You’ve heard of pay-per-click, where an advertiser pays a content site for every time their ad is clicked, but have you heard of pay-per-like? No, this is not friend finding at its saddest; it is ad marketplace Integrate’s newest form of performance-based advertising.
Performance-based advertising allows advertisers to enter into an ad campaign only promising to pay an ad seller based on how many “interactions” they glean. Integrate defines these “interactions” as clicks, texts, live transfers (telemarketing), inbound calls to a company, or leads, which is when a potential customer willingly fills out and submits personal information. The newest types of interaction supported are Facebook likes and Twitter follows.
The “pay-per-like” model is only available on digital outlets through display channels (such as banner ads), mobile ads, social ads and e-mail. The targeted customer clicks one of these ads and is taken to the company’s Facebook fan page. Integrate monitors this and only charges if the customer actually “likes” the page instead of navigating away. And though the new pay-per-like feature was released only about 60 days ago, Bloom says that 10 percent of his current clients already use the service.
The popularity of sites like TwitterGrader, PeerIndex and Klout, which recently raised an $8.5M round from venture firm Kleiner Perkins, show the pressure companies face to keep up with competitors socially and their willingness to shell out advertising cash to increase their social following.
“It could even become bigger than e-mail marketing,” predicted Jeremy Bloom, co-founder of Integrate. Advertisers have long seen the value of social media, but now social is an investment and not just a communication service.
On the whole, Integrate is similar to Google Adsense in that it requires payment on a performance-based system. However, unlike Google Adsense, Integrate’s performance-based campaigns also expand into traditional marketing outlets. Traditional outlets include print, outdoor (billboards), television, radio, and on the digital front, mobile devices (in-app advertising) and the internet.
As an interesting aside, billboard on a performance-based model works by targeting companies like CBS Outdoors that often see 20% of their ad space go unsold. They take a cut, allowing Integrate to use the space for performance-based campaigns that call for patrons to text a number. The number of texts made to that phone number determines the advertiser’s bill.
Brian Solis, Principal at the Altimeter Group, however, is skeptical on how effective the new pay-per-like campaigns will be after the like is initiated. “Consumers are learning the power they wield in social networks and it’s just a matter of time until a like results in an unlike,” said Solis. “The onus is on the brands, however, to keep the connections and nurture them into engaged and loyal communities.”
The skepticism is valid. How many times have you gone through your Facebook pages and cleaned house? It is like a spring-cleaning of fan pages you once clicked due to a campaign that promised instant gratification. Solis does, however, admit that the model is “desirable.”
Currently, Integrate’s revenue is split 50-50 between on and offline advertising. The company expects that social campaigns will creep into that revenue gauge as their own entity. Users of Integrate’s services include Citrix, Quiznos, New York Life, and more. Google Adsense does compete with Integrate on a few levels, but overall the market is still open for competitors.
Since showing off its product at the DEMO conference in 2010, Integrate has gained more than 100 employees, and it opened an office in New York last February.
Got six minutes to launch your game changer? We’re finding top shelf thinkers from around the world ready to showcase their products at DEMO Fall, on the same stage where companies like Netscape, TiVo, E-Trade, and Java got their start. After you sweat out your six minutes of fame, head off the the DEMO pavilion to chat with potential investors, partners and show off the goods. Apply for your spot here. Demo Fall 2011 is located at the Hyatt Regency in Silicon Valley, September 12-14.
VB's research team is studying web-personalization... Chime in here, and we’ll share the results.