The world of Internet has seen many kinds of pricing frameworks. It started with the fixed cost based pricing to pay per click. While the former lead to the creation of artificial traffic on the website, the latter (Pay per click based advertising) had lots of companies resorting to exercises of hiring ad clickers. These ad clickers would click on specific ads on the web and earn a specified sum for this clicking exercise.
The sanity in this kind of advertising is lost and as a result customers’ faith in this kind of advertising is gone. To reinstate the faith of the customers something concrete needs to be done. One method to do this is to introduce Output based Pricing. In output based pricing a customer pays for an advertisement on the basis of out put it generates for her. For example, an online merchant advertises on a website. In a pay per click scenario he will pay for as many clicks on the website leading to her website. In a Output based pricing he will pay only for those clicks which lead to actual sales for her. The output may vary such as completing a registration form or ordering a catalogue.
This would make the measurability of an advertisement plan more transparent.
This step may not completely rule out the traditional measures of advertising. The companies whose ultimate objective through this advertising program is branding may not still stick to the traditional pricing format but this mode will answer the prayers of many marketing managers.
