The Pontiflex Blog

It’s Not the Banner, It’s the Pricing Model

September 8, 2009 at 1:00 pm Arun Krishnan Leave a comment

In our latest article for MediaPost, the issue at hand was not the banner ad, but how we pay for it. The recession has taught us some hard lessons, on a personal level (tighter wallets, general states of unease) and on an industry-wide level (more demand than ever for measurable ROI from ad spend).

As we look forward to better days ahead, we mustn’t forget what we’ve learned. Revenues from CPMs have been hit hard: indicative of both broader economic trends and a new way of thinking. Advertisers are demanding return on every dollar they spend. This isn’t a problem with the banner ad – display banners do help with important intangibles like brand awareness – but the pricing method most commonly associated with it. CPMs don’t guarantee advertisers the same return as performance-based models like CPC and CPL.

We’re not suggesting, however, that publishers abandon CPM altogether. For placements where it makes sense and advertisers are willing to pay for it, absolutely. However, there is a huge amount of remnant inventory that publishers can keep under their control by rotating performance options like CPL and actually increase eCPMs, instead of forfeiting it. Read more on Forbes.com.

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