Blacktype

Location based services are the new poster child of digital marketing. Facebook is rushing to add the functionality to their site in response to hot start-ups such as foursquare rolling out. But is it worth the average business getting involved? An interesting article on Masahable (click here to read in full) would lead you to think perhaps not due to the poor uptake on the service at the moment. Only 4% of the adult, Internet using population has used any kind of location-based service, and just 1% of all adults check into a location at least once a week.

By contrast, more than 11% of online adults have used Twitter, and an estimated 28% of all Internet users have signed up for Facebook (Facebook).

So my advice would be to focus on facebook & twitter at present, but keep an eye on sites such as foursquare as they grow in user-mass.

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There seems to be a lot of confusion regarding online advertising and CPM ad sales in particular.

I often hear clients say that they advertise on a particular website because it’s the largest in their sector.
This sort of strategy isn’t necessarily delivering value and to explain why we need to delve a bit deeper into how online advertising is sold.

The majority of online media sales (whether that be banner or pre-roll video ads) are made on a cost per thousand basis (CPM). This means that you pay a fixed amount to display a thousand impressions of your advert. If a site charges £50 cpm and your monthly budget with that advertiser is £500, then your advert will be shown 10,000 times (£500/£50 = 10 x 1000 impressions = 10,000).

Therefore the overall number of visitors to the website has no effect on the number of times your advert is shown.

So how then to decide where to best to advertise?

In my opinion there are 2 elements to this:

1) The overall site demographics
How does the profile of site visitors fit your customer profile or target market. Factors include age, sex, location and social grade.

2) Where are your adverts shown?
Are your adverts being displayed around the premium content of the website – in general this would be the homepage, the news section and other interesting editorial led content such as videos, articles, blogs.
Sites with large classified advert sections can have very high user statistics but do you want to pay for your advert to be displayed around other adverts?

It pays to have a careful look at the media pack and ask some relevant questions to the ad sales person about where your content will be displayed.

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I’m speaking at the Bristol Ignite event tomorrow on privacy & the internet in 2010. There’s a great line-up of speakers & it promises to be a lively evening. There may be a few tickets left, check out the Ignite website.

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