Advertising – the Good, the Bad and the Ugly
The future of advertising is the Internet.
The Quest for Eyeballs
Advertising takes many forms. For Websites, the goal is always to get more qualified viewers. In this post, I’ll go over some of the most common forms of advertising, and talk about what does and does not work.
It’s all About Traffic
Advertising should should drive qualified traffic your site. The more potential customers that visit your site, the more sales you’ll make. Visitors also help you figure out whether or not your site works well.
Far too often, Entrepreneurs focus on their site without ever testing it out with actual traffic. It’s usually better to to get your site in front of real people sooner rather than later. Refine your content based on your market, not based on your guesses about your market.
There are several kinds of advertising. I’ll cover some of the most common forms of online advertising here, along with some of the pros and cons of each type.
Pay Per Click
Pay Per Click, or PPC, advertising is exactly what it sounds like. The advertiser pays some amount of money every time their ad is clicked.
Ads are typically banners or text blocks. Costs range from pennies per click to hundreds of dollars.
Pros: There are lots of networks to choose from. Easy to control spending and manage budgets. Your ads prequalify visitors.
Cons: Can be expensive, especially for popular niches. Banner ads need to be created. Requires careful research and planning to get a good return on investment.
Cost Per Thousand
Cost Per Thousand, or CPM, advertising is a little different than PPC. The advertiser pays some amount of money for every thousand impressions (views) their ad gets.
Ads are typically banners or text blocks. Costs range from a few dollars to hundreds of dollars per thousand views.
Pros: There are lots of networks and publishers to choose from. Easy to budget. Potential to be less expensive than CPC, especially in larger volumes. Your ads prequalify visitors.
Cons: Can be expensive, especially for popular niches. Banner ads need to be created. Potential to be more expensive than CPC. Requires careful research and planning to get a good return on investment.
Email advertising is either an email promoting your site, or an ad placed in another email (as a sponsor).
Ads are typically emails explaining the benefits of your product or service. Costs vary quite a bit, and can be charged based on clicks or total volume.
Pros: Emails allow you to give a lot of information to prospective clients. Visitors to your site will be highly qualified. Emails from trusted sources have a more personal touch.
Cons: Can be expensive, especially for popular niches. Emails need to be written, and often approved by the sender.
Advertising on forums, online classifieds (like Craigslist) and other community based platforms.
Ads can take a number of formats, but are most commonly a short written message.
Pros: There are lots of options. Can be very cost effective.
Cons: Can be labor intensive. Every site will have different rules and guidelines that should be taken into account.
Bulk traffic promises to deliver large amounts of traffic for very low prices.
There typically are no ads, visitors are simply delivered directly to your site.
Pros: Cheap. Can stress test your site’s performance. Might boost Alexa rank.
Cons: Traffic is very low quality. Almost never pays for itself.
What Actually Works
The truth is that, except for bulk traffic, all of the methods above are worth testing for most businesses.
How to Evaluate Advertising
The gold standard of how to evaluate advertising is Cost Per Click (CPC) versus Earnings Per Click (EPC). You’ll need to be able to track visits to your site from different sources, as well as sales. Here’s an example showing how it works:
Alice decides to launch an advertising campaign. She spends $500, and gets 500 visitors to her site. That gives her a CPC of $1. She nets $25 per sale of her product. Alice’s advertising campaign generates 30 sales for a total net profit of $750, and an EPC of $1.50.
Once the CPC and EPC of an advertising campaign is established, the goal is to bring the CPC down, the EPC up or both. I’ll talk about how to optimize advertising in a future post.
Real World Experience
At Tilden Tasks we’ve played around with multiple forms of advertising. Thus far, email advertising and guerrilla advertising have been our most effective avenues.
There are a lot of ways to get visitors to your site. Many of them take a lot of time. Advertising’s main benefit is that it is fast. Use advertising to see if your offer works, and to optimize it.
Before beginning an advertising campaign, make sure you have a way to track its effectiveness.
Start small, and make changes with each revision of your campaign. Don’t get discouraged if your first advertising campaign is a dud – keep at it until you find a formula that works for you!