…and why the obvious imperative for online marketers is optimizing conversion.
Based on the continuing data trends we are seeing for the online segment of advertising, the majority of online media is priced on a pay-for-results model — not an impression (CPM) model. Some of the reasons:
REASON ONE: Online advertising’s job is to generate leads and drive sales. Period. Most online advertisers buying impressions back into a Cost-Per-Acquistion (CPA ) metric anyway. Ask any of your marketing friends how they calculate ROI, and I’ll bet it eventually comes down how much they spent versus how many new leads or customers a campaign acquired.
REASON TWO: The web is truly a direct response medium. It is more measurable, agile and cost-effective than other media forms because it can be updated and measured in real-time. Marketers can test and tweak more easily to get the results they want…leads and sales.
REASON THREE: Impression formats (banners of all sizes) are perceived to be limiting to brand awareness advertisers because they maintain that end users are “banner blind”. Add to that brand advertisers discontent with current digital creative failing to “tell compelling stories”, and the picture for brand awareness/impression marketing is not as rosy as we all thought. (see IAB/Bain research here)
REASON FOUR: Average pricing for impressions will trend to zero over time. The web is growing each day with each new application, tweet, status update, blog post, or picture upload. As this occurs, inventory supply increases, thus pitting every web publisher in competition for the only scarce resource on the web…user attention. Logically, advertisers can get similar reach and perhaps more frequency with lower priced inventory present on smaller sites or networks. Hence, the large portion of impression inventory will see a price decrease (more supply means lower pricing). Look at the battle traditional impression models like newspapers are fighting…more sources of news means traditional outlets are the less obvious choice for news, and thus their pricing suffers. (caveat: premium impressions will always have high value due to their scarcity…there are only so many front pages)
So what does this mean for those of us that make a living with online media?
ONE: We still need to embrace the impression…its the front of the online conversion funnel. Impressions are a necessary part of an online campaign, but they are only worth their ability to get a user to take action. More and more marketers today are using impressions with the end in mind…they are looking at the impression as the first step in their funnel to attain a direct response. Conclusion: Brand awareness is a benefit of a well executed online direct response campaign. Less and less is the impression the reason for the campaign.
TWO: Impression media creative needs to be designed to be immediately engaging and have a clear call to action and benefit. The impression drives the result, so you need to make a “good first impression”.
THREE: Traffic is our fuel. We need to find ways to maximize the yield we get from the traffic we do manage to drive to our sites. The current model looks like this:
The optimized funnel should look like this:
The optimized funnel can be achieved by:
- Making sure the site conversion funnel/path on your site is optimized (landing page optimization and rigorous analytics measurement). A good example of the extreme of this philosophy can be seen here. Carbonite leaves no choice but a conversion if the user wants to learn about the service or get a free trial.
- Making sure every site has the tools necessary to reduce abandons and increase returns to the site (re-marketing tools, integrated email marketing)
- Learning to make intelligent use of content and community marketing to create other inbound interest to our offerings through valuable content associated with your brand. Chest beating aside, at MediaTrust we use our blog as a resource of industry information that suggests to users that we are a source of knowledge and potentially someone to work with. Trust me when I tell you, this generates the lions share of our inbound leads for both advertising and publishing partners.
- Like it or not, all marketers need to socialize their marketing by leveraging the power of social media to drive new and return visits, recommendations, fans, and awareness of your content and community efforts.
FOUR: With online media, start with the goal or outcome in mind (duh!): the lead or sale, or if your are confident in your site conversion funnel: site visits/traffic. Marketers should look at these goals as the starting point to allocating their spend across the web and judging each spend against these outcomes. Its clear that with the new landscape of abundance
that we can look at a much broader and cheaper portfolio of impression inventory to kickstart the conversion funnel.
FIVE: More publishers should consider offering and running more pure performance campaigns with their inventory. They might find out (as many already have) that their effective CPM is higher running pure CPA and Revshare campaigns than it is with their CPM models. Today, the MediaTrust platform has several traditional CPM publishers monetizing some of their off-premium inventory.
SIX: All marketers should be running a pay-for-performance campaign. Period. The value of performance marking online is the fact that you only pay for results. This insures that all those that you work with to achieve your desired result are optimizing their contribution. The publishers, agencies, or networks you use on these campaigns only get compensated when your result is attained. The beauty here is…wait for it…the impression is free to the advertiser so the advertiser is in effect getting free brand awareness as he seeks the desired result. Performance marketing campaigns such as these can easily be setup and run with a knowledgeable team (shameless plug: like MediaTrust !).
While there are other larger issues to work out for impression media:
- Why hasn’t Madison avenue brought to bear its creative muscle to find a more efficient solution for the people that pay them?
- How does the realtime web change our ecosystem and effect the impression model?
- Will the explosion of the mobile web go direct response or brand awareness? (Steve Jobs might say both)
We have plenty to talk about with this issue. I look forward to the dialog. Post comments below or Twitter: trip_foster
Affiliate Summit East hits New York City on August 15th. If you’re attending, we’d love to meet you!
