Regarding the advertising sponsorship pricing model question for
websites, I'd like to offer a few thoughts (having owned a successful
AAAA advertising agency, launched the first IBM PC magazine in the
country, and now providing internet marketing consulting for AT&T and
their agencies, I am egotistical enough to think those thoughts are
actually worth something!-)
PRICING CONSIDERATIONS FOR SPONSORSHIPS/AD SALES ONLINE
1.SITE TRAFFIC - Sheer numbers are not the only criterion, but they
will have a great deal to do with generating market "heat" or interest.
If you are generating a lot of traffic, use that to your advantage by
developing a a full advertising rate card including a schedule of
sub-units, based on what demographic or user-interest information you
can define.
2.READERSHIP QUALITY - if you can PROVE a qualification for your
audience that is valuable for your advertiser prospect (cardiologists
vs. GPs, for example) then you can ratchet your CPM model accordingly.
3.COMPARATIVE CUSTOMER ACQUISITION COST - in many cases, the cost of
acquiring a new customer can be worth MORE to your advertiser prospect
than what you would ever charge on a CPM basis. For example, one
division of AT&T budgeted $45.00 fulfillment costs start to finish to
enroll one home-based business prospect!!! If you can uncover the
acquisition value for your prospect, and develop a guarantee program to
beat that cost, you may both win bigtime.
4.DOCUMENTABLE ROI - the proof is in the pudding! Design a test program
with one "traditional" CPM model and another on an incentive/PI (per
inquiry) basis as in point #3, and test, test, test! Share the process
with your prospect and you will a)build their trust in you as a true
marketing partner; b)enroll them and their market as an active testing
base; and c)finetune what rates will hold over a long-term contract.
This means you'll avoid undercharging and, just as importantly, avoid
overcharging and disappointing your advertiser.
5.RESEARCH VALUE - in all cases, at this point in the development of
the web, the safest and most reasonable positioning for virtually any
new advertiser online is to perceive their effort as RESEARCH, just
like launching a new direct marketing campaign. If you're fortunate, it
may generate terrific results right away - but that means with
additional testing and fine-tuning, it will garner truly outstanding
results later!
6.MINDSHARE/SHARE OF MARKET INVESTMENT - last and not least, as in any
new market, those who start aggressively early in the game stand a far
better chance of staking out more territory and branding the customers.
While Modem Media, Wunderman Cato Johnson, BBDO and several advertising
agencies have developed very sophisticated models for valuing website
ad space, the fact is those models are based on print media notions,
and they are not proven to be transferable to this medium. Not yet,
anyway.
It's kind of like transubstantiation: you can say a few words in Latin,
pronounce that this is not wine, it is blood, but it still tastes like
good ol' Mogen David 20/20 (except in Beverly Hills, where it tastes
like Chardonnay).
So, until very precise user demographics can be gathered and
documented, it's an open market. The bottom line is: design your
program to educate and illuminate your advertising sponsor prospect,
and charge the lowest rate that you can live with until you evaluate
the results. Then you can negotiate a scaled increase over a
reasonablee period time that leaves you and your prospect winners.
Best Regards,
Mike Crosson
Market:Vision Internet Marketing Services
73 Harbour View Pl.
Stratford CT 06497
(203)380-9400
mcrosson@ix.netcom.com
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