Tuesday, February 24, 2009

CPMs are real

We've talked a bit about calculating CPMs. Do know....it's not just some textbook thing that
I've made up. Here's an article from Media Post, reporting that SQAD will start using CPM to measure effectiveness of online ads. Prior to CPM, click-through or cost-per-click were used.

While you're at it, take a look at the article and some info about SQAD.

Full article link: http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=100865

Firing SQAD: Data Firm Sets 'CPM' As Online Ad Metric
Joe Mandese, Feb 24, 2009 07:31 AM
In a move that will likely align the ROI of online advertising more closely with that of traditional media such as television, an influential source of media marketplace data this morning announced it will use Madison Avenue's long-standing CPM, or cost-per-thousand, metric as the "currency" for tracking online advertising. The announcement by Tarrytown, NY-based SQAD, comes as other influential industry source are trying to reshape online media in the image of television, and as online industry insiders wage their own debate about the best metrics for evaluating the efficacy of their medium.

Instead of CPMs, which value a medium based on how much it costs to reach a thousand audience impressions, online media often is valued based on results or actions more akin to direct response of "performance"-based media, including CPC (cost-per-click) and CPA (cost-per-action) metrics.

But SQAD's initiative comes as Madison Avenue is racing to standardize its buying metrics for television, abandoning the decades-old CPP, or cost-per-point (as in TV rating points) metric for spot and local TV buys, and standardizing all local and national TV advertising deals around the CPM.

More about SQAD: http://www.sqad.com/

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