By advertising to small numbers of diverse audiences across a wide range of sites and by closely tracking response, today s e-advertising leaders are refining a process for discovering new and unexpected customer niches. Learning quickly is an important part of the process, since advertisers do not want to spend too much money on ineffective sites. But the value of the approach is that it finds unanticipated niches and allows clients to test new creative content or rapidly respond to market changes with new buying patterns. Once an ad or an offer has been matched to an audience, the same technology used to measure response can be used to target extremely focused customer segments. Looking at the evolving price structure employed by Engage Media and other Internet advertisers, we can see the effectiveness of the approach.
Traditional media charge a fixed price for running an advertisement.
Soon, however, Internet ad brokers began to take advantage of their ability to directly measure customer response by offering clickthrough-based pricing, allowing advertisers to pay only for the viewers who actually respond to the ad. Now, Engage Media can offer consumers access only to those viewers whose profiles align with the characteristics the advertisers are looking for. Refining these concepts a step further, and incorporating technology to track the behavior of users once they arrive at a site, some advertisers have begun to offer pricing-based customer conversions. This is the equivalent of advertising on commission, where advertisers pay a fee only for those customers who respond to an ad by visiting their site and actually making a purchase. As exciting as this is, it is very unlikely that any of these newer alternatives will entirely replace traditional CPM metrics in the near future.