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CPM is pointless and must go!

Another nail in the coffin of CPM – good!

A few points I would like to add:

- The answer my friends does not lie in less formats or bigger formats.. That’s not a creative solution; in fact it’s rather lazy.

- The answer lies in what we use display for. We need to change both the context and the content of display.

To paraphrase even the boffins at IBM – I kid you not….

“Imagine an advertising world where spending on interactive, one-to-one advertising formats surpasses traditional, one-to-many advertising, and a significant share of advertising is sold through auctions and exchanges. Advertisers know who viewed and acted on an ad, and pay based on real-time impact rather than estimated ‘impressions’. Consumers self-select which ads they watch and share preferred ads with peers.”

This ought to give you a clue what the role of display could/should be.

- CPE will be replaced by CPE. What an ‘e’ equals really doesn’t matter. Alll that’s needed is agreement between adv and publisher on what the ‘e’ is. Time spent is a good place to start. Equally relevant could be a ’share’, an ‘install’, ‘content viewed, a ‘registration’ etc

You can read some top line thoughts here - from a presentation given to Ad:Tech London a couple of weeks ago.

See the future of display here: RHS column, half way down the page….Vodafone Mercedes McLaren

In line with our sentiments – the futures looks like new formats and new ways to price them. Out are impression-based models (CPM) and in are performance-based pricing models.

Read my comments below.

All I can say is – about time!

I have to disagree with Karen’s assessment. It’s absolutely right that marketers and advertisers only pay for engagement online. After all, it’s really only possible online (for now) and we should be using the medium for what it can deliver – transparency, measurement and accountability.

The model of buying impressions is antiquated and should be dispensed with. After the first wave of the internet when big brands rushed to build a web presence (with no real clue as to why other than they have one so we need one!) there was a mad rush to generate some ROI. In came ‘print models’ – impression based pricing models (circulation) and fixed ad placements. It’s definitely time to move on.

The reason why we should is simply because we can. We an create better ad formats that deliver deeper engagement and price them accordingly. Cost per action, cost per engagement are just a couple of the metrics that will replace inevitably CPM.

Let’s also keep in mind that as content shifts from singular destinations to be made available across multiple digital locations, the pressure to price online ads around agreed performance metrics will compound.

I take the point regarding billboards – but until there is a better alternative to price them – we’re stuck with the old methods. This to will undoubtedly change.

You also mention “that an ad is not a point of purchase sale and the website or other media upon which an ad sits is not a store that vends the ad’s products.” Why shouldn’t the ad be a point of purchase? Brand Awareness and DR needn’t be mutually exclusive.

Let’s move forward…

http://thisisopen.com/blog

There’s a good post over on Big Picture on Advertising: How cheap does online display need to get?

See my comments to Simon’s post….