My friend, Christopher Lars Carlson, recently posted a blog asking if one pays $0.50 for a click on a Facebook add, how much
would you pay for "every email address [one] gets as a result of clicks from your ads".
As a result I've been trying to think about the real value of an email address since I read the post a few days ago. Here
are my thoughts.
I consider myself a pretty open person. I listen to new music daily, I read news,
tweets and blogs that interest me every morning and subscribe to a pretty wide range of RSS feeds
and mailing lists.
However, I myself have three email addresses. One of which I use precisely to get
to content I wish to see but that requires me giving up an email address. In all honesty,
I don't really want to receive emails from everyone who has something interesting to offer. Sure,
I'll keep you on the periphery of my scope but there is simply too much content to keep track of. My email address
(at least, the one I actually read!) is extremely valuable to me. It's my portal to the online world. It acts as a unique filter to siv through the overwhelming amount of information available on the net today.
If I'm listening to your music, and I have paid for your music - isn't that enough? Sure, the ideal is to have a nail-biting fan waiting by their inbox hoping to receive news from their favourite artist
but I suspect a very small percentage of fans do this.
Take, for example, the 80/20 Principle. This is "the idea that in any situation roughly 80% of the 'work' will
be done by 20 percent of the participants" (Malcolm Gladwell, Tipping Point). So in this case, if you had 100 email addresses,
only 20 of those people (ie addresses) would be your die hard fans, giving you 80% of what you earn from selling through this medium. This minority of 20% is crucial to your success then. At least financially, they will make or break you.
I suspect that these kinds of fans arise only naturally, after some amount of time, and cannot be bought. The question I ask then is:
1) Is it worth buying an email address of a customer who will more than likely fall within that 80% majority bracket who don’t really spend money on your content?
I think that the value of an email address of a fan who willingly and enthusiastically gives it to me is incomparably greater than a fan's email address that I buy.
In conclusion, I simply would not pay anything for a fan's email address.
Posts
i was with you until the conclusion, which could also be stated as, "I simply will not spend money on marketing." Because what is the purpose of marketing, but to acquire new fans?
ReplyDeleteIt was my presumption that the best possible outcome from money spent for online marketing was to get a person's contact information [THAT THEY GIVE YOU WILLINGLY!].
Going back to the facebook thing, if it cost 50 cents per click, and one out of 5 give me their email address, I have effectively paid $2.50/email address. If only 1/10 opt-in, it cost me $5 per email.
My conversion rate will depend on two things:
1. how well did I target my ad? (the ad reads: if you like john mayer, you'll also like tom howie... download new EP for free here. and ad is only seen by females, age 21+, living in NY, NY and Boston, MA (where Tom will be playing shows) with mentions of John Mayer in their profile)
2. how effective was the page they clicked through to? (the music loads automatically because they've never heard of Tom Howie before, and it is OBVIOUS where they can get the download, which only requires one click).
Given these variables and countless others, my conversion rate is going to vary. Another way to ask my questions (and perhaps a clearer way) is to say, "at what conversion rate should I consider my ad a success?"
I don't want to be a slave to the variables though. If I told facebook I'd give them $X.XX for every email I get (which is the goal for me in my marketing campaign) and they said OK, then I am GUARANTEED a successful ad... so I ask again, what should $X.XX be?
To answer my own question, I think it is somewhere between $2.50-$5.00. (Betweeen a 1/5 and 1/10 conversion rate of clicker/downloader)
But that's just a feeling. I don't have any data to back it up... I think that sort of data WILL be available in the near future to EVERYONE, which is just one more reason why I am excited to be entering the music industry now :)
OK. I see. What I failed to appreciate was that the 'clicker' of the Facebook ad would be able to CHOOSE to give his/her mailing address. As I understood the original post on your blog, you would be paying "$X.XX" to Facebook in exchange for the address of ANY person who clicked on that add (hence my conclusion that I would never pay for an email address of an unwilling potential fan!).
ReplyDeleteIn light of this, I agree wholeheartedly with what you say in your comment above.
Because of
1) the very focused targeting and
2) the curiosity and willingness of the 'clicker'
this seems to be an extremely effective way to spend one's money in marketing.
In fact, if they click and you don't get their email address, it's still a win situation. If they click AND give you their email address, they may very well fall into the category of that minority responsible for the majority of your (the artist)'s sales! This is indeed fantastic.
Let's get back to putting a value on that email address.
Firstly, in answering what a "successful ad" in this case would be: I think if you get 1 email address for every 10 clicks, that is a success.
HOWEVER, I would not agree that 1 email address is worth 10 clicks (which would equate to the $5.00 (max) value you placed on an email address).
In fact, I would prefer 10 clicks to 1 address (!!!)
[the reason I say this is that I believe word of mouth is crucial in any band/product's success]
Here's what I WOULD be willing to pay - double what I pay for a click. So if someone clicks AND gives me an email address, that would be $0.50 the click PLUS the value of the email address $1.00 .
Of course, this is just an estimate. It would be interesting to see real statistics, REALLY interesting. I mean, this is very targeted marketing so if a lot of those email addresses turn out to be 'die hard fans' who really do buy, I would be prepared to pay a lot more.