Re: CPM isn't dead, it's just sick

From: Brad Jensen <brad_at_elstore.com>
Date: Fri 23 Nov 2001 08:36:56 -0500

MAURICIO MACEDO <mauricio_at_iron.com.br> WROTE:

> I've heard more than once that 50% of advertising expenses
> go down the tubes (in the advertiser's perspective),
> but at the same time they are very important to the
> publishers. The measurement of performance and ability
> to make good choices is responsability of the ad agency.

The more responsibility you take, the more money you will
make.

> What CPA does is use the power of technology (detailed
> accountability) in advantage of the advertiser.

It takes away every purchasing objection. It is perfect for
the publisher.

> It is for
> sure great for the advertiser, but, like human cloning and
> the possibility of creating always-blond-blue-eyed-
> perfect-babies, there are some "innovations" that are
> killer of today's market formats. For example the risks of
> freedom given by the mp3/internet dua for the music
> industry model.

Have any of our lazy journalists actually reported on retail
CD sales? I'll bet you a nickel that they are up.

My kid started copying CDs and trading them with his friends.
Do you know what happened? His CD purchases went up. Way up.
(His debit card runs through my online banking, so I know
how much.)

There is no risk for the music industry from mp3s.

What made PC sales go through the roof? Free content on web
sites. Free email.


> I think that if the online advertising market wants to
> continue its growth, we need to a) stick to the standard
> media measurements and reinforce the importance of branding,
> develop new formats of online advertising and attract big
> fishes like P&G and Coke, or b) find a new model that can
> afford the growth of websites meanwhile allowing the greater
> measurement that technology brings to our medium.

CPM was desined to use the most information economically
avaliable to measure the medium.

It won't last on the internet except for big-brand sites -
fox, cnn, drudge, etc. Superbowl sites. Hey did you see my
ad on Drudge? I'm a big player.

> >That depends on how you build your operation. If you're
> >built for CPM, yeah, you're going to hate CPA. But if
> >you're built for CPA, you have nothing to worry about.
>
> I can't imagine an operation built from the ground up
> with CPA. How can it be profitable with, say 10k visitors
> and 50k pageviews monthly? Or even 500k pageviews monthly?

If you have real guts and some trust - do it on CPP - cost
per purchase.

All the risk is gone if you do this - and if you have a
good fit you can make more money than any other way.

I sell a product that costs $10,000 to $50,000. I'd gladly
pay anybody who brings me a sale 8%. I'd rejoice!

Instead I sell thru direct mail and telemarketing. The
emedia sites in my market price things for the $200,000
products, the opt-in rates are ludicrous. They seem to be
getting their advertisers from the industry top tier, and
one-timers. With maybe a few special deals thrown in.

> In my opinion today's CPA model is based on a situation
> where established publishers have an inventory of millions
> of unsold pageviews, and CPA advertisers know that.

A CPA based on a click (not purchase) is just a better
measurement of how well the ad plays to the publishers
market. Don't accept advertisers who don't play well, and
you will make more money.







Received on Fri Nov 23 2001 - 07:36:56 CST