Categories: MediaOnline Advertising

CPC statistics are not a true reflection of performance

I agree with the contents of “Why Call Centers & Live Chat Are Killing Paid Search Conversions” blog post, it applies to India for sure.

I have always believed that advertising on the net does a lot more than just referring clicks to the client’s site. For beginners the popular models of advertising on the net are,

CPC – the site is paid for every click. Sites that are desperate indulge in fraud clicks but these days advertising platforms are able to identify fraud clicks.
CPM – the site is paid forever 1000 impressions. I believe CPM builds the brand for the advertiser and the surfer ‘may’ buy something offline. After all this is exactly what happens with print ads.
CPL – the site is paid forever ‘lead’. i.e. when the surfer ‘fills a form’ (yawn!) only then the site gets paid. I am not a big fan of CPL.

The share of CPM in the advertising pie in going down.

We in India like to “touch & feel” a product before we buy. What does this have to do with CPC? Well, I see an online advertisement for an LCD TV, instead of buying online I decide to visit the local electronic store, bargain and then purchase the TV. The site on which I saw the advertisement never gets credit (provided they had a CPC or CPL arrangement with the TV vendor).

When it comes to Print media, how does an advertiser really know if the advertisement in newspaper #1 or #2 performed? I doubt they can track it unless they have discount coupons in each advertisement. Just because you paid a higher rate for advertising in a particular newspaper I don’t think it is safe to assume it will perform better.

Many surfers in India still don’t have the trust factor in the entire system – i.e. they hesitate to use credit cards online because of misuse by the e-commerce vendor or a hacker. Yes, there is a possibility of misuse but same is the case with the offline vendors too. When you swipe your card at the gas station or a restaurant, you are revealing/exposing the credit card details to that offline vendor, who in turn can misuse it.

Why am I writing about e-commerce? These days few e-commerce portals in India display their phone number to place an order (at times toll-free, we like FREE, even though very few realize we are paying for it).

A surfer sees an online advertisement for a product, instead of buying it online he buys it offline (hmm..is placing an order on the phone treated as offline or online? Dunno. All I can say is VCs love when you have an online plus offline solution).

When you place an order over the phone the site which had displayed the online advertisement of that vendor may not get the credit if the site had a CPC or CPL deal. The vendor assumes that the site is not giving them enough referrals, which is really not the case.

Unfortunately, the performance stick looks longer and thicker in the hands of online advertisers. Ouch! It hurts.

BG Mahesh

Internet application ideator and implementor. Been there and done that since early 1990s. I like to present data to the common man in the simplest manner on the internet.

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View Comments

Shubham says:

June 2, 2009 at 10:16 pm

Nice article ... completely true. I feel internet has scope to grow and for now CPC models are doing the revenue job for smaller advertisers.

For bigger sites / blogs they are actually getting near the CPM model like Labnol.org and other newspaper sites.

P.S. Got to ur blog through WATblog :)