Some facts about Banner Impressions Vs. Click-Throughs
"With a slight side trip into CPM, CTR, and CR"
Internet jargon can sometimes be very confusing, even for the
most experienced marketing professional. One such example is the
difference between, what are called Ad impressions and click-
throughs.
An Ad impression is simply the number of times your Ad, be it
banner, button, or text link, has been or will be exposed to a
potential viewer. Simply put it is the number of times that
image appeared on any computer screen anywhere in the world. As
an advertiser this is the least advantageous way to purchase
advertising. Yes, it may be the least expensive, but when we
look at the facts, is it really?
A click-through is the actual number of times someone has taken
their curser and placed it on your advertising image and used
their mouse to click on that image and be taken to your site.
This is the most advantageous way to purchase advertising for
the advertiser, because it really takes all the guess work out
of the equation. You'll know exactly how many visitors will
visit your site relative to the ad purchase and then it's your
job to make the sale, or increase your CR ( more about CR as we
get further into the article.)
CPM, "Cost per thousand" is one of the yardsticks used by the
sellers of advertising space to price ad sales for impressions.
Those that are selling the advertising will sell the advertiser
a specific number of impressions (number of times that image
appears on any computer screen anywhere in the world and
presumably is seen by your visitors.) A CPM rate of $25 is
probably about average for larger agencies, while a CPM of $10
or below, is normal for the smaller entrepreneurial operations.
With a CPM of $25' a purchase of 100,000 impressions will cost
$2,500 ( $25 x 100 ), while with a CPM OF $10 those same
impressions will cost $1,000 ( $10 x 100 ) The first thing you
think here, is that a CPM of $10 is the best deal. That's not
even close to being true. In actuality the CPM of $25 could
produce hundreds of more sales than the CPM of $10 thereby
bringing in thousands of dollars more in revenue.
"How can that be you ask?" Well there are a number of other
factors that must be computed before you can see the whole
Impressions Vs. Click-Throughs picture. One of those is the CTR
( click-through rate ). The CTR is the actual percentage of
online visitors who clicked on the ad to arrive at the
destination site via one of those "IMPRESSIONS", be it banner,
button, or text link. Click-throughs are much more reliable and
give a more accurate idea of the performance of an Ad. For a
click-through to register, a user must click on the Ad.
For example, if you divide 2,900 clicks by 100,000 impressions,
you get a click-through rate of 0.029, or 2.9%. This means that
almost 3 banners were clicked for every 100 impressions. It also
means that to get 10,000 visitors to your site using this method
you'll need to purchase around 500,000 impressions.
The current industry average click-through rate is being
reported as anywhere from 0.020% to 0.050%, and that can be
drastically higher or lower based on the advertisers ad content
and how well he has selected the sites that his ad message will
be seen on. Example your ads for buggy whips are being delivered
on a site catering to NASCAR enthusiasts your CTR will probably
be 0.000%. While conversely your ad for autographed photos of
Rusty Wallace displayed on that site would have a CTR well above
the industry average.
Your probably starting to get the picture now, impressions, and
CPM do not necessarily translate into click-throughs, sales or
income.
Let's look at the thing from a different angle then. How about
instead of impressions the advertising people sell you click-
throughs? That makes sense to me. Now though we are faced with
another acronym CR, or conversion rate (Told ya we'd get to it.)
Actually this comes into play even with the scenario on
impressions described above, but in this example we have a two
step process ( CTR, CR, )to arrive at the sale rather than a 3
step process ( impression, CTR, CR )
As more is learned through trial and error as well as better
tracking tools we are finding that merely getting visitors to a
site no longer has the same value as when Web site traffic was
generally accepted as a measure of success. The trend towards
profitability, along with the above mentioned, better tracking
tools, has resulted in much less attention being paid to
click-through rates and more attention being paid to CR's
(conversion rates).
The CTR then can be seen as a measure of "immediate response" to
an ad, but not the overall response to an ad. The exception
involves ads that display identifiable information ( sometimes
referred to as "branded" ) about the destination site, and can
be arrived at without clicking on the ad and not recording a
"click-through" in these cases the click rate will vary from the
overall rate.
Contrary to what you might think a high click-through rate does
not necessarily assure you a good CR ( conversion rate,) and the
two rates may even have an inverse relationship. An ad geared
towards curiosity clicks such as those that actually trick the
viewer into clicking on them will result in a great deal fewer
sales, than an advertisement geared to receive qualified clicks.
Let's sum all that up. Impressions vs. Click Throughs -
An impression is counted each time the banner is called from the
server. Some browsers may cache data causing impressions to be
an inaccurate measurement.
Impressions are sold in groups of 1000 which is called CPM or
Cost Per Thousand ( I'll go out on a limb here and say that the
M is for the Roman numeral that indicates 1000 .) 1000
impressions, based on the industry average will bring you
something between 20 and 50 site visitors, MAYBE!
Impressions do not mean you'll have visitors to your site. A
Click- Through is the act of someone somewhere actually clicking
on a graphic image or text link and arriving at your web site.
Purchasing advertising by Click-throughs means that you only pay
for people that actually visit your website. This means you
don't need to purchase thousands of impressions to get 10
visitors. You purchase as many click-throughs as you want
visitors. This is a much more exact science, but is in direct
relation to your ability to create a high CR, conversion ratio.
How do you do that? Easy, just have a product that is in high
demand, present it to groups that are interested, at a price
that is lower than anyone else yet allows you to make a profit.
Place your ad on a tracking system like this one, notice the
above average CR.
Now just book that flight to the BAHAMAS!!
"Your Success Is Our Success"
jbp