What Cost Per Action advertising can do for the progressive movement

Recently I've been very interested in the concept of cost per action advertising.  I believe it could be a mechanism for sustaining the progressive blogosphere.  Briefly, cost per action (CPA) is an advertising model whereby advertisers pay publishers (e.g., blog owners) a certain cost for each time readers take some action.  In the world of online sales, CPA is extremely advantageous for stores, who can guarantee that their advertising dollars will result in a net profit - a store only needs to take care to set the cost for each sale to be less than the profit that sale yields, and it can guarantee something left over from each sale.  The advertising budget is completely self-sustaining.

In a highly action-oriented environment like the blogosphere, cost per action seems like an ideal model for both advertisers and bloggers.  Progressive bloggers are already exhorting their readers to take some action or another; why not get money for each action the readers take?  Of course, there are some limits on what kinds of activities CPA should not reward.  CPA shouldn't be used to incentivize people to register to vote or to actually vote, as that kind of activity will probably be considered illegal vote-buying; similarly, CPA shouldn't be used to incentivize any illegal or harmful activity.

Beyond those restrictions, there's a wide variety of political activities which cost per action could cover, if the proper mechanisms exist.  The most obvious ones are financial political activities, like donating to a campaign, buying something from a progressive company, buying progressive political merchandise, etc.  In these cases, the value derived from the action covers the cost of the ad, and the campaign, progressive company, or progressive organization always nets a profit.  Moreover, these kinds of transactions are completed online via a credit card transaction, so the advertiser gets immediate gratification.

A riskier investment, from the advertiser's point of view, is paying for non-financial actions, like volunteering for a campaign, joining an email list, applying for a job, etc.  When these actions result in offline behavior (i.e. upon "conversion"), it can be financially beneficial to the advertiser: an email list subscriber buys a product, a volunteer sign-up shows up to canvass, a job applicant gets the job, etc.  However, it's often difficult to measure the value of the offline behavior.  More than that, because the online action has to be paired with offline behavior in order to be financially useful, there's always some number of people who don't "convert".  To run a non-financial CPA campaign, the advertiser has to know both the monetary value of the offline action, and the likelihood that an online action will convert.

Somewhere in the world of cost per action advertising is hidden a great opportunity for an enterprising progressive candidate to quietly but very effectively build a solid campaign from the ground up, while helping out progressive blogs.  Besides the obvious (raising money online through CPA), a candidate could do some very interesting things with field using CPA and a fleet of other technologies.  For example, an inventive candidate could develop an mobile GOTV program for harvesting cell phone numbers and addresses from supporters; the campaign would send text messages to encourage those voters to register, and then remind them to vote on election day.

Candidates aren't the only show in town.  Combining CPA with crowdsourcing could provide a compelling way to create a low-cost decentralized newsroom, do legal and other public-interest research, or otherwise gather a wide variety of data quickly and fairly cheaply.  (This is particularly true with VPA, i.e. value per action, advertising.  In this model, ad revenues are split between the publisher, who displays the ad, and the reader, who takes the action.)  Of course, progressive businesses can use CPA to sell things like environmentally-friendly, union-made, or fair-trade products online.

There is an opportunity here for liberal entrepreneurs.  CPA is an exciting technology, but lack of adoption from the blogosphere or from progressive organizations could hamper the degree to which our movement uses it to become more effective.  An enterprising progressive could create a CPA advertising network which makes progressive CPA advertising easier and more effective; such a network could be coupled with tip sheets, resource guides, and consulting services to help progressive organizations and bloggers both figure out how to use CPA.

CPA is about to take a big leap forward.  Last year, Google announced that it would start to incorporate CPA into its AdWords program, and announced the CPA beta test in March.  Turn.com announced a competitor CPA ad network in November.  CPA ads will probably be commonplace in short order.

Progressive bloggers should pay attention to this trend, and take a serious look at their current advertising program.  Bloggers might benefit tremendously from signing up for a CPA ad network.  Bloggers should be aggressive in publishing ads which go well with their content and activities.  Progressive candidates and organizations should begin to purchase CPAs, and think about how CPA could be used to drive their core operations.  There is a serious possibility that CPA could not only make progressive organizations much more efficient, but could also help sustain the progressive blogosphere and help more progressive bloggers earn more money.

If you're a blogger, I'd love to hear your thoughts about whether CPA could be a viable revenue source.  If you're a progressive organization, I'd love to hear your thoughts about the use of CPA.  If you're neither, I'd love to hear whether you think this is all just a scam.

Tags: advertising, Blogosphere, Cost per Action, liberal entrepreneurship (all tags)

Comments

10 Comments

Re: What Cost Per Action advertising can do for th

I've not seen it in use anywhere, but I do agree that CPA is a model that is a comer in the ad world. I would use embrace it here for MyDD.

by Jerome Armstrong 2007-06-17 07:53PM | 0 recs
From Last Week

I told you I'd give you an update on our sucess at reaching out to non-candidate organizations to attempt to raise funds.

The results were much acolades given but so far no ad dollars.

Thanks.

by cottonmouthblog 2007-06-17 08:19PM | 0 recs
Re: From Last Week

How frustrating!  What type of organizations - local or national, political/commercial/non-profit?

I think local retail ads are going to be very difficult to come by unless you team up with a well-known community organization, like a newspaper or something like that (in fact, if local newspapers ever figure out what's what, I imagine they'll start creating local blog ad networks, which they populate with ads from their advertising customer; i.e. local newspapers will become go-betweens for local retailers and local blogs.)

I wish I could help you out with more ideas about advertising.  One thing you might experiment with is throwing it out to your readers - post something asking your readers to suggest an advertiser or two, and see what comes in.  Another thing to try is approaching companies in the B2B space serving progressive candidates/organizations, such as Blue State Digital.

Also, you might also try some kind of combined advertising push with the other progressive blogs in MS.  You might be able to make a case about serving an unnoticed but financially important population.

Good luck!  Sorry the first week didn't turn out so well.

by Shai Sachs 2007-06-18 04:38AM | 0 recs
Re: From Last Week

My local newspaper hosts local bloggers. To my surprise, the politically oriented blogs (not about cars, babycare, sports, etc.) are all liberal in this red area. And they're pretty good, too.

by joyful alternative 2007-06-18 05:04AM | 0 recs
Re: From Last Week

That is interesting.  What area are you in, and what's the newspaper you refer to?

by Shai Sachs 2007-06-18 06:17AM | 0 recs
Re: What Cost Per Action advertising can do for th

I really don't think it shouldn't be applied to voter reg, the bounty model is already huge in the real world.

Voting is entirely different, but voter reg is a whole different ballgame and I've paid people to register voters on this model offline and I don't know of any reason why it would be different online (paging Adam B., Adam B., please pick up the white courtesy telephone).

I agree with the model, but removing the voter reg potential removes 501c3's from the potential to help sustain the blogs which makes no sense is it isn't illegal.

by Bob Brigham 2007-06-17 09:08PM | 0 recs
Re: What Cost Per Action advertising can do for th

I sort of see your point here - if someone like ACT advertises on a blog, and pays $1 for each person who fills out the voter reg form online, then that's not much different from ACORN paying its employees $1 per person whom they register off the street.  So perhaps it wouldn't be considered a bribe.

Where things get tricky, I suppose, is with the VPA model that I referenced above - if the dollar amount which the advertiser pays for each voter registration action is split between the the blog and the reader in some way, then there is a serious possibility of bribery/vote buying.  That could easily be happening on the streets too, but it's much harder to catch.

by Shai Sachs 2007-06-18 04:46AM | 0 recs
Donations to Campaigns?

I'm not sure whether it would be legal to use the CPA model to get people to donate to campaigns.  

by KevinH 2007-06-18 04:51AM | 0 recs
Re: Donations to Campaigns?

Why not?  It's not much different from cost per impression or cost per click advertising - i.e. it's just the cost of doing business.  From what I understand, Romney is giving some of his fund-raisers a percentage of the donations they recruit; if that's legal, why wouldn't this be?

by Shai Sachs 2007-06-18 06:16AM | 0 recs
Slightly off-topic

But if you're serious about advertising you need to stop the abuse on this site of recommending diaries.  Someone can come on here, post a diary which really is no more than a press release or position paper by a specific candidate, and by getting 6 of the same people to recommend it, bam it's on the Rec. list, streaming the candidates name along the right side like a vertical ad banner.  If you don't think that's what's going on here you guys are blind.

by Doug Dilg 2007-06-18 09:35AM | 0 recs

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