The new world of digital media has given us a plethora of new vehicles for delivering our message to a captive, engaged, and targeted audience. From mass reach banner campaigns that build brand awareness to paid search that drives sales and everything in-between, a smart marketer decides which strategies and tactics will best achieve a specific marketing objective.
When reviewing our options, we often find eNewsletters as a viable vehicle to reach a niche target audience. Because the audience has opted in to receive these emails, we can be assured that our message is reaching the right people.
So the targeting is great, but is there enough reach to justify the cost? Most publishers have decided to price display ads within their regular email correspondence based on the number of recipients. It’s not uncommon for a publisher’s pricing model to look something like this:
62,000 recipients
$30 CPM
Total Cost – $1,860 (62k / 1000 * $30)
There is a major flaw with this pricing model: Open Rate. Most eNewsletters have an open rate between 20% and 35%. Even on the high end, right off the bat you’re almost tripling your CPM. Revisiting our pricing example above:
62,000 recipients
35% open rate
21,700 actual opens/views
Effective CPM ~ $85 ($1,860 / (21.7k / 1000))
Chances are the media buyer who purchased the eNewsletter based on the $30 CPM would have found a more cost effective solution if presented with the effective CPM of $85. The current pricing model would be akin to a radio station determining their pricing based on how many people have a radio in their car.
