In my life before affiliate marketing and AKMG, I used to do marketing and sales for a large brand name company where we sold ad space on a CPM basis (cost per thousand impressions, which means you pay based on the number of times your ad appears on a website). I remember the good old days when we would sit around the conference room table figuring out how to “pitch” advertisers on buying our ad space at a really high CPM. We would dig around and find the best stats possible about our audience in support of the CPM price. Then we would take away impressions from the internal house account to make the CPM price go down so it would be a great deal for the client. Now, this brand is one of the most reputable companies out there so it wasn’t that difficult to come up with great stats about their audience and brand loyalty. They have done studies that show that consumers trust a brand more if it is associated with this company. But looking at it from the advertiser’s perspective, I would want more out of my CPM buy than just a loyal audience that holds my brand on a pedestal. I would want results. I would want new customers and new sales.

Beyond just banner placement, email drops can be bought on a CPM basis. I also worked at a non-profit where I bought emails on a CPM basis. I laid out a big portion of my annual marketing budget and got nothing in return - no new leads, just money out the window and I had no stats to support why I spent that money. Not a fun predicament when I had to justify my spend.

Enter CPA (cost per action where you only pay when a new sale or lead is generated) to the rescue. What a change of pace this world is compared to CPM. We don’t have to sit around figuring out how to pitch clients, we just have to show results. Totally different mind frame. Clients are much more willing to work with you if they’re only paying for performance; it’s much easier for them to sell internally and the return-on-investment is as clear as day. The results are there so it’s NOT a matter of hoping that once people see an ad, they will remember your brand, go to your website and purchase something. We know within a day or two whether an offer works and if the media buy worked.

CPM media buys are beneficial for branding but in a tight economy, advertisers need to show results and prove that they are spending marketing money wisely. So there may be some uncertainty about when emails will be dropped when buying on CPA but the upside is that you’re only paying for leads or sales and not just when people view your ad or email creative. This is money better spent!

This entry was posted on Monday, June 9th, 2008 at 10:58 am and is filed under Advertisers, Tara's Blogs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.