GM studies click-through pricing for Web advertising

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General Motors Corp. is said to be analyzing pricing models for Web advertising based on the controversial click-through model.

GM's exploration comes as Procter & Gamble Co., the company that pioneered the click-through concept, is considering other pricing models.

"Click-through is one of the factors we measure, but it's just one tool we use," said Karen Ritchie, exec VP-managing director of GM's Cyberworks, the unit charged with making ad buys on the Web.

Click-through refers to users clicking on ads on Web sites, usually to be transported to the advertiser's site. Only 1% to 2% of users click on ads, according to industry research.

NO CLOSE LOOK BEFORE

GM had not earlier taken a close look at click-throughs, Ms. Ritchie said, since it was not until late last year that GM got most of its interactive ad sites up on the Web. "If the major objective of a campaign was to draw visitors to one of our sites, then it's likely click-through would be given more weight for that particular buy," she said.

While Ms. Ritchie played down click-through as a factor overall in determining what GM pays for online advertising, one site manager said, "This is definitely a shift from the [cost-per-thousand] model GM has been using."

Added another site executive, "I hear rumblings that Chrysler wants to go the click-through route, and I'm sure Ford isn't far behind."

Ms. Ritchie said the promise of interactive advertising on the Web is that it is more accountable than print or TV, adding, "It's time to start delivering on that promise."

She added that measurement of users and usage on the Internet must improve as well.

"Is it more effective for me to buy a sponsored section or run of site?" Ms. Ritchie asked.

In the future, she added, GM would like to target online ads using both demographic and geographic data.

Copyright March 1998, Crain Communications Inc.

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