Over the years we often have clients ask us to evaluate marketing platforms throughout the online world, and sometimes even throughout the offline. This request puts us in an interesting position because it gives us visible access to the typical costs and results of a variety of marketing mediums for a particular industry vertical. And that access has shown me something I found really interesting: online advertising is very inexpensive.
Our Measurement: CPM
Measuring the raw efficiency of marketing can happen in a number of ways. One of which is to combine a quantitative measurement, such as Cost Per Thousand (CPM), with a qualitative measurement, such as how qualified a prospect is, to better determine the full impact of the impression. For example, a prospect seeing a bus bench ad may not be as impactful as he or she seeing and interacting with a representative at a trade show.
On Average, How Much Does Offline/Traditional Marketing Cost?
So, we’ve talked about how marketers measure the raw efficiency of their ads by measuring the qualitative and quantitative impressions from each prospect, but what’s the cost? The following are some really rough industry averages for CPM in the offline world, but still give great insight into the expense of offline marketing:
- Radio: $10-$20
- Network TV: $10-$30
- Billboard: $2-$5
- Direct Mail: $15-$20
- Super Bowl: $36 (4 million dollars, reach 111 million people)
Keep in mind that you’ll have to add that qualitative measure of effectiveness and right audience to the average cost. A billboard will reach a lot of people who give it 1/4 second of attention, whereas an average Super Bowl ad is 30 seconds long and plenty of the people who watch the ad are looking forward to it.
How Much Does Online Advertising Cost?
Like traditional offline marketing, online marketing has a number of different mediums to engage with prospects. We’re going to look at Google Ads (formerly Google AdWords) for cost per click advertising and the costs to advertise on the most common social media platforms currently allowing the public to purchase ad space.
How much does it cost to advertise on Google?
Advertising on Google’s search results is typically priced on a per click basis. If we pull it back to a CPM model to match up with our offline methods from above, many businesses find that they fit into a CPM of around $100.
Google Search Ads Costs
That said, advertising costs on keywords for the exact kinds of services your business performs can range significantly. Yet, it’s a bit silly to compare because Google Ads on search results are advertising to prospects at the exact moment they’re looking for information on products/services that your business sells. Not only are we seen by those prospects at a CPM of $38.40 ($38 per 1,000 viewable impressions), we can also reasonably assume that we’ll get about 30 of them to visit our site and turn a few of them into sales. The average benchmark CPC is $1.46.
Google Display Advertising Costs
Advertising on Google’s Display Network is very inexpensive when viewed within the CPM lens. We find that highly targeted display campaigns average $0.50 – $5 CPM, with an average of $2.40. With a more general awareness goal and less targeting, CPM’s can be driven to incredibly low costs, even below $0.01. The average CPC on display network campaigns is $0.30.
Advertising on YouTube through Google Ads is typically done on a Cost Per View (CPV) basis, so it’s a bit tough to compare on a CPM model. At an average CPV of $0.10, you’re looking at about $100 per thousand VOLUNTARY ad views. And CPM for the first 5 seconds of the ad could be $7.50 or less depending on how great (or terrible) your ad is. Youtube averages as $2.54 CPC.
Social Media Advertising Costs
How Much Does Facebook Advertising Cost?
Facebook allows for a daily budget or a lifetime budget for advertising. That said, the minimum budget is $1.00. Using Facebook’s advertising platform allows you to advertise on Facebook, Instagram, Messenger and the Facebook audience network.
On average, advertising on Facebook costs marketers $0.63 Cost Per Click (CPC) and around .40 CPM, depending on how broad your target audience is. Facebook advertising costs are very flexible, Facebook Ads have become a great option for online advertising. The platform offers exceptional targeting options, which helps your advertising dollars go further by reaching the right people.
Instagram Advertising Costs
Instagram Ads are managed via Facebook’s ad platform and offer an impressive way to reach your target audience. The average CPC for Instagram ads is $0.83 and the average CPM is $4.80. That being said, Facebook ads typically perform better for campaigns focused on traffic and clicks, while Instagram typically performs better for campaigns focused on impressions and reach. Both platforms are great to advertise on and both should be considered as a part of your digital marketing strategy.
Twitter Advertising Costs
Advertising rates on Twitter are really dependent on what type of campaign you choose. It can range from $0.50 per engagement to all the way up to $200,000 per day for promoted trends.
While promoted trends provide huge exposure and awareness in a short amount of time, the price is costly, but can be worth it as it guarantees placement in the Trends section for an entire day.
For those who don’t have the $200,000/day budget, there are two other options:
- Promoted Tweets. The cost for which can range anywhere from $0.49 per click. Keep in mind this price is dependent on targeting. The average CPM is $4.20.
- Promoted Accounts. The cost can range from $2.50 to $4.50 per new follower.
LinkedIn Advertising Costs
LinkedIn allows both CPC and CPM advertising, but is more costly than other online platforms and requires a larger daily budget to be effective.
Depending on your targeting criteria and competition on LinkedIn, CPC can start anywhere from $2.00 to $5.00 or more, which is quite high compared to other social networks. The industry-wide average CPC is $3.99.
For CPM, LinkedIn charges per 1,000 impressions. Top Draw recently ran a campaign for a cost of $25.35 for 1,341 impressions, and had an average CPC of $7.85.
Online Advertising is Inexpensive
Some of our clients often ask us to evaluate the different marketing platforms of both off and online marketing platforms, which has given us visible access to the costs and results of a variety of marketing mediums. What this research has shown us is that online marketing is very inexpensive. We’re talking about the difference between pennies to dollars.
A huge factor to keep in mind is the targeting capabilities of online advertising. Online advertising allows you to reach your exact audience, whether they are searching for something specific or identify as interested in your product or service. Online advertising also allows you to track your ad performance and conversions with exact metrics. Offline methods offer much less accurate methods of measurement. Online advertising also offers the ability to remarket and retarget your audience, which can be an incredibly powerful tool in your marketing strategy.
Offline, traditional marketing costs an average of $22.00 per thousand impressions as opposed to $3.45 per thousand impressions with online marketing.