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Re: New Pricing Model

From: Dilip DaSilva <dilip.dasilva_at_tribalfusion.com>
Date: Mon 10 Dec 2001 08:42:36 -0500

A number of posts have assumed that Fastclick's CPM-CUME
is the same as the NYTimes' session based pricing.
Fastclick's model is only offered on pop-unders, where
the advertiser shows a single pop-under to a user in a
month. Instead of a user seeing the same advertiser's
ads multiple times during a single session, the user
sees a single impression for a full month.

Brian Shepherd <Brian.Shepherd_at_TechnologyReview.com> wrote:

> I would be curious to hear from other people on the
> list, but what Andy says above troubles me. It would
> seem that a session that generates one page view and
> a different session that generates 35 page views are
> worth different prices. From what I understand about
> this new model, how many page views that are generated
> per session means nothing, your cpm is no longer based
> on pages views, but cost per thousand unique sessions.
> I think given the fact that we can measure how many
> page views are generated, then we should have different
> levels of pricing. For instance, 1-3 page sessions @ $A
> CPM, 4-7 page sessions @ $B CPM, 7-10 @ $C CPM and
> anything over 10 pages @ $D CPM.

I would agree with Brian that not all sessions are equal and
it may make sense to charge higher prices for sessions with
more impressions. However, I think this method of pricing
makes more sense for ad networks than for individual sites.
Individual sites know the average number of impressions per
session, and can offer the advertiser a simpler single
cost-per-session price. The way the NYTimes has priced their
sessions is simple and compelling to the advertiser.

The single cost-per-session model does not work for ad
networks because each site in the network has a different
average number of impressions per session. One solution is
to charge higher prices for sessions with more impressions.
An equivalent solution is to charge by impressions, but
price subsequent impressions to the same user at lower and
lower prices. So the first impression may be at 1 cent ($10
CPM), the second at 0.9 cents ($9 CPM) and so on. This
solution is fair to both advertisers and publishers and
solves many of the issues raised in previous posts.

Two appealing aspects of the session based model are that
it is based on unique users and that a single advertiser's
ad is shown to the same user for the whole session
(branding). However, the branding aspect is not a
requirement for a model based on unique users. Although
the branding aspect will be appealling for many branding
campaigns, the unique user model is the more important
step in the right direction for online advertising. Not all
campaigns are branding campaigns and it will often make
more sense to rotate many advertiser campaigns in a single
session. Although a single advertiser does not own the
session, advertising can still be sold by unique users.

Dilip DaSilva
President/CEO
Tribal Fusion, Inc.
http://www.tribalfusion.com




Received on Mon Dec 10 2001 - 07:42:36 CST


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