I received an interesting email from a reader who has limited money for her startup to advertise (who doesn’t right) and inquired about her best advertising options. This is a loaded question in the current Internet climate. Web Advertising has morphed into many forms over the last 3 years. Unfortunately my answer will sound more like a politician rather than a recommendation. The advertising method a startup should choose depends on your marketing and advertising goals. Let’s take a quick look at the 4 horseman of advertising:
PPC (Pay per Click)
CPM (Cost per 1,000 impressions),
CPC (Cost per Click)
CPA (Cost per Action)
PPC should be a component of any advertising campaign and should be used with carefully selected niche “keywords” or at least your competitors keywords. A startup should also look into running PPC campaigns on search engines other than just Google like Yahoo and MSN. If you want to get even more sophisticated look at getting PPC software programs that will select keywords and manage multiple campaigns from one easy interface where user-conversion tracking is less arduous.
CPM is a model that “Federated Media” has adopted quite well and is asking for premium advertising dollars based on the targeted content it provides. The CPM model is one that bodes well for highly targeted audiences and branding. For those of you unfamiliar with Federated Media it is John Battelle’s advertising network of the biggest and best blogs on the Internet across every thinkable vertical (although technology is most prevalent). For instance, I could advertise StartupAddict on Mashable (awesome social media blog) that would run at $30 CPM. This may seem high and it is certainly above normal CPM rates, but I’m gaining exposure to a very specific niche audience –social media. The 1000 impressions or CPM I gain on mashable is more valuable than being on the front page of Yahoo where I may only be getting 200 impressions out of the 1000 that are actually interested in StartupAddict.com.
CPC (Cost per Click) is a cost per click minimum for popular keywords and really should go with the PPC comments above. The more popular the search term the more the minimum cost. CPC advertising protects you by a set amount you pay for each click, but click fraud can also be an issue as well.
CPA (Cost per action) is the new kid on the block and is an advertising model where the advertiser pays only when a certain action is triggered a “pay per play” method. In continuing to use StartupAddict.com as an example, I may only want to pay when visitors become registered users to the social network. The CPA is results advertising, and by far my favorite method. RWW has a good article on cost per action and I found TURN to be an interesting advertising firm that focuses on CPA.
A combination is almost always necessary, but if you could only pick one go with a CPA method until your cash flow gets up to snuff for a bigger advertising budget.