Online Advertising

In 1955, television had $1 billion of the $5.7 billion US advertising spend (see Ad Age’s 1950s TV Turns on America). The rest went to print media, which had about $3.2 billion of the total advertising spend (NAA).

It wasn’t terribly difficult to decide where to put those advertising dollars.

Today that target audience spends time with both online and offline media—internet, video, radio, television, OOH, magazines, newspapers, social. And the same advertising messages can be delivered on a mobile device as those viewers, listeners, visitors, and readers go on about their business.

Advertisers can no longer simply choose between a television campaign or a series of inserts in the only daily newspaper available within a 50-mile radius of the target zip code.

Reaching today’s consumer audience requires a media mix built around reach, frequency, and relevancy factors specific to a target audience and their media consumption habits.

Especially for small businesses, adding local online and search advertising to the media mix increases the reach and frequency of a campaign, making those online and offline ad impressions—and the resulting behavior, action, and sentiment—more measurable.

Online advertising is expected to show the most growth in 2011 among small to midsized businesses (SMBs), with Borrell Associates 2011 Outlook finding that 84% of survey respondents planning to buy online/digital advertising, and 53% growing that area of their marketing spend.

But traditional media still has a considerable audience. No longer does any single media channel continue to lose audience to another; rather, we’re just spending more time with more media channels.

Over the past three years, the amount of time US adults spend with each media channel has leveled off and become somewhat consistent.

Television continues to dominate with 40% of time spent per day. But the internet and radio aren’t far behind, with 23.5% and 14.5% of time spent, respectively, by the end of 2010 (via eMarketer).

For many local business-to-consumer advertisers, traditional media channels such as television, radio, and print are high-impact, delivering results that balance campaign goals and target audience with the unique properties of each media channel.

Traditional media comes with some mystical calculations like ratings, shares, GRPs, and TRPs, and CPP, measuring target audience reach and overall cost.

This can be just as effectively measured and evaluated in traditional media channels, such as radio and television, as in online advertising using the media measurement CPM.

A consistent measurement across online and offline media channels helps businesses and their agencies determine the best vehicles to use in an advertising plan, and report ROI of the campaign post-sales.

The common measurement for audience and cost, across media channels, is CPM (Cost per Thousand people reached). Its formula is simple:

cost/audience x 1,000=CPM

Learn how to use CPM as the common denominator in your media buying, and check out some sample formulas for converting traditional media measurements to CPM. Download the complimentary white paper, CPM: The Common Denominator in Media Buying.