NET.COLUMNS: Advertising on the Internet II: Where to Advertise and How Much to Pay

MUMBAI (June 18): Last week, we discussed the importance of creating attractive banners to ensure that people “click-through” to your home page. This week, we look at where to place these banners and how much you are likely to pay for advertising on the web.

Internationally, pricing of ad banners is based on the notion of CPM (cost per thousand). A CPM of US$ 20 means that you will pay 20 dollars for 1000 exposures of your ad banner. This means, that your ad will be shown 1000 times — it does not mean that these many people will actually visit your page. Click-through ratios being what they they are (typically 2-4 per cent), for a CPM of 20, you are paying about 50 cents to a dollar for each person who visits your page (20-40 visitors). So, by increasing the click-through rates, you effectively lower your cost per person.

The search engines like Yahoo, Excite, Lycos and news-oriented publications like c|Net’s News.com are examples of places where you will pay by the exposure. Their CPM rates are typically between US$ 20-40. So, if you are looking for 100,000 exposures, you can expect to pay between US$ 2,000 and US$ 4,000. On Yahoo, the higher rates apply if you want to link your ad to a specific page or a keyword that the user searches for (thus ensuring a higher relevance for your ad). For example, if a person is looking for hotels, then an ad from a hotel, airline or travel service has a greater probability of being clicked on.

The U.S.-based sites have an international readership and very high traffic, so it is not very difficult to achieve a high reach quickly. Remember that this comes at a price. Advertise on these only if your audience is international and you are one of the very best in your business. In general, the more focussed the audience a site has, the higher the CPM.

The popular Indian sites are not yet charging by the CPM. Instead, most tend to have weekly, monthly or even quarterly rates. In the absence of audit reports, it is quite difficult to estimate the real CPM. One way to do this would be to actually serve the ad from your server and then track the exposures on the ad, so at least you know what you are paying for. Rates on Indian sites tend to vary from Rs 10,000 per month to Rs 1,00,000 per month on the most popular ones. The top Indian sites for advertising include IndiaWorld (which publishes IndiaLine), Indian Express, Hindu Online, Rediff-on-the-Net, Deccan Herald and Times of India.

The Indian sites have a very high expatriate (NRI) component in their audience. This is ideal for banks, finance companies, real estate companies, publishers and recruitment. If you are looking for a long-term advertising campaign on the Net, you might want to place short-duration ads on some of the above sites, monitor the response from each site (you can get the click-throughs by checking your server’s referrer log which will tell you from which sites people have come), and then plan out a longer campaign. The leading Indian advertisers include ICICI Bank, Citibank and HLL.

An interesting variation of the CPM and fixed rate models is payment per click-through. Here, you only pay for the number of people who actually click on your ad and come into your page. These rates can be anywhere from Rs 5 to Rs 50 per click-through.

Whatever you do, make sure that you effectively track the ads that you put up. In advertising, they say, half your money is wasted — you don’t know which half. With the Net and its tracking mechanisms, you no longer have to guess!

Next week: Do’s and Dont’s of Web Advertising

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.