NONE: Re: ONLINE-ADS>> percentage of false impressions
Re: ONLINE-ADS>> percentage of false impressions
Bob Schmidt (schmidt_at_magicnet.net)
Sat, 31 May 1997 08:37:25 -0400
Laura Mitrovich writes,
>We cannot approach this medium with the
>established patterns we have been using in traditional media. Strict CPM
>pricing is traditional media.
Hmm. From my perspective, I actually see no reason why strict CPM pricing
will not work. Banner buyers are a savvy lot who can quickly size up any
pricing scheme the banner seller comes up with. Far more of an issue at
this point: the high CPM. I see this as a pricing problem. IOW, the level
of inefficiency should be reflected in the price. So far, it is not.
Thus, I predict significant downward pressure on banner CPM's over the next
year, even targeted CPM's. Lower rates cover a multitude of
inefficiencies, making them less of a concern. At some point market forces
will come to their senses and the value of a 7-postage-stamp-wide billboard
will assessed properly. In the meantime, good negotiating skills continue
to be an essential ingredient in every banner buy. But what else is new? <g>
The other area where drops are called for: buy minimums. The $7,500 -
$10,000 level many sites and sellers are seeking have no correlation in
other media, say print for instance. Where is the minimum print buy
required for a 1/12 page magazine ad (the rough space equivalent of a
banner ad)? Print and broadcast have chopped up their product into smaller
pieces to suit the needs and ad budgets of a wide variety of advertisers.
They may persuade you that a buy below a certain level will not achieve
your results, but they will not dictate and they won't turn away the
business. Why should the banner rep?
And where are the bulk earned rates of the newspaper? Let me get my feet
wet with your site or your network. If I like it and decide to return, let
me commit to a bulk rate over the next year-- and give me a choice of
levels. "Bulk" should be defined from the advertiser's perspective, not the
unsold inventory of the site. Then short rate me if I don't achieve it.
Net ad sellers have some opportunities to rethink and repackage their rate
cards. In fact, if I were repping banner ads, I'd have a print equivalent,
broadcast equivalent, and outdoor equivalent rate card, each speaking a
slightly different language. Who cares what language, as long as the
advertiser buys?
The fact is, there is nothing in net technology which prevents smaller ad
buys or makes them unprofitable for sellers. The seller's problem is they
have already maxed out their rate. They can't possibly add another impost
to the already high CPMs and sell in smaller packages. That will have to
change-- rates will have to come down-- so that they can come back up in
the form of smaller packages.
The other factor which will have the most downward pressure on banner pricing:
the fact that a clickthrough is not a sale, not a customer, it's not even
an ad view (unless you're running a pure awareness campaign). Properly
described, it is merely a lead for an ad view. In other words, for most net
advertisers the banner is nothing more than the same size ad in a newspaper
which says, "See our ad on page B4". How much is that really worth? The
web page is an ad which itself must be advertised. Banner rates still do
not come anywhere near to reflecting this inefficiency, one which is both
unique and endemic to the net.
By the way, Hill Holliday is to be commended for an excellent presentation
of their advertising process included in their site. I make mention of it
in my forthcoming book, a business guide for web developers, programmers,
marketers and other Internet professionals (and geeks).
Bob Schmidt
Orlando Florida
www.provider.com
