Archive for October, 2009

29
Oct
09

What is a good online click through rate?

By Mr Media Leave a Comment
Categories: Online media planning, media buying and media planning

This is a question we get asked often. The answer depends on two things: 1) what you paid for the impressions that generated the clicks and 2) what cost per click to have to generate to secure  your target cost per sale.   Let’s say you get a 0.05% CTR. That looks low. Now lets imagine you have a target cost per click of £1.   If your click through rate is 0.05%, then you are generating 1 click with every 2,000 impressions.  This means that to reach your target CPC you must buy your 2,000 impression for no more than £1. If your CPM rate is £0.50, then your impressions cost will be £1. So, the 0.05% click through rate is giving you your target cost per click.  But if you are paying a £10 CPM, then the 2,000 impressions you need for every click will be costing £20 – then your CTR of 0.05% is terrible.

What can you do to improve things?  There are three things you can do 1) negotiate down the CPM on the basis of performance or 2) improve the nature of the offer e.g. 5% off list prices will pull less well than an offer 20% off list prices and 3) improve the creative  – the message or call to action may not be strong enough – beef these up and your click rates could climb significantly.

28
Oct
09

Calculating CPMs and Impressions

By Mr Media Leave a Comment
Categories: Online media planning
Tags: , , , , , ,

Online display advertising is often traded on a CPM basis. But what does this mean? CPM means cost per thousand impressions. So if your CPM is £1, you are paying £1 for thousand times your ad is seen.  The lower your CPM the more impressions you will get for the same budget.  A budget of £10,000 spent at a  CPM of £2 will secure 5,000,000 impressions. A budget of £10,000 spent at a CPM of £1 will secure 10,000,000 impressions.  It’s worth pointing out that this does not mean you will actually reach 5m or 10m real people. Sometimes some people will see your ad twice, three times or even four times, depending on the level of frequency planned into your campaign. You could buy 10,000,000 impressions but actually only reach only 3m people, who would see your ad an average of 3.3 times. Managing this relationship between budget, cost, impressions and frequency is part of the role of the media planner.

There’s a nice little CPM calculator here.

28
Oct
09

Online display advertising formats

By Mr Media Leave a Comment
Categories: Uncategorized

Theres a good guide to the different online advertising display formats here.

28
Oct
09

Key types of digital display advertising media buy

By Mr Media Leave a Comment
Categories: Online media planning and media buying
Tags: , , , , ,

Here’s a list of the key types of digital online display advertising media buy:

  • Affiliate Display – display ads run as part of an affiliate display campaign for new customer acquisition – usually traded on a cost per click, cost per lead, or cost per sale basis.
  • Behavioural targeting – online display ads shown to users who are anonymously tracked as using certain sites
  • CPM Display – buying display formats like banners, MPUs and buttons on sites traded on a CPM basis
  • CPC Display – buying display formats like banners, MPUs and buttons on sites traded on a CPC (Cost per Click) basis
  • Contextual targeting – display ads that are targeted based on the content of the site (can include in-text boxes)
  • Newsletter / bulletin banners – display banners and buttons etc included in digital newsletters
  • Retargeting – showing ads to people who have visited your site and then transferred into an online advertising network like Specific Media
26
Oct
09

Online media buying: CPC or CPM?

By Mr Media Leave a Comment
Categories: media buying
Tags: , ,

CPC and CPM sound similar but that last letter makes a whole heap of difference in online media buying.  Cost per click (CPC) involves paying only for clicks, regardless of how many people actually see your advertising.   Paying for clicks is good because the media owner is sharing performance risk with you. Clicks are  a response from the consumer – you are paying for responses. THis is very different to CPM where you are paying for audience impressions. In other words you are simply paying to be seen. Being seen does not necessarily deliver a tangible business result. But a click visit to your site can. If you advertising with a lower budget where every penny (or cent) has to count in terms of short term business results, then you are better advised to go down the cost per click route.

Google is famously a major provider of click traffic. MSN’s Bing and Yahoo! are other major sites where advertising can be bought on a cost per click basis. If you want to move beyond classified type text boxes and into more visual display communication that is still traded on a cost per click basis, you can consider the larger online advertising networks who will trade on a CPC basis. However, unlike Bing and Yahoo! many of the larger players have minimum order values so if you are a smaller business, these may be too expensive.

26
Oct
09

Online media buying rates

By Mr Media Leave a Comment
Categories: media buying
Tags: , , , ,

Online media buying rates are a function of several factors. These are market supply and demand and click rate performance and CPM. The supply side comes from the impressions that the media owner offers and the demand side comes from the level of media buyer demand for that inventory. As demand for higher quality sites tends to be higher than that for lower quality sites, CPMs tend to be higher on higher quality sites.  As online display advertising campaigns are often evaluated on a cost per click basis, you will also need to make sure that the CPMs you pay will deliver your target cost per click at the click through rates delivered. Let’s look at some examples:

Online display standard banner

The standard 468×60 banner is the most common format in online display advertising. Unfortunately, this has given it a “wallpaper” quality which means that it is not particularly effective.  Whenever planning to buy an online display advertising campaign you should bear this in mind.  This is a low impact, low response format and you buying rates will need to reflect this. Consider that you may be seeking a £1.00 cost per click. If a standard banner format has a response rate of 0.05%, then you will need 2,000 impressions for every click. As you are budgeting £1 per click, you cannot afford to pay more than a £0.50 CPM if you are to generate your CPC target.

MPU – larger format ad

MPUs are a much higher impact, higher response format. An MPU can easily deliver a 1% click through rate. This means that you only need 100 impressions to generate every click. So if you are targeting a £1 CPC, you can still achieve this if you are paying a £10 CPM.

Online awareness advertising

If you are not seeking a pure click-based ROI but want to increase brand awareness or consideration amongst, for example, affluent business audiences, you will have to place your creative message on sites popular with these audiences. Typically more upscale and leading business sites have demand levels that are higher than supply which enables media owners to increase their CPMs regardless of factors like click performance.  Here you are investing on brand association with quality editorial content.  Whilst the payback to this type of activity is not measured as short-term clicks, a longer term objective to change brand attitudes can be delivered through this type of activity. Banner and MPU formats will be more expensive and you can expect to pay £5-£25 and £10-£40 for banners and MPUs respectively in these environments.

21
Oct
09

Digital media buying metrics

By Mr Media Leave a Comment
Categories: media buying
Tags: , , , ,

Digital media is traded on two key metrics: Cost per Thousand (CPM) and Cost Per Action (CPA).  CPM is based around audience delivery i.e. the number of people see the campaign, and is not therefore directly related to campaign performance. CPA is a measure of actions which can be defined as clicks, sign ups, sales, subscriptions or log-ins etc. This is directly related to campaign performance. Clearly the more budget that can be traded on CPA activity the more your commercial risk will be reduced. CPA as a form of media buying sounds great and in many ways, it is.  However, there are a couple of limiting factors that users need to be aware of. First, you are often bidding against other advertisers for CPA activity. In other words, they too are bidding for actions from the same target market.  You can bid as high as is economically sustainable for your business, but you may reach a point where the economics do not work  for your product. This is a key area and it’s important that you have understood how you are calculating ROI before commiting budget. A good revenune ROI does not mean a good profit ROI. You can read more about calculating online marketing ROI here. Second, volumes can be quite low, so you cannot usually depend on CPA activity to fully populate your sales funnel. You may need to use other online marketing techniques to drive traffic into your sales funnel.

20
Oct
09

Can online banner advertising work?

By Mr Media Leave a Comment
Categories: Online media planning
Tags: , ,

Yes, banner advertising can work but it depends on what effects you seek. Banner advertising does not always work on a cost per click basis – the most common form of online display evaluation. But online display may be having other effects that impact either directly or indirectly upon your business. If you’re wondering why many large advertisers seem to continually advertise online, the answer is that they understand the answers to the questions I have posed below.

If you are looking for response, think about these questions:

  • Do you fully understand your click path from initial source to last click?
  • Are you correctly attributing digital media cause and effect across the click path?
  • Are you over-reporting “last click” actions in your click path?
  • Are you tracking delayed response as well as direct response?

If you are looking for awareness and consideration shifts, think about these questions:

  • Do you have the correct research in place to accurately track awareness and consideration shifts?
  • Are you advertising at the correct weights?
  • Are you testing different messages and creative formats?
  • Are you researching the target audience you are planning to reach (as obvious as this may seem it is not always the case)

Measurement is key to effectiveness in online display. There are hurdles to cross, but the rewards can be significant if you plan and buy online media correctly, with an awareness of all the effects that can be driven by online display advertising.

19
Oct
09

Principles of media buying

By Mr Media Leave a Comment
Categories: media buying
Tags:

Media buying involves the implementation of media plans.   The media plan will cover the media channels that have been selected for use and the amount of budget that is to be invested in each channel. If the media planner has developed a direct response or online traffic driving plan, the media plan will detail the likely amount of response to be generated from the investment in each media channel.

The role of the media buyer is to turn the media plan into a reality that will be seen and heard by the target audience. This involves negotiating with media owners.  Both the media buyer and the media owner have similar and competing objectives. Both sides want a deal, but…

  1. The media buyer wants to secure as much weight of communication as possible  – this is usually measured as reach, size, impact or campaign duration.
  2. On the other hand, the media owner usually has a fixed amount of inventory to sell. Here’s an example: pages in a magazine for example are a bit like airline seats – there are a fixed number and the amount of revenue is driven by the amount of money generated from each page. If too little money is generated from each page in a magazine, the magazine risks running at a loss so the media owner’s objective is to maximise the amount of revenue from the medium.

So we have competing objectives – the media owners wants to maximise media revenue and the media buyer wants to minimise cost.  This means there has to be a negotiation.  It is this negotiation that is at the centre of the media buying process.

The different aspects of media buying

Because media buying involves negotiation, each side identifies area in the negotiation where they may be willing to compromise in order to reach a deal. In media buying, these areas are typically:

  • Price
  • Access
  • Timing
  • Format
19
Oct
09

Principles of media planning

By Mr Media Leave a Comment
Categories: media planning
Tags:

Media planning is the business of identifying the media opportunities that will allow your brand to connect with its target audiences.  The media world of today is highly fragmented with lots of individual opportunities across TV, press, radio, magazines, and online  – affiliates, display, search and social media. In amongst all this choice, brand managers need to ensure that their media budgets are being deployed as effectively as possible. Media planning is the agency process of evaluating these options in relation to a given marketing communications brief to ensure that the desired cost effectiveness is delivered.

Media planning considers the following

  • Helping to define the target audience in media planning terms
  • How the target audience behaves
  • How the target audience consumes media – time of week, time of day, at home, at work, on the move,mindset etc
  • How the different media are consumed – for information, for relaxation, for entertainment
  • The suitability of the medium in question to deliver marketing communication effects – to launch new products, to offer purchase reminders, to build loyalty etc
  • What effects the editorial context of the media channels available have on the recipient of the communication
  • How likely each channel is to deliver the desired media communication  effect
  • The cost structure of each media channel – usually based on the unit cost of delivering the target audience
  • How performance of each channel should be evaluated.
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