NONE: Re: ONLINE-ADS>> Industry duck and cover?
Re: ONLINE-ADS>> Industry duck and cover?
William Greene (William.Greene_at_Grizzard.com)
Fri, 25 Sep 1998 14:23:40 -0500 (CDT)
"Brad Byrd" <brad_at_newgate.net> wrote:
>
> So, what do you expect the price convergence to be? I've
> seen articles in DM discussions where the CPA is between
> $1-3, but that seems high -- I'm sure that's based on an
> order conversion model and not a branding model.
You're durn tootin' it's high - and it's a good example of many online
advertisers' misunderstanding of Direct Marketing. The "Action" you're
talking about in this CPA model is a clickthrough, which is like a
direct mailer paying for the number of people who open his envelopes. At
Grizzard, we don't give a hoot how many open the envelope - we want to
know how many read AND RESPOND to the mailer.
(If my allowable per conversion is $7, and I'm getting a 2% conversion
from a 2% CTR, I'd be an *idiot* - or just plain unemployed - if I paid
$1-3 CPC!)
$1-3 CPC rates are actually based on today's artificially-inflated CPM
rates; if, for example, a publisher's rate card is $30-40 CPM, and CTRs
on average are 1-2%, then actual CPC is $1.50-4.00. So, they sell ads at
$2.00 CPC, and they're going to average out at about the same rate as
their CPM rates.
Unless I'm just trying to brand my product by driving people to my site,
and therefore I *must* get a lot of guaranteed clickthroughs, I might as
well use the CPM model (which is also a branding model!). But I'm rarely
if ever interested in branding; I want solid ROI. (Hey, I'm a DMer, what
can I say?)
If I'm selling a specific product or service, my best bet would be
buying on a Cost Per Inquiry or a Cost Per Sale model. However, it's
hard to find lots of website publishers that understand this model right
now, unless you've got some sort of affiliate program that they can
join.
The time is soon approaching, however, when the CPM (and even the CPC)
model will change dramatically, and those overpriced ad spaces will come
down to the real-world level that the average online advertiser can
actually contemplate.
DM News just published an article of mine on this very subject; you can
view it online at http://www.dmnews.com/articles/1998-09-14/1817.html .
Hope this helps...
--------------------------------------------------------
William Greene
Moderator, Direct Marketing Online discussion list
http://www.directmarketing-online.com/
Director of Internet Marketing,
Grizzard Communications Group - A Top 10 DM Agency
http://www.grizzard.com/
404-635-5784 / 800-241-9351Ý/ mailto:William.Greene_at_Grizzard.com
--------------------------------------------------------
========================================================================
------------------------------------------------------------------------
This week's Online Advertising Discussion List sponsors:
ValueClick, AdKnowledge and The Mining Co.
ValueClick can guarantee you instant revenue on 100% of your ad space
For non-exclusive, flexible solutions that work w/ existing CPM sales,
contact us today: ValueClick http://www.valueclick.com/members.html
---
7 out of 15 top agencies know that AdKnowledge improves web advertising
effectiveness. What are YOU waiting for? AdKnowledge. We make web
advertising work. http://ads01.adknowledge.com/SmartBanner/page/9751.2
---
QUESTION: What has 5,000 fingers and has grown 44% since April? It's been
called "a Yahoo! on steroids," and it's spreading fast across the web.
ANSWER: The 500 Expert Guides at http://MiningCo.com
------------------------------------------------------------------------
========================================================================
Online Advertising Discussion List To Unsubscribe send UNSUBSCRIBE
http://www.o-a.com/ to online-ads-request_at_o-a.com
