Following is Lars' note to me and my response to him. You're welcome to add your own comments by using the "Post Letter" link in the top right-hand column of this page.

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Dear Al,

Thanks very much for the article; it gave me some ideas and some new information I didn't have before, and it helpfully kept at a good level at least for me.

What I would like to say is that your advice is obviously good but in its reality I find it flawed. "Buy and Try" different lists sounds a bit like if you had to buy five different cars when deciding on a car and/or computer or whatever product we might talk about. Obviously, when you buy such products you always have one week or one month to "try and return," and this is what I find is suspiciously absent in this field.

I understand that not all product is well suited for CPA so there has to be an acceptance procedure, but every one of the marketers out there only accepting upfront payments makes me nervous and distrust their quality and value.

It's basic common sense that if you have a product you believe everyone will buy, you have no problem working on a "trial" basis nor do you have any problems with PFP [pay for performance]. However, if you are unsure or sure it's "crap" then of course you only accept upfront because when the client paid it doesn't matter any longer.

In most cases, of course, this is not so deliberate as that but a function of reality; however it doesn't really matter to me as a client as I am not willing whatsoever to spend $50,000 because a marketing company hasn't been able to gather good lists in recent months. I am still out-of-pocket and my result still stinks. What am I supposed to do then?

If this would be the way any other business works, you would very quickly get regulations and companies coming up with guarantees, but in this field even with only 40% utilization, the market is deadly inefficient in favor of the supplier and not, as everywhere else, in favor of the customer. What do you think will happen in the future, and how do you think this will change?

I'll let you know I have bought, tried, and in fact always gotten worse results than with a CPA supplier I worked with in November last year. "Pay upfront" always has yielded worse and in some cases much worse response than the PFP we ran last year. I'll also tell you I have not bought into one single list to lower price than $2,500 and the most expensive was $17,800 all of them yielding much less success (indeed between 0.05% and 0.25% when my PFP yielded 0.8%). Also, I use the same email design and in our own user list we get 5-6% success.

Any ideas for a poor marketing manager? We don't have much to go after as we have no clawback possibility, no verification before and can only cross our heart and hope to die.

Thanks.

Regards,
Lars H.

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Al Bredenberg responds:

Lars,

The reality is that very few suppliers of email lists are willing to work on a CPA basis. I think that could change in the future, but like it or not, that's the reality now.

The CPA providers I'm familiar with are very careful about which advertisers they'll work with. Right now, it's a seller's market, because there are huge numbers of advertisers who want CPA deals and very few list owners willing to try them. So even if you have a good product and offer, you face the challenge of getting list providers to even pay attention to you and consider your product for a mailing.

Rather than comparing email advertising with the purchase of cars and computers, you need to compare it with other advertising media. Very few media are willing to work on a CPA basis. If you want to run a magazine or newspaper ad, or a TV or radio commercial, or rent a postal mailing list, you nearly always have to pay the cost of media up-front.

From the point of view of the media owner, there are too many variables. Suppose your copy and design are poor? Suppose your product is something that nobody wants? Suppose there's a terrorist attack the day your ad goes out? Owners of advertising media are in the business of renting out space in their medium, whatever it is -- TV, radio, Internet, magazine, newspaper. They just don't feel that they have the time to investigate your individual product and promotion and test it out to see if it works with their audience.

As I said, there are some email list providers who will work on a CPA basis. We have a few in our marketplace, so you're welcome to submit a request to them (http://market.emailresults.com). If you want to get CPA providers to help you promote your product, though, you need to be prepared to make a good case for your product.

This situation might not seem fair, but complaining about it doesn't do any good. As I said before, things could change over the next couple of years, but it's a reality of the marketplace right now.

Regards,
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Al Bredenberg

Other readers want to comment on the CPA/CPM dilemma? Have you been able to make CPA work for you? How did you do it? To submit your comments, click on the "Post Letter" link in the upper right-hand column of this page.

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Al Bredenberg is publisher of EmailResults.com
(http://www.emailresults.com).