The Truth About Advertising With Display ads

We found Display advertising one of the toughest options as traffic to bring optimum results for conversions and even click thru rate.

We started with statistics. Than we discovered that in order to convert affiliate sales are virtually impossible on small budget. Why is that?

Stats are simple- 0.5% to 0.7% Click Thru Rate.

From this CTR number 1.5% conservative conversions were just inadequate to continue our campaign or even to start one. Note that this numbers are very real. So how all came to this summary. Lets look different options.

Cost per 1000 impressions

The process is simple:

1.      First, we look the stats of 0.07% CTR.

2.      We took the price of $47 product with $21 commission.

3.      Than we estimated the desire traffic to bring conversions of 1.5 %

4.      This traffic should be 1266 clicks for $400 revenue.

5.      For this we would need 1,806 000 impressions at cost of $5 per 1000 or total of $9030

This is the truth about the display ads advertizing as effective method. You do not even have to spend money to see the impossible. This is the brutal news. This is exactly what happen when fishing with wrong bate, at the wrong pond with the wrong rode. Simply buying impressions by 1000 (cost per 1M) is not the way. Have in mind that this option is widely available and in some cases is the only one by ad exchanges or ad platforms.

Cost per click on display ad platforms.

This method is available by Google, Facebook and some other major ad platforms. We will go in details in other posts to describe precise methods for optimum bid with cheap price.

Lets take the method above having in mind that we do not exceed the bid per click more than $0.30 (otherwise we will brake even) and see.

1. We have to make sure that the exposure of our ad will be 1,806 000 impression which in most occasions is fantasy.  0.7% of this impressions are 1266 clicks
2. So, 1266 clicks X $0.20 per click (which is very difficult to achieve with quality audience) -$253 spend and revenue of $400 with profit of $147  for 1.5% conversion if we are lucky to find such bid and our ad is super optimized for performance. Let us see another method for Lead generation.

Lead generation with Display Ads.

Across the benchmarks the stats for lead conversions, average is 20%. So 1266 X 20% = 253 leads if we implement the clicks option and this brings us $1 per lead. Not bad but is this leads convert sales of 1,5% we have 4 conversions at $21 = $134 and this a lost on the first attempt to sell something to this leads. However when established the necessary trust and authority among your list they could convert sallies on the long run. However, let see deeper on this thesis. In order to generate 1266 leads we would need $1266. The very question is now how we are going to nurture this list of leads in order to generate enough sales for profit. In other words, we have to sell them 3 times each of them 3 different products with very high quality. Among this process, we have to give them a lot of free useful content in order to warm them for these sales. In addition, this is just to brake even. By the time we start making profit on the 4^th and 5^th sale we could worn down the enthusiasm of our list.  

Conclusion: Display Advertising does not work for Internet marketing starters. These advertisers are newbie’s and when taking the consideration their experience for optimizing the ads visually and placement location, this will bring only disaster and disappointment. Many “Gurus” that sell expensive tutorials on traffic include Display Advertising in their program. Do not attempt to advertise or follow their instructions. Display advertising may work better for branding with companies with large advertising budget, but not for a small person that try to break from the eggshell. In some regard, may work for lead generation, but the effort and the cost per lead have much more value with other advertising methods rather than Display Ads. Some of you may say:” yes but did you optimized, did you do that …did you do this…did you chose the right sites and platforms to advertise?” Yes, rest assure that we did everything according to top experts in the industry regarding ad design, selecting the right network and choosing the placement position of the ad as well the most optimum sizes. Something like 2 weeks of detailed research on only one campaign. Apologies for the negative outcome that may bring your enthusiasm down about Display Advertising. Hey at least this post can save you money.