Is it really CPA vs. CPM?
If you read the comments from my friend Rob Cotter @ FixionMEdia, a boutique music ad network you’d get that he’s not a “huge fan of the CPA model, as marketers are vying for free advertising. If I’m reading The Economist, I don’t clip out a BMW ad and send it to their corporate HQ so they can pay The Economist for the lead. It’s ridiculous.” On the other side, we have Evan the CEO of Experience Advertising, who says that “Any media rarely backs into the target CPA… better focus on putting together CPA partnerships.” They are both going back into the whole debate of CPM vs. CPA, in which publishers will demand premium prices for their inventory, but marketers and a growing amount of agencies want accountability. Is it really CPA vs. CPM? Are the two worlds really that far apart? From the comments, you’d think that the two sides are at war and can’t come together.
If you’ve been reading my articles long enough, you’ll know that I’ve shown numerous examples of where brand marketers can work together, and I’ve asked the question to my readers of what could be done to help promote the two sides to work together. I can understand both sides, but more and more am the believer that Cost-Per-Action, CPL, CPI is the way to go, to some degree. Rob brings up The Economist, and offline magazine, and somehow claims that the experience is the same, especially in light of the technology that exists on the internet that can track, well… almost anything. With all due respect, he’s a smart guy, but this argument is patently absurd. There has to be some metric that his network, for example, can provide that shows quality to his advertisers. If the audience is an appropriate match, there is something that he could provide that will prove in the way of a CPA.
CPA doesn’t mean just a sale, or an action that is difficult. For a music network like Fixion, it could be something as simple as downloading a sample track from a new musicians album. That action could show genuine interest of the readership, and that there is that magical match. Finding the target CPA that matches into a CPM would always be the key. Then after that target CPA is found, he could then in-turn offer that to all his advertisers as “proof” that the advertising works, that his audience is interesting, is engaged in his site.
On the other hand its obviously similarly absurd on what Evan says, that CPMs never produce results. Unfortunately, most ad networks, despite their claim of superior targeting, superior verticals, haven’t really developed the real verticalization and consumer data needed to present good performance marketing campaigns to potential brand advertisers. Yet, there are companies like TURN.com, Advertising.com and other networks that have built technology that does produce top-notch results for general CPA campaigns to general audiences.
With the issues of impression fraud, poor placement, lack of accountability still dominating the industry, there is a need to show advertisers, especially for ad networks, some type of metric that they can gauge.
?
6 Responses to “Is it really CPA vs. CPM?”
Leave a Reply
(C) 2010 Pace Lattin. It is the policy of this blogger to not edit or remove any content and comments, unless it is specifically attacking a protected group or irrelevant to the conversation, such as a spam. These are the OPINIONS of the respective writers, posters, commentators. All DCMA Notices shoudl be sent to pace@pacelattin.com
While they are "optimizing" for the best results and channels, you are losing money. If they ever find the sweet spot it can work but why waste time with that when you can put CPA deals together with no risk at all…
Pace,
Some preamble:
Let me starting by noting that Fixion Media is a niche vertical ad network. Whereas we will deliver five hundred million impressions over the next 12 months, I’m sure many people reading here might work for networks that deliver that amount in a single week or month.
In addition, we focus on "real" fans of rock & metal music, where I define "real" and "fan" to mean that these are visitors that are forced outside of the mainstream to find news, music, and relevant content associated with music genres that aren’t necessarily sanitized by large corporations. But I digress.
CPA vs. CPM
I am not opposed to CPA and affiliate marketing. In fact we sometimes engage in such campaigns with small retailers. What I am opposed to however is giving away free advertising. This is a disservice to the publishers that I represent.
And while I’m at it, I also want to add that we’re not fond of CPC unless the client is outside of the music industry. Let me give you an example: one of our larger publishers used Google Adsense as a remnant provider. The result? One of our clients started using Adwords to circument buying with us by buying directly with Google. The conclusion: said site no longer uses Google to monetize remnant upon my recommendation. It may sound crass, but at times we prefer not selling a spot at all to maintain the overall value and quality of ads that appear on our properties. Side note: this isn’t the case with all of our publishers. Many still use Google as remnant.
Onto another point: the music industry is in bad shape. That’s no surprise to anyone. But a funny thing happened on the path forward to a digital world from the predominant print and television industries. Seemingly all of a sudden, digital dollars are sacred. We can track this. We can track that. And we want to reach 10 times as many eyeballs for the price that we used to in print.
I realize that marketers need to reset their budgets for a digital age. But let’s just say that getting free advertising isn’t the way to go. If the media structure crumbles: then so does the editorial channel that sells more goods and music than advertising ever will.
I’m getting off base so I’ll wrap this up. A few quick points and a real world example: the music industry is a small world. We all know who’s who and there are only so many players. When a client comes in to advertise KISS or the latest Metallica album, it’s safe to say that these ads serve a purpose regardless of someones intent to click on the ad, never mind giving up personal data for a free track in an age where people are absolutely fed up with privacy issues and spam. To make a long story short: "new album from band XYZ–in stores July 1st!" Got the message. Do I really need to click on the ad? I don’t think most people do. Should we get paid to deliver that message? I believe so.
Long story short, I am an advocate for the CPM model. We work direct with 90% of our clients (record labels, concert promoters, movie studios, etc.). The remaining 10% is slated for CPA/CPC and other remnant activity.
Being a transparent vertical network has its advantages. We list our entire publisher roster online. We cater to specific music genres. And we care about our publishers earning enough money; some for massive commercial success and others that are passion projects. To me, the future of online advertising is about community. Our ads are mostly relevant to the community and our clients know that we’re speaking to real fans.
Quality of our traffic / network? BMW as a luxury brand might frown on us. The demographic might not be there to justify ad dollars. But at the end of the day I think a lot of great brands and companies are missing out simply because of their perception of what a rock, heavy metal or alternative music fan actually is. Our main demographic is 18 – 45 and male. Sure most people don’t drive Beamers, but hey we’ll take some of that Honda Civic or Ford Focus business any day.
CPA v CPM debate will rage while clients (and agencies) continue to look at linear performance and not take into account the branding effects of online advertising and the non linear response that this brings.
In a recent campaign for a client we tracked fully 95% of revenue through their estore back to ad exposures. Almost no revenue was driven off the direct response to an ad. If that data is not being collected correctly then CPM’s will always remain a questionable model for most clients and agencies.
Yes, you can track to store revenue due to exposure, but you can still gauge those clients through other means. For example, if you think the value of users is a certain amount, you raise the CPA to compensate for the non-direct users. However, you’ll get a gauge of the value of those users perhaps from a survey only as the "CPA".
It doesn’t have to be linear, but the CPA as a tool can gauge the actual value!
I think a lot of this comes down to quality and the ability to target a consumer when their desire to purchase is high. I am the owner of http://www.prosperent.com. We focus on CPA advertising and have had fantastic growth since our launch just 8 month ago. I believe the key to this success has been our technology and the ability to show ads when they matter. The rest of the time, inventory can be filled with cpm or cpc ads, but a mix of the different models is a win for the web site owners and consumers in our opinion.
Its all smoke and mirrors. EVERY ad and affiliate network will pay as llittle as possible. I have dealt with literally 100 ad networks over the years and NEVER has there been one that consistently delivered on targeting or sell through. This is kiss of death has carried over from the MLM model. The more your down line makes, the more you are tempted to take. What I see every time is the network starting out wanting to be honest and make sales for the site, but then it falls to wayside to exploit the publisher and readers to fullest extent. No ad network is going leave money on the table. If they can tire ads on a knitting site they will. Its not the ads, its not the targeting. Its greedy middle men who have broken the CPA and CPM model.