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Digital advertising has gained ground over the last decade, positioning itself ahead of traditional advertising thanks to the possibilities it offers to specifically target which audience you want to reach, with their particular tastes, characteristics, backgrounds and challenges.
Making the decision to advertise online is an important step, but with this comes a frequently asked question: how much should I spend on digital advertising?
Don't panic! Let's look at the statistics:
The average cost to reach 1,000 people with online advertising ranges from USD $3 to $10, while with traditional advertising you might spend USD $22 to get the same reach. We call this Cost Per Thousand Impressions (CPM).
When we talk about Cost Per Click (CPC) in digital advertising, it is usually between $1 and $3, but it will depend considerably on your industry and the platform you choose.
What are the costs of digital advertising by platform?
Let's look at an average per platform for 2021-2022 expressed in USD:
Platform | Average CPC | Average CPM |
|---|---|---|
Google Search AdsGoogle Display AdsFacebook AdsInstagram AdsTwitter AdsLinkedIn AdsPinterest Ads | $2.32$0.67$1.35$3.56$0.38$5.26$1.50 | $38.40$3.12$8.60$8.96$6.466.59$30 |
Average CPC | Average CPM | |
|---|---|---|
Google Search Ads Google Display Ads Facebook Ads Instagram Ads Twitter Ads LinkedIn Ads Pinterest Ads | $2.32 $0.67 $1.35 $3.56 $0.38 $5.26 $1.50 | $38.40 $3.12 $8.60 $8.96 $6.46 6.59 $30 |
The main factor that will define the final cost of your digital advertising will be your industry and how much competition exists at the moment. According to HubSpot, software, technology, marketing and finance companies pay the most per lead acquired, ranging from $50 to $100, while media companies can get leads for anywhere from $11 to $25.
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Let us look at the situation of each platform in detail:
Digital advertising costs on Google
Let's look at the 3 current avenues offered by Google.
Google Search (formerly Google Adwords)
The costs vary according to the keywords that apply to your particular service, and this cost will be known at the moment you search for these keywords. It is estimated that, for every 1,000 impressions, 30 users will visit your website and will be opportunities for prospecting and conversion.
Google Display
The CPM tends to be very economical through this service. Your ads will appear on the results page and in different areas of websites, in the form of banners with images, video or text.
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YouTube
In this case, basically the main KPI to look at is the Cost Per View (CPV), which is usually USD $0.10. This could result in an approximate $100 for every 1,000 voluntary views of your ad and $9.50 for views of the first 5 seconds of the ad. The average CPC is $3.21.
Costs of digital advertising on social networks
Let's talk about the 4 most popular social networks.
You can select between a daily or lifetime budget on your Facebook ads and the minimum budget will be USD $1. In addition, this platform also allows you to target your advertising on Instagram and Messenger. CPCs and CPMs depend on how broad your target audience is, but overall this is a space with flexibility in its options and exceptional targeting.
This advertising is handled through Facebook and is ideal for getting reach and impressions. When it comes to traffic and click-through campaigns, ads targeting Facebook audiences tend to perform better.
Costs vary greatly depending on the campaign you choose. The average amount to generate engagement is USD $0.50, while you can pay USD $200,000 per day to promote a trend.
There are other alternatives:
- Promoted Tweets, ranging from USD $0.49 per click, with a CPM of USD $6.46.
- Promoted accounts, ranging from USD $2.50 to $4.50 per new follower.
In general, LinkedIn requires a larger budget to be effective. CPC starts from $2 to $5 or more, depending on your targeting and competition, while CPM is around $7.85.
Traditional advertising costs
Although these costs depend on your provider, the medium used and your geographic location, we can say that the cost of traditional advertising varies from USD $22 to reach 1,000 people.
Let's look at the average CPM in traditional, offline advertising:
Platform | Average CPM |
|---|---|
Billboard Radio Magazine Newspaper Television | $13-$22 $10-$20 $140-$1,300 $10-$4 $20-$30 |
Platform | Average CPM |
|---|---|
Valla publicitariaRadioRevistaPeriódicoTelevisión | $13-$22$10-$20$140-$1,300$10-$45$20-$30 |
You must consider that, in this case, reach is not synonymous with effectiveness. A billboard will reach many people who pay a quarter of a second's attention to it, whereas a 20-second TV ad might get much more attention.
In conclusion, digital advertising has significant advantages:
- It is more economical
- More message personalisation options
- You can also customise the type of campaign (clicks, calls, downloads, views...).
- Offers flexible budgets
- Advanced targeting options with machine learning
- You can measure the performance of your campaigns in detail and modify them along the way.
Although traditional advertising is often key for different industries, the digital option is still the most recommended, especially for new advertisers. At Innova Marketing Solutions we offer you personalised advice to make your next campaign a success. Shall we talk?