Circos Brand Karma

This used to be Ford’s slogan, and I think couldn’t be more appropriate to describe ad trends.  One of the panels at Ad:tech in San Francisco talked about the state of advertising and how it’s evolving.  I found a couple of things interesting.

1. Higher CPM goes to content sites that fit the advertising, not necessarily sites with the most reach.  According to Scott Symond of AKQA, “tier 1 inventory is artificially high.”
2. Search marketing can be used as a response and measurement tool for offline media campaigns, but current players are too stuck on PPC.

I couldn’t agree more.  The driving factor behind these 2 points is that ROI/conversion accountability will be key for media buyers.  Google has clearly caught on to this as they’re trying to improve the quality of their click-throughs.

Referring quality traffic to advertisers is the holy grail.  By quality traffic I mean consumers who have a high likelihood of buying once they get to the advertiser’s site.  Today, during a meeting with an ad agency, we were reminded that if the consumer is new, then that traffic is even of a higher value.

Seems like quality is on a lot of people’s minds these days!

I recently wrote a post about larger traffic doesn’t = greater CPM, and now PubMatic has published a similar report. I’ve included the summary chart below, but you can read more in detail here.

One of the interesting points in the report is that the “eCPMs for social networking sites are among lowest by vertical, though they have increased 69% from $0.22 in January ‘08 to $0.37 in March ‘08.”

I was part of a panel discussion moderated by Nick on the monetization topic at the SNAP Summit yesterday. Along with my fellow panelists, Ren, Eve, and Krishna Subramanian (formerly of Blue Lithium), we discussed that social apps which gave 1) quality attention time to ads AND 2) had desirable user segments (either demographic or behavioral) are going to monetize better than apps that don’t have both.

If you look at different webmail providers as a highly trafficked social app, the eCPM has to be pretty abysmal because of the lack of quality attention and user qualification. Car IQ, on the other hand, has the ability to do both. In doing so, they should be able to extract a higher eCPM because they can facilitate branded experiences with desired segments even without a lot of traffic.

But is eCPM even the right metric? Depends on what the M stands. If M were to stand for “minute,” then the revenue model could be a derivation of the broadcast model instead of the print model, in which case I’d say eCPM is absolutely the right metric. We’d be in a world where whereby advertisers pay for engaged attention from qualified individual as they participate in (related) activities.I believe that’s where social apps will find the rainbow’s end.