"With these banners we will publish the first ever cost-per-click rate card," said Anna Zornosa, senior VP-advertising sales and affiliate development at Cupertino, Calif.-based PointCast. The move into banners was a way to fulfill the direct marketing needs of its clients, Ms. Zornosa said.
The PointCast Direct banners, which begin running in September, are designed to connect to an advertiser's site even though many users browse PointCast off-line. If a user clicks on a banner, it triggers an Internet connection that links to a company's Web site.
To differentiate PointCast's animated ads, which range in price from $12,000 to $45,000 a month, the direct marketing service is limited to static banners placed in the sports, news, lifestyle and health areas of PointCast's Channel Viewer. Its most popular channels, such as CNN, The New York Times and its weather channel, will be reserved for the premium animated ads.
The service for current PointCast advertisers is $1 per click for up to 5,000 click-throughs; new advertisers will pay $2 per click.
To hedge against losses, Ms. Zornosa said there will be a limited inventory of ads and PointCast will oversee all banner creative.
PointCast's announcement is sure to fan the heated debate on Web ad pricing. It comes on the heels of DoubleClick launching DoubleClick Direct, a service similarly aimed at the $134 million direct marketing industry that charges advertisers on a cost-per-action model, in which fees can be charged per click, lead, sale or download. "People said, `This is a stupid way to be selling things,'*" said Evan Neufeld, online advertising analyst at Jupiter Communications, explaining that many online publishers, afraid most banners go unclicked, objected that a per-click cost model devalued the Web and the banners themselves.
"I think somewhere there's a happy medium," Mr. Neufeld said.
Andy Batkin, chairman of Softbank Interactive Marketing, agrees. "I think there's room for a hybrid model," said Mr. Batkin, who helped negotiate with Procter & Gamble Co. when it insisted on a performance-based Web ad model.
PER CLICK FITS PUSH MODEL
The fact that PointCast is a push service with 1 million active viewers positions it apart from Web sites, Mr. Neufeld said. A per-click model makes sense for it, he added, because PointCast sends content to users, making it impossible to report Web page views to advertisers.
"I think within their parameters it makes sense," Mr. Neufeld said. It can help PointCast attract new clients and, ultimately, "be a win-win situation," he added.
While PointCast hasn't briefed most of its advertisers about the new service yet, it expects some of them-which include MCI Communications Corp., BMW of North America and EDS-to try it. Lynn Bolger, senior VP-Web media director at Ammirati Puris Lintas, New York, said it would seriously consider PointCast Direct if direct marketing campaigns came up for its clients, especially Compaq Computer Corp. and United Parcel Service, both of which have advertised on PointCast before.
Charging by click-throughs "I see as a piece of the puzzle," Ms. Bolger said. "There's going to be a need for both branding and direct marketing vehicles."
Still, such a model poses uncertainties. Guaranteeing click-throughs "is certainly risky," Ms. Zornosa said. As is the prospect that advertisers might opt for an inexpensive banner ad over an animated ad. "We don't want people to start to use the post card when they could use the magazine."