The low investment in advertising through this medium in the last year, especially in Latin America, has caused cash flow problems to established dotcoms and much more to those in process
Advertising on the Internet has been questioned by several factors, which do not attract surfers, which reaches very few people, which compared to advertising on television is very expensive, etc., but what is true in these appreciations, will be that advertising on the web is really not attractive, let's see.
First, we must know that the ratio with which the cost of advertising on the network is measured is known as CPM, which means Cost Per Thousand, that is, the advertising companies pay a specific rate for every thousand appearances or impressions of their banner or advertisement (for a more detailed description read the article E-business, the advertising-based business model). Around this ratio controversy has been created since it is stated that it is much higher than that of other media, for example, in The Morgan Stanley Internet Advertising Report they published «although the CPMs on the web vary quite a bit, on average, they are more higher levels than in most other media ».
The Myth: Although CPMs on the web vary quite a bit, on average they are at higher levels than most other media.
Regarding this statement, it can be said that it is very difficult, if not impossible, to objectively compare the CPM from one medium to another without taking into account the level of segmentation that the advertiser wants to achieve. The following chart appeared in The Morgan Stanley Internet Advertising Report:
| COMPARISON OF ADVERTISING RATES IN VARIOUS MEDIA (In American dollars) | ||||
| MEDIUM | VEHICLE | COST | SCOPE | CPM |
| TV | 30 seconds in prime time | 120,000 | 10 million homes | 12 |
| Magazine | Page, 4 colors in COSMOPOLITAN | 86,155 | 2.5 million readers | 35 |
| Online Service | Banner on main category page on CompuServe | 10,000 per month | 750,000 visitors | 13 |
| Web site | Banner at Infoseek | 10,000 per month | 500,000 page views per month | twenty |
| Source: Jupiter Communications |
The quick conclusion of anyone looking at the table is that the web CPM is 66% higher than that of TV, but since these two media are so different, another analysis will have to be made.
Remember that television is a medium that reaches large masses, even specialized programs do. Let's look at the picture, the 30-second primetime ad hits a CPM of $ 12, but if the audience the advertiser wants to reach is the high-income and well-educated, the CPM increases dramatically. Let's see the following table:
| SCOPE AND CPM IN PRIME TIME Vs. SELECTED POPULATION | ||
| TARGET | ESTIMATED AUDIENCE | CPM (Gross) |
| Households with TV | 8,526,000 | 12.62 |
| Between 18 and 49 years | 6,361,200 | 16.78 |
| Age 18 - 49 + Family income 40,000 / year | 3,796,200 | 28.12 |
| Age 18 -49 + 50,000 / year + minimum one year of university of the head of the family | 2,171,700 | 49.15 |
| Source: Netcasts, 1997 fourth quarter, prime time estimates; Nielsen Estimated Audience |
Now we do make the comparison between the CPM web and the CPM of a 30-second commercial in prime time, taking into account the target that you want to reach, high income and well educated. If we look at the previous table, we can see that when the target is defined more specifically with the aforementioned factors, the CPM on TV reaches almost 50 dollars, comparing this cost with that of a site like quote.com, which reaches an audience With an average family income of U $ 110,000 and 70% of university graduates and whose CPM is less than U $ 50, we can infer that the web CPM is less expensive than the TV CPM. In addition to the above, it should be noted that segmentation can be done much more specifically on the web than on television. This allows advertisers to reach better targets with minimal waste.
Beyond the CPM there are factors that allow us to conclude that Internet advertisements are more effective than those of other media, these factors are: The advertising / editing index and the fact that Internet surfers use the medium instead of acting passively as receivers.
To analyze the first factor, the advertising / editing index, let's look at the following comparison: the most usual banner has dimensions of 468 x 60 pixels, that is to say 28,080 square pixels and the size of an ordinary web page is 800 x 600 pixels, 480,000 square pixels, which means that a typical web page (with two banners) contains 11.7% advertising and 88.3% content (editing). A 30-minute TV program has 10 minutes of advertising and 20 minutes of content, a one-hour program has 20 minutes of advertising and 40 minutes of content, which means that the ratio is 40% advertising and 60% programming. A magazine typically has a ratio of 50% advertising pages and 50% content pages.Based on these figures, it can be concluded that web advertising is much less bothersome than TV or magazine advertising.
Let's look at the other factor, interaction vs. passivity. According to MRI, an entity that measures the level of attention that viewers pay to programs and commercials, less than two-thirds of the audience of the most watched programs such as Seinfeld, Mad about you and 60 seconds, report full attention to programming and those who watch TV commercials have much lower levels of attention, according to The Roper Organization, only 22% of the adult audience watches TV commercials. Now look at your case, when you surf, are you focused? Do you pay close attention to what appears on your monitor? I think the answer to both questions is yes, right. High levels of concentration and attention are required to surf the internet and, what a coincidence,They are also required to create brand awareness, penetrate markets, and make purchasing decisions.
The reality: When companies and advertising agencies make sure of how effective it is to advertise on the internet and want to do it, the CPMs will be even lower and they will be the ones to benefit, not the web sites
Now that you have taken a closer look at some of the factors that can be analyzed in terms of the scope of web advertising, do you think what is effective to advertise on the internet?
Source: Rick Boyce, "Exploding the web CPM myth", Advertising ABC’s
