Is Google More Expensive Than TV?

Denuo's Rishad Tobbacowala compares TV buys with Google search ads: "It has actually become far more expensive to buy advertising on Google than on network television. Google has a product called AdWords, which marketers use to bid on a particular key word [that consumers might type in during an Internet search]. On average, across all categories, it tends to be about 50 cents. Let's say on television you get a $20 cost-per-thousand rate. Fifty cents a click is equal to $500 cost per thousand. You can see how much more expensive it is, but the difference is there's some sort of action."

Media equivalency is a tough problem. If we compare CPM rates, yes, TV's CPMs are cheaper than search CPMs {umm, that was stupid), but Rishad's comparison is not entirely fair or accurate when viewed from at least two angles. First, you cannot call up a TV rep and say, "Hey, I've got 20 bucks here. Can I please have 1000 impressions today?" Second, Google impressions are free, at least to a certain point. It's the action (click) that advertisers are being charged for. A more accurate comparison would be the cost-per-click for an AdWord vs cost-per-call for a TV ad with a 1-800 number.

4 comments:

  1. Wow. That's all I can say. Wow.

    He's comparing cost per thousand impressions (in which there is no guarantee of anyone actually seeing the ad *at all,* much less acting on it) to cost per action.

    This is the most ridiculously skewed argument I have ever heard. What is his average cost per click for online media buys? This would be an apples-to-apples comparison. And anyone in the industry *with any real-world experience* wouldn't be betting on beating AdWords for cost per click!

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  2. I used to spend way too much money on google advertising. When I incorporated glyphius with my adwords and adsense accounts, the waste was reduced and the sales increased. So there is hope to dealing with google advertising at an affordable price.

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  3. More than comparing CPA to CPM, he's also comparing a targeted audience who are motivated and expressing interest in finding information on a particular subject to a numbingly broad and passive audience who are looking only to be entertained.

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  4. Alex Smith9/10/08 3:52 AM

    To be honest his whole argument is a bit too out there!

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