January 27, 2010

Economics of CPL vs CPM: An example

Prices on news sites for ads sold by such brokers are typically tiny: around 35 cents per thousand impressions at year-end 2008, according to Pubmatic, a Silicon Valley firm that helps publishers earn the maximum revenue for their ad inventory.

With so little revenue coming from many standard ads, publishers may consider trying to run lead collection campaigns instead. A key variable in this strategy is the publisher's ability to convince readers to turn over their personal information in forms or surveys. Lasker says response rates vary wildly, from 0.25% to 15%.

If publishers assume they will collect leads at the low end of that range--meaning that for every thousand people that see a survey opportunity, 2.5 people actually fill it out--Pontiflex's average lead price of $2.27 would translate to $5.68 in revenue per thousand ads served, or 16 times the price garnered by ads sold on networks.


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