Over on the "online-ads" list, there has recently been a bit of a
debate concerning selling ads based on click-throughs vs.
impressions. Feeling strongly that publishers should always price on
CPM -- not clicks, I posted the following note describing what we at
HealthGate think is the "correct" way to sell ads. The note has
gotten good response from the folk that read online-ads, but I would
like to hear from other publishers on this issue. Please consider the
following:

===
The recent debate over Modem Media's proposed ad model shows two
apparently divergent views of Internet advertising that can be easily
reconciled. 
        One side (mostly publishers) claims that the seller of ad
space is
only responsible for providing an audience and the context within
which an ad can be displayed but that the results of placing the ad
are the advertiser's responsiblity. They are right. (within limits)
        The other side claims that given the revolutionary new
technology of
the Internet, the sellers of space must get more deeply involved in
the success of advertisements. They are also right. (within limits)
        At HealthGate, we will soon be announcing a new business
model for
Internet advertising that clearly addresses the needs of both
publishers and advertisers. We believe that the HealthGate Ad Policy
provides the best possible compromise between the publisher's focus
on building audience and context on one hand and the advertiser's
focus on results on the other hand.
        We will not pay for click-throughs and we won't pay for
"activity on
the advertiser's site." What we will do is exploit the tracking and
accounting tools available to us to ensure that advertisments on our
site are successful. HealthGate will ensure this success in a number
of ways: (Please comment on this so I can make sure the program is
the best it can be before we announce it formally)
====
        1. HealthGate will "guarantee" click-through rates. When we
sell an
ad, part of our agreement with the advertiser will be a "minimum
click-through rate." Once an ad is posted, we will monitor the
click-through rate and will remove the ad if it falls below the
guaranteed minimum click-through rate. The advertiser will then be
notified and given the opportunity to send us a new ad which would
hopefully be more effective. A 2% minimum rate will be standard.
Higher rates may be negotiated.
        2. HealthGate will help advertisers test their ads on our
site and
with our audience. We will encourage advertisers to provide us with
two, three, four, or more ads that will be rotated through the spots
they are buying. We will then monitor and report on the click-through
rates. All but the most effective ads will be automatically removed 
after a statistically significant number of impressions -2000.
        3. HealthGate will monitor and publish to advertisers the
"click-through rates" that we experience on the various spots on our
site. Our ad rates will be partially tied to these rates -- i.e. our
rates will be tied to a spot's proven yield. Of course, this
policy will ensure that we only show "effective" ads since weak ads
will tend to decrease the value of our spots.
        4. HealthGate will aggressively invest in tools and
technologies to
help our advertisers more effectively target our users as well as
monitor results. For instance:
        a) HealthGate will permit advertisers to link their ads to
specific 
keywords which appear in user queries to our medical information 
search engines or to subjects covered in our consumer health 
information. Thus, you can buy an ad that will only appear when
people are search for, or reading about "skin wrinkles".
        b) HealthGate will soon allow advertisers the option of
limited
geographic targetting. We'll allow advertisers to specify whether
their ads should be shown to: US sites only, Non-US sites only, or
any site in the world.
        c) We will soon allow advertisers to specify the maximum
number of
times that an ad should be shown during a specified period to any
particular user. This will allow advertisers to protect against the
"ad
burn-out" recently reported by DoubleClick and Forrester.
        d) We will soon provide advertisers the ability to receive ad
response data in "real time" and have limited ability to modify
placement orders immediately and automatically over the net.
====
        Given these policies, it may look like we're doing something
"new"
to reflect the "revolutionary" nature of the Internet. I don't think
so. Publishers have always been involved in providing demographic
data to advertisers and in measuring the varying response to
advertisements in their publications. This is why SuperBowl ads cost
what they do and why the backcover of a magazine costs more than 
inside pages. The only thing that changes with the Internet is that 
we're able to measure more frequently and more accurately.
        HealthGate's policy of guaranteed click-throughs won't
involve us
any more in the creative ad process than traditional publishers have
been, yet these policies will provide an environment in which
advertisers can generate much greater yield on their efforts than is 
possible in traditional media. Additionally, the advertisers will
know that they are "protected" against the risk of paying for a
failed 
campaign or placement. Admittedly, this will take more work on our 
part as well as more work on the part of the advertising agency. We 
will need to continue to build the technology to make this sort of 
responsiveness possible and ad agencies will need to provide us 
with multiple ads to replace those whose yields are low.
        Personally, I think that all Internet publishers should adopt
similar policies and that we should move beyond the stale argument of
"impressions" vs. "click-through." This policy protects the interests
of both sides of the advertising equation and could form the
foundation of a set of standard business relationships between
Internet publishers and advertisers.
        Please provide your comments soon so that we can be sure to
incorporate them into our policy before we announce it formally.

                bob wyman
- -----
Director, Technical Operations
HealthGate Data Corp.



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