January 31, 2023Maximizing Your Margins with Lead Prosper’s Bid Penalty Feature

Maximizing Your Margins with Lead Prosper’s Bid Penalty Feature

Selling leads to the highest bidder is nothing new, but is the buyer with the winning bid actually the one willing to pay the most for a lead? Determining the true highest bidder in a lead distribution campaign becomes a little more complicated if your contracts with buyers allow for chargebacks.

Buyers who consistently dispute their bills and charge back a certain percentage of their leads at the end of each billing cycle are problematic for suppliers — particularly when the winning bid minus the chargeback percentage ends up being lower than competing bids from other buyers. To help suppliers ensure their bids are going to the true highest bidder, Lead Prosper includes a Bid Penalty feature.

With Lead Prosper’s Bid Penalty feature, suppliers can avoid losing out on some profit by preemptively applying a percentage reduction to bids from buyers who take excessive advantage of chargebacks. If a campaign has one buyer bidding $100 per lead against a buyer who bids $90, yet the first buyer typically charges back 20% at the end of each month while the second doesn’t, then the supplier would be losing money by selling to the first buyer — despite the fact that they’re technically the highest bidder. The Bid Penalty feature was designed to account for this discrepancy by allowing you to adjust the bid perceived by the Lead Prosper system for each buyer. Using this feature, the supplier can apply a 20% bid penalty to buyer A, causing the system to view their $100 bid as $80. This correct application of a bid penalty ensures that the $90 bid wins — and the supplier makes a better margin.

By using the Bid Penalty feature, publishers and lead suppliers can protect themselves from financial losses due to chargebacks and maintain positive relationships with their most valuable buyers, optimizing their lead generation efforts and increasing their overall profitability.