In a well considered post, Matthew Buckland questions some aspects of online advertising.
He refers to 0.3% CTR (Click Through Rate) in online advertising as the target being chased. I think 0.3% is actually a relatively high CTR. I venture that it is still a significantly higher per-instance follow through than conventional print advertising can boast in most cases.
He points out how the ROI(Return On Investment) favors more expensive products.
I’m not sure I agree with the following argument that the internet is not as suitable a platform through which to market more inexpensive products – but the term ‘market’ is, I believe, the key (and the argument does hold if we consider only old-fashioned random banner ads). Yes sophistication plays a role but not just the sophistication of the bells-and-whistles, the sophistication and responsiveness of the business model is critical as well.
Enter the CPA (Cost Per Action) model. This is where so-called affiliate marketing‘s ‘pay-for-performance’ model comes into play. When publishers are rewarded based on what transactions result from traffic they generate to a merchant’s store, they suddenly have an incentive to not just ‘slap on banners’ but to use the technical sophistication that the net does allow to make sure the right people get to see the right offers.
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