Re: CPM Pricing Models

From: Janet Attard <attard_at_businessknowhow.com>
Date: Mon 21 Jan 2002 09:14:27 -0500

"Daniel Limbach" <dan_at_attritiongame.com> wrote:

> CPA offers guaranteed
> results, while CPM carries the risk that nobody will click
> through and your investment vanishes into the ether.
>
> The only way CPM can beat CPA is if you have a perfect ad,
> which results in an unusual clickthrough rate.

So why should publishers bear the responsibility for ads
that don't work?

> The best way to profit from Internet marketing is to have
> a high margin product at a relatively high price. You need
> fewer sales before you recoup your advertising investment.

No, the best way to profit is the way mail order (yes, the
web is mail order) - and most businesses in general have
always profited: get the customer, then sell more products
to the customer. With most CPA models, the advertiser gets
the customer name, the publisher has nothing but a low-
percentage cut on a single sale- if they get that.

>
> Here's where it gets sticky. If a website draws quality,
> targeted people who buy things on the Internet, as many
> sites claim, why don't these websites just join affiliate
> programs and promote them?

Why don't magazines and newspapers publish nothing but
coupons and only accept payment for the ad when a coupon
is turned in at the time of sale?


> A website makes more money selling ads
> that don't deliver a good ROI than promoting affiliate
> programs that don't generate significant cash flow.
>

A content web site that keeps people coming back isn't in
the business of selling products any more than any magazine,
radio station, TV station or other media is in the business
of selling products.

If advertisers are unwilling to pay reasonable rates for
placement on content sites, the web will soon be nothing
more than a cross between a direct mail catalog and the
yellow pages.


--Janet Attard (attard_at_businessknowhow.com)
Author, The Home Office and Small Business Answer Book
Content development, web development, surveys, online directories
More than 13 years experience building online content and community sites
http://www.businessknowhow.com and http://www.careerknowhow.com





Received on Mon Jan 21 2002 - 08:14:27 CST