Flycast to Debut Cost-Per-Click Advertising

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Marketers who want to pay for online advertising on a cost-per-click basis will have that option through a new service expected to be announced by Flycast Communications Corp. this week. The company plans to make the program available separately from the existing Flycast ad network.


The move further differentiates Flycast, San Francisco, from competitors DoubleClick Inc. and 24/7 Media Inc., both of which are generally associated with higher cost-per-thousand ad impression rates. Typically, Flycast recommends that advertisers run ads across its full network of 1,500 sites at a low CPM before testing targeted advertising at a higher CPM.


The new cost-per-click program, called CPCnet, will let advertisers pay for a given number of clicks, thereby receiving responses at a preset cost per response. The initial run-of-network rate will be 40 cents per click, and ad buys on a particular category of Flycast network sites will cost 60 cents per click. Executives said CPCnet is in the early stages of recruiting advertisers and sites, but they expect the program to be in broad use in the first quarter of next year. Flycast's merger with Net venture and holding company CMGI Inc., Andover, MA, is expected to close in January.


Chief operating officer Lyn Chitow Oakes said CPCnet is not related to relationships struck last year with at least two smaller firms that specialize in brokering Net ad campaigns priced on a cost-per-action basis. Those deals are still in effect but make up only a "very, very small percentage of what we do," Oakes said. "We were just making inventory available to a couple of third parties who were interested in attracting CPC buyers."


Some advertisers -- especially those venturing onto the Net for the first time -- lack familiarity with Web marketing response rates and, consequently, want to avoid risk. Flycast is going after those advertisers with its CPC option.


"What we believe will happen is that as advertisers become smarter and get a better feel for response rates, they'll prefer to buy on a CPM basis, because they can then work the spread and generally make more money than if they buy on a CPC basis," said Flycast chairman/CEO George Garrick.


Currently, only sites that generate at least 250,000 monthly impressions are eligible to join Flycast's ad network. No such bar will apply to sites wanting to carry ads in the CPCnet program. Flycast will tempt those sites into signing on by offering them ad revenue -- and then as their inventory grows, they can move on to other Flycast products.


An upcoming marketing push planned for CPCnet will reach out initially to those small sites, as well advertisers that have expressed an interest in running CPC campaigns but been turned away by Flycast in the past. CPCnet promotions will involve print advertising and "over a hundred thousand" e-mails, Oakes said.
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