"With a slight side trip into CPM, CTR, and CR"Internet jargon can sometimes be very confusing, even for
most experienced marketing professional. One such example is
difference between, what are called Ad impressions and click- throughs.
An Ad impression is simply
number of times your Ad, be it banner, button, or text link, has been or will be exposed to a potential viewer. Simply put it is
number of times that image appeared on any computer screen anywhere in
world. As an advertiser this is
least advantageous way to purchase advertising. Yes, it may be
least expensive, but when we look at
facts, is it really?
A click-through is
actual number of times someone has taken their curser and placed it on your advertising image and used their mouse to click on that image and be taken to your site. This is
most advantageous way to purchase advertising for
advertiser, because it really takes all
guess work out of
equation. You'll know exactly how many visitors will visit your site relative to
ad purchase and then it's your job to make
sale, or increase your CR ( more about CR as we get further into
article.)
CPM, "Cost per thousand" is one of
yardsticks used by
sellers of advertising space to price ad sales for impressions. Those that are selling
advertising will sell
advertiser a specific number of impressions (number of times that image appears on any computer screen anywhere in
world and presumably is seen by your visitors.) A CPM rate of $25 is probably about average for larger agencies, while a CPM of $10 or below, is normal for
smaller entrepreneurial operations.
With a CPM of $25' a purchase of 100,000 impressions will cost $2,500 ( $25 x 100 ), while with a CPM OF $10 those same impressions will cost $1,000 ( $10 x 100 ) The first thing you think here, is that a CPM of $10 is
best deal. That's not even close to being true. In actuality
CPM of $25 could produce hundreds of more sales than
CPM of $10 thereby bringing in thousands of dollars more in revenue.
"How can that be you ask?" Well there are a number of other factors that must be computed before you can see
whole Impressions Vs. Click-Throughs picture. One of those is
CTR ( click-through rate ). The CTR is
actual percentage of online visitors who clicked on
ad to arrive at
destination site via one of those "IMPRESSIONS", be it banner, button, or text link. Click-throughs are much more reliable and give a more accurate idea of
performance of an Ad. For a click-through to register, a user must click on
Ad.
For example, if you divide 2,900 clicks by 100,000 impressions, you get a click-through rate of 0.029, or 2.9%. This means that almost 3 banners were clicked for every 100 impressions. It also means that to get 10,000 visitors to your site using this method you'll need to purchase around 500,000 impressions.
The current industry average click-through rate is being reported as anywhere from 0.020% to 0.050%, and that can be drastically higher or lower based on
advertisers ad content and how well he has selected
sites that his ad message will be seen on. Example your ads for buggy whips are being delivered on a site catering to NASCAR enthusiasts your CTR will probably be 0.000%. While conversely your ad for autographed photos of Rusty Wallace displayed on that site would have a CTR well above
industry average.