Ezine advertising space and rates

From: David Yancey <dyancey_at_adjunction.com>
Date: Tue 18 Nov 2003 18:08:20 -0600

Michael S. DeVries asks about ezine/newsletter ad rates, while Jeff
Staniforth asks about newsletters that sell ad space.

Speaking as a large online publisher, as well as a buyer of ezine space,
and an operator of targeted search advertising tools, I can make a few
suggestions for what they are worth:

As to Jeff's goal of finding ten zines with 100K subscribers each on
average where he can place his ad, sorry, Jeff, the online world is just
not organized so neatly. Ezine advertising is still being invented. Few
newsletters that *effectively and demonstrably target your desired
audience* have anything even close to 100,000 double opt-in, high quality
subscribers. The few consumer zines you could have used in the boom years
are mostly gone or MIA. Further, many ezines do not publish rates anymore,
if they ever did, because online advertising is still in a meltdown phase,
and no one wants to be stuck quoting rates that are too high, or that are
so low they cannot be easily raised if recovery ever comes.

So, you have some serious homework ahead of you. Try a search in Google
for "ezine advertising" for starters. Then use our www.ProWebguide.com and
use the same search term. You should also click on the "Online Advertising
Services" link on the front page.

Sorry, Michael, but the world of emailed publications is so full of pricing
and quality variations and special cases that it is not useful or even
possible to make general CPM statements anymore, if indeed it ever was.

Let's break it down:

1 Your calculation of Online Ads effective CPM rate looks fine. But bear
in mind that our moderator Cliff Kurtzman has a well-targeted,
premium-level, business/professional audience. Effective CPM rates to
reach this very desirable profile can range from as low as $15 to well
above $100. You *could* say that Online Ads is "typical", but it would
not be scientifically valid.

2 Even if you have a firmly quoted CPM price, you need lots of
information on the subscriber base, on the quality of the list, and, most
of all, if you can get it, references for other advertisers who have used
the list. Who cares if the CPM price seems low, if the number of people
who will click to become *qualified* leads is so small as to make the
effective cost per lead astronomical? The point is that you will find you
have a *lot* of legwork to do with each and every candidate publication
that fits your messaging objective.

3 Since effective or equivalent CPM rates are all over the lot, you need
to first decide what constitutes a targeted, convertible lead, and what you
are prepared to pay for such leads on average. If leads, *on average*
are worth, say, $100 in gross operating profits - GOP - that is, EBITDA
income after all operating expenses - to your business, *and* you can
expect to get, say, 1 such qualified lead for every 1000 exposures of your
message, then your messaging budget can sustain a cost of $100 CPM.

4 "Conversion" can quickly confuse the issue. The key is what proportion
of your leads can you realistically expect to close as clients or
sales? If it is one in ten, using the above case, it means you need to be
making at least $1000 GOP per sale or client over a reasonably short time
span. If, however (and this is the case in most consulting-type or custom
software businesses) you typically see per sale GOP of, say, $5K, *and* you
can truly close 1 lead in ten, *and* you can realistically expect to get 1
qualified lead in 1000 exposures, well, then, you can afford a CPM of up to
$500!!

5 Realize that many good quality ezines today will also accept "cost per
action" (CPA) campaigns *if* you can make a credible case that shows enough
readers will click on the ad to allow the publisher to make some
money. This is a very difficult proposition to work through,
however. Your CTR (click through rate) will be a function of your
headline, your ad copy, your "familiarity" with the reader as a trusted,
credible vendor, and of course, if the reader is a prospect for your
service *at that time*. If you expect the publisher to take a risk on the
performance of your ad, then it is *totally your responsibility* to make a
case for the ad.

With CPA pricing in ezines, there is an important subtlety to be aware
of. Understand that in almost every case, a publisher's quoted ad rates
are negotiable - but only IF he has a reason to be flexible. As an
example, let's say a quality consumer or small biz ezine is quoting CPM
rates of $20. If you can realistically show that the ezine will
experience, say, a 2% CTR for your ad on a sustained basis, and you are

willing to pay, say, 50 cents per clickthrough, then the publisher can
project revenues of $10 per thousand impressions. In today's market, IF
that ezine is running less than its desired level of ads, you could well
have a deal.

Try offering a "guaranteed floor" CPM rate as the closer. Perhaps $8.00
would be about right in the above example.

Finally - don't overlook the alternatives:

Since you, Michael, and Jeff, too, are clearly out to secure qualified
leads, you need to also become familiar with alternative CPA campaigns and
pricing. Ezine advertising has its strengths, some unique. But you need
to do the quantitative tradeoff with pay-per-click (PPC) search tools or
programs that can reach your target audience. And with highly targeted
paid-search sites like our brand-new www.Vivante.com or the above named
www.prowebguide.com. With paid search, you could well find yourself paying
less than $2 per well-qualified lead. Your problem, however, is that for
specialized services and products, you may not get the levels of lead
traffic you desire, simply because the most appropriate search terms or
keywords are not sufficiently popular with searchers.

A carefully researched and well-balanced program employing targeted zines
and carefully selected paid search venues is the most productive course for
B2B, premium consumer, or similarly targeted online lead generation.

The great promise of online advertising is the low cost per qualified lead
that one can often achieve; the unspoken expense, however, is the huge
amount of (your) effort and numbers work that it takes to reach this "low"
cost.

David Yancey
http://www.Vivante.com





Received on Tue Nov 18 2003 - 18:08:20 CST