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The New Metric for Success: CPW |
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Editor’s Note: This
article first appeared in iMediaConnection’s
Media Planning & Buying blog. View the original article here.
As the industry strives for metrics that can be
understood by all, “Cost Per Whatever” becomes increasingly
widespread. Article highlights: ·
The old method of metrics is not as useful now
·
There is no relationship between clickthrough rates and success of a Web campaign ·
CPW should be the basis for evaluation of
sites and creative I first wrote an
article on CPW in 2001. We had been using this term at Mediasmith for several
years and thought that we needed to put a stake in the ground on the term. Since
that time, it has been used by select people in the industry but only
recently has gained broader acceptance as the industry strives for metrics
that can be understood by all. What is CPW? It
is simply “cost per whatever” the advertiser is basing their ROI
on. This can be cost per sale, cost per download, cost
per sign up for a newsletter, whatever metric means success. It could be an
action such as registration or purchase; it could be a passive measure such
as pageviews or unique users. Cost-per-pageview has proven to be an especially effective measure
for media whose whole model is selling advertising on their site. In effect,
they make money on the spread between the difference in pageviews
that they sell and pageviews that they buy. CPW can also apply
to more sophisticated metrics. For instance, a client may wish to evaluate a
visitor not on their first visit, but may want to try to emphasize sites and
creative that brings back visitors multiple times. We had one client that
believes that visitors are only valuable if they come six or more times to
the site. In this case, we would measure repeat visits and place future
dollars on sites that do the best job of bringing consumers who are frequent
visitors. If a confirmation page on a web site can be dedicated to the
action, this action can be the “W” in CPW. We all know (or should know) by now
that CPC is dead. Clickthrough rates, once the
hallmark metric of Web success, have proven to be irrelevant and it is time
we moved on. Actually, they have been irrelevant for years but the success of
Google has made this metric pervasive. The web has taught us however that the
old method of computing what media costs does not make a lot of sense. What
does make sense is how much it costs to drive success or ROI. |
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Time-tested analysis has established
that there is NO relationship between clickthrough
rates and success of a Web campaign. There are two related factors here: 1)
just because someone clicks on a banner or link does not mean that they do
anything on the site they are sent to. In fact, the correlation of clickthrough and back-end action of any sort varies all
over the lot. 2) An increasingly large percentage of consumer reactions to a
Web campaign are from those who are exposed to a banner but do not click and
later visit a site. While the Web average is in the 50% range, this number
rises to higher than 50% when traditional, offline media are employed at the
same time as Web. Or when a campaign is more branding oriented. Or when the
content is especially “sticky” and people don’t want to
immediately click off of the content to go somewhere else. This concept,
called view through or post impression is not embraced by all. They point to
PR or other media factors which could have driven the consumer to the site.
All the same, there is a direct data correlation that can be established
between those who see an ad and later visit the associated content. Yes, the
more activity outside of the web that is included in the campaign (e.g.,
traditional media), the higher the view through. A “surround sound
marketing” campaign increases the chance for view through rather than
post-click. At Mediasmith we’ve had a number of campaigns where
the overwhelming majority of conversions took place without a user clicking on
an ad. Also, it should be noted here that the longer someone has been on the
Web, the more likely they are to be a post-impression rather than a
post-click visitor. |
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Mediasmith Morsel Connecting the Dots with
Today’s Online Brand Metrics – Recommended Reading “In 2009, US advertisers will spend $4.7 billion on
display ads, and another $3.1 billion on other branding-oriented ads,
including rich media and video. But are they getting their money’s
worth? Does online brand measurement even work? Do marketers have the metrics
they need to connect the dots—both within online platforms and between
online and offline media?”
--From eMarketer’s Online Brand
Measurement report.
Pull up an easy chair and read here. Although it continues to develop, online brand measurement is
the biggest challenge for online advertising. This report defines these
issues and suggests solutions for the future in measuring the reach of online
advertising. Source: eMarketer: “Online Brand Measurement: Connecting the
Dots” June 2009 |
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We are
not suggesting that CPW be a basis for payment. Although we do expect that
some sites will offer this as back-end tracking becomes more sophisticated.
There is a new generation of tagging being tested that could not only
eliminate the need for third party ad servers but could give the seller as
well as the buyer visibility on view through and associated conversions. CPW
should, however, be the basis for evaluation of sites and creative. After
all, isn’t it all about the advertiser and ROI? Now we recognize
that the concepts above are not necessarily new but could be called simply a
new label on something old. But sometimes names are everything in achieving
clarity in communications. Some people call this method CPA. But since CPA is
also a method of selling, we find that the use of CPA to describe back end
evaluation sends the wrong message in analytics wherein some readers of a
report do not understand that the underlying buy is, in fact a CPM buy. Lastly, the use of the term CPW
injects a little smile when someone first hears it. And any analytics
conversation can use that. A version of this
article originally appeared in iMediaconnection. David L. Smith is CEO and Founder of Mediasmith, Inc. -- Mediasmith is a globally recognized digital advertising media
agency with expertise in targeted media planning, execution and measurement,
integrating Web Display with Social Media, Emerging Media Technologies, and
Search. With 20 years of experience servicing clients directly or partnering
with creative agencies, Mediasmith designs award winning communication
distribution strategies that drive high value customers to interact with a
company's brands while maximizing ROI. For more information, visit www.mediasmith.com. |
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