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Online VS Offline Advertising

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According to Majestic Research, the average fee for an online marketer is 54¢ per click on Google Ads, as opposed to $1000 per column inch on the New York Times magazine, as stated in their rate card.

There is an endless ocean of opportunities beyond what your budget figures dictate. In case you’re spending on both, traditional and online marketing, how will you know which format brings you more? The trick lies in finding common ground to try on both marketing formats.

Print marketing prices are based on the circulation size of the publication and the amount of space you’re buying. While with the broadcast format (radio/TV) the prices are based on the audience estimates and the duration/time length of the advertisement at hand.

Google Ads are pay-per-click, which means you pay every time someone clicks on your Ad. Another method would be buying CPM or Cost per Milli-impression (1 thousand impressions), meaning you’ll be charged every time your ad is shown. CPM is more popular among online magazines since it relates to their traditional advertising format in print, where the price is decided by the size, space, and exposure.

Both models seem very different but their results could be compared through the response rate.

At the end, the main goal is the sales increase and the ad’s effect. No matter the source of the advertisement, the focal point will be the ‘customer acquisition cost.’

That is why, one can compare various advertising outlets through their CPA (Cost Per Acquisition) as a common factor.

An example would be when you spend 54¢ per visitor in Google and your site’s sales is average then you have a conversion of 2%, which, in value, equals 1 visitor out of 50. This means your CPA from Google would be equal to $27.00.

This happens as opposed to a quarter page advertisement in the New York Times where $10,000 will get you an exposure volume of 2 million people, though the response rate from this exposure will be 1 out of every 5000, meaning it will be around 400 calls. The sales team will convert 25% of this into sales, which is 100 sales from the $10,000 fee.

Therefore, your CPA is $100, meaning your New York Times ad is four times more expensive than your Google Ad.

Print is always more expensive, just as broadcast is more expensive than print, but this analysis between Google Ads and New York Times does not measure the power of brand awareness they could harness. There is a strong theory that suggests that brand awareness could not be developed or enhanced through online marketing, unlike TV advertising where everything is about brand awareness and empowerment.

The psychology of the customer plays a role in both formats as the traditional ads hit the viewers/customers while doing something out of focus (watching TV, listening to radio, driving on the street), while online ads hit the customer during searching for a certain product or service, therefore the ratio of spreading your ad is limited online, unlike the other media. This also applies to launching new products where people have to be aware of a product’s existence so to know what to look for a goal both formats have in common.

Comparing other parts of the process such as initial response rates would be a risky business as it makes the whole analysis vague, similar to comparing response rate to flyers on the streets to response rates for Google Ad clicks.

Another point of difference between the two formats is the nature of the interaction between the viewers/targets of the ad and the ad itself. Telephone marketing involves two people talking, with a caller, therefore able to curb rejection, work around it, and interact on the human level, through tone, voice, and language. On the other hand, online ads are uniform in figure and content that appears the same throughout the whole targeted region. That’s why a website’s content has to be catchy, persuasive and seductive, with the least interaction possible with the viewer.

The collection of comparison data requires a proper structure to monitor the source of every client that calls your phone, and the type of ad that led this person to become a potential client. Did he read your site link in a print ad? Or was that where he got the phone number from? To make the segregation process easier, create a URL address to be placed in the print ads specifically and a different phone number only listed on the site.

The bottom line of the whole process is not how you got the client to contact you as much as what the cost of acquiring this client was. By comparing all your advertising outlets, in most media formats, and using the Cost per Acquisition method, you will be able to put your finger on the outlet that yields the best results with the least expenses.

Eastline Marketing’s focus is online marketing in all aspects, from website integration and improvement to increased presence on search engines and directories. Though the traditional media may be a necessity for further exposure, no one can deny the ultimate influence and power that the internet wields in our daily life, and that is the art that we have mastered.

Choosing the Right Advertising Model for Your Website

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For most of us involved in digital media advertising, the question about which pricing model works best for a specific campaign is clear. But when it comes to choosing the right model, publisher websites are stuck wondering.

Here are a few steps that will help you earn money from your website the most efficient way, and remember that choosing the right advertising model can drastically increase your revenue. Some of the factors that will help you choose the right advertising model are very obvious such as niche, the number of unique users that your website attracts, the demographical breakdown of the users, the number of page impressions that it generates, etc.

Let’s go over the three main advertising models, their respective pros & cons and explaining when to use them.

CPM (Cost-per-Mille) – in Latin mille means thousand

An impression is counted every time one of your users sees a text or banner advertisement on your website. If your website generates a significant amount of page views (page impressions), CPM is definitely the model you might want to implement, however, keep in mind that with CPM you will not get any money from clicks. If you can generate a high number of clicks on your website than you might want to consider a CPC model (See further below).

CPM is a profitable model if your website generates high traffic/low clicks but certainly will not be as profitable for advertisers who are running call to action campaigns as they will have a very low Return on Investment (ROI) and might not consider selecting your website for future campaigns unless you give them a good deal. However, advertisers who are planning to launch an awareness campaign might be delighted by the visibility you can provide amongst your users.

CPM is also considered a risk free model for publishers (website owners) as the only thing they really do is deliver the number of impressions that an advertiser books without worrying about the performance of the campaign. This one-sided environment made advertisers search for a better model, one that can guarantee some sort of performance, thus the birth of the CPC model.

CPC (Cost-per-Click)

CPC is considered to be a very simple formula that satisfies both the publishers & the advertisers in a fair environment. For the advertiser to benefit from the clicks that an ad placed on a publishers’ website generates, he has to make sure that the specific ad is relevant to his product and/or offer so that a percentage of these clicks turns out into goals/objectives. On the other hand, the publisher has the mandate to properly place the advertiser’s banner on his website so that it generates the most clicks, better yet, the most quality clicks (relevant clicks to the target audience) knowing that a good performing campaign will result in a good ROI, thus driving the advertiser to keep spending money on clicks, campaign after campaign, and for longer periods.

One of the very few problems of the CPC model is the possibility of running into click-frauds. A click-fraud occurs when an automated script attacks a website and generates hundreds of fake clicks on a banner, turning a successful campaign into a nightmare. Combating this fraudulent method is something that any publisher has to keep in mind before opting to use a CPC model.

CPA (Cost-per-Action)

CPA model throws all the risk on the publisher, plain and simple. A publisher must know that his traffic is guaranteed to generate actions (e.g.: form submission, registration, purchase, etc.) or else he’d be giving it out for free, without generating any income. If you have ideal traffic i.e. high traffic which converts well, then this is your best bet. What you need to do as a publisher to ensure a profitable CPA model, is make sure that an advertiser’s campaign follows certain standards because you don’t want to end up serving free advertisement for clients whose ads are irrelevant to begin with.

As an advertiser, a CPA model represents the best ROI possible for your campaigns. Obviously, you are only paying for the leads you are getting, thus minimizing your risks.

Final Note

There are many who argue that all three pricing models are just different flavors of the same thing. In a way this notion is not faulty since all three models rely on common numbers to estimate the final cost.

Example: An advertiser wants to sell 100 carpets at $100 apiece. His 75% margin gives him a profit of $75 per item before advertising cost. His cost of goods is $25 by default.

Here’s the simulation of all 3 models:

In the first simulation the advertiser buys 100 CPM at $5/per for a total cost of $500. His campaign generates a CTR of 2% and generates 2,000 clicks to his landing page. Let’s say that 5% of those clicks turned into a sale, that’s a total of 100 sales and $10,000 in cash money. His total gross is $10,000, Total advertising cost = $500 and Total cost of goods is $2,500 and that leaves him with a total net profit of $7,000.

Using CPC model, the same advertiser pays $0.25/click. The same budget of $500 will generate 2,000 clicks for him. 5% of those clicks turned into a sale, that’s a total of 100 sales and $10,000 in cash money. His total gross is $10,000, Total advertising cost = $500 and Total cost of goods is $2,500 and that leaves him with a total net profit of $7,000 just the same.

Finally, Using the CPA model, the advertiser pays $5/lead (5% Commission). The same budget of $500 will generate 100 sales for him and $10,000 in cash money. His total gross is $10,000, Total advertising cost = $500 and Total cost of goods is $2,500 and that leaves him with a total net profit of $7,000 just the same.

So for every price in one model there’s a price for the other two and that’s exactly how publishers & search engines, alike, calculate the different pricing options and sell them. At the end of the day, the model that sells the best is the model that keeps the advertiser feeling happy, safe and profiting without taking a huge risk and in turn making a good profit for the publisher as well.