NONE: Re: ONLINE-ADS>> Ad Banner Campaign Jam
Re: ONLINE-ADS>> Ad Banner Campaign Jam
Michael McClure (mikem_at_marketwave.com)
Thu, 6 Aug 1998 06:34:43 -0500 (CDT)
My comments are below each question:
"Jennifer Ruffin" <jnobles_at_cweb.com> wrote:
>I'm in quite a Jam...I've been running ad campaigns on 2 major search
>engines and the way we measure results is by the cost per click...now...It
>is my goal (and my bonus is also attached to it) to keep the cost per click
>(cpc) down to $1.50...is that unreasonable? To attain this I usually have
>to receive about a 10-12% click through rate (which I am receiving on one
>search engine but not on the other) and a low cpm (which I'm already
>receiving $30-40cpms) My questions are:
>(1)...is it reasonable to assume I can get a $1.50 cpc?
This is the wrong thing to be measured on! The best way to obtain this goal
would be to advertise on a really low CPM site - which may not be the best
solution for your company. This reminds me of my days in product management
when my bonus was dependent on my product's gross margin - the easy way to
increase gross margin - slash the product costs. Shouldn't I be measured on
product profit instead? If I reduce my margins, but increase my revenues,
and profits, isn't this good? (I did, and my bonus went down)
You should be measured on advertising return on investment. This could be
cost per qualified lead, or better yet, resulting revenue/advertising costs.
Both of these add the dimension of QUALITY to the analysis, rather than
simply focusing on QUANTITY. This CAN be measured, given the right tools -
especially with Banner advertising. The best ad I ever ran (back in the
1980's), offered a free demo disk. We were swamped! When we followed up,
we found that most of the interest was in the free disk (not the product
that was on the disk). The campaign did nothing to increase our sales, it
simply increased our costs. Funny thing was, I got a big pat on the back
for it.
My main point is: YOU ARE MEASURING THE WRONG THING
>(2)...is it reasonable to expect a 10-12% click through rate?
In a word, NO. Industry standards are 1-3%. Again, I would suggest
measuring quality, rather than just quantity.
>(3)...are my cpms ok?
These vary all over the map. Often you get what you pay for, however. Low
CPMs can often be the result of a low quality site. There is usually a
reason that a site charges less for ads, much like there is a reason that
the Wall Street Journal can charge more than your local newpaper for print
ads. You might find that higher CPMs, on more focused site, actually
produce better qualified leads and therefor better QUALITY results.
>(4)...Is controlling the cpm something that is in my control? Any
>suggestions on how to control it?
A) Negotitation
B) By carefully picking the sites you do business with
Advertising QUALITY is measureable, especially Banner advertising, so set up
your campaign in advance so that it is measurable (in terms of both QUANTITY
and QUALITY). Take a look at www.marketwave.com if you would like to see
some examples of doing this (this is my company, so this last plug is
admittedly highly biased)
Mike McClure
Marketwave
http://www.marketwave.com/
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