per-click advertising, you pay a fixed amount to bring a new visitor to your website. In this instance, the publisher was paying $2 per click, or $200 to acquire 100 visitors.

 

About seven percent of the visitors who arrived at the site’s landing page actually made a purchase and spent an average of $20. That’s seven orders for $20 each, which generated a total of $140 on the first day.

 

Ninety-three percent of the visitors didn’t make a purchase. So on the first day, the publisher spent $200 to take in $140 in revenue—so far, an unprofitable equation.

 

But 14 percent of those visitors who didn’t buy anything did register for a free email newsletter. And that 14 percent were then marketed to, along with the seven first-day purchasers, on a “permission basis” for the next 12 months. Over the course of a year, those 21 names were eventually worth an average of $27 each in sales for a total of $567.

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So an investment of $200 eventually resulted in sales of $567—a 283 percent return over the course of a year. That’s a 2.8 times ROI from pay-per-click names vs. a nine times ROI from co-registration names.

A fictitious example

 

Suppose you’re a large, multi-title publisher in the health care arena. You publish six or eight newsletters, books, white papers, special reports, encyclopedias, etc. You have a great health and wellness newsletter that discusses diet, nutrition, exercise, stress management, etc. Yours is a recognized brand, perhaps owing to your relationship with a major hospital or university.

 

Your goal is create a very large email newsletter database quickly. Co-registration can help you accomplish this. Co-reg is the most effective “lowest common denominator” way to build a huge prospect file relatively inexpensively.

 

Admittedly, co-registration produces low quality names compared to other lead generation practices. But co-reg is a “volume game” that is economically feasible. As the cost of email marketing and storage has dropped dramatically in recent years, co-registration has become more viable.

 

Stated another way, pay-per-click names resulted in a 283 percent return on marketing investment. Co-registration names resulted in a 900 percent return on marketing investment.

 

The size of the client’s overall file is 10 million co-registration names vs. 300,000 pay-per-click names. Therefore, 10 million co-registration names generated $2.25 each, or $22.5 million, vs. 300,000 pay-per-click names that generated $27 each, or $8.1 million, over the course of a year.

 

A tip on buying co-reg names

 

Always determine what incentives, if any, the co-reg publisher is giving site visitors to sign up for the offers. It should be sufficient to offer the free information itself, without other inducements.

 

Be wary of a co-reg site that uses contests, giveaways, sweepstakes or reward points as an additional incentive to sign up for the free information. The quality of names from such additional incentives (other than free information itself) will be much lower.

 

Viewed another way, the client was spending $9.52 each ($200/21 names) to get a pay-per-click name on file vs. $.25 for a co-registration name.

 

Of course, without a robust, permission-based email newsletter program, there is no way to monetize these names.

 

Building a targeted, opt-in free email newsletter database is Job One for website publishers who use the Mequoda System. The size of your controlled circulation email newsletter, and the revenue per subscriber, per year, are the key metrics that drive your top line revenue.

 

And while pay-per-click names generate some income on Day One, co-reg names generate zero income immediately, and only convert to paying customers over time.

 

Co-registration is not for everyone. You probably need to be a large, multi-title publisher to monetize co-reg names effectively.

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