Home Professionalisms Sponsored Poolfunding: A New Way To Think About Maximizing Advertising Dollars

Sponsored Poolfunding: A New Way To Think About Maximizing Advertising Dollars


by Angela Stringfellow, Startup Advisor for 25K Startups

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The digital marketing landscape seems ever-expanding. Google continues to evolve and refine its search algorithms over time, leading more businesses to turn to paid advertising models to get the exposure they seek in the multi-channel, multi-device world. Consumers are becoming savvier as well, now understanding that they have a multitude of choices and the means to research them.

The Digital Marketing Landscape is Overwhelming.

The sheer volume of cost-per-whatever models can be simply overwhelming for some companies. From cost-per-click to cost-per-mille, cost-per-acquisition, and so on, it’s difficult for businesses to determine which pricing models are best-suited for their needs, let alone how much advertising spend to dedicate to the various digital marketing channels that exist in the modern landscape. You have to consider mobile advertising, social media, content marketing, pay-per-click, and let’s not forget organic SEO.

It’s a challenge for many businesses to make sense of the current digital landscape, at least not without the help of an experienced digital marketing agency. The cost of hiring an agency, of course, can easily be out of reach for smaller businesses and newer vendors without thousands of dollars to spend each month to secure their place in the digital world.

What’s more, it’s next to impossible to dedicate enough advertising dollars to every individual digital channel or tactic without a massive, enterprise-grade advertising budget. The question, for many businesses, becomes how to maximize advertising spend to get the most reach and exposure for their investments. Sponsored poolfunding is one solution, enabling businesses to receive several times the exposure for every dollar spent than they would using the traditional cost-per-click advertising model. Here’s how it works.

How Sponsored Poolfunding Works.

Sponsored poolfunding is actually an innovative approach, bringing competitors together – under the same roof, if you will – to share in both advertising spend and exposure by pooling their advertising investments to multiply their exposure, build substantial brand recognition, and generate solid business leads.

It works by compiling a list of the best vendors in a specific vertical that share some commonality – location, for example. Great Agencies achieves this by ranking the top vendors in specific niche markets within digital marketing, such as search engine optimization (SEO) agencies, pay-per-click (PPC) agencies, reputation management and branding companies, iOS application development, and Android application development companies, to name a few.

These vendors invest in the model by paying for a sponsorship, and the cumulative sponsorship fees are pooled to purchase paid advertising, build organic SEO campaigns, and purchase strategic advertising in industry publications, relevant magazines, radio, and much more to drive traffic to the rankings page. The result? As an example, a $1,000 investment could earn a ranked vendor between $3,000 and $8,000 in exposure. Essentially, multiple competitors in a space are pooling their funds together to invest in otherwise inaccessible and costly advertising space and audience.

It Turns Out That Joining Forces with Your Competition Can Actually be Lucrative.

But why would you join forces with your competition, when you’re essentially sharing potential leads with direct competitors using the sponsored poolfunding model? Think of it like this: Even when you purchase traditional paid advertising, every click to your website does not generate a viable lead for your business. That’s because not every visitor is the right customer for your business – some may be better suited for your competition.

The sponsored poolfunding model provides value to consumers by ranking the best vendors in a category, and then enables visitors to select the best-fit vendor for their needs. Really, you want leads that are both qualified and a good fit for your company’s culture and offerings, not leads that will end up costing your business in the long run because you’re spending too much time nurturing and managing, rather than providing direct value to the customers that matter most to you.

In addition to securing strategic ad space that would otherwise be too cost-prohibitive for many businesses to invest in alone, sponsored poolfunding platforms drive a tremendous amount of traffic and audience through organic (read: free) Google search presence. Every vendor ranked benefits from the traffic, audience, and leads produced through top search engine rankings at zero additional cost.

How is Sponsored Poolfunding Better than Other Advertising Options?

Here’s a broad example. We’ll use simple math for simplicity’s sake. With a traditional digital advertising investment, say you spend $1,000 per month in pay-per-click advertising. You generate 100 clicks with that investment, but only one percent of those clicks convert to viable leads, or a single lead. What’s happening to the other 99 clicks? They may have landed on your website only to discover your business doesn’t offer a key service they’re looking for, or the right combination of services, or maybe your business simply wasn’t a good fit for their needs.

With sponsored poolfunding, that same $1,000 investment in advertising could potentially net three to eight times the amount of value, so you could generate 800 clicks to a ranking page that lists your business along with nine of your competitors. Some of the other 99 theoretical clicks from the first example likely ended up converting into leads for your competition. In this scenario, you’re capturing the same potential audience but giving visitors several options on the same page. If your business is a good fit for the same one percent of visitors, you now stand to generate up to eight leads for the same $1,000 investment it would take to generate just a single lead in the first example.

Should sponsored poolfunding be a stand-alone marketing strategy? Of course not. Like any digital marketing initiative, sponsored poolfunding should be one of several marketing channels and strategies working together as a comprehensive approach to driving traffic and generating qualified leads for your company. But paired with other strategic marketing initiatives, sponsored poolfunding offers an affordable and highly effective means for generating more targeted, viable leads than other marketing tactics can generate alone.


Angela Stringfellow

Angela Stringfellow is a Startup Advisor for 25K Startups, a Long Island incubator providing funding and resources to promising startups. Having entered the digital media field in 2004, Angela has worked with non-profits, startups and corporations on brand development, marketing and PR strategy, business development and planning for more than a decade.