Commentary

No Wonder Media Planners Are Up In Arms

Last week I reported on a new system for buying media that dot-bomb rumor site, F**ked Company, started last Monday: for a minimum investment of $100 on a credit card, anyone can upload a banner or button and advertise on the FC site for a $2.00 CPM (50,000 impression minimum buy). As I said last week, I was going to give it a try and see how we did. Here are the results.

The process couldn't have been easier. No rich media was allowed (at least I don't think so) but I was able to upload an animated GIF (22k maximum size). I uploaded my 120x60 animated GIF button, chose my impressions (50k - the minimum) and the amount of days I wanted it to run (2 days). My credit card was already on file so I didn't have to deal with that. And that was it.

On Tuesday it went live. Reporting wasn't anything to write home about. I could check it for how many impressions I had gone through and the click through numbers. The buy was evenly split over the two days so I received 25,000 impressions each day.

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So how did it do? Well $100 dollars and 50,000 impressions later I had 13 click-thoughs, or a .026% click-through rate. But of that amount my conversation rate was 100%: it looks like everyone who clicked signed up for my newsletter. So my acquisition costs were $7.70 per head. How about site visits? Any increased awareness generated? Well, not that I can tell. The traffic to the site for the first day the campaign ran was slightly higher than normal but day two was slightly lower. In other words, a wash.

How does this compare with other efforts that Emerging Interest has undergone to increase enrollment of our newsletter? Well, one of the things we do is to try and create good content that people want to write about and link to. For instance, I recently wrote a white paper outlining the three categories of rich media. Jeffrey Graham of Dynamic Logic wanted to write a piece about my categories for an online trade magazine and he asked me for examples to illustrate each category. I put the examples up on our site with a very prominent link to sign up for the newsletter. The day his piece ran we had a huge spike in traffic and 27 people signed up for the newsletter, over twice the number for F**ked Company, and I didn't have to pay anybody anything.

So what's the story here? I'm sure Jeffrey's impressions were far fewer than 50,000 (probably closer to 5,000 although I don't know that for a fact) and yet my conversion rate was much higher (probably closer to .5 %). There are two things important here. One is the power of word of mouth. It is one thing to see a banner, it is quite another to hear someone you trust tell you about something. In this month's American Demographics magazine there is an article on the importance of using the Web as a word of mouth vehicle for the promotion of a new movie. Based on traffic reports to a movie's promotional Web site, researchers were able to accurately predict upcoming ticket sales. The Web site was more than a promotional device; it was a barometer. Of course word of mouth is a two edged sword. Bad word of mouth spread hyper-charged through Web can sink a movie much faster than it normally would.

The other important thing is something I'm just beginning to understand properly: the power of GRP's. Among a lot of the media buyers I hang out with, there is a lot of talk lately about selling GRP's and TRP's on the Web, rather than impressions or click-throughs. In other words, using the language of the traditional media planner as a way to attract the traditional media planner over to the Web. Coming from the technology side of things, not the media planning side, I was confused by the term until I went to the library and hauled back a ton of books on media planning.

For those of you as ignorant as I, GRP (of course) stands for Gross Rating Point. One GRP represents 1% of a particular audience (TRP -Targeted Rating Point - is the targeted form of the idea). It is a standard way for media planners to compare audiences across media properties. Obviously the GRP for my target audience (media planners and buyers, agencies, brand managers, etc interested in emerging advertising technologies) is much higher on the site Jeffrey Graham writes for than on F**ked Company. My actual cost of acquisition could have gone down, even at a higher CPM, if I had been able to compare the GRP of a few different sites. But of course I can't since the data is not available for Web sites.

No wonder the media planners I know are up in arms.

PS: I lost all my email through a computer crash. Those winners of the Emerging Interest White Paper a few weeks ago: please write me again so I can get your address.

- Bill McCloskey is Founder and CEO of Emerging Interest, an organization dedicated to educating the Internet advertising and marketing industry about rich media and other emerging technologies. He may be reached at bill@emerginginterest.com.

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