As part of my new job I’m in charge of developing and executing a marketing plan for a new website.  I’ve been doing a lot of research into online advertising and trying to figure out the best way to allocate my budget.  There are a number of ways to purchase ads online.

  • CPM (cost per one thousand impressions) is the cost to display your ad one thousand times.  For the sites I contacted the range was from $20-$70 per 1000 impressions.
  • CPC (cost per click), instead of purchasing ads which do not guarantee clicks, Google Adwords and Facebook both allow you to pay only when someone clicks on your ads.  Better.
  • CPA (cost per action), you only pay when a user clicks on your ad, comes to your site and does something (i.e. fills out a form).  This is obviously the best for ad buyers, but worse for ad sellers (since it depends on how convincing you/your product are to get someone to take that action).  I haven’t found any advertisers willing to sell on CPA basis.

There are also a number of other factors that allow you to specify your audience better.

  • Facebook allows you to specify where (to the city), what sex, age range, keywords, education (even to the specific college, year and major), relationship status and sexual orientation of your target audience (so that’s how my profile info is used).  In my example below, Facebook tells me there are 220 single college women between 18 and 23 in New York who like Pizza (hey ladies!).  You only pay per click, set daily limits on how much you want to spend and a maximum you want to pay for click.

  • Google also allows you to specify location, keywords, daily budgets and how much you will pay for a click.  The graph below shows me how many clicks I am likely to receive and how much those clicks will cost me (in Rupees):

In comparison the Google and Facebook models will give me a lot more value for my budget.  Here’s why:

  • Cost (CPC is better then CPM) – The number of clicks I get is much higher per dollar with Facebook and Google.  One of the major tech sites I contacted (can’t give their name but you’ve heard of them), offered me 174,000 impressions for 4k over two months ($23 CPM). They estimate a clickthrough rate of .25% which would equal 435 clicks.  In comparison I can set a maximum bid on Google and Facebook ads (let’s say .50 cents – $2 per click), giving me  2,000-8,000 clicks.
  • Targeting - While the tech sites I contacted gave a lot of demographic information about their users (what percentage are IT decision makers, developers etc…), it doesn’t mean the individual viewing my ad actually is in that bucket.  With Facebook, I can guarantee that the people who are viewing my ad are in the target audience I want them to be.  With Google, it’s up to me to define good keywords that people are searching for in order to reach them.  Assuming I can do this (there are a lot of tools out there to help as well), I’ll know my ads are only seen by the right people.
  • Analytics - There is no way for me tell how many times the ad publisher is actually displaying my ad.  They can tell me they showed it 100,000 times but I have no way to validate this.  All I can see is the number of people that actually click on that link.  Google and Facebook give me tools to see how well my keywords and ads are performing, guaranteeing my investment.

In short I can understand if you are Coca Cola you don’t really care who sees your ad.  In fact you don’t even care if people click on your ad. You are huge and all you want is to continue reminding people they are thirsty, your target audience is everyone. But for anyone else why would you advertise with someone who doesn’t offer targeted CPC ad purchasing? Your thoughts appreciated…

Related posts:

  1. Nu Analytics
  2. New Google APIs (Language/Charts/Visualization)
  3. The Transition to Real-Time, Social Search