According to conventional wisdom and more than a few quarterly reports:
- Ad budgets are tightening
- It’s RIP good times for startups.
- Marketers are too nervous to spend on experimental social media
- And anybody counting on the Detroit automakers better find a new line of work.
So how, exactly, did Buddy Media, which builds branded widgets, grow its revenues 138% during a quarter in which one of its more notable clients was the famously failing General Motors? Founder Mike Lazerow tells us the company’s reached seven-figure monthly revenues.
For starters, Buddy Media is a startup and a move from near zero revenues to anything larger will look like a gigantic jump on a percentage basis.
But beyond that, Lazerow says Buddy Media’s main trick is that it sells its branded widgets with a simple “performance marketing” metric: Marketers typically pay $1 each time a user signs up to use their widget.
Want a branded widget with 100,000 users? That’ll cost $100,000 — or about as much as it costs to buy 10 million impressions at a $10 CPM or 2.5 inches on the front page of the Sunday Times.
The pitch jibes with what we’re hearing from marketers who know there’s a huge audience in social media, but don’t want to waste money for uncertain returns. For them, the $1-per-1 user is simple and attractive.