Cost-Per-Action Advertising

From: Loren Baker <loren_at_webadvantage.net>
Date: Wed 18 Apr 2001 12:20:13 -0600

As a result of the recent online advertising bust, we
have been exploring "alternative forms" of advertising-
including cost per click (CPC), cost per action (CPA),
and sales commission.

Don't get me wrong, we're still purchasing some CPM
based advertising. However, since the tides have turned
with supply and demand, we're now requesting $2-$3 CPM
pricing from sales reps of well branded sites and
we're not budging until our demands are met.

On the other hand, buying online advertising (which
for all it's worth is basically direct response
advertising) at a CPM basis does not make sense and in
my opinion, will not be around for much longer.

We have run some extremely successful campaigns based
upon CPC and CPA advertising models. For instance, on
NetZero we are running a client's campaign which
delivers ad banners in the ZeroPort when the user is on
the client's competitions' sites or searching for
targeted keywords. We have purchased this campaign on
a CPC basis and since it is highly targeted, it is in
NetZero's best interest to deliver as many impressions
as they can.

In addition, we have also run a CPA campaign on ZDNet
where we paid ZDNet $1 per download of our clients web
site navigational tool. ZDNet had to PUSH this campaign
to its limits in order to fulfill the max number of
downloads and instead of just running a banner
campaign- ZDNet had to include our client in featured
e-mails, on site sponsorships, millions and millions
of impressions, and featured listings all over their
sites in order to generate 10,000 downloads.

Many large sites are still standing on their high horse
and demanding large CPMs, but I do forsee this changing
fairly soon before these sites figure out that buyers
are no longer paying inflated prices for dismal
responses. And even though many sites shun CPA based
deals, I see this coming more and more into the picture
in the months to come. And the fact of the matter is,
if you look at online advertising as "direct response",
we can get those same responses running affiliate programs.

Has anyone else noticed this trend in online
advertising pricing?

What changes are you making to your buying strategy?

I think if we all get our heads together, we have a
chance of turning this industry upside down.

Thanks,

Loren Baker
Manager, Marketing and Strategic Planning
WebAdvantage.net <http://www.webadvantage.net>
Creative online marketing, PR & advertising strategists.
Submit your site to the WebAdvantage.net eMarketing
Resource Directory: http://www.webadvantage.net/linksmanager



Received on Wed Apr 18 2001 - 13:20:13 CDT