Re: What is fair? Clicks or Conversions

From: Robert Baugh <robert_at_littleredgate.com>
Date: Tue 30 Oct 2001 16:59:38 -0500

I'd agree that the value of online ads goes way beyond
a pure click. But, following on from "there is only
one New York Times so they can charge how they charge"
comment, online properties have to realise, and play to,
their strengths.

CPM-based fee elements are more suitable for websites
which are successful in terms of track records of brand
awareness, responses, or other advertiser's target, and
so have strong bargaining power.
 
CPA-based fee elements are more suitable where the online
property cannot demonstrate that track record, or where
there's an element of the unknown due to an experiment
by the online property.

A mix can also be beneficial for both parties when
there's a particular response that can be separated.
For example, we essentially offer a CPA-based service,
where the advertiser only pays per email we send out.
But it piggy-backs an advertiser's banners, which the
advertiser has to negotiate in the usual way. So the
advertiser pays a blend of CPM and CPA, reflecting the
different uses for the one ad.

How you mix the two is all down to bargaining power at
the time of the ad, and what functionality you want in the
ad. All ads are experiments, some more certain than
others.

Robert
  
Robert Baugh
CEO
Little Red Gate
PO Box 219
Balaclava VIC 3183
Melbourne, Australia
P - 61 3 9505 9061
F - 61 3 9505 9063
M - 61 403 77 22 99
E - robert_at_littleredgate.com



Received on Tue Oct 30 2001 - 15:59:38 CST