How do you structure payment? Different campaign types use different payment models. While a Duration Campaign is likely to charge a flat fee, two other types mentioned above use CPM and CPC.

CPM (Cost Per thousand): CPM is used for Impression Campaigns and represents cost per thousand impressions. For example, a website that charges $5,000 per banner and guarantees 250,000 impressions has a CPM of $20 ($5,000 divided by 250). You banner will run until 250,000 impressions are achieved, then it will be removed.

CPC (Cost Per Click): CPC is used for Click Campaigns and represents amount you pay each time someone clicks on your ad. Some programs, like Google’s AdWords, provide a bidding system where you bid for a position on page in terms of maximum you are willing to pay to appear in that position. The actual price you pay is not determined until page is displayed and various bids are taken into account. If you pay in advance, your ad runs until number of clicks you purchased is achieved, then ad is removed. If you are billed monthly, total clicks for month are tallied then amount of charges billed to you.

How do you measure success? While every firm has their own benchmarks for measuring performance, two metrics described below are commonly used.

Click Through Rate (CTR): CTR is rate at which visitors click on an advertisement. It is usually calculated as a percentage of ad impressions. If you are doing 0.2% or higher, you are doing well.

Conversion Rate: This metric refers to rate at which users complete a sale or registration once they reach your site. Calculating conversion rates can be a bit of an art form, but if you tie your ads to pages that give clear links to action you desire visitor to take, for example registration for a newsletter or site membership, you can benchmark this with some accuracy.

Of course there is much more to world of online advertising then this short list, but at least it is start. Online advertising has been growing up fast and it is now possible to find people who are fluent in buying for this media. Shop around and find a professional and you will benefit in long run.

written by: Ric Shreves, http://www.waterandstone.com

So what’s practical application of focusing on demand instead of supply?

1. Take time to research your demographics 2. Consider streamlining your websites to include interactive elements that help develop an understanding of what your visitor desires. 3. You may need to develop a different marketing campaign based on whether there is a strong demand or weak demand for what you are offering. 4. Demand can be created via a long term process of education/awareness, then branding, then interest, then trial, then demand. 5. In a demand mindset you’ll need to be more strategic, combining a campaign of both rational information with desire oriented emotionalness

Remember, just because you supply it does not mean there is a demand for it. Take time to study your idealized market and idealized customer profile then search them out to ascertain what their demand level is for your product or service. This will help you develop your marketing strategy. Be prepared for a long-term commitment.