Re: CPM isn't dead, it's just sick (was More suggestions...)

From: Mike Pepper <Coffeerooms_at_w3PG.com>
Date: Wed 07 Nov 2001 18:23:01 -0500

ROB FRANKEL <Rob_at_RobFrankel.com> WROTE:

> No, your job USED to be the opportunity to see. The bottom
> line is, well, the bottom line. Nobody in business pays
> simply for the opportunity to be seen anymore.

Rob,
    Your point is taken, but you're disallowing an equally
valid point on the opposite side. That is, that there are
costs and profits that must be covered on that side as
well. CPC buyers (generally) don't come close to
covering that consideration.

    Take a look at the pool of CPC programs and count how
many ads you, or your wife, or kids or any non-Pavlovian
human would actually click on. It won't be many.
Ironically, calls to action are actually avoided in the
CPC pool. In fact, most CPC campaigns are actually more
like branding or positioning campaigns than they are calls
to action.

    Add to that problem that CPC buyers universally want to
pay less than true value (much less true cost) for the
privilege of qualified contact with our audience. That is;
when they do get a click, instead of paying a reasonable
portion of cost-to-acquire, they instead pay a fraction of
a reasonable CPM.

    Now look; if you on the advertiser side want us on the
publisher side to take CPC seriously, then you have to play
it seriously on your side. Your challenges are not going to
make it and they will only come across as rants unless and
until you include a reasonable view of the cost/profit basis
on ~both~ sides of the equation.

    If you want to run branding programs with bland ads on a
strict CPC basis then we figure what we think is a reasonable
rate this way; our base CPM / CTM = CPC. Typical CPC ads
will pull around 1 click-thru-per-thousand (CTM) on a good
day. If our base ROS CPM is say $5 this month, then $5 /
1 = $5.00. Sold.

    Give me "fox the monkey" on a CPC basis at $0.25 per
click and its a go. On the other hand, a dark blue, unanimated
credit card ad will need to pay $25.00 per click before we
can cover costs and make money with it on our side. I
realize that would add a lot to the cost to acquire a credit
card customer, but the solution is easy if the fraction is too
high. Just change the ad to draw more clicks. Simple
as that.

    If you want to pay only for validated clicks; OK. It
is understandable and it is doable; but you must pay a rate
that is commensurate with our costs and reasonable profits and
which does not penalize the publisher if the ad is ineffective.

Best regards,
    -- Mike Pepper

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Received on Wed Nov 07 2001 - 17:23:01 CST