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How small retailers can make the new Google approach work
Initial concerns that Google Inc.’s new impression-based CPM ad program will minimize the marketing strategies of advertisers participating in its traditional pay-per-click ad program are abating.
Announced two weeks ago, Google’s CPM ad program, which allows for the inclusion of graphics in a display ad, lets advertisers bid on the price per thousand impressions and target those ads to specific affiliate sites. The program, which is tied to keyword searches, is currently in beta testing. CPM ads will not appear on Google’s home page.
At first blush, the program appeared to be tailored specifically for deep-pocketed advertisers such as Coca-Cola Co. and Procter & Gamble, whose marketing strategies are centered on brand awareness, rather than small and mid-sized Internet retailers intent on pulling traffic into their web sites through pay-per-click ads to directly stimulate sales. Small and mid-sized Internet retailers have enjoyed great success with Google’s pay-per-click model without having to break their ad budgets, and essentially built Google’s advertising business.
After digesting the details released about the program so far, search engine marketing experts and some Internet retailers say the new program does not necessarily pose a competitive threat to Internet retailers with modest ad budgets.
“CPM will allow for small players to advertise in a bigger arena and compete directly against major corporations, if that is what they want,” declares Danielle Leitch, vice president of marketing and analysis for MoreVisibility.com, a Boca Raton, FL-based search engine marketing company. “This plan is really no different from keyword buys; it all comes down to what an advertiser can afford.”
While deep-pocketed advertisers may be able to pay top dollar for premium positioning, Internet retailers with limited ad budgets can still counter those marketing plays by running banner ads on the same affiliate site, albeit in a lower position. “The ads can run during a specific season, be used to market a specific promotion or run for however long the ad budget allows,” continues Leitch.
The time for Internet retailers to get the most bang for their ad buck from Google’s CPM ad program will be immediately after the program rolls out.
“Anytime Google or Yahoo announce a new marketing feature, the most cost effective time to participate is usually right away,” explains Neil Kugelman, CEO of Goldspeed.com, a Lynbrook, NY-based online jeweler. “Once the initial dust settles, the copycats jump in and drive up the price. After another six to 12 months, companies start to perform hard cost analysis on what they are buying and that usually brings prices down, but not to the level they originally were.”
Kugelman adds that Google’s auction-based model for CPM display ads can also benefit Internet retailers of all sizes by showing them the true market price for a CPM ad, as opposed to a flat fee set by the publisher. Internet retailers can use the auction process to determine how much competitors are spending and what kind of return they are likely getting on their ad dollars.
“If a competitor is throwing out a lot of ad dollars, but not generating corresponding sales, it can help with setting your own marketing strategy,” says Kugelman. “The auction model provides good market intelligence and helps companies analyze the true cost of their ad strategy.”
How small retailers can make the new Google approach work
Initial concerns that Google Inc.’s new impression-based CPM ad program will minimize the marketing strategies of advertisers participating in its traditional pay-per-click ad program are abating.
Announced two weeks ago, Google’s CPM ad program, which allows for the inclusion of graphics in a display ad, lets advertisers bid on the price per thousand impressions and target those ads to specific affiliate sites. The program, which is tied to keyword searches, is currently in beta testing. CPM ads will not appear on Google’s home page.
At first blush, the program appeared to be tailored specifically for deep-pocketed advertisers such as Coca-Cola Co. and Procter & Gamble, whose marketing strategies are centered on brand awareness, rather than small and mid-sized Internet retailers intent on pulling traffic into their web sites through pay-per-click ads to directly stimulate sales. Small and mid-sized Internet retailers have enjoyed great success with Google’s pay-per-click model without having to break their ad budgets, and essentially built Google’s advertising business.
After digesting the details released about the program so far, search engine marketing experts and some Internet retailers say the new program does not necessarily pose a competitive threat to Internet retailers with modest ad budgets.
“CPM will allow for small players to advertise in a bigger arena and compete directly against major corporations, if that is what they want,” declares Danielle Leitch, vice president of marketing and analysis for MoreVisibility.com, a Boca Raton, FL-based search engine marketing company. “This plan is really no different from keyword buys; it all comes down to what an advertiser can afford.”
While deep-pocketed advertisers may be able to pay top dollar for premium positioning, Internet retailers with limited ad budgets can still counter those marketing plays by running banner ads on the same affiliate site, albeit in a lower position. “The ads can run during a specific season, be used to market a specific promotion or run for however long the ad budget allows,” continues Leitch.
The time for Internet retailers to get the most bang for their ad buck from Google’s CPM ad program will be immediately after the program rolls out.
“Anytime Google or Yahoo announce a new marketing feature, the most cost effective time to participate is usually right away,” explains Neil Kugelman, CEO of Goldspeed.com, a Lynbrook, NY-based online jeweler. “Once the initial dust settles, the copycats jump in and drive up the price. After another six to 12 months, companies start to perform hard cost analysis on what they are buying and that usually brings prices down, but not to the level they originally were.”
Kugelman adds that Google’s auction-based model for CPM display ads can also benefit Internet retailers of all sizes by showing them the true market price for a CPM ad, as opposed to a flat fee set by the publisher. Internet retailers can use the auction process to determine how much competitors are spending and what kind of return they are likely getting on their ad dollars.
“If a competitor is throwing out a lot of ad dollars, but not generating corresponding sales, it can help with setting your own marketing strategy,” says Kugelman. “The auction model provides good market intelligence and helps companies analyze the true cost of their ad strategy.”
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