It all began with a healthy debate on IM regarding one of the online ad industry’s most consistent quandaries. Only this time around, the dialogue was punctuated with the statement, “CPA will dominate metrics in 2010, brand advertising will die out.” Was this a new twist to the tale, or something that CPA proponents have been insisting on all along?
2010 seems to be the magic year to which this industry clings when it comes to assessing its future success. But while we’re now used to the weekly case studies and research reports touting the boatloads of revenue set to arrive in ’10, a statement that sounds the death knell for what’s ideally been the most robust online ad model continues to spark interest.
Will CPA (Cost per Acquisition or Action, depending on your mood) kill off brand advertising/CPM in the coming years?
The persistent argument persuaded this writer to not only follow up with the source of the original comment—Joe Speiser, Co-Founder of AzoogleAds—, but pose the theory to other industry pros who sit on both sides of the fence.
True, opinions can often be laced with doses of hyperbole, but Speiser’s rhetoric, all bias aside, seems to carry some logic. With provinciality reigning in the old guard, which views the CPM metric as industry-standard, Speiser—though softening his initial IM commentary—remains adamant that the paradigm shift is inevitable. “I don’t think CPM will ever disappear entirely,” he admits, “but I do think that within less than 10 years, there will be a very significant shift of the top media buyers from the older minded CPM metric to the relatively new, but safer CPA.”
Speiser recalls the moment when CPA began to take off, emerging from the ashes of the bust with the hopes of infusing a more results-driven model. “CPA really started to take off right after the bust of 2000, and it was in that year accountability became a focus,” he says. “Advertisers and agencies couldn’t afford to spend on a CPM any longer without guaranteed results. Shareholders were clamoring for a cut back on excessive media spending with the hope of an ROI sometime in the next X years. This forced buyers to look for an alternative.”
Speiser views present-day CPA still as anything but static. “These days, while CPA has been in the shadow of CPM and CPC, it hasn’t been standing still. There have been huge advancements of measurement, and creative optimization that places many CPA campaigns on par if not above the average CPM rates.”
Considering that a CPA model plays an important role within the AzoogleAds network, Speiser’s observations can be construed as partial. But there obviously has to be valid reasons why AzoogleAds and its leadership prefer per-action over impression, and it could be proven in their growing client base and campaign metrics.
But is CPM truly destined for greener pastures, or does it still have a place within the current context of interactive advertising?