Welcome to February’s edition of Online Advertising Answers, my monthly dive into my mailbag for all the best questions you’ve sent in.
This month I discuss whether banner advertising is really profitable (it can be), whether to use wide-open targeting (if you do it right), and how to respond to reviews (politely).
Keep sending in all your digital marketing questions, and maybe you’ll see yourself featured here next month!
Let’s dig in.
This month’s questions are:
- Is Banner advertising really profitable?
- Should I use No Interest/Broad Targeting?
- How should I deal with reviews on Google Business Profile?
[Click these links to skip down to the question]
Q: “Is Banner advertising really profitable?“
A: “Hi Grant,
The answer depends on who you are talking about.
For websites placing banners ads on them
Banner advertising is profitable if your website is large enough.
The overall average Page RPM is about $10 for Google AdSense (which is the most commonly used Ad Network). This means that you earn $10 (USD) per 1,000 page views on average.
Page RPM = (Revenue ÷ Page Views) x 1,000
So if your website gets 100 page views per day, that’s about $1 a day – which is almost certainly not enough to pay for your website’s overheads.
But if you get 10,000 page views per day, then that’s $100 a day (or $36,500 per year) which would certainly bring in more than a small website costs to run.
If you have 100,000 page views per day then that would be is $1,000 per day or $365,000 per year. So at this size banner ads are very profitable.
I would generally recommend thinking of banner ad revenue as being additional revenue, and not your main source of income – but it can certainly be profitable.
For advertisers running banner ads
That’s more of a complicated question. Banner ads typically aren’t great at driving conversions on their own. There are many businesses that make them work, but for most banner advertising needs to be part of a broader campaign.
The problem is that people rarely click on banner ads. They have an average Click-Through Rate of just 0.2% (meaning 2 out of 1,000 ads shown receive a click).
CTR = (Clicks ÷ Impressions) x 100
If you consider that a reasonable conversion rate is 5%, that means that 1 out of 10,000 ads might convert.
With an average CPM (Cost per 1,000 ad impressions) of $2.80, that one conversion will cost you $28. So if your profit margin is more than $28 per sale then it would be profitable. Otherwise, not so much.
This is (of course) a very broad example. You can get a higher CTR and Conversion Rate than mentioned above, and you can drive down the CPM. But on average, banner advertising is typically not profitable alone.
However, as I mentioned, banner advertising is useful as part of a broader campaign. It’s image-based advertising, which means it can be good for branding, and increasing your brand value means that people are more likely to click on your ads (and emails etc) elsewhere.
So while your banner ads might not get you conversions directly, if you run a banner ad campaign alongside paid search, paid social, etc you will likely see better results and increase your overall profits.
For Ad Networks
Yes, banner advertising is still a very profitable industry. Much has been made about how Google make less money from AdSense now than it used to – but that’s less money, not no money! I went through Google’s financials in another answer a while back if you’re interested.
I hope this help,
Q: “Should I use No Interest/Broad Targeting?“
Hi, if I have some product that everyone can buy should I go broad without interest or should I use interest targeting? I mean is it enough, for example, one ad set with no interest targeting with $50/day budget to find out if the product is good?
A: “Wide open targeting is a good tactic if you use it right. The key is to let Facebook’s algorithm find an audience for your ads.
This means running lots of ads variations. I’ve been told that the optimum setup (by someone who tested it a lot) is 6 images and 10 sets of text which you combine to make 60 ads. You then run this on 10 ad sets (one for each set of text). Each ad set will find its own audience and winning image/text combo.
For the images, you should be aiming at different demographics. So they should all show roughly the same thing but with different types of people – young/old, men/women, black/white etc. You should also consider people using the products or service easily/happily/well vs doing it badly or struggling too. Also an illustration can be a good idea.
For the text, you should be trying different angles. So good value, branding, convenience. But also different styles – short copy, long copy, use emojis, make a list, expert endorsement etc.
I’ve tried this method a couple of times and it works great. The downside is that it takes a lot of setup time, and you don’t get any interest-based learnings. On the other hand, it runs itself and gets solid results.
The other downside is that you need enough budget to power such a big test and depending on what your target CPA is, $50 per day probably isn’t enough. I would assume you could get away 3 ad sets though (30 text/image combos). Once you’ve found your winning ad set you could potentially cut the other two and try two more sets anyway.“
Q: “How should I deal with reviews on Google Business Profile?”
I heard it’s good for SEO, but I don’t have time to learn SEO. What is the most topline advice you could give me to make the most out of reviews?
A: “Hi Steven,
f you get a good review, say thank you. If you get a bad review don’t get mad! If the review mentions problems with your business take it as an opportunity to improve your business, not confront the reviewer.
If anything, you should reply to bad reviews and see what you can do to turn their experience around. Users can edit their reviews, and so your goal should be to give them such a good experience in customer care, that they voluntarily change it. Even if reviews didn’t affect SEO, this would be good business practice.
Also, so you know you don’t need to learn SEO to run a Google Business Profile. It’s pretty simple – just put in all your details on the info page and add pictures. The only thing you need to do regularly is answer questions, reply to reviews and put in your holiday hours. If you want you can post when you have a sale on, and you should update your pictures and details now and then, but that’s pretty much it on a basic level.
I hope this helps,
[This question came in via email]
See you next month,