The Short Guide To Online Advertisement Costs
There are a number of factors that influence the online advertisement costs. These factors include ad size, location, and performance. Optimizing these factors directly influences the end result which is greater sales and a good profit margin. As the profit increases so do the online advertisement costs. Let’s take an in depth look into these crucial factors below.Online advertisement costs are usually more inclined towards the benefits of the advertiser. When compared, CPM is found out to be less rewarding as compared to CPC. When we talk about performance but the publisher of the CPC ads generates less revenue for marketing as compared to the advertiser. Online advertisement costs of CPM, on the other hand, are lower as compared to CPC but the latest research figures reveal that the CPC is taking over CPM. Moreover, the efficiency of CPC advertisement is calculated on the basis of conversion rates while the CPM advertisements are considered more efficient when more brand impressions are generated. To sum it all up, in comparison to CPM, CPC promises higher ad performance for a smaller rate because of which the definitive benefits goes to the advertiser instead of the publisher.
The Size And Dimensions Of An Ad
The Dimensions of a specific ad plays an important role in the online advertisement world because the rate of an ad fluctuates with accordance to its dimensions. Like any commercial space, on a newspaper or a billboarding, that is rented out in terms of specific units of measurement, the online ads are charged in terms of pixels.
The Placement Of An Ad
There are a number of places where the ad can be located on a website. But generally speaking, an ad that is placed above the scroll is considered gold. The location of an ad, be it may left or right, center or bottom, is in accordance with the other contents located on that specific page. The term viewability has become popular in the online advertising world as it describes the viewable positioning of an ad on a page without scrolling. The online advertisement costs increase for a higher performing ad location.
The Performance Of An Ad
How good a specific ad is going to perform depends on factors like the size, location, and the overall quality of that ad. Higher the number of clicks or views an ad can bring, higher is its performance. Performance of an ad is also influenced by targeting, for example, an ad that is supposed to be read by engineers will do best on a page that discusses engineering. Similarly, that same ad is unlikely to get any attention when placed on a page that discusses herbal medicine.
There can be two types of contracts for a specific ad. The first one is an ad that charges a client for 1,000 impressions and the other one charges the client for a proposed duration whether or not the ad gets 1,000 impressions. This is the reason why guaranteed impressions ads are considered more valuable than the non-guaranteed ones.
Below are different types of advertisements that are implemented by online advertisement sites.
Cost Per Thousand Impressions (CPM)
Cost per thousand impressions, like the name suggests, is an advertisement that charge for one thousands views of a specific ad. These minimal risk ads are praised by the advertisers who are more inclined towards advertising their inventory instead of a quick action. This advertisement type suits best for advertisers who have a small budget and brand awareness is their main focus. These ad lack productivity as the same ad is advertised to the same group of people over and over again and revenue is restricted as the client does not pay for results. The online advertisement costs of these ads are comparatively low as compared to other advertisement categories. At this point, it is important to mention that the rates for both cost-per-impressions and cost-per-click are dropping because of the increase in number of websites and a slow progress in online advertisement. Increasing the volume of an ad inventory can be a solution to the above-mentioned problem along with increasing the number of unique visitors and page views.
Cost Per Action (CPA)
Cost Per Action points out the revenue generated by an advertiser when an action is taken on a website ad by a unique visitor or any given action is completed. A specific amount is paid by the advertiser to the publisher when a targeted action is completed. This cost per action amount is fixed beforehand. The advantage of this type of advertisement is that the action is pre-decided and the advertiser only has to pay when that pre-decided action is completed. These type of online advertisements are more inclined towards the advertiser as they tend to get more control of what they’re paying for.
Cost Per View (CPV)
In some cases, advertisers are paid for the number of ad views on a website. If the goal of a specific company is to boost brand awareness then cost per view ads are the best fit. With the cost per view advertisement, the marketer only pays for the number of views by the site visitors. Cost per view advertisement is usually less expensive than cost per click (CPC) advertisement.
Cost Per Click (CPC)
Cost per click or CPC advertisement is mostly preferred by advertisers who use advertisement platforms like Google Adwords, Bing or Facebook. Cost per click advertisements generates revenue for a website when a unique user clicks on an advertisement to learn more about a specific product. CPC is different from CPA because in CPA the advertising platform is paid when a certain pre-decided action is completed which can be a sale of the advertised product but in Cost per click, the advertising platform is paid when a user interacts with a posted ad.