Posts tagged cpm
What is SOV? - Display Advertising 101 pt. 2 of 2

Ahh, it's Wednesday again and that means another riveting edition of the Hub Digital Newsletter!

Listen - I know this stuff isn't fun. I get it. If you had wanted to learn about marketing, you would have gone to school for it. But here's the deal. You can't do the fun stuff, if you don't put in the marketing work. I know your passion is taking pictures, selling clothes, styling hair, or whatever else you decided to open your business around. But you can't continue to do that if no one is giving you money for it. How do you get money for it? You drive sales through marketing.

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Now yes, you can absolutely hire someone to do this for you (hence how I have a job). But I subscribe to the idea that even if I hire someone to do a job for me, I want to at least know what's going on. There's so much more power in knowledge and even if I'm not the one installing my cable box, it's important for me to be able to understand what the tech is doing with all those wires.

With that said, today we're moving on to Part. 2 in our Display Advertising 101 series. Last week we we discussed some more general display advertising terms. Today we're diving in to different buying philosophies and where your ad is going to appear on a website. Let's do this!

  • CPM - This stands for your Cost Per Thousand Impressions. When you purchase on a CPM basis you're buying impressions (or the number of times your ad is going to be seen, not necessarily clicked on). As an example, if you're buying an ad with a $10 CPM, you're paying $10 to reach 1,000 people. What is a good CPM? That's a little harder to define. Some sites state the national average CPM at around $1.90 while others go as high as $10.40. To me, a "good" CPM depends on the audience. Smaller, local sites may have CPM's much higher in the $10-$15 range. However, if you're a local business, you're reaching a much more targeted demographic. While you may be paying more to reach the same number of people, those people are much more likely to convert to sales. Here's my general rule of thumb. For large, bulk, national buys look for a CPM below $5. For anything local expect to pay around $10. However, use your gut here and weigh the importance of the audience you're reaching when considering CPM.
  • Pay-Per-Click - Instead of buying impressions, another pay you can purchase  ads is by Pay-Per-Click or PPC. With PPC ads you are only charged when someone actually clicks on your ad. This is usually seen in Paid Search platforms like Google Adwords. Now, you're probably saying, of course I only want to pay when someone clicks on my ad! Why wouldn't I choose to pay this way!? You're right, in some cases you can get more for less money with PPC ads. However, in some cases you won't. With PPC ads, you can't control how many impressions you get, and impressions are valuable. Remember last week how we talked about how low click-thru rates actually are, but how important impressions are for branding even if someone doesn't click? Well with PPC ads you can't control those. Let's say you want to spend $5 per day and you're bidding $1 per click. That means it takes 5 clicks before your daily budget runs out. Well for some reason your ad is having a really good day and you get those 5 clicks in only 50 impressions. While it's great that your ad is performing so well with clicks, you just paid $5 to get your ad seen only 50 times. Yes, 5 people clicked thru today, but you missed out on hundreds of people who would have seen your brand and may have purchased in the future. The other thing you can't control is who is clicking on your ads. Sometimes competitors can have this nasty habit of going through and clicking on ads to run up budget. Currently the national average for PPC ads is trending at about $1.58 per click. For a qualified lead this is nothing, but for a competitor who's just clicking away with no intention to buy this can add up fast.
  • SOV - The final way you can purchase ads is by SOV or Share-of-Voice. SOV means you're buying a percentage (or share) of the total number of impressions a site gets on monthly basis for a flat rate. As an example, any website's traffic will vary day to day. However, looking at the history of a particluar site you can see that on average this website has about 10,000 impressions per month (give or take a few depending on what's going on that month). You're going to purchase an ad for $200 per month for a 25% share of those impressions. That means for $200 you can expect about 2,500 impressions per month. A couple great things about SOV. The first is that you are paying a flat rate month after month. You know exactly what you're spending on this ad and don't have to worry about those costs skyrocketing if impressions go up. Speaking of impressions going up, if the site is having a great month you could score with a ton of extra impressions at no added cost for you. Just be aware that with good months comes bad months. Just like you won't pay more for a spike in impressions, If there is a downshift in impressions for the month, your rate won't change to reflect that.

    Now that you know the different ways you can purchase an ad, let's start talking about how to know where your ad is going to appear on a website.
  • ROS - ROS stands for Run-of-Site.  When you purchase an ROS ad you've purchased the same ad position on EVERY page of a website. This means that your ad will appear next to all pages and all content.
  • Sponsorship - Sponsorship ads are the exact opposite of ROS ads. Instead of appearing throughout the entire site, your ad is "sponsoring" one particular section. This is good if you're trying to reach a very targeted audience on a website. Real Estate agents for example may want to sponsor the "Homes" section on a news site as they are more likely to reach people interested in buying or selling a home than they would on on the "Politics" section.
  • Fold - This comes from an old newspaper term where "the fold" referred to a literal fold in the paper. In digital terms "the fold" refers to that invisible line that separates what is immediately visible to an audience as soon as a website loads from what isn't. All that content that appears right away without have to scroll or move around the screen is considered "Above-the-fold" while the content that appears after you scroll down is called "Below-the-fold". Naturally, above-the-fold ads usually cost more money as they load right in the reader's line of sight without them have to work for it. However, something to keep in mind is that some below-the-fold ads could be hidden gems. Think about your own reading behavior when you go to a news site or blog. You're there to read articles, not just site at the top of the page, right? You usually have to scroll down to read the article, and because it takes some time to read you're going to sit with that part of the page open for a little while. When buying ads on a blog or news site, consider below-the-fold ads that sit right next to the content where readers are spending all their time. Not only will your ad get more screen time, but it will most likely cost you less as well.

Well there you have it! You made it through all the boring stuff and technical terms. But now you can walk into any sales meeting and leave knowing what you're buying is going to help your business online. Good luck out there and I'll see you back here next week!