Special Report on
Advertising pricing model management
Advertising pricing model management - Trends
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Several pricing models have evolved to dominate the online advertising market. The biggest change over the last few years is the emergence of performance-based pricing, mainly composed of CPC pricing, due to the increasing popularity of paid search. CPM pricing has remained relatively stable in the 40%-50% range over the past few years and has actually seen resurgence over the last two years, driven by new interactive display ad formats, such as rich media and videos. Hybrid models have experienced the biggest areas of decline as advertisers move more toward a strict branding or strict performance pricing format. This is a ...
Revenue share deals are appealing for their simplicity as well as the sense they provide of protecting the advertiser’s bottom line. As long as the commission rates make sense financially, it seems the advertiser can’t lose money. However, the fact that some sales are cannibalized from other channels can change the economics significantly if the degree of cannibalism is material. The reason for this is simple: while the pay-out percentages and discounts may make sense on the incremental sales driven by the channel, the fact that they’re also applied to cannibalized ... Read More
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