Re: online targeting

From: Leo Sheiner <leo_at_netcomuk.co.uk>
Date: Mon, 1 Feb 1999 07:31:09 -0600 (CST)

TIM LEE <TLEE_at_WEBCMO.COM> WROTE:
>Leo, I am quite honored when so many people recognize my
>math capability. Honestly speaking, I only have very limited
>stats knowledge and I have never been interested in
>statistics. I use stats only when I HAVE TO use it to solve
>marketing issues.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

It is interesting to note how Tim is capable of very selective
editing and interpretation. Makes it sound like I was just about to
hire him. His editing reminds me of the selective few words
taken out of context used in a theatre promotion that reverses
the meaning entirely.



TIM LEE <TLEE_at_WEBCMO.COM> WROTE:
>--------------------
>Targeted vs. Untargeted Banner Campaign ROI Analysis
>
> Impressions CPM CTR* CPV** CPS#
>Targeted 40,000 $25 0.25% $9.80 $143
>Untargeted 200,000 $5 0.46% $1.18 $500
>
>* Clickthrough rate ** Cost per visitor # Cost per sale
>Source: Dec. 1998 GrowthSpurts.Com
>----------------------------
>
>
>What we have learnt from the above numbers? First off,
>online advertising is costly. If you don't have a good
>promotion plan, you are most likely to lose money; Secondly,
>online targeting is very expensive. Without a well designed
>targeting system, you are unlikely to compensate what you
>pay for the targeting.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Interesting stats but of course Tim totally misinterprets them.
He infers from this tiny snippet of information that online
advertising is expensive. On what basis does he come to
that conclusion? What does he mean by the phrase very
expensive - compared to what? There is only one way to
judge if a promotion is expensive. If you spend money and
fail to make the return you needed it is expensive. If you get
what you needed it is the right price.

Of course it isn't quite that simple because the promotional
message, the creative, the product offer. the website
construction, the price plus a few other things all have a
major influence. So what is expensive for someone who is
clueless is good value for someone that knows what they
are doing. In any event the prices quoted here may not be
typical. Many of our most successful campaigns have been
virtually untargeted but around the $1CPM pricepoint.


TIM LEE <TLEE_at_WEBCMO.COM> WROTE:
>More interestingly, this set of comparisons provided several
>unexpected results that need more detailed research before
>we make any conclusion. To understand the targeting
>mechanism, we need to understand: 1. Why targeted banners
>generated lower click through rate? 2. why targeted visitors
>have lower click through rate but higher conversion rate?
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Tims more detailed research may be fun for him but rarely
appears to add to the sum total of human knowledge. To make
general inferences from the specific case where many factors
are totally unknown is foolish. The suggestion here is that
well targeted banners will always get a lower CTR but higher
conversion. That is clearly nonsense. If anything in the stats
he quotes is interesting (and probably typical) it is that the
bottom line cost of making a sale in this comparison is cheaper
with the untargeted campaign because of the considerably
higher (five fold) cost of targetting.

Put simply - as I have put it before - if the additional
cost of targeting doesn't get you a pro-rata or better improvement
in results then targeting isn't worth a plate of cold beans.

Leo Sheiner
<leo_at_netcomuk.co.uk>


18,000 member host sites and 250 Million impressions a month
Quality results-oriented advertising Free consultancy, banners
Why advertise using Safe? http://safe-audit.com/adpromo.html
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mailto:leo_at_global-m.com Telephone +44181 346 0770 Leo


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Received on Mon Feb 01 1999 - 08:26:10 CST