Online Ad Buying: Beyond CPM

In the beginning, advertising on the Internet meant buying banners. The first banner ads were sold by Wired magazine, and the idea caught on like wildfire. Now the banner ad is far and away the dominant form of advertising on the Internet.

From the outset, banner ads were sold the way advertising is traditionally sold: on a per-exposure basis. Exposures are bundled into units of a thousand, and priced on a “cost-per-millenium” basis, which is abbreviated as the familiar CPM.

But as the Internet has evolved, so too has the Internet advertising industry. In particular, marketing agencies with a background in direct response advertising have moved in and challenged the CPM establishment.

The direct marketers offer advertisers a new choice: instead of paying for exposures, advertisers can now pay for actions.

Recently the topic of alternatives to CPM was raised on the Ad-Marketing Discussion List, hosted by the Netrepreneur Exchange of the Morino Institute. Ad-Marketing is an invaluable place for advertising buyers and sellers to keep up with the changing state of the art of Internet advertising.

List moderator Mitch Arnowitz challenged the list members to identify the various alternatives to CPM advertising, and came up with the following list:

Cost Per Conversion
Cost Per Click-Through
Cost Per Inquiry
Cost Per Action
Flat Rates
Sponsorship
Cost Per Acquisition
Cost Per Lead
Cost Per Sale
Barter

True enough, but where does this leave the advertiser? Certainly, the advertiser can negotiate deals with individual publishers on this basis. But if an advertiser wants to buy any significant amount of advertising with spending endless amounts of time negotiating deals, she has to find vendors who sell these services.

To help advertisers negotiate this complex world, I have put together a basic guide to buying ads on a non-CPM basis. I extend my thanks to the members of the Ad-Marketing Discussion List for their assistance. If you have suggestions to make this guide more complete and useful, please send them to me.

Sponsorship/Flat Rates
* 24/7 Media: $.50 per click; minimum buy = $10K

Cost Per Clickthrough
* Directories
* Adbility: Pay-Per-Click Advertising Networks

* Networks – Fixed Price
* 24/7 Media $.50 per click; minimum buy = $15K
* Adflight Click Network
* Advertising.com $.45 -.60 per click, $.55-$1 targeted
* Flycast $.40 untargeted, $.60 targeted
* Safe-Audit $.10-.20
* ValueClick $.30

Cost Per Lead/Inquiry/Acquisition/Subscription
* Directories
* Adbility: Commission-Based Advertising: Multi-Vendor & Pay-Per-Lead Networks
* Musictus.com: A guide to pay-per-lead advertising networks

* Networks – Advertiser Sets Price
* Affinia
* Bach Systems $.40-$3
* Cyberbounty $.35-$6
* DirectLeads
* TransAct!
* WebSponsors.com $.40-$21

Banner Ad Barter/Exchange
* Directories
* Adbility

* Networks
* Microsoft LinkExchange Banner Network (2:1)
* SmartAge Smartclicks (2:1)

This article was reprinted with permission from by Bob Fertik
The i-Progress Report
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