by: Jake Blumes,
Marketing, Advertising & Research Consultant at Grants International Inc.
Impressions are everything in most media buying decisions. It’s the top of the funnel and you need sufficient impressions to have enough traffic make it through to the middle and bottom of funnel.
My job is to buy impressions for online campaigns to generate leads. I have to generate 10,000 new leads a year to keep the staff at capacity and given our sales conversion rate and average value per client, I need to generate these leads for about $10 Cost Per Lead (CPL).
The starting point for me to know if the impressions from the platform are worth considering is CPM – Cost per Thousand Impressions. There are 3 price ranges I’ve found when measuring CPM:
- Really cheap CPM’s as low as $0.10 to $0.20
- Medium priced CPM’s between $5 and $10
- More expensive CPM’s in the $12 to $15 range
The lowest-priced CPM’s are good but don’t rule out the higher-priced CPM’s. I know that statement is not really helpful, but there is no rule of thumb that I’ve found for CPM’s alone.
As I said, CPM’s are just a starting point.
Next, you have to combine the CPM with how many clicks you’ll get on your impressions – the CTR or the Click Through Rate. With these two measures we can start applying some general rules of thumb to follow:
Really cheap CPM’s can work with even the tiniest CTR’s in the 0.05% to 0.25% range. But when it comes to medium to expensive CPM’s between $5 and $15 you really need strong CTR’s in the 4% to 6% range or higher to get a good return on your advertising.
Here are some examples… Native ad platforms like Outbrain and Taboola are sources I find that give you really cheap CPM’s in the $0.10 to $0.25 range and tiny CTR’s around 0.2%. So even though the CTR is extremely low, it works out to $10-$12 a lead because the CPM is really low too.
Facebook, on the other hand, is a source I find that has expensive CPM’s in the $12 to $13 range but that’s okay because our Facebook ads also achieve a strong CTR’s between 5% and 6%.
I recently evaluated programmatic advertising which places your ads on sites similar to Native Ads, except you buy the impressions through the programmatic supplier. For our purposes, I did not find programmatic to be a good buy. The CPM’s were in the medium range of $6 to $8, but the expected CTR’s were similar to Native Ads in the 0.1% to 0.3% range. That means to achieve of $10 Cost Per Lead we needed 10x more impressions for our money to make this a good advertising buy for us.