Any media strategist or planner worth their weight is always geared towards maximizing the media exposure while at the same time reducing expenses – thus driving the ROI or ROMI (Return on Marketing Investment).

Let’s take a few media types and just put a very “general” CPM (cost per thousand) to them:

TV -- $20 - $25/CPM

News Weekly Print -- $70 - $75/CPM

So why would any client and/or media planner want to spend $540 per CPM? Well that’s exactly what many do when they purchase search. You see the average cost per click for all search terms is estimated to be $.54 cents across the internet as reporter by emarketer via an article from The Rimm Kaufman Group. You multiple that by 1000 and you get $540 per CPM type of measurement… might not be perfect, but hey it’s in the range! And for all of my search friends… yes I understand how you measure the performance of search… but let me play media planner for this article.

Why are we willing to “belly up to the bar” and pay an average $540 per CPM. Couple of reasons:

1. Search is typically “action” oriented… the end user “clicks” on the advertisement to obtain additional information, purchase or do something.
2. It’s track able! Usually to the ROI level.
3. It’s a targeted media choice… vs. other media types which tend to have a general audience lumped together.
4. Not all CPM’s are created equal…. Just viewing a TV spot (which you really can’t track specifics anyway) has less value than actually doing something as is the case with Search.
5. Search can tie together the other media types.

All of the above justifies a higher valuation by agencies and advertisers.

That being said… let’s look at the other side of the argument. As marketers continue to drive for efficiency out of their marketing cost envelopes, I question whether the search premium currently being paid is worth it? Should we pay a premium if we’re using search for brand awareness? Will those steep valuations decrease over time? And what happens if other media types are able to fine tune their targeting like search? What will that do to the cost model? How can we look to bring down the current CPM for search to increase efficiency?

As marketers we’ve spent a great deal of time, driving down our “traditional” media CPM’s, as we continue to move more dollars into the digital space we should equally be concerned about driving exceptional value from search now, vs. playing catch-up years from now. Metrics, measurement and efficiency are on the minds of all marketers and other media types are beginning to really drive targeting to a new level. That in its self might drive more parity between the media types, but until that day… search will have a leg up given its strong metrics component.

Scott

TV interactive search CPM cost per thousand media marketing advertising brand awareness direct response valuation HP Hewlett Packard ROI ROMI news weekly print Scott Berg emarketer

The Rimm Kaufman Group