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

From: Al Bredenberg <ab_at_copywriter.com>
Date: Wed 28 Nov 2001 10:40:12 -0500

ANDY BOURLAND <andybourland_at_yahoo.com> WROTE:

(Responding to Brad Jensen)

> > > 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's perfect for the ADVERTISER, NOT THE PUBLISHER.
> Advertiser assumes no cost or risk until a sale is
> made. Publisher carries the entire burden of risk
> and expense.

I would take it a step further and suggest that
usually CPA is not even good for the advertiser.
Insisting on a CPA deal often results in lost
opportunities. A promising product doesn't receive
the exposure it deserves because the advertiser
isn't willing to take the risk of actually paying
for the advertising necessary to conduct an adequate
market test.

We operate a trading exchange that brings together
buyers and sellers of permission email lists and
marketing services (http://market.emailresults.com).
I've had a chance to review many RFPs from buyers
looking for list owners willing to work with them
on CPA deals. These buyers get very few replies
from vendors, because most list owners and
managers work only on a CPM basis.

Because I'm the primary contact person for the Web
site, many advertisers and business people also
contact me directly to see if I'm interested in
consulting for them and working on a CPA basis, or
promoting their products on the Web site or in our
newsletter. What I've found is that it's usually
not worth it for me to even have a discussion with
a prospect in this circumstance. For me to enter
into a venture like this, it would have to be a
compelling product with a generous payout, which is
usually not the case. Why should I neglect my paying
clients for an extremely speculative venture?

That's not to say that I think CPA is unworkable. I
just think most businesses that are trying to buy
their media on that basis are being unrealistic. To
get a Web or email publisher to work with you on a
CPA basis, you need to convince them that:

1. You have a product that is targeted to their
   audience and will really sell.
2. You can provide effective creative to pull in
   response.
3. Your Web site is usable, functional, and does
   an effective job of merchandising the product.
4. You have a back-end tracking system that
   really works, so the publisher will get proper
   credit for traffic sent.
5. It is practical for the publisher to audit
   results to be sure you are being fair and
   honest.

If you try to set up a CPA model without such
assurances in place, you're selling yourself short,
because you are going to have difficulty convincing
publishers to work with you. Your message won't get
out to the market and you'll have a hard time
getting the traction you need.

This requires the marketer to do a lot of initial
legwork before starting the media-buying process. It
also argues for a good program of testing, as all
good direct marketers do. And generally speaking,
you're going to have pay the cost of that legwork
yourself, and do that testing on your own nickel,
paying CPM rates.

When faced with these requirements, many business
people are going to say, "I don't have the time and
resources to go through all that hassle!"
Unfortunately, these are realities of marketing and
of being in business. Ignoring these realities is
one reason most business fail, as well as most
products.

---
Al Bredenberg, Publisher
EmailResults.com Marketers' Market
Permission Email Marketing Directory and Marketplace
http://market.emailresults.com
ab_at_emailresults.com






Received on Wed Nov 28 2001 - 09:40:12 CST