CPA much easier to sell?

From: Kevin Frazier <kfrazier_at_adace.com>
Date: Thu 08 Nov 2001 22:21:14 -0500

<snip> <Rob Frankel Wrote>
Looking at it from another viewpoint, I can also tell
you from experience: CPA is much easier to sell,
because it's what advertisers want to buy. And there's
nothing in the playbook that says you can't toss
in a participatory arrangement to share the risk/reward.
<end snip>

I don't see any selling in a CPA deal. You are basically
agreeing to the terms set forth by the advertisers. In
some cases you can negotiate a better payout, but it
really isn't selling an ad campaign. Furthermore,
with the current method of CPA you must "trust" the
conversion data and payout to be reported correctly by
the advertiser. In your participatory arrangement in
sharing the risk/reward are you getting an upfront
deposit or a guaranteed minimum to accept the deal?

If so, then you are closer to running a hybrid CPA
deal with a base CPM floor, which is what I have been
trying to promote for the last six months. I'd like
to see things shift closer to putting more value on
the unique visitors and charging for time and space
so we have a measurable unit /exposure to rely on.
I agree a full page 4 color ad is more compelling
than a 468x60 banner, but if a banner ad lived in a
space over time on a website and became visible on a
regular basis on specific pages of a site it may begin
to have more impact and get better results.
Especially if the ad was a good fit for the content.
With the adoption of new ad sizes (skyscrapers,
oversize, etc) the opportunity is getting closer to a
print experience. Flash, audio, and video will be
settling in over the next few years to begin to give
us a blend of print and television. I understand your
view that CPA is kind of a proof of purchase, but it
really doesn't cover the gambit, and should not be
considered the only measure of success for web advertising.
Again, I must ask how you plan on handling non
acquisition offers. The thousands of advertisers looking
to drive local business to their brick and mortar
businesses, or the large national advertisers that want
blanket exposure to create an image or entice audiences to
choose their brand over a competitors.

With CPA deals these advertisers can buy millions of
impressions for pennies, as their CPA payout will be
created to give them the best run for their money.
Upside will not be available as it will happen months
after the campaign has run its course. We need to have
better systems in place to service true advertising (the
"hey check out my store/restaurant") and (the "don't
you think this is cool") offers.

Currently we use "clicks" when CPA doesn't make sense.
We sent you 25,000 visitors to your site so you owe us
"x". People don't need to answer to get the message.
Just telling them something is cool may be all it takes.
The same problem applies to clicks. What if the offer
isn't cool, and the clicks take forever to deliver
(which happens more often than not). The advertiser
still got their message to the end user (or did they?).

Because we rely so much on ad rotation and moving ads
across many pages of a given site and across many
sites, we may not be getting the best exposure for our
 money. If the same ad was a fixture on a site for a
specified time period and always showed up in the same
slot, on the same pages, and the ad was not interrupted
by other ads, the brand would really have time to work.
Pricing could be determined by the unique viewers
multiplied by the length of time and positions purchased.
Longer time commitments yield better rates. Currently
ads have become too frantic, too diverse (on some sites)
and too invasive (pop-ups). I personally think we could
see a much better return, and far more user acceptance,
if we scaled down the ad arsenal (delivery options), and
better matched advertising opportunities to the sites
they run on. I truly believe we would begin to see
advertisers marry their brand to specific sites and
become long term customers of sites that best match
their audience. Sure we must continue to explore, but
creating relationships that work well is what it is all
about.I'm not saying CPA doesn't work. It works
incredibly well for advertisers, and on occasion can
benefit site publishers, but there is just too much gray
area to consider it the only option. Lets keep striving
for more!

Kevin Frazier
CEO
AdAce, Inc.
http://www.adace.com
kfrazier_at_adace.com




Received on Thu Nov 08 2001 - 21:21:14 CST