Just got off the phone with the Chief Marketing Officer for Orbitz who told me they ONLY do ROI-based media buys (i.e. CPA). A thoroughly unprofessional anger rose in me on behalf of all the publishers who are fighting the fight to keep CPM alive online. (You know the arguments -- branding's not paid for, the publisher can't control the conversion to sales or creative, it's not fair .... blah-de-blah ad nauseum.)
But then I forced myself to forget kneejerk reactions and really listen to his point of view (after all that's my job.) He said something interesting, "Why should we treat online like traditional media, when it's better than traditional media?" And I remembered our own experience recently when a newsletter publisher we run ads with decided to switch from an affiliate relationship with us to a straight pay-for-the-ad deal. After we tallied results, that publisher would have made three times more money if they had stuck with the affiliate deal!
So, OK, thanks to Michael Sands at Orbitz, I'm now undecided on the whole CPA vs CPM front. There probably isn't any right answer. The only real problematic spot I see is that less knowledgeable marketers than Sands may try to use his example to bludgeon media owners into accepting CPA when it's not a good idea. Namely when the marketer's creative or offer sucks, when the campaign is branding vs. direct response, when the landing page is a worthless conversion vehicle, or when they don't have decent measurement systems in place.
Maybe what online publishers need to do is add a new section to their media kits specifically explaining what hoops a marketer must jump through to be considered for a CPA deal. What the ground rules are. So, if you can make more money in certain circumstances with CPA, you are set up to do so. But it's clear up front what the ground rules are for accepting deals.
It would also be nice to see some guidance from any of the related associations to their members on which CPA deals to accept and how to do so safely. Plus an outreach educational campaign to CPA media buyers explaining what they have to live up to in terms of measurement, creative, etc., to make this work. All I see now is a lot of rearguard action -- people screaming "No! No!
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