Radio 192219301938194619541962197019781986194200 Figure 8-1 8.3. 2 Price level of Internet ads 1. Exposure models that are based on CPMs Traditional pricing has been based on CPMs. So far, this model had been the standard advertising rate-pricing tool for Web sites as well. Why CPM changes on the web very widely, on average they have been at higher levels than they are in most other media because of the small supply of highly trafficked Web sites Since advertisers pay an agreed-upon multiply of the number of"guaranteed"impressions (page views), it is very important that impressions are measured accurately in the context of the dvertising business model. This limits the site's responsibility for ad delivery, and the ad revenue generated is simply the product of the traffic volume times a multiply, which is generally priced in terms of CPM, which can range from $10 to $100(in 1999). The price charged is different for different search engines and other popular sites. For example, in 1999 Excite charged $68 per CPM and Lycos charged $50 to $60 per CPM. Generally, CPMs seem to average on the order of $45, resulting in a fairy low cost of$.045 per impression viewed The wide price spread suggests that the Web can function both as a mass medium and a direct-marketing vehicle and that context, audience, technology, and anticipated results all play a part in determining what price an advertiser will pay. A few well-branded sites in a very broad nge of categories(such as news, entertainments and sports)will dominate, and these sites will be able to charge a premium for ad space Some companies, such as USA Today, charge their clients according to the number of hits(about 3 cents per hit in 1999). As explained earlier, there could be several hits in one 2. Click-through char. Ad pricing based upon click-through is an attempt to develop a more accountable way of agingforWebadvertising(seehttp:/www.pawluk.com/pages.htm).Thepaymentforabanner ad is based on the number of times a visitor actually clicks on it. However, a relatively small proportion of those exposed to a banner ad actually click on the banner. Double Click Inc. reports that only 4 percent of visitors who are exposed to a banner ad the first time click on the ad. Thus payment based upon click-through guarantees not only that visitor was exposed to the banner ad but actively decided to click on the banner and become exposed to the target ad(Hoffman and Novak 1996). Space providers object to this method, claiming that viewing an ad itself may lead to a purchase later or to an offline purchaseFigure 8-1 8.3.2 Price level of Internet ads 1. Exposure models that are based on CPMs Traditional pricing has been based on CPMs. So far, this model had been the standard advertising rate-pricing tool for Web sites as well. Why CPM changes on the web very widely, on average they have been at higher levels than they are in most other media because of the small supply of highly trafficked Web sites. Since advertisers pay an agreed-upon multiply of the number of “guaranteed” impressions (page views), it is very important that impressions are measured accurately in the context of the advertising business model. This limits the site’s responsibility for ad delivery, and the ad revenue generated is simply the product of the traffic volume times a multiply, which is generally priced in terms of CPM, which can range from $10 to $100 (in 1999). The price charged is different for different search engines and other popular sites. For example, in 1999 Excite charged $68 per CPM and Lycos charged $50 to $60 per CPM. Generally, CPMs seem to average on the order of $45, resulting in a fairy low cost of $0.045 per impression viewed. The wide price spread suggests that the Web can function both as a mass medium and a direct-marketing vehicle and that context, audience, technology, and anticipated results all play a part in determining what price an advertiser will pay. A few well-branded sites in a very broad range of categories (such as news, entertainments and sports) will dominate, and these sites will be able to charge a premium for ad space. Some companies, such as USA Today, charge their clients according to the number of hits(about 3 cents per hit in 1999). As explained earlier, there could be several hits in one impression. 2. Click-through Ad pricing based upon click-through is an attempt to develop a more accountable way of charging for Web advertising (see http://www.pawluk.com/pages.htm). The payment for a banner ad is based on the number of times a visitor actually clicks on it. However, a relatively small proportion of those exposed to a banner ad actually click on the banner. DoubleClick Inc. reports that only 4 percent of visitors who are exposed to a banner ad the first time click on the ad. Thus payment based upon click-through guarantees not only that visitor was exposed to the banner ad but actively decided to click on the banner and become exposed to the target ad (Hoffman and Novak 1996). Space providers object to this method, claiming that viewing an ad itself may lead to a purchase later or to an offline purchase