Iggy’s Got Game — Meeting with AdBrite’s CEO and Moving Beyond CPM

Is there anything really new in the Internet marketing Game, at least that makes money?  Ask most people and they’ll tell you how smart they are…blah blah blah.  That happens in markets that are mature, at the top of the bell curve, and lacking innovation.
Iggy FanloAs I sat down to lunch in San Francisco with an old high school classmate, I didn’t know what to expect.  Iggy Fanlo is the CEO of AdBrite, and was an integral part of the Shopping.com team that sold that business to eBay for over $600 million dollars.
We didn’t really know each other in high school, and it was just a fun time to sit down with someone from back in the day.  Until we started talking about Internet marketing, and what he’s coming up with at AdBrite, what I consider is a part of a new and exciting future for this business.
What’s exciting is not just what he’s working on, it’s the look in his eyes…this guy loves the Game and is trying to reinvent the way we all buy and sell ads, an ad exchange instead of another “ad network” basically selling the same space under a different name.
The Game is changing, and Iggy’s definitely got Game, because he doesn’t believe that his brains, or success, or reputation defines his success…he’s opening up the ad game, like an open source system for buying ads.

While I can’t yet give you the specific details, just think of buying ads like a real time bidding process, giving you the best time, keywords, and ad space to target (and while Google does offer bidding on search, you just don’t have the control — or scale beyond just search — that this system promises to unleash).

What’s most interesting is the move beyond CPM as a measure of buying ads.  In the old days of ads driven by magazines and TV, advertisers would pay premium CPM for ad space, and less money for remnant.  Iggy pointed out the insanity of this process, because basically it’s the same ad space, one priced at 10% of the other.  It’s an old sucker game that is changing, partly driven by the ad network phase and partly because all advertisers are waking up to the reality — ads must have a measurable result, not based on volume of impressions but on the activity generated.

For those in the performance marketing space, you know this and you understand the insanity of CPM;  you can’t pay more than $1 CPM to profit.  The old branding dollars are also getting tied into performance, measurable results, and are realizing that just paying high CPM prices makes no sense.

It’s a reverse challenge;  the higher CPM you pay, the less people you reach — while ideas like behavioral and contextual marketing rule, the reality is you get less impressions, and it’s tough to scale.  So how do you buy ads, scale, and profit/get your brand out there?

You pay less CPM (cost per thousand impressions) and spread your bets around morepartners.  And start thinking of terms like RPM (revenue per thousand impressions) or the traditional eCPM (effective CPM or Net CPM you earn per thousand impressions) and you dare to build in measures that validate your ad buy.

While common sense to all affiliates and performance marketers, this mentality is finally starting to spread beyond the direct marketers and into the general ad buyers, both for brands and for niche markets.  If you want to get more customers, you have to think about getting more visitors, and there is only so much you can get from search…

Now that the ad network’s temporary rise and fall have decimated the illusion of CPM online, you find some publishers wanting to get more money for their space and blaming the ad networks for gutting their value.  I think Iggy and I share a different viewpoint;  the gutting is part of the process.  And CPM is a lousy way to measure ad space value…monetization is what it’s all about, and you can’t monetize by measuring volumes of impressions.

We all need new tools, more than just bidding on keywords;  timing is so essential for creating sales, and also creating interest.  As marketers, we have knowledge but most of us don’t know how to use it.  Variables like keywords, time spent researching, and surfing history can combine to deliver this knowledge, yet at the cost of privacy (a cost that doesn’t seem to be favored in the current political climate).

For example, Iggy shared a story from Shopping.com, who found that most people buy digital cameras between noon-5 pm during the weekdays.  That was the best time to buy an ad, driven by the behavior of the customer — and a behavior that is aggregated and doesn’t violate the privacy of the individual.

So if you are selling digital cameras, buying the keyword in the middle of the night is crazy…unless of course it works for you.  Yet if the buying behavior is correct, you’d want to know how much to pay, not just by keyword but by time of day, and the site(s) that draw the right customers that you can convert at the right time.

Maybe I’m drinking the AdBrite kool-aid because of the high school reunion aspect of our meeting, or maybe it was just meeting someone who loves this Game like I do.  So many of the marketers today just brag about the money, when those who really create breakthroughs love the Game.

Because that’s the difference between fly-by-night marketers and breakthrough entrepreneurs;  one replicates what others do, and the other replicates and adds something to the process to empower the market..and knows that is not about your ego, it’s about your system’s ability to let marketers do what they need to do without raping, pillaging, and plundering the audience (unless you are flogging.)

Which type are you?

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