Recently, a well-known international digital advertising agency pitched a client of ours, who shared their proposal with us, showing the estimated ad impressions and clicks to their website.

We use a Demand Side Platform (DSP) as does the competing company, so you’d think the estimated costs per lead would be fairly level, right? (A DSP provides a real-time-bidding environment, incorporating third-party data for targeting, in order to assess the best prospective online customers to show the ad to.)

Their proposal gave estimates for Budgets, Impressions, and Estimated Clicks for Display campaigns. If you calculated the Cost-per-Thousand rate, they range from $42 to $46 CPM, which includes their management fees built-in (so it’s not clear how much goes to management versus the ad spend itself).

Our most recent month’s CPM was $3.37 on the Display ads; even if you factor ALL of our management fee (for Display, Search and Video ads combined) into that, our apples-to-apples CPM cost comparison was $4.11, versus the other company’s estimate of $42+.

The cost-per-click comparison is similar: their estimate is about $22 on average CPC. Our actual including ALL of the management fee was $1.50 CPC.

digital advertising

We’ve also been receiving a number of online ads from a competing national digital ad company, offering a “50% Discount Until June 30th” when using them to place Display ads. Saving money is great but if you’re still paying $22 CPM instead of $4.11 CPM, is that a good deal?

Video pre-roll ads are the same story. Here’s the competing company’s pitch on budget versus impressions and clicks to the site, versus our actual:

To recap, with $1,500 less to that campaign line for video, we have dramatically more viewers, and dramatically more engaged viewers. That’s less money for a more engaged audience; lower cost per complete video view, lower cost per click, and a lower cost per thousand ads served.

At Ad House Advertising, we clearly show our management and any graphic design charges for the artwork as line items on our invoices, separate from the ad cost itself. Yes, we could mark up the ad cost 100% like in this example… but it’s just not us; it’s just not the way we work. If you like the sound of that, give us a call for a comparison to what you’re experiencing.

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