Advertising people generally put all ads into two major groups, display advertising and direct response advertising, but this really falls short of telling the whole story.
Direct Response Marketing
Direct response advertising is easy to relate to because so much of the advertising we do via the Internet today is direct response. If someone clicks on a link in an ad, we have a direct response to the ad. We can then look at that “response rate” and compare it to how many people buy after responding and get a conversion rate.
At that point, figuring out whether or not that particular advertising campaign is worth the investment, is totally straightforward.
However, with display advertising, the story is different. You’re just paying to “display” something to a customer of prospect. If Coca-Cola rents billboard space to put up a picture of their bottle with the message “Things go better with Coke” they can’t directly measure a return on what they paid to advertise on the billboard.
So how does Coca-Cola figure out that it’s worthwhile to rent that billboard? The most important part of making that determination is knowing how many people will see the billboard each day or for the term of the contract, and that is the cost per impression and it’s usually figured on a per-thousand impressions basis (CPM). The billboard may have a $4 CPM.
Every business wants to be right in front of the eyes of its customers and prospects. When a sale is about to be made, businesses want to be like the seagulls in “Finding Nemo” screaming “Mine! Mine! Mine!” Today the fashionable way to put this is to say that you want to stay “top of mind.”
Cost Per Impression Advertising
Helping you stay “top of mind” is exactly what CPI advertising does. However, its usefulness stretches far beyond billboards and banner ads. The concept applies to a wide range of business activities and once you understand this, you’ll be able to make better decisions across your entire operation. We’ll start with the traditional and then move into some areas that you may not have previously considered in terms of CPI.
#1. Local marketing
Would you rather engrave your logo on a bar of iron or a bar of gold and hand it out to your customers and prospects? Frankly, neither one would probably be a good advertising scheme – although I know a high-end malpractice insurer who did something like this with gold – but I want to make a comparison of how long your logo would be visible with these two minerals being used as a “canvas.”
The iron will rust within a few years while I’ve seen gold bars salvaged from the ocean floor after having gone down in a shipwreck 700 years ago and they still show their maker’s mark. Gold doesn’t decay, and even more importantly, people don’t throw it away.
If you depend on local business, staying top of mind is critical and you should be doing some local marketing. Keep your CPM in mind. Consider these examples:
- Magnetic refrigerator sports season calendars. They get used a lot and have a lifespan of several months.
- Multi-use magnetic refrigerator clip. If it’s a good one, it will be used until it breaks, so it probably has a better CPM than the sports season magnet.
- Ball point pens with your logo and phone number. Cheap pens get tossed immediately. Good pens get used until they are lost or run out of ink.
- Wrapping your car or delivery vehicles with graphics. Depending on how much driving you do and where you do it, this can have a great CPM.
- Copy of the Farmer’s Almanac with your logo on it. A new one is issued each year, so it has a lifespan of a year. However, they get tucked away as bathroom reading, and that gives you a lot of eyeballs.
The point here is that it’s not the initial cost that’s important. It’s important to consider how much your item will be seen and the lifecycle of the item. Going for the more expensive item can be the smart choice, plus it will make a better overall impression on your customers and prospects.
#2. Customer Rewards or Gift Giving
There are more rewards and loyalty programs today than every before. Further, the tradition of giving gifts to your clients is as old as the invention of alcoholic beverages. Consider CPI in these situations as well.
For example, if you give your best clients a bottle of expensive brandy, how long will it last? However, what if you gave your best clients a $200 gourmet kitchen knife with their names etched on the handle? A top-quality knife like that will last a lifetime.
If you’re at the other end of the spectrum and have a reward system based on the old punch-card idea, try to find ways to get added impressions out of it. Instead of merely a “your 10th sandwich is free” strategy, add levels or choices to your offerings. Perhaps you could toss in movie tickets or some other premium that would give people a reason to include your business in their future plans. “Hey, I checked our rewards status online. Let’s eat at Joe’s. Two more visits and we get in free to the water park.”
#3. Employee incentives
In today’s talent marketplace, employee incentives are critical. Does your business hand out a year-end cash bonus? If you have an unadorned reward program like this, you are getting little value out of your CPI. The program exists out in the ether and once a year there’s a payout that people forget about as soon as they’ve cashed their checks.
I won’t argue with the fact that people like cash, but maybe you could offer more options, like vacations or electronics. The key would be to come up with a system – and the system is really the “advertising” vehicle – that let’s people know how big their bonus is at any point of time that connects to a “catalog” of rewards. For example, let’s say six months of the year have gone by and you have 600 bonus points. If you wait until the end of the year, that would pay you $600 cash. However, if you want to cash it in right now, it could get you a flat screen TV that has a retail price of $800.
The idea is that a system like this would keep people coming back to see their point status. It would keep them involved in your company’s reward system. It would have a better CPI than the typical year-end bonus check.
The bottom line with all of these schemes is that when you evaluate them in terms of CPI you can better judge their relative value to your business. With prospects and customers, you’ll earn more loyalty and business; with your employees you’ll get a team that works harder and is also more loyal: Who quits when they only need 200 more points for a Hawaiian vacation?
Images: “CPI Industry Global Standard on 3D Map/Shutterstock.com“
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