• by Ken Liebeskind , July 13, 2001

Web publishers have traditionally rejected pay for performance deals because they were unsure how much they would be paid. There was no data to determine an advertiser's commission rate and how it compared with other advertisers.

Commission Junction is trying to change that. Even though the company laid off 40% (60 people) of its staff on June 7, CEO Lex Sisney says it was a business decision to help streamline the company and to focus on Commission Junction's core competency - pay-for-performance advertising. According to Sisney, the company is "targeting profitability next quarter," so MediaPost decided to find out just how they're planning to accomplish that.

The ad network, which serves 7 billion impressions a month for almost 1700 advertisers, has begun publishing payment and conversion statistics on advertisers and publishers in its network, creating the first open marketplace for pay-for-performance advertising.

There are two primary metrics in Commission Junction's new system: EPC and 'network earnings.' EPC stands for "earnings per hundred clicks" and is a relative rating that shows effectiveness. It illustrates the ability to convert clicks into commissions. 'Network earnings' is a relative ranking that shows how an advertiser or publisher ranks within the network based on volume of commissions paid or commission earned respectively.

Sisney says the data will enable publishers to compare commissions paid by advertisers, which will help them determine which advertisers to accept. "In the past, companies knew their own performance but not others. Now the lights are on and everyone can see the performance of everyone else," he says.

The data can be used by publishers to find the most productive ads for their sites. Advertisers will get more sales and leads by being on the best sites for their ads. "Advertisers and publishers have been fumbling around, unsure about fair pricing and measurable results. This provides an efficient way for clients to manage their advertising campaigns," Sisney says.

The data will help Commission Junction popularize CPA advertising, which has been growing in popularity after its initial problem gaining publisher acceptance. Publishers will be more willing to consent to CPA deals if they know what they'll be paid, which the new data will reveal.

Sisney says the data will also be of interest to ad agencies who will use it to "deliver accountable results to their account base and manage programs more effectively."

Sisney says no other ad network offers similar data, primarily because the data only pertains to CPA deals and most networks primarily handle CPMs. But with the falloff in CPM deals due to shoddy results, advertisers are moving to the CPA model and the new data from Commission Junction could enhance that trend.