CPM?
April 27, 2006 1:08 AM   Subscribe

How much does Internet advertising cost? I'm looking to sell some stuff online by advertising on sites like metafilter (through Indiclick, I guess) fark, collagehumor, ebaumsworld, &c. I'm just wondering how much that would cost, and what kind of clickthrough I could expect to get assuming I had a totally sweet ad for something people who visit those sites would be likely to buy.

(of course I wouldn't actually advertize on ebaums since they are plagerists, but you get the idea)

Also, do you have any ideas for content sites that would be good to advertize on?
posted by Paris Hilton to Grab Bag (6 answers total)
 
You're going to have to lay out an audience analysis so we know exactly who is likely to buy your product. (I kind of get the gist of who you're trying to sell to but i have no idea about age range, household income, etc)
posted by ZackTM at 5:55 AM on April 27, 2006


If you're trying to keep costs down, I'd recommend considering advertising on some of the larger to mid-size professional blogs out there. You'll be targeting a smaller audience, sure, but if you pick the right blog that is geared towards a topic that relates to your products, you can focus your efforts on that demographic. Since you're dealing with a blog that may not have 1,000,000 hits a day or so, the price to place an ad could be comparatively less.
posted by Servo5678 at 6:07 AM on April 27, 2006


A lot of advertising these days is done with keyword advertising via Google or Overture (who manages Yahoo and others). In these situations, you pay per click, not per view. They have also setup a rather effective auction system where you bid for placement. Every advertiser says, "I will pay X for clicks when someone searches for 'Widgets.'" The highest bidder gets the highest spot and the most views, and so on.

They enforce a minimum click-through rate, so if your ads are appearing too low or aren't attracting enough clicks, the ad will be turned off.

Cost depends a lot on the competition. For items where the value of a sale is high, like "custom web application development" you might pay tens of dollars per click for the top spot. But for something with low margins you could be bidding as low as 5 cents per click.

I have one client who sells a physical product and has been generating $5 in sales for every $1 in keyword advertising. Since his margin is over 20%, this is a good deal.

If you've got a good tracking system in place, you can tune your advertising campaign very precisely. You know the cost per click, figure out your conversion rate, calculate your margins and you know exactly what your highest bid should be.
posted by justkevin at 7:14 AM on April 27, 2006


CPM depends, in print as well as online, on the audience you're targeting. General publications have lower CPMs but larger audiences; specialized publications have a more targetable audience and as a result can charge more for ads.

If you're selling widgets, you'll pay a lot per thousand ads on WidgetWorld, because everyone there will be interested in your product; it'll cost less on a general news site, because your interested audience is diluted. That's why you see ads for cars in newsmagazines -- lots of general interest -- and fewer ads for more specialized interests; those end up in hobbyist magazines where the ads will do more good.

A high CPM doesn't necessarily mean a more expensive ad campaign: it depends on how many M's you're buying. A CPM = $10 ad campaign on a site with <5 ,000 daily visitors is going to be cheaper than a cpm=$1 ad campaign a site with 100,000 visitors -- and, if the smaller site is more in sync with what you're selling, better bang for your buck.br>
On the other hand, if interest in your product is widespread enough, you'd be wise to go with a cheaper, broader campaign -- why spend more per thousand on a specialized audience if your product isn't as specialized?
posted by mcwetboy at 7:31 AM on April 27, 2006


(Oops -- should have been more careful with the less-than sign.)
posted by mcwetboy at 7:35 AM on April 27, 2006


I have one client who sells a physical product and has been generating $5 in sales for every $1 in keyword advertising. Since his margin is over 20%, this is a good deal.

So do I, unfortunately I know someone in this market space and he's only been able to get about 5-10 clicks a month doing this.

Right now I'm just writing a basic business plan, and I need a dollar figure to put in there somewhere. I'm just guessing $40 CPM and a 0.5% conversion rate (impression to sale) those seem like being on the pessimistic side of reasonable, but my biz should still make a profit. If I didn't need other investors, I'd just "go" for it and find out that way.

I was under the impression that Indiclick and those other sites charge by impression, rather then click, so I'm wondering what the impression (not click) CPM is and the average click-through rate. Almost all of these places require you to 'contact them' to 'find out more'. ugh.
posted by Paris Hilton at 11:26 AM on April 27, 2006


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