Friday, May 7, 2010


Advertisers continue their inevitable march to accountability. Generating awareness is helpful, receiving a click through is better, but driving sales is the real goal.

Ten years ago, 90% of online advertising was sold on a CPM basis. Today that's only about a third. Instead, 45% of advertising is now sold on a CPC basis (the vast majority from Google).

But the story doesn't end here. CPA-type advertising is now 19% of spending and sharply on the rise-- this includes: pay per call, cost per lead, revenue shares, and so on.

I expect that 10 years from now CPA advertising will have caught-up with CPC (and perhaps exceeded it)-- and CPM advertising will have declined to the single digits.

1 comment:

  1. Bob,
    I particularly like the phrase "inevitable march to accountability", which I believe has greater and greater significance as advertisers, and especially their executive general managers (as opposed to the deep marketing specialists) struggle to understand and to harness the potential of the "platform era" you have identified. As the pace of technology continues to accelerate, and it rapidly broadens and diversifies the potential audience, it seems to me that the value of "old school", bottom-line focused disciplines becomes, ironically, more and more critical to financial prosperity and competitive health. It is becoming less and less acceptable for MOST companies to rely on "reach" or "image" as justification for spending on media/channels/platforms that do not deliver quantifiable returns on marketing dollars spent, because doing so leaves them less and less relevant and financially productive than their competitors. I think it puts in perspective the fact that technology, as powerful and transforming as it might be, remains a tool to achieve the lasting goal - financial success and competitive preeminence.