Re: Next Generation Pricing Models

From: Andy Bourland <andybourland_at_yahoo.com>
Date: Mon 19 Nov 2001 22:16:19 -0500

KEVIN FRAZIER <kfrazier_at_adace.com> WROTE:
 
> It is becoming clear that we need to be open to many
> advertising models as there is room for more than one
> model to flourish. CPA with a floor/base CPM. CPC
> with a maximum impression limit to keep from delivering
> too many ads for too few clicks. CPM with basic floor
> prices that protect the bottom line, and better
> measurement and tracking for unique users and
> impression display. Discrepancies are really hurting
> networks and publishers right now. Large campaign
> purchases at rock bottom prices are also hurting the
> market, as many of these large deals have 48 hour outs.
> So they buy a 100 million campaign, run 1 million and
> decide to pull it. Pricing needs to be there to
> protect early termination. One final note.... Net 60
> deals are just plain ridiculous in today's market.

Kevin,

Your impulse that we need to explore new pricing models
to reflect new realities is dead on. I have issues with
the specifics, as publishers are still having to cave in
to the CPA terrorists <the TalibAd? Ad Qaeda?> currently
destroying this industry, by offering exposure to their
audiences at little or no cost or risk to the advertiser.

Perhaps where we need to go in doing a complete reset in
pricing models is to abandon the "impressions" model
completely. In most other media, aren't pricing models
based upon audience -- NOT on the number of pages they
view, commercials they see, hear or pass by?

In other discussion forums <I've only been back on O-A for
a few weeks now, so forgive me if this has been covered
already>, much discussion has centered on "sessions" as
the basis for a pricing model. So for each unique visitor
who comes to a particular site at a moment in time, that
event -- whether it produces 3 or 5 or 50 page impressions
-- is a session.

Each session has its own advertiser. A visitor is not
experiencing a zillion ads competing for his/her attention.

The advertiser has exclusive exposure to the x number of
visitors for whom they have purchased access to. The length
of time, number of page impressions, etc may vary by site,
content and audience, but the principle remains the same.

The publisher -- if they have built a valuable, desirable
audience -- can enjoy a fair return for marketers' exposure
to that audience, maintaining their editorial integrity in
the process.

The reader, most importantly, may experience a far more
pleasant, less cluttered and frenzied environment where they
might get the content they are looking for.

If you'd like to see some excellent articles on the topic,
Tom Hespos and Jim Meskauskas have penned a few for ClickZ:

http://www.clickz.com/media/media_buy/article.php/905691
http://www.clickz.com/media/plan_buy/article.php/908421
http://www.clickz.com/media/plan_buy/article.php/912521

Fundamentally, this strikes me as a far more fair, equitable
and sustainable pricing model than CPM or CPA/CPC.

We can't grow this medium for the long run by caving in to
the Ad Qaeda. Let's shoot for a win-win model that will
keep the quality online publishers alive and thriving.

Andy



=====
Andrew R. Bourland
... Stay tuned!



Received on Mon Nov 19 2001 - 21:16:19 CST