Why CPM is dead and where advertising dollar will flow in 2010?

Till now, most media agencies are buying impression media. Is it because it makes sense or because it’s easy way of handling a clients’ advertising dollar? Is CPM a way to go and what are the new online ad trends?

I’ve being repeating for over a half of a decade that CPM model has a short life span, and many publishers would receive such a statement with skepticism. It is understandable since a decade ago CPM was the cash cow, but people, you can not live in a denial any longer or you will be out of the publishing world.

From the visitors stand point web is saturated with ads. Display banners have been in exactly the same place on publishers’ web sites for so many years that it became an intrinsic user behavior to ignore them. (If you believe that you have a lot to offer to the advertising interesting and ready to get a cut of multibillion dollar industry, you might enjoy an article “The Smooth Road to The Riches”.)

It is inevitable for web publishers to move away from a reliance on typical display ads and pricing methods, and fortunately some large social media player such as Facebook, Digg and Meebo are already doing it. They are slowly veering CPM in favor of engagement based prices and ad formats.

The Web is flooded in ad impressions, and as publisher you have no choice but stand out in the market. With growing number of impressions without any interaction the prices will very soon drop to zero. Actions are hard to achieve with impressions, but actions are what advertisers looking for these days – conversions. The focus is placed on transactional marketing. You can’t tag along for too long.

Even thou the ad industry infrastructure is still based around standard display ads with impression-based pricing, it only makes sense to build ad products around engagement since that’s what advertisers expect from those platforms in next few years.

Weather you are a blogger or a publishing powerhouse, what this trend of moving away from CPM means to you and your publishing business? More headache accompanied with a need for a change or more opportunities?  Yes, some bother is inevitable, but let’s focus on opportunities.

Putting creativity of your editorial team forward, with customized advertising campaigns you can bring advertisers that were earlier not available to you due to competition.

Some seeds for further brainstorming:

• Take advertising from the periphery of banners and mix it more closely with content;
• Add campaign related Q&As;
• Add rating;
• Add embedded surveys;
• Run advertorials (sponsored stories);
• Run “breakthrough” ads with product shots that plop in the middle of story;
• Blend current campaign with entertaining adds and provoke a dialogue.

The sky is the limit. Just indulge in imagining what’s possible.

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Last month The Daily Beast launched interesting ad twist – a two-week push with British Airways that puts the headlines of the site’s most recent posts inside a BA “New Arrivals” unit.

From advertisers stand point, being able to work with the publisher to develop something that’s a combination of utility and advertising is a treat; for you – a goldmine.

Now with a unique offer of interaction between a brand and its audience you can not only get your hand in larger advertising pockets, but also get a hold of transactional marketing budget that often is hidden in advertisers’ sales commission and naturally not available for CPM ads.

So, how to squeeze juice of sales budgets and reallocate it to advertising expenditure?  We have been doing it for a while with our advertisers (see the demo) and bringing their marketing dollar on a silver plate to publishers with Pay Per Deal performance marketing model that offers high CPD – price for transaction. The earning potentials for publishers are uncapped with the advertising model that we have introduced few months ago. For better understanding of how the model works and what is your opportunity window, pleased browse our Use Cases.

As in any market and with the launch of any product, there are always early adopters and those that follow when the party is almost over.

The good news for the publishers is that the party has just begun and the crowd is still half sober. Go get’em!

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If you believe that you have a lot to offer to the advertising interesting and ready to get a cut of multibillion dollar industry, you might enjoy an article “The Smooth Road to The Riches”.
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by Olga Kostrova, CEO of IdeaMama Group:




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