When Exposure-Based Advertising Stops Making Sense (And What CDNOW Did About It)

This actually follows on to a large degree from my post below (http://www.e-consultancy.com/forum/Default.asp?v=351&p=1) and refers to a white paper titled "When Exposure-Based Advertising Stops Making Sense (And What CDNOW Did About It)". You can find this by going to the white papers database on this site at http://www.e-consultancy.com/knowledge/whitepapers/search.asp and searching on 'advertising' - there are other useful white papers there as well.

The white paper essentially makes the argument that online advertising pricing models should be based on performance and results rather on a CPM 'exposure' model.

The argument goes:
- CPMs are the natural progression of the mass market 'traditional' way of buying and selling advertising space
- This is why CPM pricing models are currently dominant: the industry can understand them
- This 'more is better' broadcast bias is not making using of the web's interactive, personalisation, targeting and tracking advantages and will have to evolve.
- pay-for-performance pricing models means that it is in both the media owners' and advertisers' interests to get results and the closer partnership that this necessitates is a necessary next step

Whether media owners will ever buy into a 'get paid according to performance' model is questionable: they would say a) they don't control the creative execution of the advertising, and b) there is value in brand exposure and awareness which is hard to measure online etc. etc.

Points of Interest include:
- projections on the increase in affiliate marketing
- the CDNow case study which gives hard data on how customer acquisition costs vs. life time value returns can be weighed up against each other
- the 8 different components of CDNow's customer acquisition strategy
- A budget breakdown showing relative spend across media and customers contributed as a result of this spend

Well worth a read...