Techniques to Drive TAC Costs Down

TAC, or Traffic Acquisition Cost, is a measure of the amount of money required to buy in traffic. It is usually calculated on a percentage basis, using either revenue or visitor numbers to yield a figure that can be measured over time.


For example, if you pay out $5 to Google in AdWords fees, and receive 1,000 visitors, then the cost per visitor is 0.5 cents (actually, it's more common just to say that the cost is $5 per 1,000 visitors, otherwise known as CPM).


Others may choose to measure it in terms of revenue - if you sell an eBook for $15, and pay $100 in advertising fees to sell 500 copies, then you have generated $7,500 for $100 of advertising. That's quite a margin!


Actually, these numbers might be a bit optimistic, and so helping reduce TAC costs is usually high up on the list of priorities for online entrepreneurs.


One method might be to hunt after JV's (Joint Ventures) where partners each get something out of the relationship. An eBook can be exchanged for the traffic that this might bring, for example - one partner offers the eBook to their list, and the eBook contains links to the other's online store.


Or, a software manufacturer or online service provider might pay a third party to pre-install software on a piece of hardware, or even supply software with certain settings that provide an opportunity for third party promotion.


This last example is use by advertisers to buy advertising in applications (so-called adware), which is a method that works, but can be costly and obtrusive to the end user.


When formulating your TAC cost reduction strategy, remember one thing - it's much better to offer something of value if all you're after is traffic; otherwise it may end up costing more than it brings in.

Reducing Traffic Acquisition Costs using Destination Sites

Traffic acquisition costs are probably one of the highest direct costs for online businesses. Anything that you can do to reduce traffic acquisition costs must, almost by definition, be a good thing - but there's a right and a wrong way to do it.


Like the hotel industry, the web is split into two kinds of page - destination and everything else. Budget hotels that people use whilst traveling offer a very different experience to so-called destination hotels, which have to give customers more than just a bed for the night.


Likewise, destination sites are places people go to for something, unlike 99% of the other random search results which are just places people find themselves almost by accident.


Look at your own mental bookmark list. The chances are that you have a favorite site for social networking, video sharing, even email. There's also a good chance that these don't need to be in your browser bookmark list. You know the URLs by heart.


Now, I'm not suggesting for a moment that you try to become a destination site. That's part of the misconception that people have about the web - everyone wants to be the next big thing, the next mental bookmark, but very few people reach that status.


Mostly, we're all part of the 99% of pages that people visit on their way somewhere else. And that's okay, because it's what makes the web tick.


However, despite the fact that Google AdSense is available on many of these destination sites, and despite the fact that you might be paying for prominence on them, what happens when traffic acquisition costs outstrip the earning power of the target site.


We're in a world wide recession, after all, and people are cutting back spending in the so-called power niches of health, money and sex. Never mind hobbies, dating, and suchlike.


However, the power of the destination sites can still be harnessed by offering content in return for traffic, thereby significantly reducing direct traffic acquisition costs.


Right now, for example, there's a WSO (Warrior Special Offer) that uses the power of YouTube to drive traffic. It's called the Royal Affiliates Banker, and seems to be a process, coupled with some software which purports to drive traffic to a web site with only 15 minutes of real work.


(Disclaimer - that link makes me no money. Zero. I have NO affiliation with the product, and am just citing it here as an example.)


If the Royal Affiliates Banker works, it could significantly reduce traffic acquisition costs, and boost profits. And, it's likely that a very similar process can be applied to other destination sites - it's all about giving potential customers valuable content, and a reason to click through to the target site.


Just like a promotional blog, but potentially with much more power, and certainly a lot more fun to put together!

Traffic + List = Profit?

Recently I stumbled across a blog post by Nicole S. Cooper, titled 'A Valuable Lesson Learned About List Building Popups on your Lead Capture Page'. It was interesting to me because it highlights a few salient points about traffic acquisition and the process of leveraging that traffic.

The conventional wisdom is that you need to get the visitors onto a list in order to market to them. This has been adjusted of late to promote content over and above sales, where the marketing becomes a touch more subtle, and the actual selling process is part of a confidence building exercise.

Now, many readers might assume that the quicker the visitor is presented with the option to sign-up, the better. Visitors are notorious for clicking away from sites after only a short stay, so getting them to sign-up as soon as possible is surely a good thing?

As Ms. Cooper found out, however, this isn't the case. The post itself is a great snapshot  of the marketing process, and I wholeheartedly recommend it. The long and the short of it is that she had a bounce rate (visitors dropping in and clicking out straight away) of upwards of 30% (3 in 10) when visitors were immediately presented with a sign-up box, but that this dropped by 10% the moment she adjusted the script so that the box appeared after a short delay.

Other variations might include changing the page that the sign-up pop-up appears on, and playing with the position, layout, and presentation - the end message is clear, and as Ms. Cooper herself says:

"metrics and tracking is pivotal in the world of Online Marketing"

So, if this wasn't enough to convince you to take another look at your sign-up box placement, timing, and statistics, head on over to The Mailbox Money Blog  and get the scoop from the lady herself!

What Do I Do With All This Traffic?!?

It's a question that often comes up - traffic acquisition is one thing, but once it's flowing, the story doesn't just end!

After all, there is a whole process that begins when the user (potential client) lands on the page, one which takes them through the marketing funnel, step by step. First they are a visitor, then, they become a prospect, then, hopefully, a customer, and eventually, a repeat customer.

Along the way, there are ample opportunities for upselling, special offers, one time bargains, and so on, all geared towards maximizing the revenue generated now, and into the future. The question is : how can we possibly know what is working, and what isn't?

The answer is given on the blog I've linked to above. It's all about testing traffic, tracking results, and helping to read customers minds, all with one goal : raise revenue and the value of each and every visitor.

The Marketing Funnel

The latest in a series of articles on Internet Marketing, the latest concentrates on sales lead generation, using the marketing funnel approach. It is an internet marketing strategy that is designed to turn random success into a process that can be repeated.

The article discusses the finer points of the process:

• Collecting email addresses;
• The One Time Offer;
• List Segmentation;
• etc.

Beginners and experienced marketers alike can use this article to learn how to make the most from their internet marketing.

Until next time!