A newly emerged e-commerce company, known for selling clothes online, has made a big splash in the advertising space. According to recent data, Vanke's ad campaigns have generated more impressions than many large corporations, including the three major telecom operators.
On December 13th, an analysis report from Analysys International revealed that the total cost of Vanke’s online advertising in 2009 reached 1.896 billion yuan. However, when questioned on December 14th, Vanke’s CEO Chen Jin stated that the actual investment was only 200 million yuan. This discrepancy sparked discussions around a new marketing model called CPS (Cost Per Sale), which is changing how online advertising works.
Vanke’s approach involves paying based on actual sales rather than just ad impressions. This model allows them to achieve massive exposure with relatively low upfront costs. For example, while the reported ad value was 1.9 billion yuan, Vanke only spent 200 million. The difference lies in the way the numbers are calculated—Analysys International counted the ad display price, while Vanke paid based on actual performance.
CPS means that advertisers pay only when a sale is made. This method ensures that every click or impression directly translates into potential revenue. As a result, Vanke managed to secure over 10 billion yuan worth of ad placements with just 200 million invested.
This strategy has not gone unnoticed. Other apparel brands, such as Dream Bazaar and Mecoxlane, have started following Vanke’s lead. In 2009, Dream Bazaar increased its online ad spend by over 10,000 times, reaching 460 million yuan. Mecoxlane also announced a 100 million yuan investment in online marketing for the coming year.
The success of CPS has led to a shift in the industry, with companies rethinking their advertising strategies. While it offers high efficiency and measurable results, it also poses challenges for websites, as they receive less revenue compared to traditional models like CPM (cost per thousand impressions).
Experts believe that while CPS is effective for advertisers, it may reduce the overall ad revenue for websites. Large portals, in particular, are hesitant to adopt this model due to the risk of lower returns. However, small and medium-sized sites have found it beneficial, especially when they can track real-time conversions.
In the long run, the rise of CPS could make online advertising more transparent and competitive. It challenges the traditional advertising model and forces both advertisers and publishers to adapt. As more companies explore this approach, the future of digital marketing looks increasingly performance-driven.
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