CPM, CPC or CPA
Adsense moved from CPM to CPC. Other ad networks have also moved from CPM to CPC model, if not, they are thinking to move.
This brings me with a questions. What is Advertisement?
Advertisement is a form of branding. The purpose of advertisment is to get the attention of the public to your product/service. The purpose of advertisement is to build a brand name in the mass. The purpose of advertisement is to improve/sustain a brand name in people’s mind.
For example, Adobe is giving ads of Adobe Flash. Is the purpose of the ad to get users click on the ad and view their website or product? No, Adobe is giving ads to sustain their brand name in people’s mind.
Lets say a start up, Orgoo is giving ads. Is the purpose of the ad only to get new users to the website? No Again. The purpose of the ad is to build a brand name. How can that be done? To bring new users as well as remind the users who already are a registered user, to come and use orgoo.
There are a lot of similar examples. What I am trying to point out here is that CPM can not be removed from the advertising model. Actually CPM is not out of the advertising model, however, the ad networks have stopped paying the publishers on CPM.
The ad networks became popular coz any small r big website owner could make money by displaying ads on their websites and earn money based on the number of the hits their website gets. All the popular websites commanding very good hits are able to get ads directly from the advertisers based on CPM. Even popular blogs get ads based on CPM. Check Techcrunch for example.
With adsense and other ad networks not paying based on CPM and propagating CPC/CPA only has left the small website owners nothing to earn. The user of the websites are very knowledgable and they do not feel the need to click on an ad. The advertisers are getting to build their brand name FREE OF COST.
I have a website which gets 20,000 ad impressions per day, however, ad clicks ranges from 4-8 per day. Am I not displaying the ads free of cost? So I removed every ads from the website. It was not giving me so much earning that I can not do without the ads.
DO NOT DISPLAY ADS FOR FREE.
If the advertisers wants to pay for click and action only, then let the page show a blank space and only if the users click on the blank space, it directs the user to the advertisers page. With blank space, they would not be able to do branding of their website/product/service for free.
So my advise to the users, check your earnings in adsense or other ad networks. If you are not getting atleast $1 per 1000 impression, remove the ads. There is no point in displaying free ads.
To the ad networks, bring back the CPM model. It is good for the internet and good for the small publishers.
Great post! hope to read more from you. thanks!
dax
June 5, 2008 at 8:13 am
[...] To all the startups and those working on their business model. Start looking for revenues beyond the ads. And no matter what happens, never and I repeat, never put ads from any ad networks in a start up website. I had given the reason for that here. [...]
Ads were Yesterday!!!!!! Adblock Plus :- Awesome addons to Firefox « RRP | Ideas and Strategy
June 8, 2008 at 7:34 pm
I am starting a nightlife entertainment website. I am having trouble finding sample projections from ad dollars can you please give me some direction.
T.J. Watkins
August 18, 2008 at 10:12 pm
if you could give me your website URL, i might be able to suggest something.
rashmiranjanpadhy
August 19, 2008 at 12:33 am
Its very hard to take this stand as lot is dependent on site content to content and kind of advertiser which will get RoI on running ad on your site. For instance advertiser is not getting branding for 100% free on your site as if he advertised in google PPC his cost per conversion on CPA model he is ready to pay is around $1 but for similar campaign for a display advertisement he is ready to pay $1.35 per conversion which means branding is always factored in.
Every website cannot be in same model of getting atleast 1 USD CPM especially with increase competition and increase in long tail.
One should try to build model around advertising where Quality of lead given via your site is higher than a santabanta.com or other portals not contextual to advertiser product.
Sid Puri
August 26, 2008 at 9:22 am
Well, i reached your blog searching on google for “How to remove CPM” and see where i landed, you want the CPM back. Well i don’t the reason for abysmal CTR you have, but the general opinion is that CPM will reduce your earning.
Well anyways if you know how to stop CPM, do let me know, as i have a website http://www.fungineer.co.cc and i have CTR of 2% , and thus doing good with CPC.
aaditya
December 29, 2008 at 10:50 am