Doing the ‘Mendel’ Buy

Some of you may be scratching your heads and wrinkling your noses wondering, “What the hell is a Mendel?” Racking your mind for pages of trade pubs and Internet marketing online newsletters you’ve read, you ask again,”Mendel?”

You think of your 20th century history class you had as an undergraduate and scroll through the names you can remember from The Trial at Nuremberg. You sift through your cloudy mind for names of agency personalities you may have met or read about…”And then, in 1996, Rick Boyce and Bob Mendel…” No, that’s not it, either.

Some of you may have to reach back into the recesses of your minds and look behind doors that haven’t been opened since your sophomore year in high school, maybe even seventh grade science class.

It is no other than Gregor Johann Mendel, the 19th century Austrian monk, that I’m referring to. He’s the guy who discovered and experimented with heredity and genetics. Cultivating and testing over 28,000 different pea plants,he bred and crossbred a variety of plant life to yield what we now call “hybrids.”

Most stringently defined as an offspring that is a cross between different species, genera, or, in rare cases, families, a hybrid can also be a cross between parents of different subspecies or varieties of a species.

They occur in nature, where they serve the important and some might say essential evolutionary function of increasing genetic variety.

Hybrids often have what is called hybrid vigor; they tend to be bigger, stronger, faster and healthier than their parents-like mules bred for their strength. Hybrids are the impetus for evolutionary change, almost always for the better.

What do I mean, then, by applying this to online media buying?

I’m talking about committing the hybrid buy. Or what I’d like to call from this point forward, the Mendel. This kind of buy takes into account a variety of placement and pricing structures and puts them together into one singular buy so that the effort can benefit from the best-of-breed ad models that are available in the marketplace.

The most common (if you can call it common) kind of hybrid buy is cost-per-click (CPC) and CPM. As everyone knows, the CPM is the LCD of online advertising pricing structures (lowest common denominator). A CPC buy is the next most common.

The CPM buy really places all of the risk and exposure at the doorstep of the advertiser. The CPC places the onus on the strength of the creative but shares much of the risk with the publisher. By combining these pricing models, both advertiser and publisher can manage the downside risks of an online buy. This is achieved by the publisher ensuring some resultant cash flow from impressions, and the advertiser ensuring that at least some portion of their dollars are allocated to “pay for performance.”

How do you make this happen, though? Most reps don’t want to talk to you about CPC.

I’ve found this is an approach that can best be taken from a position of strength. In this business, strength is translated as “money.” If I’ve got a decent amount of dollars to allocate, I have better negotiating leverage. (This, of course, is always true when buying anything, from cars to homes to rare pets.)

If I’ve got a $20K budget to spend with a single site, I try to get half placed against CPM and half against CPC. If you have truly compelling creative, and the site is a good match with your advertiser, everyone wins. The site gets paid in full, and the advertiser yields an efficient return, with the CPC portion anchoring a cost-per-action for the effort.

The other kind of hybrid buy I’ve worked on usually can only happen with much larger dollar commitments and a proven track record with the publisher. That would be cost-per-acquisition mixed with CPM/CPC. These are great if you can swing them, but, as I say, they require a serious commitment on the advertiser’s part.

If you’ve got a site that you know works well in sending conversion-prone leads (otherwise known as “qualified”), and you have a good sized budget to work with, negotiate a cost-per-action or cost-per-lead (not click oriented) along with some regular CPM inventory. These deals (though not as simple as vanilla-media CPM buys) are really great if you can strike them. And clients get very excited when they hear “pay for performance” as part of a media plan.

To put together any of these deals, all you have to do is ask. You never know what you’re gonna get unless you run the concept up the flagpole. And don’t take the first response as the final word. These things take some time and some follow-up to become activated. Even if they don’t end up anywhere, you’ve put the concept on the table with the publisher, loosening him (or her) up for the next time you float the idea. And your clients will love that you are treating their money like it was your money, making it work for them as efficiently as possible.

If you do a good job, you could end up with a deal as strong as a mule.

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