Media Buyer For Hire

It's been a while since I have been quoted or interviewed, so I figured it was time to answer some reader mail/questions. I had been getting inquiries for a while on how to calculate the familiar cost models used in online advertising - CPA, CPL, CPC, and CPM, but once I posted the formulas the questions started to change in nature:

"What does the 'e' in front of CPA stand for in eCPA or eCPL?"

"I know my CPC or CPM, but how do I calculate/project my eCPA or eCPL?"

"I'm a publisher, someone offered me a CPA or CPL deal, how do I calculate my eCPC or eCPM?"

So I'll start at the top, the "e" in front of any of these cost models stands for "effective", and it is used to determine what price you are paying per lead, per acquisition, per impression, per click when running an advertising campaign on another cost model. Effectively, you back into your metric when you are running a campaign based on a cost model that is not your ideal or target situation.

So to simplify, you are an advertiser that prefers to advertise on a CPA basis, but in this ad market it is becoming more and more difficult to find CPA advertising opportunities that will really drive quality volume for you, so you decide to buy advertising on a CPM or CPC basis. You may have a target CPA of say $25 or $30, but when you run your impression or click based advertising campaign, you need to figure out what your eCPA really is. So you bought 1,000,000 impressions at a $5CPM, the advertising ran, it generated a CTR of 0.60% (or 6,000 clicks) and you generated 125 acquistions or sales at a Conversion Rate of 2.083%. Your media cost was $5,000, what was your eCPA? To solve this equation, you take your media cost, and divide by the number of acquisitions to determine what your eCPA was, in this case it ended up being a $40eCPA. Although this is higher than your desired target of $25-30CPA, it is still a decent source of acquisitions that is coming close to your target. Because your conversion rate is pretty good on this source of traffic, you may be able to back into a CPC to make the deal more favorable to you. To determine your eCPC, take your media cost, and divide that by the number of clicks achieved, the resulting eCPC is $0.83, if you can negotiate a $0.60CPC on a subsequent ad deal and maintain your conversion rate, you would only spend ~$3600 for the same number of clicks (and impressions) thereby reducing your eCPA to $28.80.

In the converse situation as a publisher, you may have some unsold inventory that you want to run on a remnant basis, and an advertiser is offering you a $50CPA to run in either banners or email. In order to figure out how this would work out on an eCPM basis, you'll need to know what the advertiser's CTR and conversion rate is. If the advertiser has similar CTR and Conversion rate stats as the above example, with a CTR of 0.60% on banners, and a Conversion rate of 2.08%, on those same 1,000,000 impressions, you would have generated 125 sales at a $50CPA, yielding a commission payment of $6,250, and a resulting eCPM of? To solve this eCPM equation, take the commission payment of $6250, and divide by the number of impressions delivered/1,000 (because CPM stands for Cost per Thousand Impressions). The result is a eCPM of $6.25. To solve for the eCPC, divide the commission payment of $6,250 by 6,000 clicks, and your eCPC is $1.04.

Hope this helped! If you have any more questions or need further clarification? Please email me - steve [at] mediabuyerforhire.com

Labels: eCPA, eCPC, eCPL, eCPM

I was quoted recently (1/31/07) in an iMedia Connection feature on Behavioral Targeting for different industries, to read the entire feature, click here: http://www.imediaconnection.com/content/13423.asp

Targeting Secrets of 5 Industries
By Dawn Anfuso

Increase consumer touch points
Industry: Diet/Health/Wellness

Scenario: A consumer clicks on various diets within Yahoo! Health. Weight Watchers, Jenny Craig or other such diet companies then can serve this person ads across the Yahoo network. (See "Healthy Behaviors Online.")

Unlike with autos and houses, which have long buying cycles, diet and health products are often purchased on impulse. Thus, the key use of behavioral targeting in this industry is to increase consumer touch points.

"The buying cycle in this industry is often quite short, and the consumer may purchase based solely on an impulse after seeing a banner advertisement," says Stephen D. Kempisty, director of business development for Flatiron Media.

"Behavioral targeting is used in this industry to reach consumers when they are outside of the targeted content that is so relevant to their research and purchase process," he continues. "It extends the ability to transmit your message to that same consumer when they are viewing alternate content, and may engage them enough with its out-of-context approach to grab their attention."

He warns, however, that since competitors may be employing similar technologies, the message has to stand out.

Another reason Kempisty says to use BT in this industry is to reach consumers through less-expensive media than what an advertiser would pay for a highly targeted / sold-out channel.
"You can also use it to reach consumers with a more tailored message than would be used for a typical RON campaign," Kempisty says. "I would caution against being too aggressive with this process, though, and make sure the proper frequency caps are in place; otherwise you may end up scaring your intended target."

If you're looking for a media buying job, look no further. I have partnered up with Simplyhired.com to try out their Job-a-matic job postings specifically for Media Buyer opportunities. It allows me to accept job postings directly as well as supplement the results with their listings from the web. So far it seems pretty decent (although the targeting is a bit off - raw materials buyer positions showed up) and I will continue to evaluate before I make it a permanent fixture. There are some openings for Print buyers at Google and a few other items of interest:

http://mediabuyerforhire.jobamatic.com/

If you want to place an ad on this site, it is $200 for 15 days, feel free to contact me for further details - steve [at] mediabuyerforhire.com.

A good friend and peer of mine (Dan Vassallo of TrafficBuyer Digital) that is a specialist in SEM had this article recently published on the Co-Reg Insider. I figured I would give him some props and a little plug to all of my readers, enjoy!

Using Paid Search to Drive More Effective Lead Generation

By: Dan Vassallo

Outside of co-registration search marketing provides one of the most effective and efficient tactics for generating leads online. Search provides and audience of users who are actively looking for something, intent on finding information important to them. Paid search marketing provides you an opportunity to reach these users with a relevant message tailored precisely to their needs through a performance-based model. Success in search marketing is not about getting the most clicks to your site, but getting the most qualified users to click on your ads and fulfill the actions you're looking for them to take. (To read the rest, click here)

Advertisers Weigh in on BT
July 19, 2006
By Dawn Anfuso More by this Author
We asked some Amelia Island iMedia Summit attendees their thoughts on behavorial targeting. Here's what they had to say.

What is the greatest advantage of behavioral targeting? In what part of the campaign process does it make the most sense?

Christine Bensen, Vice President, Media, Modem Media: One of the great strengths of behavioral targeting is that initially, it is a relatively easy sell. It makes logical sense. "We are going to use observed behaviors that have historically resulted in certain activities, as a predictive methodology to determine what will work for you." That statement is difficult to argue with until you have an experience to the contrary.

Stephen D. Kempisty, Director, Business Development, Flatiron Media: Behavioral targeting allows you to reach a consumer that has exhibited tendencies towards a specific behavior outside of the normal context for that behavior (i.e. beer ads to males in Webmail).

Lee Slovitt, Media Supervisor, Heartbeat Digital:Reaching users outside the "norm"-- you can give them a relevant ad in content unrelated to the brand.

Mark N. Dorf, Managing Partner, Acuity Media Group:One modality today with behavioral targeting… publisher side and network side. Network side behavioral targeting allows an advertiser to re-target and re-message a user. I am bullish on the ability to do sequential messaging and see a large growth area with that opportunity. Publisher side behavioral allows an advertiser to reach a consumer in areas that could be less expensive but just as targeted. For example, advertiser xyz is targeting the travel market. They want to place their ad on a website that has a travel section and (a) that section is sold out or (b) the CPM is too high to get the return the advertiser needs. These publishers can provide the advertiser the ability to reach the consumer that visited the travel section in another area knowing they have demonstrated a propensity to the travel section, thus having a higher probability of being receptive to their message at a better price point. Another potential added benefit is the advertiser won't be in a cluttered environment with many competitors most likely.

Jack Goldberg, President, Windy City Advertising, Inc.:Lower costs to reach the same target audience when they may not be expecting our message. This can also lead to less competitive ad clutter for our client's message.

Erik Harbison, Director of Performance Marketing, Refinery: Advantage-- being able to leverage existing offline audience data to develop targeted categories. This data will help validate if their audience's behavior offline matches online.
Assuming a client does not have much audience data, behavioral targeting could work best at a later phase once audience behavior is validated. With existing audience data, behavioral targeting would work best at launch of a campaign.

Is there a downside to BT? If so, what?

Christine Bensen, Vice President, Media, Modem Media: There are two potential downsides that come to mind. The first is the potential for it not to work, for a particular campaign, resulting in a loss of faith for the technology itself. The second is the possibility for another privacy scare in the public sector-- whether or not it is warranted.

Stephen D. Kempisty, Director, Business Development, Flatiron Media: It doesn't always work for DR advertisers; and can be a shock for some consumers if they realize the ads are being targeted towards them.

Lee Slovitt, Media Supervisor, Heartbeat Digital:Some users may wonder and find it offensive, but for the most part I think it's a good thing.

Mark N. Dorf, Managing Partner, Acuity Media Group:Over promising what it can do.

Jack Goldberg, President, Windy City Advertising, Inc.:Privacy concerns.

Jason Weidner, Director of Performance Marketing, Refinery: I believe that it is packaging unsold inventory -- ROS if you will -- with a fancy new buzz name. It is great for publishers, but in my mind, not too proven for advertisers.

Erik Harbison, Director of Performance Marketing, Refinery: While behavioral targeting has been around for a while, it still struggles to be more widely accepted by agencies. As of recent, it appears that anyone can start a behavioral targeting company, state that it is "different from ad.com" and ask for marketing dollars. Partnering with one rotten apple may ruin the reputation and adoption of behavioral targeting as a staple channel in an online marketing mix.
What's the next generation of targeting going to look like? What technologies and platforms should marketers look to embrace via BT?

Stephen D. Kempisty, Director, Business Development, Flatiron Media: I believe the next generation of behavioral targeting will be shaped by consumer's search behavior. This will influence how ads are served to them across a network or portal. Technologies and platforms may start speaking to each other more as technology providers distribute their cookies in new ways and form partnerships with publishers and ad-serving companies.

Mark N. Dorf, Managing Partner, Acuity Media Group:Marketing in the search field will be very popular-- the ability to re target someone that visited you from Google or Yahoo! for example and did not take the action you wanted. This is where sequential messaging will be a very powerful tool to use.

Jack Goldberg, President, Windy City Advertising, Inc.:I think targeting may evolve to permission being granted by consumers to show ads on content that is relevant to them. The control has to be placed in their hands so they can have the ability to see what information about them is being disclosed. They also must be allowed to share only the information they are comfortable disclosing. If I am in the market for a new car, I am more than happy to be served ads about new car deals. On the other hand, if I have an illness I do not want insurance companies or other prying eyes to know about this very private matter as it may affect my being approved for a new job or insurance coverage.

Erik Harbison, Director of Performance Marketing, Refinery: In addition to "targeting people" via banners, behavioral targeting companies are now focused on "re-marketing" to search traffic with text ads that appear similar to Google ad words listings. This appears to be a fairly new and untested technology. Networks are still gathering case studies for release. Only time will tell.

Dawn Anfuso is senior editor, iMedia Connection. Read full bio.