Digital marketing doesn’t need to be an expensive venture. There are several ways to pay for digital marketing depending on your budget and what you need to accomplish with your campaign. Here’s a rundown of the four most common payment models in digital marketing and how they might apply to your business.
Model 1: Pay-per-click
The most common digital marketing payment model is based on pay-per-click (PPC) advertising. If you’re looking to reach new customers, Facebook and Twitter ads are both popular options that can help drive more traffic to your website. PPC advertising will allow you to spend only as much money as needed while targeting exactly those people who might be interested in what you have to offer. It’s easy, measurable, and one of the fastest ways to generate a return on your investment in digital marketing. When it comes to digital marketing payment models, it doesn’t get any simpler than pay-per-click. And that makes sense—it’s essentially Google AdWords or Facebook Ads—the digital marketing platforms used by nearly every business these days. These platforms make it simple to set up an ad campaign and bid on certain keywords or phrases.
Model 2: Cost per action
Pay-per-action models typically come in two forms: cost per click (CPC) and cost per lead (CPL). In these models, digital marketers are paid each time a user takes an action, such as buying a product on your eCommerce website. Because pay-per-action compensation plans can vary greatly between advertisers and vendors, it’s important to understand exactly what you’re getting into before entering into a contract. Make sure that both parties agree on specific actions that will result in payment, as well as how much will be paid out. For example, if a vendor offers $1 CPL but only pays out after 10 leads have been generated, make sure you know how many leads must be produced within 30 days, or else no money will change hands.
Do you need more than one?
As a business owner, you want to generate revenue from your marketing efforts. So, do you need to use more than one type of payment model or will one do it all? Check out these seven digital marketing payment models to find out which one is right for your business. Read More: Digital Marketing: Top 7 tips for small businesses. digital marketing payment models.
Model 3: Cost per lead
This model doesn’t charge per click or impression but rather charges based on leads. It may be appropriate if you offer a service that requires an individual to sign up or apply to be serviced. For example, if you run a law firm and want to reach potential clients interested in your services, you could advertise on Google with a cost-per-lead model. The ad would direct users to fill out a contact form before they’re connected with your law firm. You can then track how many people filled out your form and moved forward in the sales process. If it costs $10 to generate one lead, you’d pay $10 regardless of whether that lead became a client.
Model 4: CPM, CPC, and CPA
These are perhaps three of the most popular digital marketing payment models. CPM, or cost per thousand impressions, is an ad model where an advertiser pays on a set price basis to a publisher every time their ad is seen. CPC, or cost per click, means that you pay every time your ad gets clicked by a user; CPA means that advertisers only pay when there’s a positive action from users—for example, signing up on your website. So if you’re trying to decide which digital marketing payment model is right for your business, here are some questions to ask yourself: How much do I want to spend each month? How targeted do I want my ads and landing pages to be? What will be my return on investment (ROI)? Will I be willing to spend more money upfront too gain customers down the line? The answers will help guide you toward choosing one of these digital marketing payment models.
Knowing which one suits your business best
I imagine that your first thought on reading about digital marketing payment models was: Uh oh. Not another model to learn. How much time and money am I going to have to spend getting up to speed with yet another strategy! You’re not alone, but I can tell you that my experience has been different. Digital marketing isn’t just one model, and some types are more suited than others depending on your business and how you want to approach things like lead generation and online sales. Here are seven digital marketing payment models, along with some tips on which ones work best for small businesses. 1) CPM (Cost Per Mille or Cost Per Thousand Impressions): This model works best if you want to build brand awareness or drive traffic to a landing page where users can sign up for an email newsletter or download a white paper. It’s also useful if you plan to run display ads in a specific geo-targeted area.
Where do you place ads, what ad platform should you use, and what campaigns should you set up?
The right digital marketing payment model will depend on your business and its goals. If you’re an e-commerce site, you may want to take advantage of demand-side platforms (DSPs), which help you place ads on relevant sites. If you’re a small business owner with a local brick-and-mortar shop, pay-per-click ads may work better than Facebook advertising for your needs. And if you’re a B2B company, search engine marketing might be more effective than social media advertising. Here are some tips to help you figure out what type of digital marketing payment model works best for your business