Acknowledging and moving on...

From: Kevin Frazier <kfrazier_at_adace.com>
Date: Mon 03 Dec 2001 10:59:14 -0500

I appreciate all the participation that has been
happening on the list again. I am hopeful that
these discussions will lead to action by the
IAB, Ad Forum, AMA, DMA, and all the organizations
trying to better use the web as an advertising
medium. We all need to get involved outside
this list to push things forward. Take the
information we are sharing here and put it to
action. I think the discussions on pricing have
been thoroughly flushed out. Here is my take:

CPA - Cost Per Acquisition/Action - It may be an
effective tool for small niche sites, direct marketing
experts, affiliate networks, and merchant-centric
ad networks to use as a primary source of revenue.
Getting a piece of the sale makes more sense as the
volume is not there to sustain a session/unique/time
based/ CPM model. Targeted inventory that can
produce a sale may be the only way for some sites to
survive. I still don't like calling it advertising,
but at this point it is just semantics.

CPC - Cost Per Click - This model is probably the most
likely to change or end, as there is too much margin
for error presently. Clicks may be used as measuring
sticks, and offer some upside for the sites that do
well, but may not be used as a final pricing model for
much longer.

CPM - Cost Per Thousand - This will become the defacto
standard for pricing on the web for mainstream
advertising. It is known, it is understood, and it is
accountable. How we base our totals may change,
but the cost will be based on a per thousand model.
Per thousand sessions? Per thousand unique viewers?
Per thousand views over a time period? Maybe a
combination thereof. We all seem to agree that a mere
hit is not enough.

So in moving the discussions forward I would like to
pose a few more issues to debate:

Web Site Analysis Tools – Log files are the gold
dust of the internet.

Web Trends and other analysis companies have been
cashing in on the market demand for understanding
who is visiting your site. Unfortunately, the analysis
by many of these programs do not break things out
from a marketing perspective. If you are tech-savvy
enough you can customize them to be effective, but
they most certainly don't deliver the information in
a way that is highly useful for most marketers and
agencies. Too many things seem to slip through the
cracks... Bots, spiders, URL mangling, re-direct code,
and other mis-calculated log information can be a
nightmare to decipher and causes reports to be out of
sync with reality. There are service companies that
will crawl your logs for you and provide detailed and
useful marketing information, but they are quite
expensive for the general population.

What I would like to find out from the list is what
type of information you would find the most useful in
an analysis tool. If you could have a report
generated from your logs, what would you want? What
data is key to your marketing efforts? I have heard
Jim Sterne speak about e-metrics that centers around
this subject, and NetGenesis (www.netgen.com) has a
great white paper detailing their findings. I hope
participants in this list will also share some
perspective and insight. I'm looking to compile a
Top 10/20 list of features for an open source site
analysis tool. If we all participate, we will all
benefit, as I am going to forward the suggestions on
this list to the programmer who is working on an open
source website/log analysis program. He is going to
post his finished product as a free download. Sure
beats the current choices.

Brokering the buy - As an owner of an ad network I have
had many sites call me to buy inventory on sites within
our network. The problem I am seeing presently is that
there is too much overlap and too many hands in the pie.
More often than not I have turned down a deal that was a
ridiculous low ball CPM. Lots of volume but no money.
Then I'll get a call from another rep firm that offers
me even less for the same deal as they add their cut to
the deal. They accept the deal I turned down, then
scramble to find sites/networks who will place it.
This is happening all over the place and it is seriously
driving the prices down in the market. As long as these
companies keep accepting these deals, the price points
are going to suffer. I have also seen situations where
one of my sites is running a campaign at "x". Then I
call and offer the same campaign, unaware they are
running it with someone else. I offer them a higher CPM
as it is a direct deal with the advertiser. They then
tell me they will cancel the other campaign and run mine
instead. Is there anyway to enlighten advertisers to be
sure the reps they are dealing with actually have
relationships with the sites they want to advertise on?
So many of the deals I've seen start out at a decent price
point, but by the time they get to us to run on our sites,
they have been shaved down to nothing. All I can do is
continue to turn down the low-cost deals arriving at our
network door. I only hope that others on this list will
do the same. Am I the only one experiencing this man in
the middle issue?

Ad Serving Software - Real Media merges with 24/7, L90
sells Ad Monitor to Doubleclick. Who is going to produce
the next generation of Ad Serving software that enables
us to track sessions, time based sales, unique visitors
and more. Are there any new technologies that the list
may be unaware of? Please enlighten us.

Thank you all for your participation in these ongoing
industry issues, and best of luck to us all!

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




Received on Mon Dec 03 2001 - 09:59:14 CST