Re: ONLINE-ADS>> Cascade Pricing

david gianelli (dgianell_at_pni.com)
Tue, 21 Jan 1997 10:07:45 -0700 (MST)

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On Saturday, Jan. 18, Charles C. Smith of Real Media wrote the following:

>(snip) ... but for some clients the customer becomes more valuable after
>clicking
>through and then getting more information or buying product. How about a
>pricing model that reflects all
>of this? Where each potential customer is treated individually, based on
>the interaction with the brand? In this cascading model an impression
>could be worth $.03, a clickthrough $.50, a lead $2.00, and a sale $15.00.
>The key is not paying for the impression on a customer that clicked
>through, so that each customer is only paid for on the value they achieve-
>a lead is
>$2.00, not $2.53, a sale $15, not $17.53.
> I look forward to comments

-------------
I've been lurking awhile but want to surface for this one.

Publishers may not appreciate the cascading model because it breaks down at
the level of lead and sale. We can invoke forms and track e-mail responses
(lead or order) to an advertiser, but we have no way of knowing whether the
forms are a bona fide transaction or a miscreant filling in X's or "Elvis
B. Dead, Marketing Manager."

As for sales, how could this work unless the goods and services were
offered online? Even then, we have no way of knowing whether a sale
"sticks" and don't want to get into the business of having to handle
adjustments, returns,
cancellations, etc. for advertisers.

In short, I'm not sure advertisers will pay for noise in the communication
channels. Clickthroughs are problematic enough given that the rate depends
on a lot of factors outside the media's control.

_____________________________________________________

David Gianelli
Special Projects Manager
Phoenix Newspapers, Inc.
voice 602.271.8601
fax 602.271.8325

Arizona Central on AOL - keyword: Arizona
Arizona Central on the Web - http://www.azcentral.com

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