Wednesday, October 15, 2008

Cost per Engagement...

It appears the hottest new online media buzz term is “Cost Per Engagement”. Rich media network, VideoEgg has offered this up to the industry as a new pricing structure that is based not on impressions or click thrus but rather on the various types of interaction that can be achieved through rich ad units.

I LOVE the ad they used to launch it…

Today’s rich ad units include roll-overs, polls, games, video and flash demos. Each one of these points of interaction can be valuated and priced accordingly.

I’ll have to think long and hard about how this pricing differs from the more traditional models we’ve seen. At the end of the day it feels a bit like we’re collapsing the click and going straight to the advertiser’s content. After years of grumbling about poor ad executions being responsible for poor site performance, this may be a great way for publishers to place the onus of the ad’s success back on the advertiser side.

The advertisers will have to work out the varying levels of value attached to their levels of interactivity and as a result, we may see an increase of multi-layered rich media units offering a number of engagement opportunities.

I suspect that advertising agencies will have a lot of fun developing these strategies and advertisers will get a much deeper understanding of what kind of engagements lead to quicker acquisitions as they home in on metrics that cater more specifically to this model.

There's a great white paper on their site that digs deeply into the subject.

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