I have been following some conversations on TechCrunch about the relevancy of the CPM model in today’s world. – Let’s Kill the CPM
And I don’t agree to that call and here’s why:
CPM has been and always will be the most commonly used mechanism for advertisers to generate brand awareness. Those full-page ads in newspapers (funny how no one talks about newspaper ads these days, at all!), billboards on the freeways, banner ads on any portal, relate to something more fundamental as to how human beings think and make decisions – to buy or not to buy; if to buy, then when to buy and for how much.
But yes, the technology for delivering ads on a CPM basis will definitely change and make this an effective mechanism for advertisers.
To illustrate my point, consider this example: If you are on a page reading about Kanye West’s latest blockbuster release, you really do not care about (and thus your brain would automatically tune out) the ad for reducing your mortgage payments. On the other hand, if you see an ad for the latest lineup of shoes by him, you would look at it and if the message were sharp enough, you would probably click on it too! Agreed that clicking on an ad and landing on a page does not mean a sale, but atleast it served the purpose of generating awareness about that specific brand in your mind.
Thus, advertisers should set their expectations as to what they can possibly achieve from a CPM campaign – Generating brand awareness with a possibility of some sales.
Now, the main point that I am making in my example was that the CPM model worked – but only because of its contextual relevancy. Now, in addition to the page relevancy, add a toping of site visitor’s interest relevancy, so that in our example above, the ads were about the latest lineup of shoes only because the visitor at some point in the past on some other site, had indicated an interest in buying shoes – then we have a model that really works.
And today in this digital world of the Internet, we can rely on technology to give us this mechanism of providing contextual relevancy – both for the page the visitor is currently reading (viewing) and the interests that the visitor had expressed in the past
While this is NOT a shameless act of promoting my own company, MyContextualAds.com, is exactly on this mission and so had to mention about it.
All in all, models that have worked in the past, super charged with sophisticated technologies will herald the new age of advertising models – whereby the ads generated will be relevant to YOU, the buyer – the center of the ad world!