A newly emerged e-commerce company, known for selling clothes online, has been making waves with its aggressive advertising strategy. According to recent data, Vanke’s ad impressions have surpassed those of major industry players, including the three leading telecom operators.
On December 13th, an analysis report from Analysys International revealed that Espresso, a leading online apparel brand, spent approximately 1.896 billion yuan on online ads in 2009. However, when questioned by reporters on December 14th, Vanke’s CEO, Chen Jin, stated that the company only invested 200 million yuan this year. This discrepancy sparked interest in a new marketing model called CPS (Cost Per Sale).
Vanke’s 200 million yuan versus the reported 1.9 billion yuan highlights a key difference in how ad spending is measured. While Analysys International calculated based on the display price of ads across various platforms, Vanke’s actual investment was much lower. The gap stems from different statistical methods—Analysys counted ad exposure time multiplied by unit price, while Vanke’s approach focused on actual sales generated through ads.
The real secret behind this massive reach lies in the CPS model. Unlike traditional display ads, which are charged based on impressions or clicks, CPS charges advertisers only when a sale is made. This allows companies like Vanke to achieve high visibility at a fraction of the cost. For example, Vanke managed to secure over 1 billion yuan worth of ad space with just 200 million yuan.
This model not only maximizes return on investment but also ensures that every ad directly contributes to sales. Only when users click and make a purchase does the advertiser pay. If no transaction occurs, even extensive ad exposure doesn’t generate revenue. This precision makes CPS highly effective, especially for industries like fashion where conversion rates are critical.
Inspired by Vanke’s success, other apparel brands have started adopting similar strategies. Companies such as Dream Bazaar and Mecoxlane have significantly increased their online ad budgets, following Vanke’s lead. Mecoxlane, for instance, announced a 100 million yuan investment in online marketing for the coming year.
While some critics worry about the impact of CPS on website revenues, others see it as a game-changer. The model shifts the balance of power from publishers to advertisers, allowing more transparent and measurable results. However, large portals are less enthusiastic about CPS due to concerns over reduced ad income.
As more companies embrace CPS, the fashion industry is witnessing a shift toward smarter, more efficient advertising. This trend not only benefits brands but also challenges the traditional advertising landscape, pushing for greater accountability and performance-driven strategies.
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