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Advertising 101: different advertising models explained

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In the digital era advertising has become a lot more complicated than it once was. The reason for this is due to several reasons. Firstly, the digital audience is almost unlimited, it is not like the old-school days with newspapers where the audience was limited to the size of the circulation and the geographical region. Secondly, and perhaps most importantly, with digital everything is measurable and as a result, it is easy to see how campaigns are performing, who is clicking and what the responses are. It is very simple to track return on investment and thus easy to provide a range of different commercial options tailored to meet the needs of the client. What are these options? Here are a few different ways you could structure commercial deals in the online advertising space.

PPC: Pay per click

Also known as PPC, this is a commercial model that sees publishers paid a fee for every time a user clicks on a banner or advertisement. It is a model that is often employed by search engines who allow for PPC ads, which have been purchased by advertisers based on specific search phrases. This is something that an individual can manage but in order to get the best return on your investment, you would be best off partnering with a PPC agency Brisbane has several who could help. So too do most of the other major cities in Australia. In short, it is very effective in driving traffic and it is a solution that means you only have to pay if somebody actually clicks on the ad, if there is no click then there is no payment.

CPM: Cost per thousand

Also known as CPM or cost per mille, this is the standard method that brands use for buying space on websites. There are no guarantees of clicks or interactions. It is simply a case of paying a flat, pre-agreed fee to a publisher for exposure to their audience. Typically, a CPM campaign would be capped at a certain financial value to ensure that the expenses do not spiral.

CPA: Cost per acquisition

When a specific conversion goal is set advertisers will often go with a CPA model. In other words, if the advertiser has done the math and calculated that once signed up a typical user will be worth an amount of x per month. Then they can extrapolate from there what is the average useful life span and what will they make from that user. In turn, they can then calculate how much they are prepared to pay to acquire the user and the publisher is remunerated accordingly. These types of campaigns work well for insurance companies, people selling mobile products and subscriptions or banks.

Sponsorships

Smaller publishers who struggle to guarantee big audiences but who publish niche content to loyal audiences, often like to look at a sponsorship model. This is a flat fee that is charged to the brand for a hard-coded position on a business website. Regardless of how large or how small the audience is, the advertisement will appear on the site.

PI: Per inquiry

Per Inquiry, also known as cost per inquiry, is a form of performance-based marketing that has a variety of channels (TV, radio, print, and Internet) to create a custom campaign that brings you incoming leads while giving you mass exposure.

ROS: Run of site

ROS is when an online advertising campaign or ad targets every page of a specific site.

SOV: Share of voice

SOV means the share of total advertising exposure that a business gets in comparison to its competitors within a specific time frame.

RTB: Real-time bidding

This refers to the buying and selling of online ad impressions via real-time auction occurring during the time a webpage takes to load.

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2 Comments

  1. alannahmargarot@gmail.com'

    alannahmargaro

    June 7, 2019 at 6:29 pm

    Great post!

  2. giselleheberling@yahoo.com'

    Giselle

    June 7, 2019 at 8:16 pm

    Hi there, after reading this post i am keen to find out more.

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