Having achieved my goals at Google, I joined Incubeta as Head of Business Development and Partnerships. Incubeta found that traditional agencies were poorly incentivised by retainer models: Google Ads accounts would be set up and left, with the result that their performance would decrease over time.
Incubeta’s arbitrage business model involved the creation of bidding algorithms in order to bid for keywords at a price when, combined with the conversion rate of the customer’s site, allowed it to make profit from coming in below an agreed cost-per-acquisition.
Our method for setting up these deals was simple:
Understand what the historical cost-per-click on the customer’s keywords are and compare them to Google’s estimated costs.
Understand the client’s conversion rate on their site and compare to what good historical site conversion rates are.
Understand what the client’s cost of acquisition threshold is for new customers.
See what the gap in (1), (2) and (3) is in order to work out if there is margin on each acquisition attained by Incubeta in order to be correctly incentivised to make profit.
By applying this model to Standard Chartered Bank, Expedia and Zappos, Incubeta made considerable revenue from financial services, travel and retail customer acquisition.
Locally, Incubeta partnered with Interface Digital to create a product directly related to helping small businesses advertise their local products on Google. I was part of the team that managed ~$1m annually.
