Case Study: Ad Strategy & Audience Monetization at BenefitHub

On September 26, 2024, Jacob Donnelly of A Media Operator hosted a webinar with BenefitHub’s CEO Jeff Litvack and EVP of Advertising Mehmet Zenginler to discuss ad strategy and audience monetization at BenefitHub. The webinar was sponsored by advertising automation platform Ad Orbit, which is used by BenefitHub.

Following are the highlights and insights that Newsletter Business took away from the session:

Understanding The BenefitHub Model

  • BenefitHub is a 25 year-old cloud-based employee incentive benefits platform that operates as a marketplace for discounts, voluntary benefits and perks distributed through employers

  • They function like a publisher, curating the best merchant offers and discounts for the companies that use their platform

  • They have 2 main revenue models:

    • Affiliate model: They make commissions from merchant products sold on the platform.

    • Advertising: They offer the ability for merchants to boost their products via ads on a paid basis.

    • Advertising is 2/3 of their business; commissions (affiliate and insurance brokerage) account for 1/3.

    • They can double dip from a revenue perspective: they get paid for the ad boosting a product, as well as the commission on the sale.

Key Ad Strategies / Philosophies

  • Deeply care about customer experience. Delivering the best customer experience is the ultimate goal, and BenefitHub will seek to deliver the best offers for the employee customers using their platform even if it’s worse for BenefitHub in terms of ad sales/commission economics.

  • Whenever you deal with ad sales, you need to stand in the shoes of the ad sponsor:

    • Understand their needs, interests, budget, and goals.

  • Can you deliver the results? If so, you can engage whatever ad model the ad sponsor wants to do.

  • BenefitHub is willing to get merchant sponsors to test the waters with them by reducing commissions to show them how great they are.

Ad Model

  • Any merchant has to be a qualified merchant according to BenefitHub standards to be promoted.

  • Won't overload product categories with too many competing offers,

  • They consider merchant ad budgets and seasonality of merchant offerings when considering ad placements.

  • Ads

    • Newsletters ads are charged on a flat fee cost per send.

    • Ads are also offered on a CPM (cost per thousand views) basis.

    • Merchants might also pay a cost per lead or commission on product revenue.

Targeted Advertising Capabilities

  • Offer advertisers highly targeted, relevant, and personalized placements.

  • Most effective ad platform is their newsletter.

  • They use the following data elements to inform their advertising and meet customer needs:

    • Traffic data; what's resonating with users?

    • Which merchants do customers want to see?

    • What’s driving newsletter signups?

    • Ad placement performance:

      • Experiment by adding new placements or removing placements.

      • Constantly tweaking up to just a couple of days before publishing.

Scaling and Streamlining Ad Sales

  • Most important thing in ad sales: have the best sales people around (understand traditional and digital selling)

    • Over hire in ad sales:

      • If you hire 3 people in sales, it’s likely that one will be a star, one will be OK, and one will be terrible - you have no way of knowing in advance.

    • Pay a little extra to get the talent.

    • Metrics used to maximize effectiveness of sales team:

      • Activity

      • Proposals

      • Close rates / conversion rates

      • Ad inventory management / sell through rate

      • Discounting / “make goods” : put controls in place to track these or sales team will give away to make sales, and is easy to lose track of

    • Consultative approach: will put together a special program to meet sponsor needs.

    • Tier-based discounts for customers spending a certain amount.

    • Having 2 competing sales teams (1 focused on ad sales, 1 on commissions) can lead to conflict and there is no perfect answer; must address on a case by case basis to optimize business economics as the deciding factor.

  • Invest in robust analytics to understand your audience / behavior.

  • Don't be afraid to make a decision based on what the data tells you.

  • Empower your ad organizations to have the tools and skills and bench strength needed to succeed.

  • Really try to understand the needs of the client

  • Growth comes from:

    • Optimizing site experience

    • Targeted newsletters

    • Ad placements based on behavioral data

    • Driving results per sponsor goals

  • Ad inventory should be treated as a valuable commodity

    • best placements command lower discounts

    • specific products and locations will affect discounting

  • Customers will have different kinds of ad budget; try to get them to spend from all their department budgets (social, etc.)

    • Create new assets for them (images, videos, etc.)

    • Leverage first party data.

Tools & Technology

  • AdOrbit is used as their advertising automation and CRM platform; it can be used to manage clients, offer client dashboards, invoicing, manage ad inventory, etc.

  • If automation can drive more efficiency, the ROI will follow.

  • Customer Data Platforms (CDP) considered by BenefitHub:

    • Tealium

    • Lytics

    • BlueConic

    • Omeda

  • Key considerations when considering a CDP:

    • Amount of money to invest.

    • Amount of time to invest.

    • Features that are planned to be used.

    • Most companies have overcomplicated their needs and need to reflect on that before selecting a platform.

  • You can put the best tech in a company, but if it's not adopted it's useless.