How to Pay for Digital Advertising: The Pros and Cons [Infographic]

August 27, 2015

How to Pay for Digital Advertising: The Pros and Cons [Infographic]


We often sing the psalms of PPC advertising here at eZanga. After all, pay per click is the most common form of digital advertising. When you’re faced with the decision to advertise, however, relying blindly on PPC can hinder your growth.


But it takes time to research and understand other methods of online advertising. And the majority of marketers simply don’t have the time.


Lucky for you, I did have some time. So I did it for you. Here’s a quick run down of the pros and cons of pay per click, cost per action, pay per call, and cost per mille advertising.


Pay per Click

There’s a reason PPC is so popular. It’s tried and true, and readily available. And with it comes traffic. If you’ve optimized your keywords, landing pages, and web pages, this traffic will seamlessly lead to conversions and sales.


But keywords can get expensive. And if you’re not optimized, you’ll be paying for clicks that don’t convert.


Let’s break it down.


Pros:



  • Easiest to Implement, Track, and Optimize. There are many reputable PPC providers giving you access to actionable data from your campaign.
  • Extensive Tools for Targeting. You can geotarget, target separate devices, target users with a specific browser history—the possibilities are endless!
  • Traffic, Traffic, Traffic. PPC is best used to generate traffic to your site. Once the traffic is there, you can design your website to guide visitors down your sales funnel.

Cons:




    • Keywords Can Get Expensive. Common keywords (like lawyer and insurance) are notoriously pricey. If you’re relying on these keywords to generate clicks, your budget can get used up quickly.
    • Click Fraud. Some sources have a high number of fraudulent clicks. Google states in its terms of service that you can expect up to 10% of your clicks to be fake. And you’re usually paying for these. Some sites, like eZanga, have a system in place to prevent click fraud. But others do not.
    • Not All Clicks Convert. If your website isn’t optimized, you may not see results. PPC leads to clicks and traffic, but it can’t promise conversions.

Cost per Action

Popular with affiliates, CPA advertising is great when you get commissions on conversions. Most affiliates make a set amount per signup or download. By paying for advertising by the action, they can assure they never pay more than the money they make on that action.


But for the company paying these affiliates, the leads that come as a result may not always be legitimate. And for the affiliates, it may actually be less expensive to buy PPC and optimize landing pages for each offer.


Pros:





      • It Generates Sales Leads. Your budget goes directly towards leads, rather than traffic or views.
      • Pay Only for the Leads You Generate. You’re not paying for clicks, impressions, or calls that may not convert.
      • Useful for Affiliates. Since affiliates often get paid per action, it’s easiest for them to buy advertising by the action. This keeps revenues and costs on the same scale for them.

Cons:





      • Leads May Be Illegitimate. When people are faced with forms, they often will plug in fake information to get the insurance quote, download, or ebook that’s beyond the form.
      • PPC Might Be Less Expensive. You pay more per action than you would per click, naturally. Instead, if you optimize your PPC campaign, you can convert more people for less.

Pay per Call

For some, it doesn’t make sense to pay for clicks or actions when it’s easier to convert people over phone.


Think of this example: you’re a law firm specializing in automobile accident lawsuits. You’re an expert in this field, and client relationships really drive your service. You don’t want people to sign up on a form, or click through your website (if you even have a website). The best way for you to make client relationships is to speak to them over the phone.


This will only work well if you’re able to convert over the phone. If none of your calls convert, you’ll be hemorrhaging money.


Pros:





      • People Who Call Are Often Better Leads. Fraud is less likely, since phone calls take more time and effort than views, clicks, or filling out forms.
      • Mobile Ads Make Pay per Call Much Simpler. The rise of mobile browsers allow advertisers to place a simple button in the ad to place a phone call. Users are now a tap away from making a call.
      • You Can Qualify Your Lead. Lawsuits are expensive, and you’ll want to be paid, right? Mentioning your rate is $ 300 per hour on a form will likely scare a lead away. Mentioning it on the phone might, too. But on a call, you’ll discover if they can afford your rates and sell yourself on why it’s a value.

Cons:





      • It’s Significantly Harder to Get Someone to Call. People are more likely to click or sign up, so you may miss out on some potential traffic.
      • If You Can’t Convert Calls to Sales, It’s More Expensive. Likewise, if your calls go to another party (like a separate sales team or call center), make sure they’re ready to convert your calls.

Cost per Mille

What if you don’t want clicks, calls, or signups? Well, cost per mille advertising is an efficient alternative. With CPM, you pay for every 1,000 people who see your ad (mille is the Roman numeral for thousand), and it’s effective at pushing awareness of your product, service, and brand.


However, while brand awareness can spike as a result of CPM advertising, you’re subject to impression fraud. Much like click fraud, some of your ad views may be fake (and you’ll be paying for each one). Impression fraud can be hard to combat, and can cost you money.


Pros:





      • More People See Your Ad. Impressions are cheaper than clicks, so you can afford more of them.
      • Increased Brand Awareness. As a result of the views, people are more aware of your company and brand, and brand awareness can lead people to choose you over your competition.
      • Your Costs per Click Could Be Lower. If impressions are 50% cheaper than clicks, and every person who sees your ad clicks on it, your clicks would be 50% cheaper than in a PPC campaign.

Cons:





      • Not All of Your Impressions Lead to Clicks and Conversions. In fact, the majority don’t. You’re paying for your impressions no matter what, so if you’re looking for traffic or leads, look at PPC or CPA.
      • High Risk of Impression Fraud. You pay for every impression, and it’s hard to sniff out fraudulent views.

Conclusion

Relying on PPC or CPA isn’t always the best answer. Think about what you offer, and to whom you offer it. Who are you targeting, and what are they looking for? You need to find what works best for your campaign.


Also try a mix of advertising models. Many of the largest companies have ads that serve different purposes. Mixing your campaigns can have a faster positive impact than sticking with a single model.


Lastly, test test test. Test what you think might work for you. Test these all individually, test them in combinations, test them through different outlets. Everyone’s ideal advertising mix is different, you need to test to find your sweet spot. Don’t set and forget.


I repeat, don’t set and forget.


Pros and cons of paid digital advertising pricing models


 

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