Archive | Pricing

How to Measure and Evaluate the Efficiency of Your Pricing

Segmentation in all pricing helps companies develop targeted plans for different groups of customers. Segmentation can be based on demographics, firmographics, or behavior. From Scout® Research’s benchmarking, demographic and firmographic segmentations consistently underperform behavioral segmentation in yielding the maximum revenue. How much opportunity exists to increase revenue from behavioral segmentation? The following infographic illustrates how to measure and evaluate the efficiency of your pricing. The infographic analyzes the efficiency of pricing for an online market research service where pricing is based on user roles, for which one specific role is defined to be $100/user/month. The service has 20,000 of these specific users which generates $2,000,000 of revenue per month. As with every service, users have different behavioral patterns that can […]

The Faulty Comparison of “Analog Dollars” to “Digital Dimes”

This post originally was written for and appeared in adexchanger.com. The comparison of “analog dollars” to “digital dimes” is often an attempt to explain that paltry digital revenue is coming from commoditized advertising prices. When you dig deeper into rate cards, the reality is quite the opposite – digital rates are more expensive than print! The digital dimes issue does not stem from pricing but from size and quality of audience. Here some math to explain. I reviewed individual media kits from 10 B2B publishers that contained both print and digital advertising units to get apples to apples comparison of print vs. digital within one publisher. A consistent theme emerged – digital advertising rates were higher than print advertising rates. […]

The Real Price of Advertising

Audience metrics are the key for publishers to increases prices and advertising revenue. In fact, right now most publishers are charging more than they think for advertising, because who receives the page views dictates the real price of advertising. But without the right metrics, they are not able to package and price their advertising inventory to maximum revenue potential. Most publishers sell advertising inventory based on aggregate measures of page views and unique visitors, assuming that views are distributed evenly among visitors. But here’s the reality. First, a small number of loyal visitors (“Fans”) consumes a disproportionately large number of page views (and ad impressions), while a large number of one-time visitors (“Fly-bys”) consumes disproportionately few and a small number […]

Total Disaggregation: The 80/20 Rule of Online News

This is the final post in my series about the transition of print newspapers to online news. In print news, distribution costs led to scarcity, allowing publishers to create an audience and a marketplace for advertisers. Online distribution costs are nearly free, producing massive competition for audience engagement and a disaggregation of the newspaper business model. In addition to new competition for audience engagement from social networking and games, news publishers have to increasingly compete with themselves – the total disaggregation of the newspaper business model. This becomes clear when examining the articles read by an online-news audience. Rather than purchase multiple newspapers, print news readers consume local, regional, national, and international news from one paper. In online news however, […]