HPM in the Press & News

Letter to the Editor of BusinessWeek - 1236059940

Ad Networks Are Transforming Online Advertising

Networks that buy space on lots of tiny sites are changing the business—and putting pressure on ad rates

March 2, 2009

Dear Editor,

One of the negatives cited in your March 2 article “The Squeeze on Online Ads” – the inability to tell advertisers exactly where and when their messages will appear – can be turned into a positive through per-inquiry (PI) advertising, also known as pay-per-lead (PPL) or direct-response (DR) advertising.

Like the advertising networks, a PI ad agency has relationships with media outlets and access to their unsold inventories of ad space or time. It will place ads in those spots at no charge to the client. But rather than paying for clicks, the client pays only for firm responses. What qualifies as a response is negotiated between client and agency. Packages can be structured for a variety of results: per inquiry (any response), per call or Web inquiry, per lead (name and contact information) – even per sale.

A PI ad runs until the agreed upon number of responses is reached, allowing the advertiser to establish a stable, predictable cost per lead (CPL) without the burdensome and unpredictable expense usually associated with buying advertising – a crucial benefit when money is tight.