I was interested to read Andrew Harrisons article in this weeks Marketing Week entitled “Digital revolution will shake up buying and selling“. Andrew makes some compelling observations about the changing nature of advertising and the need to monetise content. He talks about content being ‘king’. something that most people accept, but importantly makes the distinction between direct and indirect advertising. As he says Google provides a valuable service in providing relevant traffic for websites to convert (direct) and compares this to traditional media owners who offer “spot” advertising to broad demographics (indirect). He rightly points out that the ‘lure of immediate and quantifiable results offered by search’ is something brands will find increasingly hard to ignore and therefore media owners are going to have to get on board with this.
“This is changing the fundamental nature of the ad business from an exclusively above the line display advertising model to what will probably become predominantly a perfomance based sales model”
Essentially, we’re talkling about the difference between CPA and CPM.
At a recent conference held by the IMRG on Affiliate Marketing, Dan Cohen from dgm spoke about the ‘flight to CPA’. We see this shift happening already as advertisers seek more efficient advertising models. In a downturning economy this trend can only accelerate as marketing budgets are forced to become increasingly accountable and CPM rates are squeezed. At what point does a publisher appreciate there may be better rewards from a well planned, well executed CPA campaign?
Having recently migrated from the regional press I have have come from an environment with a very large amount of online traffic, but its generally unqualified and being traditional media owners, the idea of moving to a CPA pricing model is not very appealing. They are not alone here and I suspect that until revenues drop away from CPM and pressure to monetise the online content increases it’ll be hard to persuade them otherwise. However, we have had some success with smaller publishers who are looking to embrace other revenue streams and whose infrastructure allows them to be a bit more flexible.
Fundamentally, the issue is one of search optimisation and including it in the ongoing commercial and strategic activity rather than a separate administrative task. If a media owner invests time in optimising their site against the advertising they are hosting, they will attract the right traffic and if that’s regionalised they can even steal a march on the competition and in the process increase their local relevancy - the same could be applied for most other publishing sectors. I have likened this to the difference between stopping someone in the street who you know wants what you have, and standing by the side of the motorway with a placard hoping that someone in the passing throng is interested enough to slow down and stop.
Affiliate publishers have know this for some time and the affiliate marketing model is fast becoming part of mainstream media activity. Surely it won’t be long before we’re seeing more publishers from all areas, both B2B and B2C, embracing the performance based model.
