I’ve been thinking a lot around digital pricing recently, especially CPM.
Should you pay double to reach someone with a TVC online that you do on TV?
Should you pay triple to reach someone with a medium rectangle ad that you do for a Full Page Colour ad in a similar magazine (ie content and quality).
We talk about digital having the added benefit of interactivity and response – which is true – but when we look at response generally 1 in 1000 people are responding/clicking which isn’t statistically massive.
So are we getting double/triple the impact from digital creative that we are from other media? I guess it’s a question that hasn’t been answered.
Now I know people will come back and say ‘it’s not apples with apples so you’re wasting everyones time’ … which could be true … but I’m not so sure it’s not apples with apples. Now when you add layers of behavioural targeting and non standard ad units it is different … but if you running ads which are primarily concerned with exposure I think there’s some more opportunity to think about cost parity.
I was briefing out activity for a client last week and the CPMs some digital publishers were coming back with were 7-10 times more expensive than similar magazines. When you ask for rationale you get the ‘well that’s what everyone else is charging’ argument.
Trouble is, ‘everyone’ means other digital publishers … not everyone. And for digital to keep making progress it needs to look at the broader media world.
Pricing and impact are the 2 key things that will become critical in the next 6-12 months.