NONE: Re: ONLINE-ADS>> Direct response pricing
Re: ONLINE-ADS>> Direct response pricing
Bob Schmidt (schmidt_at_magicnet.net)
Sat, 23 Aug 1997 09:16:52 -0400
Frank Ball writes,
> The purpose
>of an advertising vehicle, including the Internet, is to
>deliver an audience.
I would agree that the purpose is to deliver an audience.
That same audience, however, has different value to different types of
advertisers. This is obvious when one looks at the newspaper rate card
(bring your Philadelphia attorney with you). There are so many different
prices at which the same column inch of newprint is sold it is mind
boggling. Even the column width varies from one part of the paper to
another, for no other reason than to establish the relative value of the ad
space.
>Publishers play no role in these decisions, so why
>should they take responsibility for them?
Yes...and no. In direct marketing, at the absolutely most simplistic level,
you have three variables: the list, the offer, and the creative. Of the
three, the list (i.e. the audience) is generally considered to be the most
important-- so don't sell yourself short. The offer is next in importance
and the creative is last. Thus, who has control over the most important
variable in the direct marketing model? The publisher. If the publisher is
doing a good job, the quality of the list will be high for many -- though
not all -- advertisers and offers aimed at the target audience.
Alas, many publishers do not do a good enough job in this area to meet the
requirements of the direct marketer. That means the direct marketer is, in
effect, buying a weak list with too much waste. Now the question is, why
should the advertiser pay for more than the publisher can deliver?
It is not reasonable to assume that a single rate can satisfy the needs of
the direct marketer seeking sales and the brand advertiser seeking
exposure. And that is not to say that the same advertiser may not need to
advertise in both ways and at both rates-- many brands have direct
marketing campaigns going on underneath the brand campaign.
Even so, don't show a direct marketer your general rate card. They won't
buy. They don't buy that way on TV and radio and they don't buy that way in
print either. They won't do it online because they don't have to-- direct
models are emerging.
And a publisher has but to look to the remnant space direct response rates
in other media to find an opportunity. You may have to resort to creating
artificial scarcity to make this work. The unlimited space of a web site
works against creating urgency from scarcity and the omnipresent time
factor works against creating urgency from issue deadlines. But with some
creative approaches these limitations can be overcome.
The publisher can either choose to forego the direct marketing revenue or
figure out how to structure a rate that is profitable to sell and offers
value to the advertiser. It's not a problem, it's an opportunity.
>Now, I'm not
>saying that Direct Marketing and Direct Response do not
>belong on the Internet, I just think they should pay a fair
>price to reach their target audience, like everyone else,
>and leave the responsibility of *response* up to their
>creative and research teams.
That is not a persuasive or compelling pitch to a potential advertiser.
What you are really saying is you don't want direct response business. You
should consider modifying that stance if you want to appeal to this segment.
As to fair price, that, of course, is all the direct marketer wants to pay
as well. The question is, can you arrive at one that works for both sides?
Even if you leave response up to the advertiser, as the publisher, you
still have a burden to demonstrate that you offer an ad medium that is
responsive-- success sells, and it adds value. Your early efforts to do
whatever it takes to create success for your advertisers-- and success
stories for yourself-- will pay off with later sales. That implies a
willingness to experiment and being flexibile and adaptable-- and an
accurate sense of the real market value of the audience you are delivering
to direct marketers.
Bob Schmidt
www.provider.com
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