NONE: Re: ONLINE-ADS>> Order conversion
Re: ONLINE-ADS>> Order conversion
jgehman_at_creativelabs.com
Thu, 10 Sep 1998 05:48:36 -0500 (CDT)
Kevin Frazier wrote:
>>I agree with Joel regarding the death of banners...To me $1
>CPM's are getting awfully close to free banner exchanges...
If you think $1 CPMs are "awfully close to free," please
send us your billing address--we'd like to forward our $1
CPM invoices directly to you. Tens of millions of
impressions per month still add up :P There are lots of
million dollar budgets out there being spent on "close to
free" banners. Don't confuse cost per unit, with cost...
Kevin Frazier wrote:
>>They [banners] will probably morph into more of a test
>medium for businesses to experiment with taglines, audiences
>and creatives at a lower cost, before spending big budgets
>to develop more interactive, highly targeted, campaigns.
Why would anyone use an un-targeted, un-interactive banner
as a test campaign for a "more interactive, highly targeted"
campaign? For the test campaign to be meaningful, the two
populations need to look and behave the same. Otherwise,
the test will have provided no insight into the target
audience.
Kevin Frazier wrote:
>>If I can spend $50 to $100CPM and get a highly targeted
>audience that gives me good results in a short period of
>time, is that $1CPM really going to match the performance?
Define "short period of time." Match what "performance?" A
visit to www.focusonu.com revealed its dedication to
"helping honest, hard working, and success minded people
like yourself achieve the results they always knew they
could have." The QuickTime clip promised to explain how
"the money flow concept really works." Hmmm...It hardly
sounds like the profile of a $50 to $100 CPM audience.
Regardless, what are the objectives of your online
advertising? Eyeballs? Sign-ups to your free memberships?
Which is better: 10,000,000 impressions _at_ $1 CPM = $10,000 _at_
0.5% CTR = 50,000 clicks _at_ $0.20 CPC _at_ 1% conversion = 500
"memberships" _at_ $20.00 each 200,000 impressions _at_ $50 CPM _at_
= $10,000 _at_ 5.0% CTR = 10,000 clicks _at_ $1.00 CPC _at_ 5%
conversion = 500 "memberships" _at_ $20.00 each
These two campaigns can be analyzed on many levels. For
starters, if you're in the branding/awareness camp, those 10
million impressions should count for something (vs. the
200K). If you're in the quality vs. quantity camp, the $50
CPM counts for something. Certainly if you're the site
selling the ad space, a $50 CPM sure looks good ;) If you
just want traffic, more is better--and price always wins.
If you want membership sign-ups, both paths
converge--assuming all the benchmarks are hit. And that's a
big assumption.
The trouble? It's much easier to beat the 0.5% CTR goal
than the 5.0% CTR goal. It's much easier to beat the 1%
conversion rate goal than the 5% conversion rate goal. My
money is on the $1 CPM...
No research has ever been able to validate that the eyeballs
on a $50 CPM site behave any differently than the ones on a
$1 CPM site. Fact is, there are only 20MM US HH on the
Internet. Average Internet HHI is north of $60K; around 60%
have some college. Sure, at ground zero these 20MM Internet
HH probably look different. We're not at ground zero...
Back at thirty thousand feet, those 20MM Internet HH look
very homogenous when compared to the 80MM US HH without
Internet access (average HHI <$30K, <10% college education).
Until the Internet looks more like the US population, it is
possible to find basically the same wealthy, educated
eyeball on *any* site. That said, cheaper is better.
Before the rants pour in, there are *always* exceptions. If
you want to reach Fortune 500 CIO's it's going to cost a
bundle (online, print, TV, anywhere--there are only 500 of
them after all). For now, an Internet eyeball, is an
Internet eyeball...
If you are spending $10K+ per month on advertising and
averaging more than a $10 CPM, we should talk. You can
likely double your performance *and* reduce your spending.
Kevin Frazier wrote:
>>...but in all business, time is money. If I can generate
>the same revenue in one month instead of 3 or 4, I can grow
>my business that much faster...I don't mean to slight a
>potential good thing for small budget advertisers, but I do
>believe we all want to grow our business sooner than later.
>I am open to a deal as much as the next guy, but I want
>results more than a bargain.
Honestly? Have you ever bought online advertising? Are you
really concerned with faster? You could serve all 10
million impressions of the hypothetical campaign above
before lunch--on one site in many cases. You are correct,
results are more important than a bargain. Unfortunately,
even at a $1 CPM, making money is far from certain (see the
Order Conversion thread). The logic of paying a premium for
quality seems sound, until viewing the dynamics of the
online space. No one can prove they have a premium
audience. This isn't DM, or print, or TV, or radio. It's
called "New Media" for a reason.
As the online audience continues to fragment and segment,
this will change. Unfortunately, even as this happens, we
are all still slaves to technology. For example, a discount
broker could determine that its target was US HH with $250K+
in liquid assets. Just because they know who their target
is, doesn't mean they can reach them. Don't confuse buying
banners on the Motley Fool or Yahoo! Finance as targeting.
Until someone has a database of 20MM US HH, including the
criteria *you* want to target against *AND* can resolve who
they are *AND* serve an ad in real-time, targeting is a
fuzzy notion a long way from being practically implemented.
And by the time someone figures out how to do all that
targeting, the privacy groups, the FTC and others will have
it deadlocked in a courtroom in Redmond.
In the meantime, "targeting" is a euphamism for online media
buyers that got taken to the cleaners.
Joel Gehman
Internet Marketing Analyst
Creative Labs
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