Evaluating Web Marketing Options

Some of the most common paid advertising options on the Internet are Web site banner ads and Paid Search on search engines like Google. We will look at the variety of cost structures, ad units, and metrics to consider when evaluating the opportunities.

Cost Structures

Some of the most widely used cost structures are cost-per-thousand (CPM), cost-per-impression (CPI) and cost-per-click (CPC). Sites like Google and Facebook set up a bidding structure for their ad rates.

CPM and CPI go together when calculating the cost of an advertising program. On some sites you can indicate the maximum number of impressions you want to buy in a given time period. You will be given a CPM rate for those impressions. For example, if you indicate you want 1 million impressions over 1 month, and the rate is $15 CPM, the cost for the program is $15,000. When you buy on a CPI basis, you are paying for the number of impressions on that page and the OPPORTUNITY for your banner ad to be seen. You do not know how many people actually paid attention to your ad. This means that the viewer is only passively involved with advertising campaigns on a CPI basis.

What is a fair CPM? It all depends on a number of variables. It is reasonable to say that mass sites have lower CPMs than targeted sites or pages. Supply and demand also comes into play. Is the site hugely popular or is it a new site with limited visitors? Some national sites may have higher CPMs than local sites. Are you seeking a targeted position on a page or run-of-site (ROS)? The more flexibility you give the site regarding placement of the ad, the lower the CPM should be.

The CPC rate will be higher than CPM or CPI because you now are paying for an actively engaged visitor. You only pay for the ad when a person sees your banner ad, has interest, and then clicks on it. I like this option for the campaigns that desire a response from the target audience verses a branding/awareness campaign. Once respondents click through, you now have a number of opportunities to engage them further, drive them to a landing page or web site, and gather information from them.

The bidding process for getting your ad served on Google search or Facebook is an interesting process. With Google, paid search is based on key words. You enter the desired key words, and they suggest a CPC rate. This rate is based on how many other marketers are also interested in those key words. However, having the highest bid is not the only variable that determines whether your ad gets served or where on the page it gets served. The popularity or value of your ad also plays into the equation. Google moves your ad up on the page if the people searching find it valuable or informative. Key word search advertising is a program that needs constant monitoring and adjusting to get the best results.

On Facebook you can run local ads based on attributes such as geography, gender, or age. After you indicate who you want to reach, Facebook suggests a CPC or CPI for your schedule. Again, the bid rate is based on how many other advertisers want that same audience. If you place a bid and do not see your ad served, then you must go back and adjust the program.

Ad Units

There are a variety of ad unit sizes such as leaderboard, boxes, buttons, badges, squares, expandable boxes, walk outs, peel backs, and on and on. Every site has their own unique mix of units for sale. Each unit has its merits and needs to be evaluated based on the campaign objectives and messaging. The more attention demanded, the more the unit cost will be. Walk outs and rich media that deliver animation in the ad units can be expensive but provide great impact.

When it comes to positioning, I am a big proponent of “above the fold”. This old newspaper term is used with online pages. It is the visible portion of the screen without scrolling down the page. I never buy banner ads at the bottom of the page. You’ll be charged for the impressions delivered on that page, but you do not know if anyone is scrolling down to see your banner ad.

Road blocking is a fun concept but I believe it is often a waste of money. Road blocking is when you own all the ad units on a given page. It is probably overkill and wasteful. It may be a good strategy if the site is in high demand in your category, and you know that your competitors are interested in that site. You can then block them out with your buy.

Metrics

Web sites and Google can provide extensive analytics reports detailing the metrics for your campaign. They can provide impressions, click-thrus, and click-thru rates. They can provide this information for each unique ad unit and creative execution that runs in the program. You can evaluate the pulling power for the day of week, ad units, page position, and creative message. With Google you can determine if you need to make adjustments to your bid price and messaging if you are not getting the results you expected.

To leverage this information, it will be useful to establish a testing protocol in advance for the various applications of your web advertising. By monitoring and tracking the metrics and the pull-through of the leads through the sales process, you can more accurately determine how to incrementally increase your web productivity at a lower cost per unit.

For more information on how to integrate web-based advertising into your marketing mix, contact DMC Advertising.