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Online Media Buying

chen.jpg By Chen Hindi

chen.jpg By Chen Hindi

Online media buying is the general term for the purchase of media “real estate”. When buying online media, price and position are main factors.

Looking into the “offline” world, where the media buying started, we see that advertising on newspapers and magazines, billboards, TV commercials, radio commercials, these are all media buying real estates.

The main difference is that offline media sellers can only estimate advertising spaces’ impact but they can’t measure results.

Magazines can tell you how many copies they print, sell and distribute but they definitely CANNOT tell you how many people ACTUALLY SAW your ad, how many people READ it and how many performed a sales related action (phoned your shop, came to your restaurant, searched for you online for more details, etc.).

When creating a TV commercial – you can get estimation of how many people are watching a certain TV show but you can’t know how many people stayed for commercials, how many people watched and listened to it and how many were convinced to check out your service.

This doesn’t mean that advertising in magazines, TV and radio don’t work, it simply means that you need to define your campaign’s needs and then examine what suits you better (offline/online/both offline+online).

Know-it-All Online Media Parameters 

Across the Internet, every single parameter can be measured in every channel.

With Google analytics on your website, you get the FULL analysis of visitors in your website – their actions, behaviour, age, gender, which device they used, which country they come from, how long they spend on your website, and much more data which can be helpful for your understanding of your clients.

If you are running an online campaign, you can know at all times how many people saw your ad, how many clicked it and whether they perform a sales related action.

The fact that statistics are available at all times and cross channels allows you to “price” each sales parameter. 

ROI or How to make 45,000 MUR from a simple campaign 

Let’s take an example. You are running Google AdWords campaign for your spa in Mauritius for the past 30 days. Your daily budget is 1,000 MUR.

On your website you are advertising a new treatment package and there’s a strong call to action encouraging the users to leave their phone numbers and names for more details.

In the past 30 days your ad appeared 715,000 times and you got 2,000 clicks in your campaign.

You also know that 140 users left their phone numbers and names.

The conversion rates in your campaign are:

  1. CTR (click through rate) - 0.279%.
  2. Click to lead conversation rate - 7%.

The campaign’s cost parameters are:

  1. CPM (Cost per Mile, 1,000 impressions) - 42 MUR.
  2. CPC (Cost per click) - 15 MUR.
  3. CPL (Cost per lead) - 215 MUR.

Let’s suppose that you have a good sales team, but not an amazing one. At first round of phone calls/meetings they managed to get only 25 people out of the 140 to buy the package. If each package costs 3,000 MUR, your income from the campaign is 75,000 MUR (twice what you invested) and your ROI is 45,000. Your CPA (cost per acquisition) is 1,200 MUR. 

And then some…

We presented you only the statistical parameters of your 1 month campaign. Think about all the added value you got and will get –

  1. You added 140 people that are interested in your product to your database.
  2. 115 people didn’t buy first round but you can be sure that out of them, some will become your paying clients in the future. Your ROI will increase even more.
  3. Your ad appeared 715,000 times – that means a LOT of people saw you. You increased your brand’s awareness.
  4. Due to cookies and browser history, expect more leads from this campaign to arrive even after your 30 days campaign.
  5. You learned more about your clients and their behaviour online, it would assist you in improving for the future in general and for the next campaign in particular.

Conversion Rates vs. Cost Parameters

Above we separated between conversation rates and cost parameters. Pay attention to conversion rates since these are parameters that DO NOT depend on the money you spend. It depends on your campaign’s optimisation. Good, hands-on optimisation can increase your ROI significantly.

And what about your business’s ROI?

Contact us today for any question!

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