Trademob, a mobile app marketing platform, found “that 40 percent of clicks are essentially worthless, creating a conversion rate to install an app from an app store of less than 0.1 percent. Trademob found that 22 percent of clicks are accidental, while 18 percent are fraudulent.” While Trademob’s research was focused on mobile apps, it’s not unreasonable to assume that click fraud can occur anywhere online. For companies that rely heavily on online lead generation to sustain their customer acquisition programs, click fraud can result in a major waste of budgets and have a negative impact on your overall sales pipeline.
Imagine you ran an ad on a popular industry website for a month, costing you $250, and 100 people clicked on that ad. 100 “leads” from one ad for $250 sounds like a pretty fantastic deal, right? Your CPC (cost-per-click) is $2.5 which is considerably lower than your company’s usual CPL (cost-per-lead) of $8.50. However, if 40% of those clicks bounce right away from your landing page you’re really only getting 60 “real” clicks from your ad. Now your real CPC is $4.16, almost double your original calculations!
But remember—just because someone clicked on your banner ad that doesn’t mean they’ve automatically converted into a lead. Chances are your ad takes them to some kind of lead form where they can download a white paper, register for a demo or take some other action. Of the 60 clicks that arrived on this landing page, maybe only 10 actually bothered to convert. Now your real CPL is $25, three times your usual CPL!
So was your $250 investment really a “good deal?” You may have earned 10 new leads for your sales team, but the end cost was much greater than you had originally anticipated.
One of the biggest issues with most online lead generation tactics is that you pay per click, not per lead. If 1,000 people click on your link or ad and you have to pay $3.50 per click that’s a cool $3,500 out of your lead generation budget and there is no guarantee that even ¼ of those clicks will become solid leads, or that they are even real people! A large portion of your budget is wasted on click fraud and “curiosity clickers” that have no real intention of converting. While online lead generation can be very valuable for companies dependent on their industry, it’s not foolproof nor is it always the cheapest option.
By the way, new developments in performance-based campaigns leverage the customer voice channel as a net new opportunity to acquire customers. Unlike traditional online lead generation programs, the SalesPortal partnership marketing network lets marketers bid for live lead transfers from contact centers with branded enterprises, giving them much needed control over the real costs of their customer acquisition program. Additionally, companies are only required to pay for live lead transfers that stay connected for at least 20 seconds, essentially eliminating the chance for a voice-channel version of click fraud.