Cost of online avenues of advertising

Advertising

There are almost infinite amount of places one can advertise on. From a loud billboard over a highway or as simple as a sticker on a wall, advertisements are everywhere. Currently, you are exposed to tens if not hundreds of ads and in one day, you could face almost a thousand advertisements. Well, as a marketer, you would want to hit not only the highest traffic areas but also a high-quality one. There are a few places to advertise online which could potentially bring your brand a large audience.

Let us understand a few words before moving on.

Cost-per-click (CPC) = cost of an ad is charged only when it’s clicked.

Enhanced-cost-per-click (ECPC) = similar to CPC but this option will automatically raise or lower the max CPC bid that you have set up initially from analysing the conversion rate.

Cost-per-mille (CPM) [Mille means a thousand in Latin] = cost of an ad is calculated by dividing the cost of an advertising placement by the number of impressions.

Cost-per-acquisition (CPA) = cost for every successful conversion resulting from that ad.

Now we got the nitty-gritty words aside, the first avenue of advertising is the AdWords. In general, cost of advertising on AdWords is controlled by you. There's no minimum amount that you have to spend and you set your own daily budget. Having a target market would help your ads to appear to specific groups and actions that are on Google. AdWords works on CPC, CPM for Display Network campaigns and CPA.

Secondly, there are Facebook ads. It costs 5 to 20 dollars daily or a lifetime budget to promote a page. Lifetime budget, which can be slightly misleading, means setting a budget for a set amount of time. You are able to pace the amount of money you spend on each particular day. An example of a lifetime budget is 100 dollars for 10 days for a Mother’s Day campaign. If only 8 dollars spent on one day, the leftover money makes up for the other parts of the campaign. Works on CPM or CPC. The minimum cost for a click is 1 cent. Although the cost is cheap but that doesn’t necessarily mean that your ad will appear due to other bids. A suggested bidding price is given to you by Facebook but you don’t have to follow it. What’s important to take note is that your daily budget has to be at least two times the amount of your bid. For example, if you bid 2 dollars for a click, your daily budget needs to be at least 4 dollars.

 

 

Next, Linkedin ads. Works on CPC and CPM. With both options, Linkedin will suggest the bidding price to you from gathering information of other bidders targeting the same audience. Of course, the higher you bid in this range, the more likely you are to receive impressions and clicks. Due to the bidding nature, it is difficult to calculate the cost for your specific marketing campaign. The minimum daily budget is 10 dollars/day while the minimum CPC bid is 2 dollars/click. The minimum CPM bid is 2 dollars/thousand impressions.

Linkedin charges a one-time fee of 5 dollars to post up an ad. This 5 dollars becomes ad credit which covers the initial clicks or impressions after the ad is posted. Once the credit is depleted, you'll be billed periodically for the impressions or clicks that your ad incurs. You'll continue to be billed through the end date of the ad or until you manually turn it off.

As for a bigger, high-roller kind of advertising; there is the log-out screen ad for Facebook costs around 100,000 dollars. A Yahoo homepage takeover cost around 450,000 dollars, YouTube page takeover is about 400,000 dollars, Twitter promoted trending topic is 120,000 dollars and AOL homepage takeover is 400,000 dollars. A homepage takeover would look something like this:

            

The biggest factors that affects price of a homepage takeover include:
1. Timing/Date
2. Total investment
3. Audience makeup

4. Quantity of ads on the page
5. Impact of the ad

In general, online advertising works on CPC and CPM. Make sure you keep track of your advertising campaign from the moment it starts. The main reason of advertising is to get as much exposure and revenue for your company. If the cost of advertising isn’t paying off, you should review the strategy and target market of the campaign. More importantly, if you fail to plan, you plan to fail.


Han Teng

Han Teng

Ever heard of the story of the rice crop? The older and riper it gets, the more it bends downwards. Living by this principle I believe that life is a never-ending learning process and the more I learn the more I'm humbled by it. Keeping my nose low and helping others are my priorities. I'm no successful entrepreneur nor an excellent sportsman. However, I do aspire to reach for the stars and when I do; it is of utmost importance to be grateful to everyone around me.


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Comments (3)

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Phil Khor

Phil Khor , Founder at SavvySME

What an awesome article packed with bucket loads of good information of how to advertise online, where to advertise, and associated advertising cost. Thanks for sharing Han. :)

Eric Phuah

Eric Phuah , Director at Hystericalz Pty Ltd

Thanks for the informative article Han! Good to know the costs involved for different strategies.

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