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Greg Papacosta

A Bean-Counter's Apology
By Greg Papacosta

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Last weekend, I had one of those "eye-opening" moments regarding online advertising -- and not just once, but twice.

As an accountant, I've been having a difficult time understanding the issues my colleagues were concerned about regarding CPA and CPC campaigns. Although I know the subject has become more popular during the past six months, I'm a bean-counter! I love results that can be plugged into a spreadsheet, statistically analyzed and spit out in a quantitative analysis. I've been asking myself, "What's the issue with CPA and CPC?" Bean-counters hold marketing departments accountable for Return On Investment (ROI) on all of their advertising and marketing projects. If they don't know a campaign's ROI, then they'll never run the campaign again. So, why shouldn't advertisers get the same feedback? Perhaps my thinking was wrong.

When did advertising become such a science? Sure, email newsletters offer advertisers the ability to target readers, measure responses and gather immediate feedback, but don't they also offer the same intangible benefits that traditional media offer? What happened to the idea that advertising creates brand awareness and builds positive images for consumers? If it were all about clicks, then the fake cursor ad and the fake drop-down box ad should be every advertiser's dream.

However, on the other end of the spectrum, an obsession with metrics has pushed some publishers into creating bogus clicks by using clicking software just to generate money-making clicks. These "schemes" by the unscrupulous are just designed to deliver clicks and it's giving the industry a bad name.

These "pay for performance" advertising campaigns have tarnished the online-advertising medium. Not because ROI shouldn't be measured, but because the majority of the risk of advertising online has been wrongfully pushed off onto the publishers.

Why have "pay for performance" campaigns become so prevalent, and why does risk continue to fall on the small guy?

This is when my second "eye-opener" occurred. One word: Yahoo! The leader in online advertising was so busy enjoying its press clippings, it forgot that revenue was important, too. Yahoo! became fat and happy. As a result, advertisers look at Yahoo!'s shortfall in advertising revenue and assume Internet advertising doesn't work. *But it does work!*

This weekend, I read a few articles describing Yahoo!'s revenue problems. A recent Merrill Lynch report suggested Yahoo! had it too easy for too long and now lacks product and service innovation. Other articles suggested Yahoo! was too arrogant and waited for advertisers to knock on its door. If only we "small players" could be so lucky.

Because of Yahoo!'s failure, advertisers are now questioning the effectiveness of online advertising altogether and are becoming less motivated to test or continue advertising. Those who are advertising see the "bleeding" as an opportunity for them to push the risk of advertising onto the publishers. This may be the online industry's fault for hyping click-through rates and then not being able to meet those expectations.

However, companies in the industry share the blame, because they failed to educate advertisers about all of online advertising's benefits. Online advertising is not a science. It's not just about clicks, acquisitions or ROI. It's more than branding and building relationships with the consumer. Online advertising combines all these things, and *it is NOT always measurable.*

As much as I (a bean-counter) would like to measure it, and as much as I would like to define the return on marketing and advertising dollars and pop it into a financial spreadsheet, it's not going to happen. I now realize this.

I hereby apologize to all of those marketing people I've worked with who've had to deal with me in the past regarding this issue. ;)

Ezine-Tips for March 21, 2001

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