Online Marketing Options -
CPM Advertising

The Overview

CPM/banner advertising is very similar to the concept of radio or tv advertising. With radio/TV, you're rate is determined by demographic info, total reach, and the number of times your ad receives exposure (or an impression) on that audience. Online, CPM advertising is much the same. Demographics are targeted, you're guaranteed exposure, and you pay a flat rate for every 1,000 times your ad receives an impression. Hence, CPM, or Cost Per Thousand.

Unless you are the top of the chain for a major brand name, CPM/banner advertising is a dead form of advertising for you. Currently, the ONLY benefit to CPM advertising is branding (which is a bottom feeder on the internet marketing benefit list).

The reason? Banner ads simply do not draw clicks. During their induction, banner ads we're very effective, driving as high as a 10-15% click through rate (you received 100-150 visitors to your site for every CPM purchased). Over time, searchers became immune to banner ads, and clickthrough rates plummetted. Today, banner ads typically receive between .1% and .3% click-through rates. That means that you'll receive 1-3 visitors for every CPM purchased.

For targeted niche websites, CPM rates can vary between $20-40 CPM. Based on this figure, you'll be spending $7-40 for each visitor that comes to your site - ouch. Compared to Pay Per Click pricing (which averages a 1% click-through rate, and you only pay for the clicks), the return can be astonishlngly lower. There's a reason why the major search engines use PPC over banner advertising now, perhaps we should follow their lead.

factors affecting success

• Demographic of audience. Not so much their personal demographics, but how they found the site you will be advertising on. If an group travel site receives most of their audience from general news stories they stream on their site, the audience is not very targeted.
• CPM rate - the more targeted the audience to your specific product/service, the higher the CPM rate
• Do they offer a Make-Good policy if they are not able to deliver the exposure to your ad as promised?
• Click-through rate of ad
• Conversion of visitors to site into action takers

Pro's

• If you are the top feeder in a brand name, CPM advertising can work very well to keep your brand name in front of a targeted audience.

Con's

• Internet users have become blind to standard banner ads.
• Click-through rates have dropped from 10% - 15% at their inception, to .1% - .3% currently.
• Newer mutants (rich media for example) have been created to boast this dying form of advertising. The same declining pattern is occuring, only at a much faster pace.
• You pay for exposure, not visitors.
• If your ad doesn't draw any clicks, you've wasted your investment poorly. Think, how many banners do you click on?
• Branding has little to no value online unless you are the top feeder of a brand name. Branding the Hilton name when you're hotel only services Orlando does not benefit you.
• 1000 impressions on a website does not mean 1000 people saw your ad. It means your ad was displayed 1000 times. If the average visitor on a site views 5 pages, you're only getting exposure to 200 people.

'Net profits recommendation

• Avoid CPM advertising unless you are the top feeder brand name.
• Invest into other forms of advertising that drive actively-searching visitors to your business.
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