There are a few pricing models for online advertising and we all know them well: CPM (define), CPC (define), and CPA (define) being the major ones.
But recently, Ari Rosenberg brought me a very novel and intriguing pricing model. It’s so unique that he patented it and has some pretty major advertisers and publishers using it. It’s called IPC, or impressions per connections pricing.
Maybe we’ll all be buying media with this new pricing structure some day. Here’s what Ari had to say about it.
Harry Gold: Ari, please tell me a bit about your background and how you came up with IPC pricing.
Ari Rosenberg: I used to be sales manager at Snowball.com (we changed our name to IGN in 2001). We had three “hub sites” at the time, including IGN.com, Chickclick.com, and Powerstudents.com.
While on our sites, I had noticed how often we were running ads that didn’t seem to fit. Our sales folks were great at pumping in ads that made very little sense for the audience our brands attracted (Ameritrade running on Chickclick.com, for example).
At the same time, I also learned firsthand what it was like to have a campaign I sold get canceled because the ads did not perform well. This was a strange feeling coming from traditional media sales and I was resentful that revenue I booked would cancel because “their” creative didn’t work on my site. I knew there had to be a better way to formulate a deal structure where everyone could benefit and performance on all sides was incentives.
