Thursday, March 20, 2008

Recession Proof?

Recently we've been seeing a lot of chatter in the media about a pending recession. Some may argue that the recession has already hit, and that it's only going to get worse. Pending events like the US Presidential Election, coupled with the Bejing Olympics are top of mind as well.

I feel that performance based online marketing/affiliate marketing is recession proof.
Let's think about this; if you're currently spending money online for your company you certainly understand that there are numerous ways in which you can aggregate new users/viewers etc. You can purchase media on a CPM, CPC, or CPA. If you're currently working in a CPM scenario and you have a budget that can handle that, great. But what happens if that budget is directly effected by a recession. You'd be forced to modify your offering to performance based only. This would entail your only paying for a paid conversion, or a user (depends on how you'd prefer to define an aquisition).

In this manner of advertising you're still spending ad dollars, but only if you're making money yourself. If you've done your homework, understand your allowable aquisition rate, and can back into the appropriate metrix....then you're recession proof!


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TheMobiBlog said...

CPA marketing is recession proof I agree.

Interesting post and I clearly get its point,though some advertisers are more recession proof than others.

Because of this the core clientele in a recession can & will have either a positive or negative effect on a CPA networks bottom line'(s).

In a recession it seems to me most consumers spend less on items they do not really need like example:ringtones

A consumer looking to cut monthly bills down would eliminate this type of spending first, so to speak.

This consumer will most likely still spend money, though will be looking for greater value and reusable benifit per perchase.

Nice blog Chris


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