How Much Does Digital Advertising Cost?
How Much Does Advertising Cost?
As time passes, advertising changes to suit the current demographic, business owners, and the ever-evolving technology. Today, advertising looks different from how it was a few years back. Online advertising has become the norm, and no other form of advertising seems to be more accessible.
Research shows that the average cost of reaching the target audience through online advertising ranges from $3 to $10. On the contrary, the average cost of reaching people through traditional marketing strategies is about $22 and more.
Forms of Online Advertising
Online advertising takes many forms, some being the following:
- Google Search Ads
- Pay-per-click (PPC) Ads
- Mobile Ads
- Banner Ads
- Facebook Ads
- Twitter Ads
- Bing Ads
- Video Ads
- Instagram Ads
- Pinterest Ads
Whichever form of online advertising you choose, it’s crucial to remember there’s no universal formula for success. Some companies inject a lot of cash into online advertising to boost their ROI on marketing, while others cut costs by eliminating online advertising spending. Whatever your marketing strategy, ensure you advertise to the relevant audience, targeting various digital mediums.
With that said, the most expensive keywords in Bing Ads and Google Ads cost approximately $50 or higher for every click made, as determined by click-through rates.
People are now used to seeing ads on various social media platforms like Facebook, Instagram, and even LinkedIn. Search engines such as Google have also revolutionized how large and small businesses can create brand awareness that suits their target audience and their lifetime budget.
Google ads, Instagram ads, video ads, and display ads provide the easiest means to grow your business and increase your return on investment (ROI). However, you need a reasonable advertising budget to effectively advertise your products and services.
You can achieve this feat by considering three major advertising platforms that make online advertising a reality: Facebook Ads, Google AdWords, and Instagram. Let’s look at each of these social media platforms to help assess ad costs related to your business.
A Summary of Online Advertising Costs
- The average ad cost on AdWords (Google Ads) is about $2.32 per click on a given search network. But the average cost/click of an advert on the Display Network is less than $.0.58.
- The average cost of CPA in a Google search ad campaign is around $59.18.
- A small business using Google Ads spends $9,000 to $10,000 monthly on its online ad campaigns. This amount translates to about $100,000 to $120,000 annually.
- The average CPC on Facebook Ads is $1.72, while the CPA on Facebook Ads is about $18.68.
- An average CPM on Facebook advertising is about $10.
- A typical CPM for Instagram Ads is around $5, although this will likely increase as the platform’s popularity improves.
Digital Advertisement Cost: Google AdWords
Google AdWords is the world’s leading online advertising platform and an integral part of digital marketing. Besides, Google is considered the most widely used search engine today. For instance, running an online Ads campaign using Google gives you a greater chance to reach your target audience by searching for businesses like yours on Google maps and search engines.
Small businesses rely on Google Ads to drive more traffic to their websites, increase traffic to their physical store locations and get more phone calls. This is why most small businesses add Google advertising to their Ads strategy to maximize their online Ads budget.
Regarding the Google Ads pricing model, you need to choose between the search and display networks. So, when you launch your Ads campaigns on a search Ads network, expect the ads to take the pay-per-click or PPC model.
For display ads, the adverts appear on Google’s display network on websites across the internet. Ads of this nature are in the form of banners, ideal for adverting on a website with your target audience.
Three main options for ad pricing used on Google Display Network include CPC pricing, CPM pricing, and CPA pricing.
However, you can reduce the ad costs on Google AdWords by raising the quality score, scheduling ads, opting for geo-targeting (different targeting options), or settling for device targeting.
Digital Advertisement Cost: Facebook Ads Cost
Facebook is one of the most popular online advertising platforms. Facebook Ads are both affordable and effective when it comes to helping brands reach your target audience. These ads also help small businesses drive website traffic, reach new audiences, and improve conversions.
Furthermore, Facebook provides sophisticated targeting and retargeting options to allow brands to reach the right audience based on interests, behaviors, and demographic information. Facebook’s advertising pricing model is similar to Google’s search pricing model.
Brands using Facebook as their online advertising platform set weekly or daily budgets for their Ad campaigns.
Apart from your daily ad budget and marketing budget, you can bid to control the amount you spend on persuading users to take particular actions. For example, you can compel them to download your application or subscribe to your email marketing lists.
Digital Advertisement Cost: Instagram Ads Cost
After acquiring Instagram in 2012, Facebook devised a strategic plan to expand its Ads platform and generate more online Ads revenues through Instagram Ads. Visual brands now rely on Instagram to create a thousand impressions that attract their target audience.
The best thing about using Instagram is that its Ads are not as disruptive as what you may experience on other online Ads platforms. Plus, its pricing model is almost similar to that of Facebook Ads.
Instagram Ads are also bought through the same ad auction system used on Facebook Ads. That makes advertising on this social media platform affordable and reliable. In this sense, the Ads that create more value for users stand to win the auction.
Digital Advertisement Cost: Pay-Per-Click (PPC) Ads
Most search engines like Google and Bing allow users to create and run ads that display beside or above the regular search results for specific keywords. The ads work on a pay-per-click system, meaning you only pay for the ad every time someone clicks on it.
In other cases, PPC ads work on a bidding system. To explain, your ad only displays on the search engines if you pay more than your competitors for clicks. Depending on the competition level within your industry, the digital advertisement rate, or cost-per-click (CPC), can range anywhere between a few cents and a few hundred dollars. Overall, the average CPC cost is between $1 and $2 per click. That said, small-to-medium-sized companies spend between $9,000 and $10,000 on PPC per month.
Choosing the Right Online Advertising Channel
With an overview of the digital advertising costs for various forms of advertising, the question then arises about how to choose the right channel. You also must determine how much to invest in each. The answer lies in your target audience and budget. For example, PPC ads are ideal for e-commerce sites with specific product names. However, a large B2B software provider would do better with a different advertising strategy, like content marketing.
The average cost of advertising can vary depending on different factors, key among them being your preferred ad campaign type, ad format, and advertising platform. In this case, you may prefer online advertising to reach as many target audiences as possible.
The most crucial thing is to think strategically and strive to keep potential customers in mind. In other words, your marketing strategy should target the platforms your customers are likely to check online for long-term results. Moreover, you can use a combination of multiple approaches to get the best ROI on your digital advertisement cost.