When advertising reps came knocking, Seth Selesnow, marketing director for Alure Home Improvements, on Long Island, N.Y., used to "half-seriously" suggest that he'd buy if he could pay by the number of inquiries that developed. Ad reps, he notes, usually fled at the suggestion.
Chris Keeter, president of All States Windows & Siding, in Wichita, Kan., says that his standard response when approached by ad sales reps proclaiming they have a great new medium is to say, "I'd be happy to, but let's do it on a performance basis." Only once did a rep go along with it, and the leads were disappointing, Keeter says.
But with ad sales down and media companies hurting, the idea of pay per performance, also known as pay per inquiry (PPI), is gaining ground. When reps for two magazines, one lifestyle and one home improvement, approached Charles Gindele of Dial One Window Replacement Specialists last fall, the Orange County, Calif., company owner initially declined to renew his ad contract.
The magazines kept calling, offering to drop their per-page price. "I said: If you sell it to me for a dollar and I don't get an appointment, then I threw a dollar away." Instead, he offered to pay $400 per lead generated by the ad. Both publications agreed.
Varies Market to Market
Ron Sherman, of Ron Sherman Media, a Little Rock, Ark., company that produces ads for home improvement companies, says that PPI agreements have existed since the 1960s, usually in smaller markets and often involving a local newspaper.
Marketing directors at several large window companies ? Newpro, in Massachusetts, and Feldco, in Chicago ? say that they have been approached to advertise on a pay-per-inquiry basis. Newpro director of marketing Marci Karales says, via e-mail, that the company has "found success using the pay-per-performance model in non-digital channels." Patti Fretko, of Feldco, calls PPI a "short-sighted strategy" by media companies. It will go away, she believes, when the economy grows.
Chris Ripley, of Lifetyme Exteriors, in Boston, whose company has often negotiated pay-per-inquiry agreements, says that it's usually up to home improvement companies to instigate the arrangement, and that the only way that a mutually advantageous situation can exist is when leads are dutifully tracked and reported so that the advertiser can be credited for payment. Ripley advises company owners looking to negotiate a PPI deal with their advertisers to offer a sum of money in exchange for X number of inquiries.