Re: Subject: Is CPA really advertising?

From: Miguel Alvarez <miguel_at_encenta.com>
Date: Thu 08 Nov 2001 21:49:24 -0500

KEVIN FRAZIER <kfrazier_at_adace.com> WROTE:

<<Snip>>
CPA should not even be considered an advertising term as
far as I am concerned. Nor should anyone be advocating
it as the only real solution for online advertising.
<<Snip>> <<Snip>>
>How do you run a CPA campaign for Pepsi?
<<Snip>>
<<Snip>>
My previous post regarding charging over time, and
basing CPM rates on unique visitors seems to be a
step in the right direction. We can get more upside
for delivered clicks when they are above a certain
percentage. The CPM rate could be adjusted down if
there was an agreement to share upside on the sale,
but again this gets very difficult to track. I
personally think we should stick to delivering the
eyeballs, and let the retailers, suppliers, and
manufacturers concern themselves with the sale.
<<Snip>>

My responses:

1. I must have not been too clear on my last post
where I asked for any respondents to please state
what where your income is derived from, CPA or CPM.
I think that is important to this debate. My income
is purely based on CPA. 2. Again, regarding your
post about Pepsi not being a good company to pay
for CPA, I am 100% behind your opinion. Again, I
must have not been too clear so I am clipping that
piece below.

<<My Previous Post - WHY CPM WORKS FOR FORTUNE 500'S>>
My personal belief is that branding in this online
medium works best for Fortune 500 companies, which
have product readily available near the person being
advertised to and have the budget to chalk up
unsuccessful campaigns as "branding." Let's take
Coke for example. Banner advertising is great for
them. After watching a tantalizing Coke banner ad I
can literally walk no more than ten steps from my
office and buy one. Online advertising also works
for Ford. Why? Within a 24 hour period I will most
likely see a couple hundred of those on the road
and maybe even one or two car dealerships.
<<End of My Previous Post>>

3. I believe this forum is about coming up with
outlined solutions and not general suggestions.
Let's work together on this. We are all on this
boat. I know some of us are working hard at rowing
and others are just catching the wind in our sales
but we can't let it sink. Suggesting that everyone
sticks to their guns regarding CPM, when hardly
anyone is paying for even the cost of delivery, is
a hard pill to swallow. Again, below is my proposed
solution to our current problem.

<<My Previous Post - PROPOSED SOLUTION>>
First, do away with CPC. Don't buy it. Don't sell
it. It is too easy to cheat the system. Second, I
understand large networks have already spent
millions in structuring their business around CPM
and CPC. I suggest networks require each publisher
within their network to give up 10% of their CPM
inventory for the sole purpose of testing CPAs.
Revenue will still be generated from the 10% but
it just won't be guaranteed. These advertising
agencies can still stand firm behind a base CPM
and only push the CPA offers that perform to their
satisfaction after each CPA test. <<End of My
Previous Post>>

Is anyone willing to open the discussion as to
these very important questions? What do we do
about companies not disclosing their poor open
rates, about bots running up clicks and
impressions, where e-mail lists were acquired,
if a similar ad has recently been pushed? Should
these issues be disclosed and tracked by a third
party (adding more cost)? What can we do to make
sure a campaign will be successful from the very
beginning rather than from the end result?

To end, I would implore everyone who desires to
debate this issue to please work towards finding
a solution. We all know that THE PROBLEM IS
that it is hard to sell inventory on a CPM basis
that is even close to covering the cost of delivery.
Of course CPA has a strong case but so does CPM.
Let's work together, CPMers and CPAers, to find
some solutions, which will keep us alive until the
dot com bounces back makes us all filthy rich :)

Miguel Taylor Alvarez
Encenta, Inc.
VP, Sales & Marketing
(801) 431-0022 x 203
Fax (801) 431-0021
mailto:miguel_at_encenta.com
Encenta.com
WinDaily.com



Received on Thu Nov 08 2001 - 20:49:24 CST