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When you’re marketing your company or product, every dollar counts. It can be difficult to decide how to allocate your budget with the wide variety of options available. Ultimately, marketing is about a lot more than simply getting as many eyeballs on your product as possible, but knowing the reach of a dollar is important.

There are two main ways to measure reach in online advertising: CPM and CPC. CPM (cost per mille) measures the cost of a thousand impressionsCPC (cost per click) measures the cost per clickBoth are typically offered as options for paid search, display, and social ads. The chosen pricing model depends on campaign goals and budgets. CPM is often chosen for awareness-based goals, and CPC is better for performance-based goals like traffic or conversions.

Traditional Advertising

Costs for traditional advertisements vary greatly. A spot on network TV (excluding primetime) has a median CPM of less than $7. A direct mail CPM can run as high as $1,046 for an oversized envelope.

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Although placing a TV ad can be relatively inexpensive, the price does not include production costs, such as script writing, editing, and voiceover or acting talent. Direct mail, conversely, may be less expensive than it appears. According to the Direct Marketing Association, the median ROI for direct mail campaigns using a prospect list is 12 to 14%. Depending on your goals, this type of return may be worth the high upfront costs.
 

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Digital Advertising

Digital advertising is generally cheaper than traditional advertising. The median CPM for video advertising is $24.60 on the high end. On the low end, a general-display ad has a CPM of $1.90.

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Paid search can be measured by CPM, but CPC is much more common. The cost of paid search varies greatly depending on the vertical, keywords, and targeting. For instance, buying an ad targeted toward shopping and classifieds keywords costs an average of $0.38 with Yahoo Bing, whereas buying an ad targeted toward education keywords costs $4.41 with Google AdWords.

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The average CPC in the above chart is $1.70. Assuming a 5% click-thru rate, a $1.70 CPC ad would get 117,647 impressions per $10,000 spent. 

Social Advertising

Like paid search, the more targeted your social media advertising, the more expensive it likely becomes.

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Content Marketing

Without an industry-wide standard for measuring content marketing costs, it is difficult to compare this type of advertising with others (read more about measuring the ROI of content marketing). However, we can look at a Fractl campaign for help. Fractl recently placed a campaign on BuzzFeed that achieved more than 3.2 million views within several days of publication. This is an example of a very high-performing campaign.

The industry average for a campaign of this scope is $10,000 for end-to-end strategy, production, and promotion. This means content marketing has a CPM of about $3.09.

Marketing Costs Compared