IAB claims the vendor's decision to drop CPM pricing for a new model based on customer profiles indicates the shift from quantity to quality in the new data-driven marketing era
Adobe’s decision to move away from CPM (cost per thousand emails sent) campaign pricing to one based on customer profiles is indicative of the rising importance of value-based metrics in marketing, according to one industry group.
Adobe will introduce a new pricing structure for its Campaign email management platform from January that see costs based on customer profiles instead of the more traditionally dominant CPM model. Adobe MD for Australia and New Zealand, Paul Robson, claimed the new model will enable marketers to better rollout cross-channel campaigns with a single solution to support all of their needs.
“Marketers are being held back by CPM. It places the email vendor, rather than the marketer and their customers, at the centre of campaign operations,” he said. “Adobe’s pricing structure for Adobe Campaign sets a new precedent in the industry and helps marketers to experiment and engage with their customers across all channels. It provides full transparency for marketers and ultimately a better, more relevant experience for the consumers they reach.”
Adobe Campaign was launched in September following the acquisition and integration of Neolane.
Interactive Advertising Bureau (IAB) CEO, Alice Manners, welcomed the new cost model and said it reflected the ongoing trend towards value-based marketing metrics.
“Email marketing is in decline and from a revenue point of view, has been declining for some time,” she said. “We do need to look at it, and Adobe is taking the next step by reassessing the CPM model.”
According to the September IAB Online Advertising Expenditure Report, produced by PwC, email display advertising continues to trend downwards. Email advertising expenditure fell to a record quarterly low of $2.1m during the quarter, a drop of 52 per cent compared to the previous June quarter and 63 per cent year-on-year.
While CPM was still noted as the primary pricing mechanism being used, the PwC report signalled that direct response is gaining traction, and accounted for 42.2 per cent of total advertising pricing during the quarter. The report attributed this to Google and Facebook gaining a greater foothold in the overall general display market.
“CPM is based on the more you send out, the better response you expect to get. Now, the focus is increasingly on quality over quantity,” Manners told CMO. “For the IAB, it has been an interesting year seeing how marketing performance is measured and the changing ways campaign activities are priced.
Read more: More marketing emails reaching Australian inboxes
“Everyone is looking at their pricing models right now and making them more accountable. CPM is something we used traditionally when looking at [email marketing] activities but now that we have so much data, it’s accountability and performance that are the key areas for marketers. We’re looking to show that value, and pricing should be reflecting that as well.
“There is a lot of value in email marketing – seeing that decline in revenue, we need to be looking to how we measure effectiveness.”
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