Low CPMs Stall Ad Spend

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Actually, I stole my headline from this recent article from e-Marketer, “Low CPMs Stall Social Netword Ad Spend”

Here’s one of the main charts from the article that dramatizes the point.

ad-spend

The basic idea here is that there are a lot of impressions available on Social Networks but not a lot of advertisers are there because the cost is so low.  They never explained why low prices lead to low usage but I can make a guess.

In fact, the same can be said for many other online categories as well.   Because the CPM is so low and the effort to place an ad on Google local or Facebook is so high, it’s hard for an advertising agency or a marketing/pr firm to make any money offering it as a service.  So, no one sells the idea into a client.

In the very old days traditional agencies made a lot of money marking up media by 17.65% because national, regional and local outlets protected agencies and the buy was always rather hefty.

Now a retailer can buy Google adwords himself online (albeit time consuming) and in a small to medium market may only be able to spend $1,000/month.  How can a professional marketing person squeeze into such a small window to provide the expertise needed to do online the right way?  They can’t.

The only way we think this will work is to create online tools that simplify the process based on working with brands where you already have online tools dealers use for their other advertising efforts.

For example, a dealer builds a newspaper ad online (with approved material) and then it’s easy for them to commit to an online spend with Google or Facebook around the same promotion.  When we create the ad we also create a landing page and now there is a cohesive local advertising program.

The real work is building the API to Google or whomever so we can streamline the process and reporting.  It’s being done and it means dealers now have better access to the best advertising buy of the century…online.

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