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Re: Going CPM Rates

From: Marco Janeczek <info_at_webadvertising.ca>
Date: Fri 07 Dec 2001 12:38:11 -0500

Scott Brew <Scott_at_Adtegrity.com> wrote:

>Reality dictates that you'd better be able to serve
>ads for substantially below $1 CPM. We're seeing that
>we need to be closer to $.02 CPM for the
>cost of serving an ad in order to be profitable.

>And yes, we're accomplishing that.

True, but you also have to take into account the
quality of the site that each of those publishers
is providing.

Here is Canada, where I am writing from, its hard
these days to see a really nice, useful, friendly,
dynamic, content managed website (publisher).

The rate of CPM has gone down dramatically,
giving no choice highly qualified publishers,
to shut doors. Those who have survived have no
choice but to charge customers for services
(such as subscription).

You can have 10s of thousands of publishers who
provide Static Sites. But do your advertisers know
about that?

If the content of such site is static (never changes),
then yes you can have even $0.01CPM, but if the quality
is dynamic (you have to pay the staff, hosting, etc...),
and with a rate of even $1.00CPM is hard to survive.


That is why I have decided to design a variety of
quality based websites, where like StockHouse.ca I
could get a min. $10 CPM (ref. TribalFusion targeted
Marketplace) (the web site is WebInvestor.ca and
Crawler.ca - currently both under construction)


Lets do some math:
(all in Canadian $$$)

assume: $1CPM x 1,000,000 Impressions / month

Revenue $1,000
Cost:
ISP Cost = $40
Hosting = $25
Staff = $500 (part time)
Advertising = $400 (google, overture, etc...)
Bank Fees = $20
Domain Registration = $1 (diluted per month $12) - Fixed Cost
etc...
-------------
Total = $0 (or even -$)




Now, why would a publisher update the content, waste the
time, etc... to have $0 profit or less in their pocket ?
(the above is only for those who do not provide paid
content, services etc...)

Somebody has already mentioned in this list, that
quality = price.

I can basically create 10s of website with two pages
(even dynamic ones, using tools such as Moreover.com) and
give advertisers a $0.02CPM. But is that what you want ?

No "shit" if I may say so, that advertisers gave up and
are reconsidering the Online Advertising models. I would.

Online Advertising networks have also made mistakes.
They have accepted publishers that should not even be
called "publishers".


What we need to think of is: "what is the customer as
well as the advertiser thinking of the site."
If I was the Vice President of sales at IBM,
Would I advertise my new series of PCs (lets say) on a
network of $0.02CPM, where probably the CTR ratio is
low, and the audience is either always the same or
driven by an automatic scripting module. Do websites
such as these increase my "Brand Building" concept ?


Online Advertising as well as Billboard advertising gave
and gives BrandBuilding to those firms who have the $$$.

As an advertiser I should think of an Effective BannerAd
(size, quality, colors, loading time, words used, design)
and banner campaign. Demographics. Etc... etc... etc...



>It's a tough market, but we've got plenty of
>publishers who are succeeding at current market
>rates (sub $1 CPM).


Should we really call these sites publishers.

Think about BillBoards. Billboards in parking lots of
shopping mall, billboards in busy streets (are
noticable), at least I look at them.

But billboards in some dead end street are not.
Same example can be given for Bench Advertising
(Bus stops).

Why would an advertiser advertise on a dead street
(where there is a bus) or consider a busy street ?!

I think that advertising and publishing firms should
stick and help each other out. BOTH, and I underline
this concept, BOTH will benefit at the end.

Billboards and BenchAdvertising have succeeded and
their business model works. The internet advertising
will surpass magazine and outdoor advertising.
Quality should equal Price.


I'm a little bit frustrated, but what can I do. :|



Take care,



Marco Janeczek
Founder
StartupsVenture.com Group.




Received on Fri Dec 07 2001 - 11:38:11 CST


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