Since our launch in June, we’ve had remarkable interest from new merchants that want to get their products incorporated into Jellyfish.com.  Almost without fail, these new Jellyfish merchants express how great it is that Jellyfish aligns its incentives on the end sale, providing them with a risk free channel.  Most of these merchants highlight their concerns over the growing threat of click fraud, and the problems they have managing their Return On Ad Spend at the Pay Per Click engines. 

I don’t want to minimize this feedback, because it does represent a major shift towards more accountable search advertising (In fact, I kind of like the sound of this headline: “Jellyfish.com Eliminates Click Fraud & Makes Online Advertising 100% Accountable“).  However, traditional Cost Per Action (CPA) forms of online advertising have been around for some time (e.g., Affiliate Marketing) and at least one other search engine (Snap.com) is trying to move to a Cost Per Action search advertising model.  

So what makes our Value Per Action (VPA) search advertising unique for online retailers?  There are several unique elements, but the one element I would like to highlight in this post is the maximum value that retailers obtain from each advertising dollar they spend at Jellyfish.  This concept can be boiled down as follows: Jellyfish.com is the only search engine where retailers achieve both search promotion (moving higher up our listings) AND price promotion (driving conversions with price discounts) with every advertising $1 they spend on the site.  Let’s look at this concept at work in the following basic example:

I own an online store called Mark’s Camera Shop and I have $100 (easy math) to spend this month on my online search advertising.  

Pay Per Click: I can spend this $100 on links at pay per click search engines like Shopping.com, Pricegrabber, Google, etc.  And what does my $100 spend get me?  I get search promotion, which moves my product link up the search rankings and in front of more eyeballs.  But I have no guarantee that my $100 spend will earn me ANY sales.  Because of this, I might spend some of that $100 on improving my chances of converting those clicks to sales.  I decide to offer a pricing discount on my products that I project will cost me $25 of that $100 budget, leaving me only $75 for search promotion.

Pay Per Click Results:

• $100 total spend
• $25 used for price promotion (assuming my projected closure rate is accurate)
• $75 left over for search promotion

Jellyfish VPA: In contrast to the Pay Per Click engines, the Jellyfish VPA advertising gives me significant additional value for my $100.  In fact, I can spend my entire $100 on search promotion at Jellyfish AND I will automatically obtain an additional $50 of price promotion with the same $100 spend because Jellyfish shares back at least half of every dollar I spend with the end consumer.  What’s more, I obtain this additional power from my ad spend in a risk free channel where I no longer have to guess at conversion rates and hope I earn a positive return.  

Jellyfish VPA Results:  

• $100 total spend
• $100 search promotion 
• $50 price promotion

I may be biased, but I know where Mark’s Camera Shop is going to spend its limited ad dollars.  Is anyone aware of another search engine or online channel where my advertising dollar creates this much value?  If so, I would love to hear about it.     

Seth Radwell, President of the e-Scholastic Division of Scholastic gave an interesting talk in Chicago this week at the Internet Retailer Conference. One of his key points was that the Internet creates “enablers” that allow retailers to change the traditional relationship they have with customers. In particular, he stressed the following three enablers:

1. Transparency-don’t hide anything from your customers
2. Control-give customers control over how they gain value from you
3. Simplicity-make it simple and easy

There are many examples of how Internet retailers are applying these enablers in new ways online, but what struck me was how far we still need to go for online advertising to catch up to these pillars of customer value. If users are in control, why do we continue to see intrusive, annoying advertising (like pop-ups talked about by Jeremy Wagstaff here) that interrupt and annoy? And why are customers in the dark about paid search bid rates and completely cut off from the daily online advertising auction that creates millions of $’s of value for companies like Google and Yahoo?

At Jellyfish, we believe the future of advertising is to create advertising units that customers find valuable in and of themselves. Technology enables companies to bring customers directly into the advertising value chain and create an environment where it is easy for them to seek out valuable messages on their terms. Transparency, Control of Value, and Simplicity. It is the future of online advertising.