Social media has seen an outburst of activity from marketers over the past year, but brands looking to prove the value of their efforts on social media often come up short. But according to a new study released by Pontiflex today, advertisers are shifting to a cost per lead model rather than paying for the number of eyeballs that see their ads. And when it comes to retaining new leads, social media is an excellent way to keep consumers engaged and listening to brand marketing.

The Pontiflex CPL Report found that nearly 50% of
advertisers who are collecting leads on an opt-in, CPL (cost per lead) basis
are bringing those leads to social marketing and community sites. Also, 23% of marketing leads received e-newsletters from advertisers of
interest. Furthermore, 15% of consumers enrolled in subscriber
acquisition programs – these include loyalty programs, reward programs
and other member acquisition efforts.

A
marketing lead consists of basic personal information — first
name, last name and email address. In a marketing lead campaign, advertisers only pay for individuals that sign up for their programs, rather than a CPM basis, where brands pay a certain amount according to how many thousands of people look at their ads. 

According to Pontiflex CEO Zephrin Lasker:

“A marketing
lead is the contact information of a consumer who has raised her/his hand in response
to a specific brand advertisement and said ‘Tell me more!’ – a Jane who wants to
volunteer for a climate change campaign or a John who wants to receive special
offers from Blackberry.”

Pontiflex also found that the price of leads is going up. The CPL Report found a 31% increase in the
overall price of basic marketing leads. Pontiflex attributes the increase to more premium publishers offering CPL options. Those publishers included
Lifescript.com, PlanningFamily.com and Demand Media.

Pontiflex also thinks that performance advertising is becoming more useful than CPM ads. According to Lasker:

“Performance advertising is growing rapidly at the expense
of CPM advertising. To meet this demand, an increasing number of premium
publishers are monetizing untapped revenue streams on their websites
(registration paths or mobile apps) to offer CPL advertising. Premium inventory
costs more. As a result the cost of the marketing leads increased from Q3 to Q4
2009.”

To increase sales, many marketers are finding that a strong relationship with consumers beats bombarding them with brand advertising. After getting leads from CPL advertising, Pontiflex found that brands continued to engage consumers through social media. Because leads are opt in, it’s up to brands to continue to engage consumers after they earn initial contact with them.

One example of this is the Huggies brand, where Kimberly-Clark collected leads
from CPL ads targeted toward expecting mothers. They then sent emails to those leads to build brand loyalty with them and then
directed them to a pregnancy countdown widget that was embedable in any social networking site.

According to the findings, CPL advertising is gaining ground online.

In the third quarter of last year, 43% of advertisers used CPL advertising to communicate with their
audience through social media. But in quarter four number grew to 48%. Similarly, between those two quarters, the cost of a lead containing the basic contact information
of a consumer increased by 31%.

In the fourth quarter of 2009, there was an increase in the percentage of consumers engaged by brands through community/social sites and e-newsletters. There was also an increase in marketing leads acquired for direct response efforts in the last quarter of 2009.

Says Lasker:

“Social marketing has always been thought of an ‘experimental’ medium where it is difficult to measure results. The Pontiflex CPL Report debunks this myth. It
demonstrates that by combing CPL with social media, you can have it all –
accountability and engagement.  It shows that even as we speak, marketers
are using CPL advertising in conjunction with social marketing to deliver on
all of the tenets of a major advertising channel: reach, measurability,
optimization and control.”