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Making Sense of Online Ads
By: Jeff Louis
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While traditional-media costs show declines due to the economy and lack of willing buyers, online ad rates have remained steady, or even increased, despite the slow economy. Online-advertising costs are computed using a couple of different methods. The easiest is the cost per thousand model (CPM), when an online ad seller charges X dollars for 1,000 impressions or views.

It’s a bit deceiving, actually because as most of us know, Web pages have a feature that scrolls the page up or down, which is great for content. It's not so great for CPM ads. If your ad happens to fall outside the viewable portion of the Web site (referred to as “above the fold”), it counts as an impression whether viewed or not. For instance, if I purchased an ad on People that fell below the “readable” space opened on my browser, I would still get charged for the ad even if no one saw it. The sponsored links (pictured) fall at the bottom of the People Web site.

The next method is cost per click (CPC), which is popular due to the fact it tracks the effectiveness of your ad by counting the number of clicks it receives. CPC is used by most search engine companies for sponsored-text ads. 

Some packages vary depending on what source is used. For instance, we could do a “home page” takeover on a popular newspaper site. This means every single ad on the homepage is for a single product or company. Movie companies often use takeovers prior to or on the day of a new release.

Another popular form is the “road block.” A road block is when you come to a certain page on a site, and similar to a takeover, all the ads are for one products or brand.

According to an article in Ad Age, some Web sites are cashing in. Web MD garners between $40-$60 CPM, depending on where the ads fall on the site; Kim Kardashian receives $10,000 per tweet on Twitter through Ad.ly; the WSJ-Online video rates fall between $75-$100 CPM; the online video site Hulu is around $35 CPM; and a YouTube home page roadblock with video runs an advertiser $400K for a single day.

How much should be spent depends on what your client or company is willing to spend. For instance, when opening a casino in California, we ran entire site takeovers on several of the major newspapers due to the stiff competition between Native American Casinos in California, meaning every ad (except ads sponsored by Google) were ours. It cost a lot of money, but the community was excited about the new casino, and there were more than enough clicks on the ads to justify our expenditure. When it comes down to it, do your research first to find where your consumers surf. Then, use the top-trafficked sites to run your campaign(s). 

It all sounds simple, and it is. As a digital advertiser, it is up to you to determine where your client or company will get the most bang for their marketing buck. Is one tweet the way to go, or would you rather run a sustained campaign?


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About the Author

Jeff Louis: Media Planner, Brand Project Manager, blogger, and aspiring writer. Please leave a comment or get in touch with Jeff on Twitter. As always, thank you for reading!

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