Re: online targeting

From: Joe Bartling <joe.bartling_at_spiderware.com>
Date: Tue, 2 Mar 1999 08:35:04 -0600 (CST)

Hmmm... Perhaps I missed something, but I don't think so...
 Having voluntarily thrown in 300,000 untargeted banners on
our network (http://www.adsdaq.com) for this targeted vs.
untargeted test for GrowthSpurts, (with no subsequent
mention I might add), I feel compelled finally to dispel
Rick's rant with a rant of my own...

RICK BRUNER WROTE:
> I am doing some research for two presentations I'll be
> giving at this summer's Web Advertising conference (by
> Thunder Lizard), on "Measuring ROI" and "Ad Targeting," and
> someone referred me to this thread.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I can hardly wait to hear... Maybe I should bring some
tomatoes for the occasion (just kidding...)



RICK BRUNER WROTE:
> One point, however, has me totally baffled, which is why I
> write. In response to the Iconocast example,
>
> LEO SHEINER WROTE:
> >If anything in the stats [from Iconocast]
> >he [Tim Lee] 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.
> >
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

I agree COMPLETELY with Leo. Our $600 campaign (which we
ran pro bono), based on $2/CPM produced 700 visits to the
GrowthSpurts.com website, with 3 "sales" resulting. Cost
per visit from ads on our network were 85 cents versus the
$9.80 cost per visit by the "targeted" ad...


RICK BRUNER WROTE:
> Here are Michael's numbers again:
>
> >--------------------
> >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

>>and ADSDAQ's:
  untargeted 300,000 $2 .23% $.85 $200 (3 sales)

> >* Clickthrough rate ** Cost per visitor # Cost per sale
> >Source: Dec. 1998 GrowthSpurts.Com
> >----------------------------

> You agree, Tim, with Leo that the "cost of making a sale" is
> *cheaper* with the *untargeted* campaign? How on earth do
> you both figure that? The last column clearly states that
> the "CPS" (cost per sale) of targeted is $143 vs. untargeted
> at $500. I may not have had enough coffee to fully follow
> the complexities of Tim's original forumula that kicked off
> this thread or Clint's "Valuation of Target Pricing" stuff,
> but unless I did much worse at math than I remember,
> $143-per-customer is cheaper than $500-per-customer. No?
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


If it were only that simple. GrowthSpurts.com needs traffic
as well as sales. They display ads on their website so they
get some revenue from advertising. They also have an
affiliate program to get webmasters to sign up, so some
visits may result in affiliate signups. If I recall, the
"sale" membership offered was a bit confusing and didn't
offer much more value than the free visit, so I'm sure that
some visitors would come back and browse a few times before
handing GrowthSpurts their email address for email marketing
purposes. You seem to be confusing "cost per sale" vs. "cost
per customer". I would argue that visitors become
prospects, prospects become customers, and customers make
purchases resulting in sales.



RICK BRUNER WROTE:
> In this example, both campaigns cost a total of $1,000, yet
> the targeted one produced 7 customers, while the untargeted
> produced 2 customers.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


Again, your confusion of "sales" vs. "customer" sets in...
Our untargeted campaign produced 3 sales at a comparable
cost per sale to the targeted campaign. If the cost per
sale is somewhat comparable, wouldn't the cost per visit be
just as valuable, if not more valuable?


RICK BRUNER WROTE:
> Who gives a rat's ass how many
> impressions were shown or what the CTR was.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


I agree, but VISITS are the key. Banner ads bring people to
sites. Its the site that makes a visitor a customer or a
prospect.

RICK BRUNER WROTE:
> If we're talking
> in direct marketing terms, cost-per-acquisition is the only
> metric that ultimately matters (unless of course, the goal
> were lead generation or something equally tangible; in
> whatever case, its the cost per ultimate goal that matters,
> not the intermediary CTR).
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


But you're only looking a one metric, a lousy signup on a
mailing list... We get hundreds of visits for every one
that signs up on a form on our sites, but thank God for the
visits...


RICK BRUNER WROTE:
> Yes, there is the whole argument to be made for branding,
> which I respect up to a point, but it really seems to me
> that this (admitly statistically limited) study is pretty
> conclusive that the greater-than-threefold edge the targeted
> campaign had over untargeted in terms of cost-per-customer
> aquisition is what is most compelling. It also seems clear
> to me that the 39,993 visitors who saw the targeted campaign
> but who didn't buy are a lot more likely to visit another
> time and buy then than are the 199,998 who saw the
> untargeted ad but didn't buy.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


But you're not counting the 920 VISITORS (for $1000) from
Burst and 700 VISITORS (for $600) from ADSDAQ who actually
VISITED GrowthSpurts.com and didn't "make the sale", versus
the dismally pathetic 126 visits (for $1000) from the
targeted campaign who are likely to visit again and buy...
Those visitors cost 5-10 times as much on the targeted
campaign...


RICK BRUNER WROTE:
> BTW, no one pointed out that GrowthSpurts.com, the source of
> Michael's campaign data, is a baby goods e-commerce site.
> After browsing it for a few minutes, it's clear that there
> are only a handful of items on the site that cost more than
> $143 (much less $500), namely a few strollers. The majority
> of the merchandise are books and toys under $20. You'd have
> to build a *hell* of a lifetime value equation to justify
> either of those acquisition costs.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


I've noticed a number of changes in GrowthSpurts.com since
December, probably as a result of this campaign. Maybe I'm
mistaken, but I thought GrowthSpurts.com was a content
community for people with growing kids. Its turned into
more of an e-commerce site than it was before... The
purpose of the community would be to capture a customer for
repeat business during their growing years, which seems
contrary to your infomercial-like, onetime sale, direct
marketing and admittedly statistical approach. How many
Ginsu knives would someone want?


RICK BRUNER WROTE:
> Also, to use this whole example as a basis for a discussion
> on "targeting," where Tim began the thread talking about
> Ultramatch's neural network technology, is misleading, as
> the "targeting" in question in this case was strictly on the
> basis of editoral positioning. Namely, the untargeted ads
> were run of network on the Burst ad network (whose members
> are not exactly top-name sites to begin with), while the
> "targeted" campaign ran on BabyCenter.com, which is itself
> another baby goods e-com site.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


My guess is that people who see ads on Burst or on the
ADSDAQ network, have as many kids as the general population,
which makes a great case for using UNTARGETED ads to hit
that market if it can be done. Does it make sense to pay
5-10 times more to find people with kids, when more than 90%
of adults have kids?


RICK BRUNER WROTE:
> Why on earth BabyCenter runs banner ads for their
> competitors is another good question (does Amazon.com run
> ads for BarnesandNoble.com to supplement its red ink?), but
> let's not go there. It is obvious to me, however, why those
> "targeted" visitors had a low click-through rate yet a high
> conversion rate. Visitors to the first baby site were well
> primed to shop for baby goods, yet they were primed to shop
> on the site they were already on (hence the low CTR), but
> those who did click were highly motivated to buy baby goods.
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


Hmmm, so the targeting had a *negative* effect on CTR???
How does that figure into your rant on targeting? The
GrowthSpurts.com banner didn't indicate that it was a
e-commerce site, only offered an online tracking service for
child growth. Maybe BabyCenter.com is so compelling, no one
wanted to leave, another disadvantage of using "premium" ad
space...

BabyCenter took the ad for the same reason GrowthSpurts
would take the ad. When someone is willing to pay $25/CPM
and you've got traffic, take the deal... Bills need to be
paid... No bankroll or multi-billion valuation like
Amazon.com. And GrowthSpurts is a BabyCenter.Com
affiliate, so a relationship between them could be very
complementary... As you know, babies don't stay babies for
long...


RICK BRUNER WROTE:
> The results are signifantly more disturbing for Burst. The
> 0.46% CTR is already less than the industry CTR average
> (0.6%, according to Net Ratings, generally, if
> optimistically assumed to be 1% by the industry at large
> these days), and the 1 in 100,000 customer aquisition rate
> (from the original impressions shown) is 10xs worse than the
> 1 in 10,000 average rate I've been quoted from Be Free and
> ValueClick. (The ugly truth of "1 to 1 market": 1% CTR & 1%
> conversion rates are the average.)
>
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


I disagree with Rick's conclusion vis-a-vis CTR and his
repudiation of Burst (even though we are "untargeting"
competitors). The GrowthSpurts.com banner (IMHO) wasn't the
best creative and was probably meant for posting on
affiliate sites for free. A little work on the "click
here" animation, could have probably increased CTR by
.10-.20. The banner got a dismal click-thru, even on the
targeted site. I'm sure that Burst ad CTR ranges
drastically as do ours (.4 - 5.0%). Given the limitations
and structure of the 30 day test, no tweaking was done to
improve CTR on our network although some could have been
done. CTR's vary greatly and a few very "clicky" banners
raise the average for many...

And, OBTW, Rick, I'd be happy to provide you with any
information you want in your research for your Web
Advertising presentations. No hard feelings, here!!!



Joe Bartling, CEO, http://www.adsdaq.com/ ADSDAQ - The Banners That
Pay!, 703-293-7339, mailto:joe.bartling_at_spiderware.com. Buy
impressions in million+ quantities/month ($2-5/CPM) on over 1,400
English-speaking, non-adult website network. (and yes, certain
"targeting" options are available!) Come see why we are growing so
fast! http://www.adsdaq.com/


========================================================================
------------------------------------------------------------------------
       This week's Online Advertising Discussion List sponsor:
                    Clicksales and Internet.com

 ###100% GUARANTEED### Pay-Per-Click and Pay-Per-Download Advertising
     All of your money back if you are not completely satisfied!
-->> http://www.clicksales.com/ and http://www.downloadsales.com/ <<--

                                ----

PURE INTERNET...Three in four internet.com users are online purchasers.
Deliver your ad to a PURE Internet audience. Contact sl_at_internet.com.
          http://www.internet.com/mediakit/pure.html

------------------------------------------------------------------------
========================================================================
Online Advertising Discussion List To Unsubscribe send UNSUBSCRIBE
http://www.o-a.com/ to online-ads-request@o-a.com



Received on Tue Mar 02 1999 - 10:11:47 CST