The Rise Of Paid Advertising
In the past 20 years, the Internet has grown from 300 million to over 5 billion users, or about 66% of the planet.
Paid ads can be effective when used for a targeted purpose, and can have natural advantages. Targeted ads can reach users globally, are cost-effective, measurable, and engaging when done right.
Search engine and social media advertising provides a short-cut to natural organic ranking. Instead of slowly building brand and site ranking, paid media allows maximum visibility in a short amount of time. Getting to the top of a Search Engine Results Page (SERP) or in a Facebook feed ensures products and services can be visible to target audiences.
PPC and PPM are two of the most popular advertising metrics, but there is still confusion among marketers. What is PPC? How is it different from PPM?
Once broken down in simple definitions, any marketer can identify the best option for a business.
What is PPC?
Under the Pay-per-Click (PPC) ad model, marketers pay only for the ad when someone clicks on it. For example, if 100 people saw an ad, but only 10 clicked on it, the marketer would only pay for those 10 clicks.
This is best for brands or advertisers who want to pay only for ads that actually lead to page or website visits. Advertisers set the ad budget, time, and placement, and then bid for a specific search term. The more popular the keywords, the more expensive the cost-per-click (CPC). That’s why it’s important to research the best keywords to get the most out of a budget.
To learn more about how PPC works, check out our in-depth blog post on the topic.
What is PPM?
Under the Pay-per-Impression (PPM) ad model, advertisers pay a specific rate for every 1,000 impressions of the ad, regardless of whether it is clicked or not.
This is similar to more traditional ads, such as print ads and billboards, and is geared towards visibility and brand awareness. PPM stands for “pay per mille,” with mille being the latin term for “thousand.”
Even if the ad is not clicked, it is still displayed. With strong ad copy and landing pages, even a click-through-rate (CTR) of 2% equals 20 clicks to the link. Some advertisers prefer PPM because it is generally cheaper compared to PPC.
Which One Should You Use?
Understanding the difference between PPC and PPM is the first step in creating a digital ad strategy. The next step is evaluating which metrics or considerations are most important to the brand. These include:
- Ad Budget: How much is the business willing to spend on advertising?
- Campaign Objective: Is the goal to raise awareness, or generate traffic and sales?
- Brand Familiarity: Is the business well-known, or in the early phases of marketing?
- Channel: Will the ad be on search engines such as Google and Bing? Or on social media networks such as Facebook and Twitter?
PPC is best for companies that want to focus on conversions: either through sales or member sign-ups. PPC ensures you pay only for each person that clicks to your website, so this method is most effective for people who need genuine engagement and want to track clicks.
PPM is best for brands with a limited budget and a small audience, such as startups or new business ventures. You pay for every 1000 views, so you can have your ad run and not pay until you hit a certain amount of views. You’re not concerned about generating a certain action, just views. PPM for Display Ads can drive awareness if enough saturation is reached.
Managing An Ad Campaign
The best way to find out which is right for you is to revisit your own business’s goals. Is it to increase the number of people who sign up for a newsletter? Is it to sell a new product? Or is it to bring awareness to a sale?
Once you know what you want to track, run a small experiment. Start with one ad, with simple copy that reflects your brand, and a low bid amount. Analyze the results, and determine from results and costs whether to continue.
For SMBs or niche industries, Arcalea specializes in managing paid ad campaigns for your business. Contact us today to find out how your business can utilize online advertising.
Also, be sure to read our previous post, Managing the Digital Ad Ecosystem to Create Value.
