Marking a significant departure from traditional CPM-based advertising, ad exchange AdBrite has launched a cost-per-click auction for graphical banner ads.
When direct-response advertisers pay on a CPM or per-impression basis, they assume the full risk of impressions that may never convert into clicks or sales.
AdBrite advertisers can now pay for graphical banner advertising in the same way they pay for search placements and text ads--paying only when their ad is clicked, according to AdBrite CEO Ignacio Fanlo.
"Allowing them to pay for performance makes sense," Fanlo said. "More than 90 million consumers visit AdBrite's sites every month, and our new CPC auction provides an effective and low-risk way for advertisers to engage them."
In addition to advertiser benefits, CPC pricing rewards AdBrite's publishers by compensating them for the full benefit of their contributions to each advertiser, according to Fanlo.
AdBrite is one of several ad exchanges--including Yahoo's Right Media Exchange, ContextWeb's ADSDAQ, Traffiq, and AdECN--that are looking to help agencies maintain a basic level of ad-targeting quality and effectiveness at reduced costs.
While exchanges continue to gain traction, however, the model faces increasing competition from Google as it increases its stranglehold on automated ad sales with the acquisition of DoubleClick.
Founded in 2002, the San-Francisco-based AdBrite is backed by venture capital firms Sequoia Capital, DAG Ventures, and Mitsui Ventures. Today, AdBrite is one of the Web's largest ad networks, presently serving ads on nearly 1 billion pages daily across a network of some 50,000 sites. In January, its ads reached 85 million unique U.S. users, according to comScore.
In March, AdBrite launched a network partnership program, including a dozen online ad networks such as AOL's Advertising.com and CPX Interactive.
As the buying of media increasingly becomes a commodity business, AdBrite's program allows ad networks to supply ads and site inventory directly into its marketplace to encourage the matching of advertiser demand with publisher supply.