NONE: Re: ONLINE-ADS>> CPM and Click-through averages
Re: ONLINE-ADS>> CPM and Click-through averages
Kristine Loosley (kris_at_concentric.net)
Wed, 15 Oct 1997 14:28:49 -0700
At 10:47 AM 10/14/97 -0500, Jason Rapasky wrote:
>
>I was wondering how accurate are the industry averages for CPM and
>Click-through rates.
Jason: There is absolutely no way to answer this question for "the web" as
a whole. It is so varied and complex that you might as well give up! You
have to determine your OWN benchmarks for your OWN products.
The reality is that clickthroughs are irrelevant unless you aren't selling
anything. Let me illustrate. If my goal is to drive traffic to my site, a
compelling ad and its concommitant clickthrough is relevant. If my goal is
to sell a $29.95 web hosting account, then the # of clicks is irrelevant
and the number of SIGNUPS is the only thing that is relevant.
I've spent the last couple of months buying ads for our ConcentricHost web
hosting product and have seen click throughs from .3% (not 3%, 3/10 of one
percent) to 7%. With the same ads.
What drives the 7%? There is not necessarily a relationship between CPM and
clickthrough. I can have the best ad in the world and if it's on the wrong
site, it's gonna bomb.
There's also not necessarily a relationship between quality of ad and
clickthrough. One of my ads won a "best of web advertising" award for
messaging and creativity and never got better than a .26% click rate. Go
figure. One of my lowest-budget ads is the one that got 7% BUT the
SELLTHROUGH from that ad was much lower than the low clickthrough ad. In
other words, now you have to monitor not only the CPM and the clickthrough
rate and the quality of the ad, but how effective WERE the clickthroughs.
I actually buy primarily on the "cost per sale."
Say it takes 100 clicks for me to get a sale. I know that if I buy 1000
clicks, I should get 10 sales. If that doesn't happen, or if I get more or
fewer than 10, then I have a gauge of the quality of the sites. I know what
an "acceptable" cost per click and cost per sale is for me, and it has
absolutely no relationship to CPM. The formula is: # of impressions
divided by dollars paid for those impressions. You will then know the cost
of an impression (.02 cents on $20 CPM, for example). Now figure out how
many impressions it takes to get a single clickthrough. If it's 1,000 and
you paid .02 cents per impression, you just spent $20 to get a clickthrough.
I came up with the benchmarks I use by doing a lot of advertising on a lot
of varied sites and by BABYSITTING the ads through their runs. When an ad
bombed, I would not yank it immediately IF it was getting a lot of
sellthrough. No sellthrough, it's outta there. That's what's wonderful
about the web -- things can change immediately (OK, 48 hours to get traffic
instructions through, but that's pretty amazing!)
I don't think there's much mystery about what makes a successful sale on
the web or off the web. If you are selling the right product to the right
audience at the right price, you will succeed. Mix up any one of those
three-- the wrong product to the right audience at the right price, the
right product to the wrong audience, or the right product at the wrong
price -- and you will probably not succeed.
Kristine
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