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The yardstics blog is discussing issues related to marketing and marketing communication. It is to be used as an tool for learning and sharing of information in the mentioned areas. Scroll your way through the blog and find information related to your current course. Ask your lecturer for a password if you want to add material. Enjoy your stay!

How to Price Web Advertising?

Measurement Posted on Sat, October 27, 2007 23:42:13

Some are wondering what pricing method is the best for Web advertising? Is it the CPC (Cost Per Click), the CPV (Cost Per View) the CPTU (Cost Per Time Unit) or some other method like HPM (Hybrid Pricing Method)?

The answer to the question is actually depending upon who you are. If you are an advertiser you can always try to influence the company publishing your ads to use a method that suits your “interests”. For instance, an advertiser could benefit from using CPC in at least two ways. The standard way and the standard argumentation is that you are only paying for those who are really interested in your product or company (read more about this inadequate idea in the “Measurement” Category). Another less common line of argumentation is that companies pursuing image communication can benefit from the CPC since fewer customers will click on such an ad and thereby the campaign will be less expensive.

CPV (sometimes called CPM, cost per thousand views) is a pricing method where the advertiser pays for the number of customers that have been exposed to the ad. The price per “view” is usually lower than the price per “click” but here you are paying for everyone that are exposed to the ad, including those that are not interested in the advertisement. Publishers are using this method to a greater extent today than what they have done in the past, perhaps since they, when using the CPV, can get revenue even though web surfers are not clicking on ads.

The CPTU pricing model for the Web is similar to what is used in print media. It is basically like when you are paying rent for your apartment, a hotel room or the like. You pay for the time that you are using the space, if you use it for a day you pay for a day etc. This pricing method is also gaining in popularity, just like the CPV.

The HPM – Hybrid Pricing Method can comprise of a mix of the previously mentioned pricing methods and future ones not yet established. One frequently used hybrid is that the advertiser pays for every “view” and pays extra for every “click”. This can even be combined with a “fee” for the number of days or weeks that the campaign is running.

A serious downside with the non-time based methods is fraudulent behavior from actors on the market. So called “Click-Fraud” may be a threat to the advertisers’ budgets, the publishers’ credibility and also for search engines such as Yahoo, Google, Altavista, MSN and the like. A lot of effort is put in to battle Click-Fraud but still it is an open battle between the search engines and their “enemies”. Who will win the battle is yet to be determined.

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.

Marketing & Communication

Marcom Posted on Sat, October 27, 2007 22:08:10

Yesterday I was asked “to what extent communication is part of marketing communication and marketing” but since I had to rush away I promised to put an answer to the question here on the blog. More can of course be said about the issue but here is a brief answer.

Duncan & Moriarty (1998) argue that marketing theory and communication theory share common roots and thereby they are enriching each other. Amalgamating marketing and communication consequently forms the area of marketing communication. In a marketing communication context, information is distributed to inform, persuade, motivate and to make potential customers aware of an organization’s offering (Keller, 2001).

Marketing communication comprises of a variety of activities aiming at communicating with the company’s customers. Marketing communication tools are typically divided into four or more defined areas and these tools or sub functions are often referred to as the promotional mix. The tools in the promotional mix are advertising, personal selling, sales promotion, public relations and can also be extended with for instance direct marketing, packaging, point of purchase display and event marketing.

In summary; Communication is an intrinsic part of Marketing as well as Marketing Communication.

Duncan, Tom and Sandra E. Moriarty (1998), “A Communication-Based Marketing Model for Managing Relationships”, Journal of Marketing, 62 (2), 1 – 13

Keller, Kevin Lane (2001), “Mastering the Marketing Communications Mix: Micro and Macro Perspectives on Integrated Marketing Communication Programs”, Journal of Marketing Management, 17 (Sept), 819 – 847

© Copyright 2007: Stics. This article may not be re-produced (in full or part) in any format/media off-line or Internet based, without prior permission from Stockholm Institute of Communication Science.