THOUGHT (aka Centric's Blog)

If you read this article, you might get that impression.

Here’s the Cliffs Notes version for those of you who don’t want to wade through the article: Google AdWords has an equivalent cost per click of $0.50 on average. This means it costs $500 for 1000 clicks. However, television charges only $20 to show your ad to 1000 people. So, television is much less expensive than Google AdWords.

Um, well . . . no.

The fact is, you can’t compare the two numbers at all. Cost per click (CPC) is measuring a cost per action. A click means a person has seen the ad, read it, and decided that they were interested enough to click on it. However, cost per thousand impressions (CPM) is measuring the cost to show an ad to an audience that may never see it (thanks, TiVo), much less be interested in it, or respond to it.

Anyone can see which is the higher value. CPC is delivering a targeted lead that has already said, "I’m interested enough to act on this." CPM is simply how many times your ad appears.

In fact, anyone who has spent time hands-on with internet marketing wouldn’t bet on banner ads (which may have only a $1-5 CPM) beating AdWords in terms of cost per click. Why? Because the response rate is so low. A 0.1% response rate on a $1 CPM network buy is a $1.00 CPC–2X the average for Google Adwords. And, guess what: a 0.1% response rate is good for network buys.

Television? Forget about it! Without heroic measures, you can’t track an individual television ad impression to an action. And even if you could, nobody with any practical experience would expect television’s equivalent CPC to beat AdWords. 

This entry was posted on Thursday, August 28th, 2008 at 12:31 pm and is filed under Ruminations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.