CPM – Does it makes any sense any more?
I have been following some conversations on TechCrunch about the relevancy of the CPM model in today’s world. – Let’s Kill the CPM
And I don’t agree to that call and here’s why:
CPM has been and always will be the most commonly used mechanism for advertisers to generate brand awareness. Those full-page ads in newspapers (funny how no one talks about newspaper ads these days, at all!), billboards on the freeways, banner ads on any portal, relate to something more fundamental as to how human beings think and make decisions – to buy or not to buy; if to buy, then when to buy and for how much.
But yes, the technology for delivering ads on a CPM basis will definitely change and make this an effective mechanism for advertisers.
To illustrate my point, consider this example: If you are on a page reading about Kanye West’s latest blockbuster release, you really do not care about (and thus your brain would automatically tune out) the ad for reducing your mortgage payments. On the other hand, if you see an ad for the latest lineup of shoes by him, you would look at it and if the message were sharp enough, you would probably click on it too! Agreed that clicking on an ad and landing on a page does not mean a sale, but atleast it served the purpose of generating awareness about that specific brand in your mind.
Thus, advertisers should set their expectations as to what they can possibly achieve from a CPM campaign - Generating brand awareness with a possibility of some sales.
Now, the main point that I am making in my example was that the CPM model worked - but only because of its contextual relevancy. Now, in addition to the page relevancy, add a toping of site visitor’s interest relevancy, so that in our example above, the ads were about the latest lineup of shoes only because the visitor at some point in the past on some other site, had indicated an interest in buying shoes – then we have a model that really works.
And today in this digital world of the Internet, we can rely on technology to give us this mechanism of providing contextual relevancy – both for the page the visitor is currently reading (viewing) and the interests that the visitor had expressed in the past
While this is NOT a shameless act of promoting my own company, MyContextualAds.com, is exactly on this mission and so had to mention about it.
All in all, models that have worked in the past, super charged with sophisticated technologies will herald the new age of advertising models – whereby the ads generated will be relevant to YOU, the buyer – the center of the ad world!
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I found this discussion totally intriguing.
While I agree with Mr. Shelby, we need to move to new metrics; especially since monetizing sites has everything to do with their respective audiences and the audiences involvement with the content, I also feel like this is a double edge sword.
So, for example if you go by other metrics….
CPC / CPL / Engagement, everyone knows how those can be played with, just like CPM. Also, Engagement is an empty word unless some basic parameters are placed around such metrics. IAB is trying to do this currently by suggesting standardized metrics around newer ad units and social media. I support such efforts by the IAB. Still, when you look at engagement metrics &/or ROI metrics it becomes very subjective. Who determines what constitutes an engagement, who is measuring it, by what standard are we viewing this engagement, and the list of questions go on…. Worse, as a publisher if you go down the road of CPL or CPA you can be left holding the bag for a company’s inferior products &/or services. Publisher rebel against dropping CPM because it places the onus back on them to sell the advertiser’s products/services for them. We, as publishers, are not selling ROI, but the potential for ROI through our audiences. It will be difficult to really come up with a satisfactory solution if Publishers think they have to sell advertiser’s products for them. Publishers will offer up the audience and then it is up to clients/agencies to put their products/solutions in front of the audience.
Publishers need to come up with more engaging ways to put messaging in front of their audiences, and should look to work with vendors (and thier respective agencies) to accomplish this task(especially since vendors are a part of the community they serve). Still, Publishers shouldn’t be held to a metric of success for an empty product or solution when they are delivering the right audience.
I’ve mixed feelings on this, and the way to find the solution is to hit it hard on the sweet spot when messaging to an audience these days. In this case, use Social or ProSocial media and find new ways to engage audiences and cover a multitude of ground in ways relevant to the audience, not just the vendor…
Branding / Lead Generation / Engagement.
Not easy to do by any stretch.
Thanks to Mr. Shelby for placing this thread. It is a difficult situation to say the least, but if everyone maintains an open mind, eventually the right answers will surface.
In my place of work PSN Inc.(CIOZone.com and CFOZone.com) we try to place the audience first, and then fit the vendor information contextually to the content provided. We do it with both professional and user generated content.
Ron Kost
VP of Sales
CIOZone.com [PSN, Inc]
RKost@CIOZone.com
Well I read your topic. I think you are right.