Category Archives: Media

Digital Advertising: The Cost-Benefit Analysis of Behavioral Targeting & User Data

Just some old food for thought I wanted to put out:  The cost of behavioral data historically averaged between the $1-2 CPM mark (sometimes greater!).  In past reports, I found that using such data resulted in a lift in campaign performance by 10-25%.  For campaigns that utilized this data on advertising placements valued at $1-2 CPM mark, this clearly makes sense.  Your marketing cost is going up by as much as 100% for very little incremental gain.

However, there may be some situations where utilizing data, given the cost makes sense.  Some niche categories like Autos, Retail Oriented locations have CPM’s beyond the $10-30 range.  I recall CPM’s for the mortgage category being as high as $80-100 in some locations!  These may be the situations in which data should be utilized in order to ensure you’re reaching the right audience.  $1 out of $30 is a small enough fraction where reaching the right users becomes more critical given the cost of inventory.

One interesting thing I have seen in recent times from publishers/vendors is that they have begun to recognize these disparities between performance pricing — and they are beginning to provide more transparency in order for agencies and advertisers to justify cost.  Additionally, some data providers are finding ways to attain and share data at rates that make sense.  However, sometimes one may wonder whether the quality of the data is only as good as the amount you pay for…

Facebook ‘dis-likes’ Google?

The latest story regarding Facebook’s consideration of generating bad press on Google and privacy concerns is an interesting twist related to an Adage article in August 2010.  In short, that Adage article articulated Google’s concerns regarding the fact that consumer traffic was shifting dramatically towards social sites (such as Facebook).  To address that situation and maintain their market share of users, Google has focused a lot of their latest developments in the social media space (as an example, see Google +1).

Facebook likely took Google’s focus on the social space as a challenge — which is fair for Facebook to recognize and create an action plan.  However, to hire a PR firm and highlight issues with another company is an ill-conceived plan….  especially a much bigger company with a more experienced management team (to go off on a tangent, why is there not a similar outrage when politicians run attack ads all day?).  This mis-step unfortunately is one of many by Facebook, and one can hope they focus more on innovation and improving their product instead.

The New York Times: Digital Subscriptions

The New York Times recently transitioned back to a subscription model (see article).  A couple highlights regarding the new model:

  • The NYT is still allowing users to have free access to 20 articles per month.
  • Readers who find NYT articles through links (from search engines, blogs and social media) will still be able to read those articles.
  • Price Models:
    • NYTimes.com + Smartphone App:* $3.75 per week (billed every 4 weeks at $15.00)
    • NYTimes.com + Tablet App:* $5.00 per week (billed every 4 weeks at $20.00)
    • All Digital Access:* $8.75 per week (billed every 4 weeks at $35.00)

Although I will miss the ad-supported content, I understand the need for the Times to find a solution to cover its expenses.  Producing news at the rate and quality in which they do requires a significant expense, and continuing to do so was likely not a viable solution for them in the long term.

From my perspective, when the Times converted to the ad-based only model, they encountered the following challenges: Continue reading