Re: Generating income via ads

From: Brad Jensen <>
Date: Fri 19 Jan 2001 14:44:34 -0500

> The way pricing should work, however, is as it does in
> with other vehicles in other media: the more targeted,
> the higher the CPM. "Reach" on the web, and, IMHO, the
> rest of media, will be meaningless in the future.
> Given the state of the current quest for accountability
> brought to the advertising world by the Internet,
> pricing may actually have to be based on "performance."
> Big reach doesn't necessarily translate into bigger
> bottom lines. Media will be put in a position to
> demonstrate its effect on an advertiser's business.

A really smart advertiser will always track the
impression through to the sale, and make his or her
buys on this basis, unless they are just doing it for
brand impression, in which case their stock is in the
toilet right now.

I'd design my site to put a cookie on the user the
first time they hit me, to see where the original
impression came from, even if he buys on the third or
fifth visit. Then I'd add to that first impression
cookie every time he buys, so I know the lifetime value
of that customer by his original impression.

Of course, some of these other statistics are being
developed to help chart the course of ads long before
we have valuable statistics on actual buy value.

And some are being generated to create flimflam and
something to talk about in the client meetings.

If I were Amazon, I'd be paying associates not only on
first visit buys, but on residual purchases.
Incentivize the behavior you want, since you know how
to track it. Let your associates be out there thinking
how to get you the biggest spenders and the largest
value customers.

People are doing web and still thinking print. I call
it 'The Rat Dance' (someday a publisher will come find
me and I 'll write a great little bestseller about
this. Hint hint hint.) Our brains are built on top of
rat brains, and we do a lot of things because that is
the way it worked the first time. Every step in the
ritual dance carries a meaning of its own, without
intrinsic value. In the case of circumstances with
chaotic and semirandom outcomes, we quantify and nomify
every part of it to try to demonstrate some control.
Also to create dependent variables to test in our
organic neural network.

Has anyone noticed the significant downsizing of NBC
and now CNN? NBC blamed ad revenues, CNN wasn't so
forthcoming. Web business has been built on ad
revenues, and as the dotcoms have blundered off the
cliff, the ad providers have become more ravenous and
persuasive at going after the more traditional revenue
sources to replace all those evaporated investment
'mindspace branding' dollars.

The client gets absolutely measurable results, and then
it is a matter of negotiating price. The web is sucking
ad revenue out of traditional media. Magazines are
going to fold left and right. CNN will turn from Wolf
'Buddy 2 the Sequel' Blitzer and towards Newt Gingrich.
'Friends' will become 'Acquaintances' as the budget
continues to shrink.

These are exciting times and I am glad I am alive in

Brad Jensen

PS for real fun, take your best estimate of the CPM for
the Drudge site (the last ad I noticed was doubleclick
and it was targeted to me geographically) and multiply
it by his visits, then add his page2 impressions (I
would guess 70%) to figure out how much that site is
bringing down each day. I don't know. I hope he is
getting most of it since he deserves it. I wonder what
the other columnists will do when they finally realize
that they are their own brands.

Received on Fri Jan 19 2001 - 13:44:34 CST


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