NONE: RE: ONLINE-ADS>> Does Targeting increase CPM?
RE: ONLINE-ADS>> Does Targeting increase CPM?
Len Bilello (lenb_at_cnet.com)
Thu, 13 Feb 1997 10:21:21 -0500
I agree with Steve for the most part and though I sell internet advertising
for living, I think are some grey areas to discuss--no pun intended--like:
-List aquisition costs
-Paper and Postage
-Fulfillment expenses (800#, contracting that out usually etc.)
Pre qualifying: Steve made a great point, but what I am learning is that if
you surgically select the correct "content" sites with some search engine
keywording, you can_pre-qualify_via the media buy to a good extent. Would
you agree that certain people surf Hotwired's "Packet" vs IGolf? BOth are
good sites but attract different types of people.
Plus, when web advertising is done effectively the advertiser receives an
almost equal amount of branding value while an advertiser is associated
with a quality content publisher. Before I worked at CNET I sold ads for
CNN's website and discovered that for many advertisers just being
on_CNN_was "enough" for them.
You see sites like CNN, CNET, USA Today (and about 10-20 others) are where
many people go day after day after day. So if click thrus are poor, a
significant amount of good will is being generated through continuous
exposure at the CNN (or other site).
If Amazon is on the CNN World News page and I go to CNN World News very
single day at work and tomorrow I need about six books, where will do you
think I will at least consider to buy my books? I may click on the Amazon
ad or I may just type in Amazon.com. This is why I get a little
uncomfortable comparing web ads to direct mail.
Certainly there are similarities of web advertising to direct mail but it's
not the end all.
And if you were to compare it directly, I still think web advertising
compares favorably....
Some Math: (If any of these numbers are wrong please let me know)
Would you agree that the minimum price of a decent direct mail piece is
US$.80 including postage?
So it would cost an advertiser US$16,000 to send out 20,000 pieces and
let's say response rate is 1.5% which no one gets consistently unless they
give the store away. SO you have gotten 300 responses and let's say that
conservatively that 15% back out for one reason or another--they cancel the
order or bad credit etc.
So that leaves you with 255 sales for $16,000 or $62 per sales/lead.
If you spend about US$16,000 on CNET and our other sites, you can get a
pre-qualified audience in terms of income, education and a few other
factors. There are a number of high quality sites and that would take your
$16,000 and with that you would probably get around 500,000 impressions as
you would with CNET. Bad thing is for the most part, we can not limit how
many times a person sees your ad, I know DOuble CLick offers this and a few
other sites, but let's stick to the average site here.
Let's say you have a great creative person and a media savvy web planner
and they have a good plan. Ok, so they are not giving the store away for
your click but you do offer a good valueprop for that click whether it's
information or whatever. Let's say these guys are just slightly better than
everyone else out there they made a god banner and picked a site(s) that
matches the content and of the site with the product you are selling-and
your banner gets a 2.6% Click Rate. That's 13,000 people clicking through
who are experiencing and touching your brand and getting more info on
something they probably want. Let's also say that back out rate is 70%
which I have no idea if that is average or way off the mark, but it seems
than fair. So that's 3900 people who are way interested in what you have
and if it's available on line you may have as many as 1000 or more people
make a purchase. Even if it's only 500 you have still made out pretty well.
Thought comments would be appreciated.
At 05:49 PM 2/10/97 -0700, you wrote:
>
>[comparions to trad. marketing/advertising deleted]
>
>> More importantly, WE as an industry, need to look at the potential of
>> response. In direct mail, I think the industry average response rates
>> are about .05 of 1% (but lets say it is 1%). And according to
>> statistical research conducted by I/PRO on ad-banner response
>> (click-thru) rates are at about 2.85%. Hence, Jim, we can evaluate
>> pricing and targeting based on an equivalent return to achieve a similar
>> value to a response.
>
>You can not compare click thru rate on a banner ad to that of response to
>a direct mail piece as being equal in value.
>
>A banner ad click is merely a person looking for more info or is just
>curious about what the ad was about or the company.
>
>A direct mail response is normally a call to a 1800 number or a completed
>reply card. In either case the person has actually spent time to either
>call or fill out a card.
>
>I would far rather have a person call my 1 800 number and thus pre qualify
>themselves for my product or service than have a Internet user click on my
>site. The first is a real prospect, the second may be a prospect and maybe
>not.
>
>So, the issue is ensuring that it is better value for money for Internet
>advertising than for direct mail is the real area for disccusion. This is
>I agree with Steve for the most part however, let's not
>similar to Mark Welch's comment about the CPM price for untargted banner
>ads being overpriced.
Len Bilello
Regional Sales Manager
CNET: The Computer Network
email: lenb_at_cnet.com
Phone: 212/768/8822 ext. 227
CNET INC.,
1500 Broadway 18th Floor
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