Riddler shifts to results-based rates

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Interactive Imaginations last week ended its relationship with rep firm Softbank Interactive Marketing after deciding to implement a response-based ad pricing system that the rep firm didn't agree with.

The change in strategy, which will be implemented across most of Interactive's properties including the Riddler game site, is one of the first aggressive pushes by a Web publisher for a pricing model other than cost-per-impression.

"We want to move ahead with this new model . . . and Softbank is more of a streamlined banner offering," said one Interactive Imaginations executive.

An Interactive spokeswoman confirmed the split, adding that the company will build its own sales force.


Bob Colvin, president of Softbank Interactive Marketing, said his company was unsure how it could rep the new rate structure.

"It's a new concept, and for the most part our buyers still continue to pay on a CPM basis," said Mr. Colvin, who estimates that 98% of the advertising Softbank handles is CPM-oriented. Softbank now exclusively reps about 14 Web sites.

In addition to Riddler, Interactive Imaginations manages the 7,000-site Commonwealth Network, a consortium of sites into which Interactive brings advertising. The network serves 90 million page views per month to 1.5 million unique users.

Interactive will offer full-screen, response-based ads on properties including Riddler, a forthcoming "Name that Tune" game and 250 of the most trafficked Commonwealth sites.

The company's new ad proposition presents an exception to the rules of CPM-dominated rate cards. It promises to take a risk on consumer behavior by allowing advertisers to pay only for results, not just exposures.


Advertisers are eager to buy online media based on results.

However, few media companies have proactively created deals, consenting to offer them only if agencies and advertisers insist.

Full-screen ads became available to Riddler advertisers in late 1996. Because click-through was high (averaging between 15% and 20% through press time), the company decided to alter its pricing model to one based on full pages alone, the spokeswoman said.


Full-page ads can be integrated into the content or be connected to a marketer's existing banner ad. Ads appearing within the content will sell for 15 cents per full-page delivery, while full-screen ads seen after clicking a banner are priced at 75 cents per click.

Analysts agree that marketers are looking for more creative and effective ways to reach consumers.

"I think more Web sites are going to consider this," said Melissa Bane, senior analyst with the Yankee Group. "The general CPM model is not satisfying right now to a lot of advertisers."

Copyright February 1997, Crain Communications Inc.

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