Re: Do publishers want to make money?

From: Jan Hviid Hemmingsen <admin_at_eState8.com>
Date: Fri 01 Feb 2002 08:36:35 -0500

>CPA and CPM are the same thing measured with different rulers.
>Offer a cpa to get the advertiser you want on board, then measure
>the CPM. If you don't get what you want, find someone else who
>will get better results or offer a higher cpa, until you get the
>best cpm you can get. And when you dump an advertiser with a cpa
>that is too low, if your site meets his goals, he will come back
>with a higher price. Unless there are other sites that offer him a
>cpa and results better than yours, in which case your price is too
>high - for that advertiser.

At the end of the day there really is only one measure of success and
that is each party's satisfaction. If both parties are happy then it
works and if one is unhappy it doesn't. In reality it has nothing to
do with cpa or cpm or cpc or any other abbreviation, but with whether
the parties are both happy with the structure and the outcome.

Advertisers who know what they are doing should have no problems
testing on cpm basis and then recalculating their other models into
effective cpm. This being the number they should be able to pay the
publisher and still getting the ROI they are looking for. If the
price is right for both we have a good deal and if the price is off
there will be no deal. It seems simple enough to me :)

Using cpa and cpc seems like a way (and are often used to) muddy the
waters, push all risk towards the publisher, remove responsibility
for conversions from the advertiser, lower the effective cpm etc.
After being presented with both models I can only come to one
conclusion namely that advertisers using cpa and cpc exclusively when
dealing with publishers are risk averse, cheap, and so on.

I have advertisers who seem to do fine paying a decent cpm and who
come back season after season and still I have others claiming that
only cpa and cpc works. Their problem is that as soon as it is
established that the effective cpm is less than 10% of the cpm paid
by others they are of course removed from the rotation and told to
come back when they can give us a decent ROI. When only one is happy
none is happy ;)

Please remark that I use all models when I calculate things. I just
use them for different purposes and towards different people.
Publishers prefer cpm so we talk cpm, direct sales people prefer cpa
so we talk cpa, and cpc and hybrids are talked about to find
alternative routes to distribute risk/reward and construct
arrangement satisfying both parties.

Kind regards,

Jan Hviid Hemmingsen
Advertency @ http://www.advertency.com
Attentive Individual Advertising Brokering











Received on Fri Feb 01 2002 - 07:36:35 CST