With a one-time tagline that read, “Shrinkage is good,” you know that the company BillShrink wants to stand a part from others, and recently it has had the chance.

For those unfamiliar with BillShrink but familiar with the online lead generation space, you could almost describe the company as LowerMyBills.com 2.0. I’d suspect that all things being equal, BillShrink’s CEO Peter Pham wishes that his board member and the founder of LowerMyBills, Matt Coffin, hadn’t had quite the success he did, because  he wouldn’t mind using that name.

Perhaps only one other consumer site in the online customer acquisition arena has received the type of media coverage that BillShrink has, and countless articles and mentions have flown their way from TV news to the Wall Street Journal. As one following the evolution of online customer acquisition, what interests me most are the factors that have allowed BillShrink to fulfill on the promise originated by LowerMyBills. Interestingly, both BillShrink and LowerMyBills (purchased by Experian Interactive in 2004 for roughly $330mm) made their biggest gains during a difficult economic environment, but the means by which they have done so highlight not just the differences between LowerMyBills and BillShrink but many others in the customer acquisition space.

You could say both companies have made a name through themselves via the ads people see, but the strategies for placement couldn’t be more dissimilar. LowerMyBills initially wanted to be all things to all people, a place to save on countless categories of expenditures. But, they couldn’t make money doing that. Coffin’s genius, among other things, was the realization that they could generate high returns on their refinance lead generation business, and while the main LowerMyBills page kept non-financial services, e.g., home services, viewable to visitors for a while, the company focused all of its attention on building out a media business focusing on financial services lead generation. They succeeded for many reasons, but the perfect storm of low rates, high demand, high acceptance, and cheap media among other things, enabled LowerMyBills to become a dominant player not just in online lead generation but all of advertising. The now famous Coffin-”double down” transformed his company and created a brand in the process.

BillShrink could have taken a similar route as LowerMyBills for growth. Media is inexpensive, and many companies in the online lead generation/customer acquistion space have seized on this opportunity to continue to scale. But, BillShrink doesn’t advertise anywhere. They’ve deliberately taken a dramatically different approach. Yet, they also make money the old fashioned way, i.e., the online customer acquisition way; they earn it. They receive payment not when users click on ads or on the site but if a user takes action as a result of what they found. That is how just about every company in the online lead generation space earns their money, and it’s how LowerMyBills earned theirs. The big difference is that instead of spending money to make money, BillShrink has a goal of becoming a consumer destination site where users don’t just transact once but come back to time again. The only spending they will do is PR. It’s a bet that will either succeed or fail without much room in between. Doing so means money, and the company is backed by powerhouses Bessemmer Venture Partners and Trinity Ventures.

Already on their way to becoming a media darling, BillShrink’s bet on becoming a destination and consumer brand received a big leg-up recently, as alluded to in the opening salvo of this post. Type in BillShirnk in Google, and you will see one example of their rise to prominence. BillShrink doesn’t advertise, but they don’t have to. They are receiving a double benefit by the latest T-Mobile campaign which has included references to site.

Below, a snapshot of T-mobile.com/Billshrink that once clicked redirects users to the BillShrink homepage.

It’s one thing for T-Mobile to mention BillShrink on a Google ad and off a page on their site.  More impressive though, is the same mention in a nationwide campaign including mega-TV airtime that has brought Catherine Zeta Jones and just so happens to end with a BillShrink plug. Here is the TV spot.  (That you have to watch an ad first before getting to see an ad… well…)

A freeze frame of the mention:

If you follow the ads advice and head to the BillShrink, you will see that the company doesn’t just collect your data and send it off so that you can be called during dinner for the next three months. They have a technology layer and partner integration that make for a pleasant user experience. Both of those didn’t exist 8 years ago when LowerMyBills was modifying its strategy, which makes the latter’s decision to change course all the smarter. this is definitely not a strategy for everyone, but we wish them the best because their efforts help everyone in online customer acquisition. Its shows that a marriage between brand and performance can exist and those getting paid on a performance basis don’t have to be sleazy. I hope theirs will be part of a wave that lifts the boats of the good players in this sector.

Distilled, the affiliate tactic used for the incentive promotion ads involves creative ways to a) buy traffic on keywords not directly relevant to the core business and b) pay less for traffic than they would if they tried to bid directly.

The online education landscape is among the most competitive, especially in paid search. It’s also full of schools being heavily wooed by Google to spend directly with Google and rely less on the aggregators. Google is even reportedly offering pricing incentives. One area, albeit with less traffic and arguably lower intent, where there aren’t the same brand / direct advertiser issues involves scholarships. Below is another example, this one from the online education space, courtesy of Vantage Media, although they are far from the only ones. (Education Dynamics for instance has run a very successful and well-branded scholarship promotion they call Project Working Mom.)

The Ad:

Clicking on this ad, takes you to the follwing landning page:

The page above is interesting. Being experts in the online education space, Vantage knows that schools don’t want just leads. They want enrollments. Enough people fill out forms with no real commitment to enrolling as is, so making it even easier to do that (offering them an incentive) makes the liklihood for conversion even lower. To combat that, they put the following disclaimers to discourage just those wanting money:

• Who Can Apply: Anyone planning to enroll in a school of higher education
• Requirements: Winner must be enrolled in a school when the scholarship is awarded*.

Fill out the essay, and it takes you to:

While they collect some lead data here, outside of the check box asking users to join their email list, they don’t suggest that it will go to a school. That opportunity comes later, on the third page:

Notice the subtle prompting of the headline saying, “Which school would you use a $1000 scholarship at?”

Incentivized marketing has existed offline for years. Online it tends to refer to a very specific form of marketing with users clicking on ads thinking that they have discovered a way to get a free prize. The “free ipod” ads have now become synonymous with that form of advertising and those in the industry have achieved a certain level of infamy.

Without getting too repetitive with respect to the countless articles written on the topic, the incentive promotion business resembles less a style of ad and more a platform for advertising. It allows marketers to leverage user interest in a given product (ipod, kindle, camera, tv, etc.), and parlay that interest into conversions on unrelated ads.  When users click on an ad for a “free” product, they enter an ad funnel that ends with their having the opportunity to earn the product in which they first expressed interest.

The maturation of the ad market has made it ever more challenging for those in the incentive promotion space to attract new users. They face headwinds on several fronts. Most of the places that they used to acquire countless users have either restricted these types of advertising and/or the economics no longer make it possible for them to buy the way they once did. That doesn’t mean the companies behind the free offers or their affiliates have given-up, as evidenced by the two recent ads we saw.

We recently spotted two ads on Google. Years ago they could promote the free offer directly. Now, in order to get listed, they must come up with a different hook for the users. They can’t just say, get a “free x.” In a trend that we’ve seen employed, those trying to market incentive offers try to get the users engaged in a quiz / poll topic that could have some emotional appeal to the user. Celebrity is a very common theme as users tend to have an opinion and if executed correctly, the traffic is inexpensive. Given that the affiliate here makes just $1.50 or so per email submit, they still need a healthy percentage of people to click on the ad, again on their jump page, and convert on the following page. They do prime the users to convert by telling them what to do on the landing page.

It’s not an easy way to make money. There is limited traffic, so it’s really a lifestyle business at best, not to mention a constant cat and mouse game to make the jump page appear to be more relevant and valuable than it is, all in the name of Google Quality Score.

Ad 1:

Miley Cyrus: Yes or No?

Quick 1 Minute Poll. Win a Prize! Will Miley Always Be A Good Girl?
PollRocker.com/MileyCyrus

Landing page (affiliate’s jump page):

Ad 2:

Harry Potter vs Twilight

1 Minute Poll
Vampires or Wizards, Who would win?
wethepeopoll.com/Wizards-Vampires

Landing Page:

When you click on either poll pages, you will end up on the actual incentive promotion page: