NONE: ONLINE-ADS>> Sales Commissions vs. Ads
ONLINE-ADS>> Sales Commissions vs. Ads
Leo Sheiner (leo_at_netcomuk.co.uk)
Wed, 24 Sep 1997 22:54:58 +0100
<snip>
>I fear that many sites will cease to exist if this type of advertising
>becomes the norm on the web. And many of these are quality sites, mine
>included. We need to be able to have a predictable revenue stream in order
>to pay overhead and meet other obligations. In addition, as we expand our
>web sites, development costs must be recouped via some means. For those of
>us who are content providers, there is really only one viable way--CPM
>advertising. We have learned from experience that fee-based approaches
>don't work well on the Web, so we have this one avenue to develop our
>revenue.
<snip>
If a fee-based approach has not worked for you then it implies either
that the fee was too low or that advertising on the Net does not work as
efficiently as traditional advertising or perhaps <heresy> that traditional
advertising doesn't work too well either but nobody can actually
measure it adequately to prove that supposition.
<snip>
>I certainly hope advertisers take a look at this perspective, because I
>think they are getting tremendous value for their CPM advertising
>expenditures, and these revenues help us who are content providers maintain
>and grow our sites.
<snip>
Well how do you prove that tremendous value? A sale is tangible.
so to some extent is a click through. An impression is a far more
slippery thing to measure and value.
However, let us look at this more positively. Say I have a site
where I can sell space for $60CPM and I am efficient enough to sell
80% of my inventory. Then I see a site like Safe-Audit where I can get
quantities of quality click throughs at 15 cents. At 2% CTR that is
$3CPM, even at $3% CTR it is still $4.50CPM. Here is a straightforward
arbitrage situation. If I were Savy (and one or two of my advertisers are
just that) I would buy extra traffic which I know I can leverage. Buy at
$4.50 and sell at $60. Moreover I am quoting for a straight exchange.
The truth of the matter is that some of that bought traffic will stick and
return so for at most $4.50CPM I am also buying some long term
repeat visitors.
As with all arbitrage, the effect is to drive prices to the mean. I have
certainly noticed our prices for Clicks rising and I believe that
CPM generally has eased a little. I am quite sure both models will
survive, compete and co-exist. But in the meantime there are
some opportunities.
Want a $150,000 site for nothing? Grab your copy free
of charge for the fastest growing Transaction Banner Ad
Network at http://www.safe-audit.com/market/
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mailto:leo_at_global-m.com Telephone +44181 346 0770
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