Display Advertising, Email Marketing, Media Buying, Search Engines


The other day I had a tough time negotiating with one of the big online publisher. “We sell only on CPMs”, the publisher said and were ready to discount the price by 20%. CPM is the usual discussion starter for any media negotiations and vary from publisher to publisher (at times can be as high as Rs.500). CPM stands for Cost Per Million, but in reality is only cost per thousand (CPT). Let me illustrate with an example

If you buy 1 Million impressions on Yahoo at Rs.350 CPM, means that at the end of the campaign you will have to pay Yahoo
_____________x350= 350,000 Rs.

The other way to handle the negotiation is to get a fixed spot in prime real estate, at a fixed cost. e.g if you block the DHTML position (LHS position below the header). You might have to pay Rs.200,000 and would generate say 3 Mln impressions. See the following example to access if effective CPM might be a good idea to take a fixed position.

___________x1000= Rs.67

Thus indicating that given monies the same, Rediff is a better buy.

Most of the publishers keep revising the rates, depending upon the popularity of that position. internationally, it the third party auditing sources like comScore or Neilson net rating that corroborates this, however in India, it might be decided by the availability of the inventory (which brings us to the second most used term in discussion “Our inventory is sold out” ;). How many come to the website, what is the rightmatrix for measurement, time spent/Pageview, audience profile is a different discussion and Pandora’s box. Check this article.

CPM is the starting point of any discussion and can actually multiply into lot of mathematics. The first such matrics is GRP, which brand advertisers will find most relevant. You might recall that (like television)

GRPs= Reach x Frequency

comScore has a special tool in its module that will help you to access the reach and frequency of your campaign. I’m not familiar with Neilson Netrating (as they don’t have their services in India), but I’m sure they will also have this standard tool. This matrix will help you to synergise online campaigns with the other mass media component. However, the online world has a different brand dynamics. You might note, the first trigger of an offline campaign results in search for the keyword/website. Please note that this is an inexact science and as of now has no valid data point to corroborate assumption :).

There are other bunch of guys who swear by SEM. It is only by trial and error that you will find the solution to this misery and find that optimum Offline and Online mix.

CPM also brings us to the next big currency- CPC. You might get this standard reply from a big publisher- “We don’t sell on CPCs ;)” or “We can lower the CPM”. All they mean is that they don’t have the right technology to support CPCs. Let me illustrate CPC by example. If you buy 1 Million impression on Yahoo with Rs. 3.5 Lacs as the outlay and a fixed spot on Rediff Home page for Rs.3 lacs, how would you measure the deal.

One way to do this is to use the Media Planner reach and frequency through comScore and come about a GRP number (which a brand guy should).

However, if you happen to be a marketing manager of a website, where traffic is paramount and you need visits to increase the bottomline (with your bottomline at stake), you will consider clicks. Say Yahoo creative has a an average click through rate of 0.6% and Rediff has 0.3%. The number of clicks that you will get from respective Publishers is as under…

Yahoo….. 1,000,000 x 0.6%= 6,000
Rediff…. 3,000,000 x 0.3%= 9,000

CPCs will be as under

Yahoo…. 3,50,000/6,000= Rs.58
Rediff… 3,00,000/9,000= Rs.33

Indicating that Rediff real estate works better and is more cost effective to drive the click traffic (maybe Rediff should sponsor my blog). Please note that the numbers are only indicative and for the sake of discussion.

As a performance advertiser, you would want a real estate that drives traffic and converts, not necessary a property that gets you eyeballs. CPC when used will remove this doubt from a planners mind (a smart marketer will further better this by using a better performing creative and up the CTRs). The benchmark CPCs (and effective CPCs) should be in the range of Rs.3 and upwards depending on the category. If you are jobs, it is easy and becomes tough for a luxury product/service.

In the performance marketing space the “IN THING” is the CPA (cost per acquisition), which a further distilled version on CPCs and effective CPMs. The most expected answer from a Publisher will be- “What is CPA?” and “There is a policy against CPAs”. As a smart buyer you will chance upon and start the CPC discussion with the publisher again.

Truth is, CPA deals are a potential source of loss for a publisher, unless he is in a dire need to sell his inventory. By far, Google and Other Search engines will give the Best CPAs, followed by Affiliates (if your price and conversion rates are attrctive). Another fact of the matter is that a publisher would need huge investment to CPAs, MSN has Atlas, Komli has it own technology and so does Yahoo (but they still have to start monetising it). Let me illustrate it with one last example. Suppose Yahoo campaign converts at 0.5% and so does Rediff. The cost per conversion will look as under

Yahoo Total conversions= 6,000 clicks x 0.5%= 30
Total Cost= Rs.3,50,000/30= Rs.11,667

Rediff Total conversions= 9,000 clicks x 0.5%= 45
Total Cost= Rs.3,00,000/30= Rs.6,667

Indicating that Rediff drives much cheaper conversions (Now Rediff should definitely sponsor this blog;). This however depends on a number of factors, but most importantly what a publisher must realise is that most of the conversions is brought about by Non-prime real estate or the remamant inventory. This opens their inventory to a completely new set of clientele and huge potential to monetise their inventory. Check out this mediapost article…

Please do note that the smarter you buy, the better you can justify the value and at the end of the day it your numbers and board meeting that matters!!


Email Marketing, Internet Marketing, ROI Marketing, Web Analytics

First Step (Part 4): Email Marketing

Email Marketing is not CRM; treat this as the most precise communication weapon that you have in your arsenal. EMails are personal and if used using “Recency” concept can deliver fantastic results. This is a bit of cliche, but studies have shown that personalized attention and getting to know when to connect with the consumer increases attachment and relationship (Marketingsherpa). And therefore EMail Marketing.

The conversion of an EMail campaign to a established base can be as high as 4-5% (and more) depending on the product category, which makes it even better than Search Engine Marketing. There are few other advantages…

1. The media spend spend is 0, you will spend only in technology to maintain the Email Platform and maintaining the response and conversion data.

2. EMail Marketing is also insulated from the bid fluctuation due to competition, and therefore the inconsistencies of the response and expected conversion.

3. The targeting is more precise, as the data is completely yours. Ideally you should have all the information- right from age to location and his buying pattern. Targeting coupled with right product mix would work wonders for the business.

4. Faster turnaround and results. SEM campaign will take 2-3 days to kick off, whereas Email can start getting your responses and conversion from the next day itself.

However, before an eMarketeer would reach this ideal stage (where he exactly knows who is he targeting), there’s lot of groundwork to be done. An Email infrastructure requires an immense Technology backbone, coupled with data mining & history of communication plan. The goal should be to create identifiable and profitable clusters. These clusters are the cornerstone of this internet marketing tool, and needs to be studied continuously to determine how much focus should be given to a particular cluster. One of my friends who worked for Citibank direct marketing told me that they had 120 such groups (and is growing everyday). This segmentation is the foundation on which Email marketing works. Though initially traditional parameter like age, education, location, income level etc might dominate, but gradually one should move towards non demographic traits like preferences, tastes, which are more likely to influence the purchase.

The decision on which EMail platforms to go for will torment you for days. Better idea will be to get test account from two-three vendors, before you finally decide one. At MakeMyTrip, we used CATAPULTMAIL, which is the homegrown product of erstwhile Webshatra and now Position2. This is a very basic emailing platform, which helps to broadcast email with nice performance dashboard (# Broadcasted, # Opened, # Links Clicked). There are few advanced ones, notably Dartmail, which has a good relation with all the ISPs and inboxes. The precision and analytics are of very high standard. There are also specialised agencies which deliver this solution, solution integrated. Another late entrant is Epsilon International, which uses Dartmail. They have started an Indian office headquatered in Mumbai.

Before you start sending EMails, you should have a very clear idea of your database profile- total numbers, active base, targeting information like age, location, sex and transaction history (if possible). This should help you to divide the database into few groups and hence target communication. Every campaign that you execute should make you more intelligent about the base, about their preference and about their buying capacity. Here again, I would want to emphasise the need to integrate Web Analytics with the EMail platform, which would help you to measure the response down to the level of conversion. Again, when you use this data to enrich the profile information (in the database) it will make you next campaign stronger.

Though all the above points were in favor of technology and Emailing platform, one shouldn’t ever neglect the power of content, the creative and the subject line. Like all the other form of internet marketing, these too should be optimised. An average open rates is 20% (30% in case of super efficient database) and click through rate (on open) is 15%.

Through EMail Marketing, marketing and organisation overall will not only save valuable marketing monies, which it would have spent to acquire the same users and increase conversion, but also make the brand stronger through a relevant interaction. The method encourages the marketeer to segment and thereby gain valuable and psychographic insights about his consumers and business. What could be a better competitive edge?