How do you know that the internet advertising price you are paying is fair? Do you know how that price is calculated?
A lot depends on what kind of advertising you are talking about. Different types of ads will, of course, cost different amounts. As an example, and for the sake of brevity, we'll talk about the price to use banner ads.
There are three fairly common methods used to figure out how much you will pay for a banner ad . . .
Cost Per Impression
The first method is called CPM, which stands for Cost Per Impression. This is used when you want to have your banner seen by a particular group of potential customers. The usual way that CPM works is pretty simple. The price is usually figured for every thousand impressions.
An impression is simply whenever your banner is displayed on the screen, before the "audience" you specified. Even if they don't click on or look at the banner ad, you still must pay the fee just to have your banner shown. As of this writing, the rates per thousand clicks can run from thirty to fifty dollars, depending on who you choose to display the banner to.
CPV and PPC
The second method is called CPV, which stands for Cost Per Visitor. This type is similar to the next method below, called PPC. What this does is show your banner ad to a particular group of visitors and lead them to your web site as well.
The third method is PPC, or Pay Per Click, is hugely popular and well known, probably more so than any other type of online advertising. When you use pay per click, you pay nothing up front or monthly; this is one of the reasons it is so popular. The only time you pay anything is when a potential customer clicks on your banner. The price for pay per click can vary a lot. Prices can be as low as ten cents all the way up to four or five dollars.
Traffic is Key
Prices for banner ads have gone down somewhat recently, simply because there is a lot of competition among banner ads. The internet advertising price that seems fair to you should be the one that gets you the most traffic for the least cost. Since traffic is vital you should test your traffic.
As you know, traffic can easily turn into potential customers, instead of just web surfers. Banner ads are not the only options you have for advertising your online business, but they are a good one.
In addition, know how your costs, clicks and impressions are calculated. All key factors whether the internet advertising price you are paying is fair.