Was thinking of the cooperation today and being in the middle of the work running marketing campaigns for one of my clients there came this weird idea about co operation in marketing .
Here I am going to speak about advertising on Google, one of the most preferred advertising channels online. Consider this hypothetical situation where there are only two companies who want to sell the same product and are both running their respective online campaigns on Google . Both have the target to generate 100 sign ups a month @ of $2 per sign up. They are both trying to outbid each other to be on the top spot of sponsored links to get as much traffic to their website as possible.
Suppose the search volumes for the two products remain same during the next two months and the two competitors now agree to cooperate and run campaigns one by one i.e. Company 1 runs the campaign in 1st month and the second company in the second month. Let’s see how the math could change here now.
Since there is only one advertisement, the attention span increases. Since there is no competition the average amount per click would decrease and also the Click through rate on your advertisement would increase, it could be double since there is only one company advertising. The increase in CTR logically should further decrease the Cost per click.
Assuming the conversion rate on the website remains same, I not only get the desired 200 sign ups as I wanted at the end of two months but also achieve it at a lesser cost. The same happens with the other company.
Ideally the math should work.
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2 comments:
Very smart!!!
Nice way to profit and give Google a run for its money.
Great! It's almost like what happens between Visa and Mastercard. Whenever I apply for a new card, the bank changes the provider without asking me.
That is, when the market leaders decide to cooperate, another Stakeholders takes the hold of market.
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