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IntegraClick embraces once-derided strategy

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  • | 3:39 p.m. December 9, 2010
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The founders of IntegraClick built a fast-growing Internet advertising empire when they broke one of the industry's supposedly unbreakable rules: How customers pay for ads.

Now the Sarasota-based company, which creates and publishes online marketing campaigns under the Clickbooth brand name, plans to break another rule. The company will also offer clients the traditional way of paying for ads — a philosophy it once scorned.

Indeed, Clickbooth claims to be one of the first online ad firms in the country to offer both cost-per-action and cost-per-click services.

The differences between the two philosophies are stark.

In cost-per-action, the company's original business model, a client only pays for an online ad when an 'action' happens, like a sale. In cost-per-click, however, a client pays for an ad every time it's clicked, even if there is no sale, or action. Cost-per-click is older industry model.

Tom Haney, the Clickbooth executive hired in early November to lead the cost-per-click division, CB | CPC, says the company made the change primarily for one reason: Customers demanded it.

Haney says clients that asked for cost-per-click services include auto insurance firms and home improvement companies. “It really comes down to how Clickbooth can help clients sell more products,” Haney, a onetime marketing executive for AOL, tells Coffee Talk.

Still, the move marks a significant shift for IntegraClick, which was co-founded by John Lemp, the Business Review's 2010 Entrepreneur of the Year. The firm has grown 400% since 2007, from $24 million in revenues to $120 million last year. (See Business Review, May 14.)

In fact, Lemp and several other IntegraClick executives have talked up cost-per-action as an infinitely better way of online marketing over cost-per-click going back a few years.

“The problem with the old [pay-per-click] model is there is no accountability,” Clickbooth President Graham Gochneaur told the Review in 2008, when he was the firm's chief marketing officer. “It's a roll of the dice. You have no idea what you're going to get.”

Gochneaur now has a different point of view.

“Our goal with [pay-per-click] is to provide advertisers whose products convert better through a CPC model the opportunity to work with a company that has proven itself as a leader in all other areas of the online marketing space,” Gochneaur says in a statement released Nov. 24.


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