Performance-based Advertising - Metrics

Metrics

Various types of measurable action may be used in charging for performance-based advertising:

• Many Internet sites charge for advertising on a "CPM" (Cost per Thousand) or Cost per impression basis. That is, the advertiser pays only when a consumer sees their advertisement. Some would argue that this is not performance-based advertising since there is no measurement of the user response.
• Internet sites often also offer advertising on a "PPC" (pay per click) basis. Google's AdWords product and equivalent products from Yahoo!, Microsoft and others support PPC advertising plans.
• A small but growing number of sites are starting to offer plans on a "Pay per call" basis. The user can click a button to place a VoIP call, or to request a call from the advertiser. If the user requests a call, presumably they are highly likely to make a purchase.
• Finally, there is considerable research into methods of linking the user's actions to the eventual purchase: the ideal form of performance measurement.

Some Internet sites are markets, bringing together buyers and sellers. eBay is a prominent example of a market operating on an auction basis. Other market sites let the vendors set their price. In either model, the market mediates sales and takes a commission - a defined percentage of the sale value. The market is motivated to give a more prominent position to vendors who achieve high sales value. Markets may be seen as a form of performance-based advertising.

The use of mobile coupons also enables a whole new world of metrics within identifying campaign effect. There are several providers of mobile coupon technology that makes it possible to provide unique coupons or barcodes to each individual person and at the same time identify the person downloading it. This makes it possible to follow these individuals during the whole process from downloading until when and where the coupons are redeemed.