Originally published in MediaPost's Social Media Insider. I'd love your comments below.
CPSA: The New Pricing Model For Social Media?
What's the best way to price social media advertising or marketing programs?
That's one of those questions that screams for the ever-honest "it
depends" answer. Maybe that's because we need a new pricing model.
Let's first take a look at some current options and review their
strengths and weaknesses in this context:
the overarching strength of social media. But the value marketers get
from social marketing isn't just exposure — it's something deeper.
is won't do the same for Facebook, at least not on the same kind of
scale. CPC is tailor-made for direct-response marketers, while social
media is centered on building relationships. This is the classic
"square peg/round hole" issue.
rest easily, as marketers shouldn't be driving a relationship-building
vehicle on a conversion track.
engagement metrics translate well to various social marketing programs,
such as time spent with a widget or percentage of a shareable video
When you want exposure, traffic, conversions, or interactions, each of
these four pricing models comes in handy. But social marketing, when
done right, achieves something much different: relationships. How does
that fit in neatly with these pricing models?
To that end, I'll throw out a fifth model: Cost Per Social Action
(CPSA). It's for any action with a distinctly social quality that leads
to either new relationships (such as through "viral" referrals or
acquiring new followers and fans) or deepening existing relationships
(such as through "likes," comments, responses, and ratings).
The main benefit of CPSA is that marketers know they're paying for
something social and relationship-oriented. More importantly, marketers
know they're not specifically paying for exposure, traffic,
conversions, or interactions (though those can all provide additional
value). It's an acknowledgement that social media is something else, so
it's deserving of a new model, one that stresses relationships above
There are downsides too, and I'll spend even more time on these:
There are others too, like CPL (Cost Per Lead) and CPS (Cost Per Sale).
So now marketers have to learn another?
to sell yet another pricing plan? Then again, some publishers like
VideoEgg have used Cost Per Engagement pricing to differentiate
themselves. Could some differentiate themselves by promoting CPSA?
to three letters so it stands a chance. Though you could argue that to
stand out, maybe the four-letter version will differentiate it.
things. Just looking at Facebook alone, can you really say that the
same pricing structure can be used to cover everything from the number
of fans accumulated to the number of virtual gifts sent? Then again,
CPM covers everything from an impression on a portal's homepage to an
impression that's highly contextually relevant on a blog. Similarly,
CPC is used for search and contextual marketing, two very different
as CPI — a Cost Per Install model for widgets. CPSA doesn't account
for enough of the intricacies of social media that are already being
veers from reach and sales, the harder it's going to be to tie this
into marketers' traditional metrics.
I'll leave it to you now: is CPSA needed? Are some already using a
version of it? Is this latest version of alphabet soup past its
expiration date? Share your thoughts in the comments to address CPSA
the way it should be: socially.