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 Beep Good Practice Knowledge Base


Web advertising, like the Web itself, is new. When the Web first began, traditional, mainstream companies had no use for advertising in this medium. The birth of advertising on the Web began with "link trades" whereby two Web sites would provide hyperlinks to the other party's site.

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As the Web grew, link trades proliferated to include commercial advertisers. As the Web's original population was chiefly avid computer enthusiasts, computer companies were the main commercial presence. Computer companies could place links anywhere and be assured of a targeted audience-computer enthusiasts.

The Web soon reached a wider audience. Advertisers from other industries entered the Web advertising fray, paying real money in exchange for hyperlinks. Furthermore, advertising became more formal, with highly designed banner ads replacing simple linked text.

Cybergold, a new Internet advertising company, wants to establish a new paradigm for the Web. Cybergold expects to profit by becoming a primary brokerage of new advertising and selling its enabling pioneering technologies to other potential Internet partners. Cybergold faces vast challenges since it must demonstrate the viability of both its advertising concept and its enabling technology in order to survive.

The Problem

Widespread Web advertising has spawned the need for effectiveness and pricing measures. How much does it cost to reach an appropriate and interested audience? How can an advertiser be certain the audience has been reached?

Today's dominant pricing model is measured in CPM, a standard advertising industry measure for cost per thousand. This figure attempts to describe the cost of exposing an advertisement to 1,000 people through traditional media such as newspapers, television, and radio spots. On the Web, the CPM paradigm is less well understood and explained; however, it is an industry standard that advertisers are used to, so CPM on the Internet will not disappear quickly if at all.

At the present, Web CPMs range from around $10 up to $150 for popular sites like HotWired. This fee per 1000 consumers is not small-a CPM of $15 translates to $15,000 for a four-week placement. Lower CPMs generally indicate high-volume, untargeted traffic. Sites with a higher CPM generally have a more loyal following and let advertisers target a more specific audience, such as those reading The Wall Street Journal on-line.

Other quantitative measures include:

  • Transfer rates measure the number of clicks on an ad, indicating how many viewers are paying attention to that ad. Through the act of clicking on the ad, Impressions-where the number of users who call up a page with an ad banner on the ad are counted.

  • Impressions may also be referred to as page views.

  • Click-throughs-where the number of users who click on an ad banner are counted. Click-through rates range from 1 to 10 percent of page views.

  • Keyword searches-where search engines sell banner ads for particular, popular searches on their site. Whenever anyone searches for Apartments on any of the major search engines, for instance, a RentNet banner will appear.

  • Sponsorships - where sponsors generally obtain prominence or exclusivity in particular areas on a Web site. This category includes entitlements-getting a sponsor's brand into an area's title.

  • Joint developments-where an advertiser's brand and products are integrated into the content of the site itself, often in a game or narrative, blurring distinctions between advertising and editorial.

The Outcome

Cybergold was founded by Nat Goldhaber in 1995 and based on the attention theory work of his philosopher cousin. Nat's cousin believes our global society is turning into an attention society where the largest payment anyone can give is his or her attention. Cybergold matches this concept of attention as a valuable commodity with the interactive, multimedia, and user tracking capabilities of the World Wide Web.

Cybergold is a group of very well known experts with an unproven concept. Whether Cybergold can live up to the brand equity built on its board's reputation and unique idea remains to be seen. However, this strategically-created entity is sure to draw both immense publicity and speculators by the droves.

The basic Cybergold concept is to have advertisers pay potential consumers to focus on product information. The concept seems foreign and unworkable based on today's understanding of advertising as unwanted, broadcast noise. Cybergold hopes to propagate this "payment for attention" advertising concept by changing all the rules of the current game.

Cybergold members fill out an initial questionnaire to specify their profile and areas of interest.

Every time consumers log onto Cybergold, they allow the system to glean more information about them. Cybergold tracks information such as time spent within an ad, which ads are chosen and in what order, where the consumer chose to click within ads, what time of day the consumer logged in, and whether the consumer answered the ad questions and/or participatory information correctly and tracks the evolving preferences of this consumer through the life of the relationship.

Second, Cybergold will harness the interactive and multimedia capabilities of the Web to make the advertising entertaining. Cybergold will provide members with three minutes of information, games, and a quiz about the content of the site they just viewed. This means that consumers will consider Web advertisements to be a fun activity worthy of their effort and attention.

Third, Cybergold will only charge advertisers for consumers who actually view and participate in their Web advertisements. A member must complete an activity or quiz within the Web advertisement to be paid for his or her attention.

Finally, Cybergold will pay members for their attention in "Cybergold" via cash, airline miles, or charitable donation. They are looking to change this payment scheme in the near future when a better, more global e-cash payment scheme emerges as the Internet standard.

If the concept works, Cybergold will open up a whole new concept in advertising with many potential avenues of growth for the company.