RE: Buy $40,000, Sell $60,000

From: Cahners <Baker_at_arganet.tenagra.com>
Date: Tue, 8 Jun 1999 18:27:20 -0500 (CDT)

ROB FISHER WROTE:
>Example: Agency a) buys the word "golf" for $40,000, b) >ad
>reads "Visit Golf Resource Center", c) Golf Resource >Center
>page is divided into quadrants, d) space sells to four
>advertisers: equipment company, resort, LPGA, and >apparel
>company for $15,000 each.

Don't know what you would call this but in the publishing
industry a couple of years ago we ran across a couple of
agencies that tried to buy space from us and then go to our
advertisers and resale the space in a cooperative ad. There
were a lot of reasons why it didn't work but one of the
biggest was that the agencies didn't want to be on the hook
for the ad if they couldn't sell it- which they would have
been if they contracted for it. That would be the same for
any of the portal sites. The key word idea is a bit
different- you are really only advertising another web site.
But, why would a company pay you $15k for only the
impressions from the click through on the banner on the
portal when they could pay $15k to the portal and get
impressions directly? At a $40 cpm your Golf Resource
Center banner would get 1,000,000 impressions; assume a very
generous 2% click through and that gives you 20,000 visitors
to the site or 20,000 impressions for each advertiser. At
$15k a spot on your site that is a cpm of $750. If you can
get that... Of course the advertisers could go to the
portal directly and get 375,000 impressions for the same
$15k (depending on how good a negotiator they are).

Todd Baker
VP, New Business Development
Cahners Business Information- NPI
973-292-5100 x230

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Received on Tue Jun 08 1999 - 19:20:22 CDT