REVShare Raises $20 Million For Cost-Per-Action TV Ad Business
Erick Schonfeld
9 comments »
The idea that advertisers should only pay for actual responses to their ads is gaining acceptance beyond the Web, where cost-per-action (CPA) ads are becoming more common. A SoCal company called REVShare has been doing the same thing on TV since 1989, with ads that urge viewers to call a 1-800 number or go to a Website. The company has relationships with 1,500 TV stations (most of these tend to be local, infomercial-style ads). These type of ads have become increasingly popular. The company says that it is profitable and that it has tripled revenues since 2003 (But it doesn’t give specifics—is that triple from $100,000 or $1 million?). Now, it is ready to expand further.
Today, the Carlyle Group and H.I.G Ventures co-led a $20 million venture round in REVShare. Even though the company’s been around for years, this is the first time it has tapped outside investors. They obviously believe that REVShare has a lot of room for growth in the local-ad market alone. But what is lacking in the whole CPA ad industry is a way to run CPA ads across the Web, TV, and other media. Also, nobody has really proven that CPA ads are effective for broader brand advertising rather than those Ronco slicers. Hopefully REVShare will use some of this $20 million to break new ground.
Advertisers spend big bucks on TV so it’s only natural that they have a way to track their marketing campaigns. I can see that they are wising up and slowly moving their advertising online.
Advertising without tracking is equivalent to throwing a bowling ball into the gutter.
???”Advertisers spend big bucks on TV so it’s only natural that they have a way to track their marketing campaigns.”???
Why do people constantly equivocate the terms “marketing” and “advertising”? They are VERY different things.
CPA is a way for lazy advertisers and agencies to pass the buck onto someone in the event of a general failure in performance. It is not that I think CPA is bad model, I just can’t believe that people are actually building their businesses around it. It makes more sense for the buyers than the actual companies taking the CPA contracts.
I tend to agree with Phil (#2). Some portion of marketing will always be unmeasurable, and the temptation to make everything measurable rarely results in better performance. Luxury brands and discretionary purchases are usually about emotional connections between the consumer and the brand, which are fostered by much more than simple call-to-action advertising.
I do not believe in RevSharing, no way boy!
http://fakesteveballmer.blogspot.com
As a publisher, I can say that cost per action is a great way towards making NO money… it’s a great way to keep the vast majority of publishers from putting your ad or joining your ad network if that is all you can offer. Google Adsense has this features and I can say the results of pay per action are mediocre at best.
Jon
the cable operators we talk to use voicestar services to track phone calls so they can get paid per call
To my surprise actually, the CPA model in radio and TV long preceded the internet version. CPA advertising on radio and TV has been around for 11+ years, while commission junction’s website has only been around since 1999.
I focus primarily on online marketing, and was a little surprised to find out that my “babies” were not so original after all…