NONE: Re: ONLINE-ADS>>Unsold Inventory
Re: ONLINE-ADS>>Unsold Inventory
Tom Somers (tgsomers_at_cands.com)
Wed, 5 Nov 1997 10:14:08 -0500
>Jason Rapasky said:
> I believe that >the move to subscription fees is the result of high
>CPMs. Many sites,
>even those asking for CPM's in the $20 range, are pushing advertisers
>away. Advertisers simply want to get the most for their money. When
>average sites ask for an above average CPM, why blame the advertiser for
>not being interested? As a result the publishers have to become
>creative, and that's how we get the advent of subscription fees. Here
>is a simple formula: High CPM = Unsold Inventory = Publisher Panic =
>Subscription Fees
<snip>>
Tom Lix responded:
>...Smart marketers sell what they can at high CPM and fill unsold
>inventory at lower prices (which AdBot can help with). Magazines,
>newspapers, television and radio have all adopted this model... it works for
>them, and not suprisingly works for web publishers as well.
>What I object to is the "pitch" I'm increasingly hearing from AdBot that
>CPM's in general are too high, and that the "true market" price is what they
>get in their "auction" format. IMHO, the statement is both untrue and
>_very_ self serving. Unfortunately the message they're spouting (to groups
>such as this as well as their advertising in mainstream trade publications)
>is to the detriment of web publishers in general. AdBot is a fine system
>for unsold avertising, but if you're using it to sell "all" your
>inventory... or believe their pitch that the auction prices are the 'real"
>market prices... well, then you're selling yourself for less than what
>you're worth.
We are really talking about two issues: revenue sources and inventory
management and the role pricing plays in it.
Regarding the move to subscriptions, I feel it is unreasonable to define it
simply as a CPM driven issue. If you are in business to make money, it is
incumbent upon you to test every possible (and some impossible) scheme.
Subscription-based revenue models are common and many are quite successful.
Inventory control is, in part, influenced by product pricing. There is an
important difference between "position pricing" and "closeout pricing." And
that is what sales (vs. order taking) is about. Position pricing is based
on the ability to create demand (the pitch, the sizzle, the
gee-I-gotta-have-it). It makes us masters of our destiny in the sense that
we strive to develop a market according to our standards (be they product
quality, diversity or price). Close-out pricing (auctioning, discounting,
etc.) place control of those standards in the buyers' hands (which is not
always a bad thing.). But, where it fails is in providing a logical
explanation for the erosion in price, i.e., "Were you lying to me before
when you said what it cost?"
Tom Lix makes an important point. It makes absolutely no sense to
surrender pricing control to the market, and even less sense to degrade
your product value by grabbing the quick buck via deep, unjustifiable
discounts.
The sale doesn't start until someone says no. Up until then it's just a buy.
Tom Somers
Ciavolino & Sheeler
http://cands.com
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