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CEO • Author • Speaker
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How to Buy Ad Space on the Net
One expert stresses number of leads gainedBy Lynn JonesLast year, companies with interactive media budgets spent most of those dollars constructing sites on the World Wide Web. This year, those dollars are being shifted to online advertising to support the sites, as companies realize that just building it won't make them come.The question is, once you've hung out your shingle, how do you determine where to advertise or how much to spend? "We tell people to allocate between 3% and 5% of their television media budget," says John Nardone, director of media and research services for interactive marketing agency Modem Media, in Westport, CT. That estimate is based on the fact that 10% of U.S. households are wired, and they're watching 25% less television than the average household. "For companies that don't have a TV budget, we estimate how many people they need to reach based on their objective," Nardone says. But don't depend on response rates as a measurement tool. "It's impossible. You'd have to know what the whole universe is," says Gaye Sussman, executive vice president and U.S. media director for DraftDirect, New York. "More important," she adds, "is how many leads you're getting and what they're costing." Cost is defined by how targeted the audience of a particular site is. Placing advertising banners on search engines such as Web Crawler or Infoseek, which reach a broad, untargeted audience, runs around $15 to $20 per thousand. Highly targeted areas, such as ESPN Online or PC magazine, can command as much as $100 per thousand (CPMs are based on average number of site visitors). Rate cards are just the starting point. Prices are negotiated based on the per-lead or per-order cost an advertiser needs to achieve to be profitable, similar to direct mail. New York agency Wunderman Cato Johnson negotiates per-inquiry rates for many of its clients based on the level of visitor involvement. "We might be willing to pay $50 for someone who joins a client program, or $25 for someone who fills out an application," says Greg Stuart, WCJ's director of interactive communications. Even home-page visitors are worth something, Stuart says, but the value would be much lower. As the number of Web sites increases, expect the cost of advertising to drop, says Nardone. Top brands such as ESPN and the Wall Street Journal will remain strong, but the competition level on the second tier is such that companies will have to vie for advertising dollars on something other than price-namely creativity, service and willingness to provide more perks. Once ISDN technology becomes mainstream, bringing full-motion video capability, Web ad pricing will resemble TV commercials. Companies will be charged for 15-, 30- and 60-second spots. (April 1, 1996) Media News | Marketing News | Search | Site Map | Home |
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