RE: ONLINE-ADS>> Why should low traffic sites cost less...

Jason Baer (Jason_Baer_at_azfamily.com)
Mon, 5 May 1997 13:10:49 -0700

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Matt Carkci wrote:

>Why would traffic determine the
>CPM? Shouldn't it be determined by how narrow the target audience is?
>If the CTR for a low traffic site is too small for an advertiser to
>bother with, fine, but if that site is one of only a few places to
>target that niche, then I think that they should expect to pay a
>higher rate.

--I completely agree with this perspective. CPM should be based on
(in theory) one factor:

How desirable is the audience being reached as it relates to the
advertiser's ideal customer prospect. For very targeted sites,
therefore, the CPM should be higher due to the lack of wasted
impressions.

It's the same concept that's used by broadcasters. Run of schedule
ads are cheaper than drive-time ads because in drive-time you can
target in on the business crowd.

The same should be true on-line. This philosophy, however, requires
that the small, targeted site generate decent CTR, as an advertiser
will assume that the CTR will be higher if the ad is reaching the
ideal target.

The only other element I can see factoring in to CPM is "cachet"
owned by certain sites driving up their rates. For instance, while
the WSJ is a great site and a great paper, their CPM (~$200 I've
heard), is high even for a powerful, targeted site. You pay more
because it's the WSJ, period.

Jason Baer
Manager, Interactive Services
azfamily.com "Arizona, You Belong Here"
jason_baer_at_azfamily.com

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