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Maple Forest, a fast-growing UK paid search agency, is announcing the launch of a new Cost per Acquisition (CPA) based billing model called Pay-on-Results PPC.
Maple Forest’s new model offers ecommerce retailers and subscription-based sites the opportunity to convert existing paid search campaigns into a pay-on-results model. In traditional paid search management, end advertisers typically pay Google or other search networks for click costs, and them optionally pay an agency or other resource to optimise that spend.
Maple Forest’s new Pay- model throws the traditional method out on its head. With their CPA billing model, clients only pay a fixed marginal rate when a sale is made, usually a percentage of checkout value or a set cost per conversion. This eliminates click costs and agency fees entirely, and makes advertising a fixed marginal cost per sale.
The Pay-on-Results model is essentially a risk-free proposition to existing paid search advertisers. As long as advertisers are currently measuring conversions, and those conversions are profitable, it is possible to convert onto a Pay on Results model quickly with the same or better marginal advertising costs per sale. On the model the responsibility for optimisation, testing and most importantly scale, are shifted from the end advertiser to the Maple Forest.
Commenting on the unusual agency model, Maple Forest’s co-founder and Account Management Director Lloyd John points out the problem. “Paid search’s normal billing model is essentially broken,” claims John. “You pay Google for clicks, you pay an agency to optimise that spend. The problem is that the incentives for both Google and the Agency are wrong. The CPA model aligns your agencies’ interests directly with yours. They only get paid if you do.”
He later added “We’re secretly shocked that so few agencies operate on this model! It’s actually the best way to add value to the client, the agency and to Google. If you’re a current advertiser, your agency should be biting your hand off for this!”
Effectively, the model allows Maple Forest to guarantee the return on investment on their client’s paid search spend.
“The maths were very simple,” said Fraser Birt, Maple Forest’s co-founder and Business Development Director. “If a customer can measure results on their existing paid search campaigns, the case for the CPA model is easy. Why not lock into success and stop paying for clicks? Shift that burden to your agency and make paid search a fixed marginal cost. Make scale their problem.”
For more information, advertisers can contact Maple Forest's Business Development Director, Fraser Birt, at 0207 993 8886. For detailed information on the Pay-on-Results model visit http://www.mapleforest.com/ppc-management/pay-on-results-ppc/
Published on: 2:40PM on 19th September 2012