With CPM-based advertising, a specific number of impressions are guaranteed by the ad spend; whereas for other types of online advertising (like CPC), there is no guarantee that your ad will shown. You’re paying directly for people to see your ad — these are likely to be top of the funnel consumers. You can make modifications to campaigns (CPCs and budgets) in near real-time by tracking performance on your website. When well-optimized, CPC traffic can be a significant and well optimized traffic driver. For marketers who are tracking ROI, CPC advertising can be much more cost-effective than traffic generated via CPM. You can choose to have ads autoplay or for users to click “play.” You can very easily find the right videos and users through massive distribution networks like Google/YouTube. How to Choose the Right PPC Network Choosing the right ad network is an important strategic decision. Available Targeting Options How will this ad network help you reach the right audience with the right advertising message at the right time? Unattractive ads will generate a negative user experience, costing you time and money. Focus on generating ROI based on your long-term user acquisition value instead of in-session revenue.
PPC marketing is something you’ve probably come across in some form or another.
The paid channel advertising landscape is worth hundreds of billions of dollars. In 2011, the ad-supported Internet contributed more than $500 billion to the United States economy.
Holy smokes. That’s a lot of spend.
The numbers alone tell us that this marketing channel far too robust to ignore, but more often than not, marketers are scared to take the plunge for two reasons:
- It costs money to get up and running
- There’s a big chance you’ll lose money if you aren’t smart about your strategy
PPC advertising is a powerful marketing medium because it is measurable. It’s possible to calculate both a long-term and short-term value for how much revenue resulted from even one incoming website visit. You can also deploy targeting features to ensure that you’re reaching the right audiences.
LinkedIn, Facebook, Twitter, and Google all offer products for marketers looking to reach customers.
Which network should you use?
The answer to that question goes back to user psychology. Understand what people are doing when they’re using LinkedIn, Facebook, Twitter, and Google products. These details will help you determine which channels are the right fit for your brand and advertising message.
Start by Knowing the Different Advertising Sales Models
The capacity in which you work with a website or advertising network to show your ads will depend on how you are able to pay. Tools like Facebook will generally give you some different options from which to choose. Making the right decision will ultimately impact the efficiency of your online ads. Here is a breakdown of the different paid channel pricing models, as well as their strengths and pitfalls:
- Defined as cost-per-mille.
- You’re billed a flat rate per 1,000 impressions of your ad.
- You’re not charged for any clicks.
- This ad format is common on display advertising networks (banners, ads with an image, etc).
What’s an impression? It’s a measure of the number of times an ad is displayed, regardless of whether it’s clicked on or not.
With CPM-based advertising, a specific number of impressions are guaranteed by the ad spend; whereas for other types of online advertising (like CPC), there is no guarantee that your ad will shown.
- CPM rates can be relatively inexpensive.
- You’re paying directly for people to see your ad — these are likely to be top of the funnel consumers.
- You can easily apply a budget that makes sense, as you are only paying for views.
- Works well for visual, branding-oriented campaigns.
- Guarantees that your ad will be shown the number of times that you want it to be seen (per impression).
- If people aren’t clicking on your ads and converting, you risk overspending.
- Performance (resulting sales from ad views) are tough to accurately track and monitor.
- You can’t easily quantify the return of your traffic buy until the end of the campaign.
- Rush of resulting web traffic is uncommon.
Here are examples of CPM banner advertising on Investopedia.com (see the ad from Underwater Audio on the top of the page). It’s possible to purchase ads with sites like these directly or through the Google Ad Exchange.
Here is how Forbes runs display advertising (see the banner ad from HP at the top):
PPC (also called CPC)
- Defined as cost-per-click.
- You pay for every click on your ad, at a price determined by the marketplace value of the keyword or expression you’re interested in.
- CPC marketplaces operate on an auction model, where strong-performing ads are likely to win.
- Strong performance is defined by a function of ad click-through rates (CTRs) and the CPCs that the advertisers are willing to pay.
- Clicks are straightforward to track.
- You’re only paying for traffic directed to your site.
- It’s possible to place budget caps on traffic coming in through large networks.
- CPCs and budgets are modifiable in real time.
- You can make modifications to campaigns (CPCs and budgets) in near real-time by tracking performance on your website.
- You only pay for the clicks you need.
- When well-optimized, CPC traffic can be a significant and well optimized traffic driver.
- For marketers who are tracking ROI, CPC advertising can be much more cost-effective than traffic generated via CPM.
- You’re competing against other advertisers for traffic, which can cause CPCs to become high and sometimes unaffordable.
- Clicks coming in now may result in monetization later — attribution models need to be accurate.
- If you’re not bidding with a competitive CPC, it’s entirely possible that you won’t get traffic.
- It’s complicated.
- If you don’t have a handle on your strategy, it can quickly become super-complicated.
- It requires a dedicated resource to monitor and optimize campaigns.
- You need to know what you’re doing to see an ROI.
- You may lose significant money initially in order to optimize over time.
Here are example PPC ads targeting the keywords “usability testing” on Google:
CPA and Revenue Share
The advertiser pays for traffic based on a proportion of revenue earned. For instance, if you advertise on pqr.com, you will pay 20% on sales generated from pqr.com’s traffic. If no conversions or transactions occur, you won’t pay.
The strength is that you pay for performance. The downside is that because performance is difficult to track through the correct attribution models, this type of advertising model is quite rare.
Cost Per Install (CPI)
CPI stands for…