Re: CPA, CPM...

From: Andy Bourland <andybourland_at_yahoo.com>
Date: Wed 21 Nov 2001 16:07:07 -0500

BRAD JENSEN <brad_at_elstore.com> WROTE:
 
> Now with the web, you can do this. The publisher and
> the advertiser can track the viewer in a manner they
> can generally agree on, at least to the point of the
> initial response action - the click.

The weakness in this argument lies in the premise of
the "click" being the primary response people have when
viewing an ad. 99.75% of all banner ads <if not more>
are not clicked on. Why then, would a click be the
foundation for all ad pricing?

You don't click on billboards you drive by, or radio
advertisements, or tv ads -- but often they register a
datapoint in our minds and are recalled later when
we're in need of a type of product or service.


> The obvious answer is for the advertiser and the
> publisher to be partners. That will provide the lowest
> cost and highest value advertising on the web - which
> is the best thing for all involved. Advertising is
> actually a service to the consumer, and the lowest
> cost and most effective service is the best value
> proposition.

So in this partnership, the publisher assumes all risk
and the advertiser none... hmmm... some partnership!

Advertising isn't a service to the consumer. It's a means
for marketers to acquire new customers and retain
existing ones. Some advertised products provoke response
sooner than others.
 
> People cam into the web trying to preserve the value
> propositions of print advertising - and it resulted
> in dotcom failures and the disillusion that has
> depressed advertising prices (and value).

I think we were making it up as we went along, we had
oodles of bucks available from the VCs, and didn't really
take the time or effort to develop an appropriate ad or
business model. That's the stage we're going through now.

 Since the
> click cost is constant, the initial runup to get focused
> doesn't cost anything extra - except of course the sites
> are not earning anything until the clicks happen.

Ooops! Those pesky sites! They'll just have to wait for us
to optimize our model, I guess. We can run our ads for free
on their sites until we figure it out...

> There are some other strategies to make this effective
> that I don't want to mention at this point. Think of this
> as an automated ebay for advertising.
>
> I can do the technical end, designing, writing, and
> serving the system. (I've got a development staff that is
> top notch, and I know the ins and outs of web programming
> myself.) I need some money and the marketing organization
> to make it go.

Perhaps you could develop it on a CPA basis. When your
system produces direct sales for advertisers, you get a
small percentage in return 45 days or so after the quarter
ends. But you need to wait for them to optimize their ads
first...

So take your savings, max out the credit cards, tap your
family's resources and develop this technology so that --
if it works and the advertisers produce compelling ads --
you will get the best possible return for your technology
investment.

> Like I said, a couple of million and a piece of the action.
> Somebody from Kansas City would be a good match, we are in
> Tulsa.
>
> Ready to get rich? Ready to restart your ad revenue?

Uh... not that way....

Andy

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



Received on Wed Nov 21 2001 - 15:07:07 CST