4 Strategies for Combating the Rising Costs of Digital Ads

A Business Insider analysis of digital ad costs from Q1-2021 and Q2-2021 comparing year-over-year costs for CPC (cost-per-click) and CPM (cost per mille, or how much it costs to serve your ad to 1000 users), reveals some significant increases. For instance, Facebook and Instagram’s CPM increased 89% year-over-year and YouTube CPMs increased 108% year-over-year.

Why? Competition and that old economic principle of supply and demand. As demand for digital advertising has increased (likely impacted to a large degree by the pandemic and a shift to more online commerce), costs have risen as well.

So, what’s a multi-location brand manager to do when they’re looking at the impact of costs that could represent literally hundreds of individual locations? Here we take a look at four options to consider.

1 – Put a greater focus on earned media

Organic traffic represents earned media in the digital world. Multi-location marketers that can get their sites to show up in the top spots can capture the attention of a ready-made audience searching for exactly what they have to offer.

Land the top position and you’ll capture about 30-35% of clicks, about 18% in the second, 10-12% in the third—and it drops off significantly from there.

In addition, organic search is trusted by consumers. They view these results more positively than they do paid ads because they believe these results are more relevant. It’s like the difference between a news story in the newspaper and a paid ad.

2 – Leverage email lists

Most companies are doing email marketing and there’s a lot of opportunity here. You have your email lists of customers and prospects or people who have requested information from you. Having a nurturing program in place, as multi-location marketers know, can see dramatically improved conversion rates when they localize that content. They can benefit from a stronger relationship at the local level with the consumer than the national brand would have.

The more you can personalize and localize your email campaigns, the better results you’ll see.

3 – Digital ad localization

Your digital ads can generate better results if you localize your messaging and tie that ad to a page that corresponds directly to the content of the ad. So, if your ad talks about furnace replacement in Naperville, Illinois, and your landing page talks about furnace replacement in Naperville, Google is going to reward you with a tremendously higher quality score—and a lower cost per click.

Simple enough for a single location marketer, of course, but this obviously becomes far more complex and time-consuming when you’re dealing with dozens or hundreds of locations. Fortunately, there’s technology that can help you automate the process to create content at scale.

4 – Investigating alternate channels

As the digital marketing world has come to dominate most of our lives, it’s easy to get caught up in thinking that digital is the only way to go.

It’s not. There’s still great value to be gained from investing in alternate, and more traditional, forms of advertising.

Take direct mail for instance. As email inboxes have become more cluttered, many marketers are gaining traction by using traditional direct mail marketing--in a not so traditional way: direct mail marketing, personalized through variable data printing, to appeal to specific users. Variable data printing allows you to change the copy and the images on your direct mail pieces to target specific recipients. So, you might include images of older people if you’re targeting older people—or young families, if you’re targeting young families.

Beyond direct mail there’s also opportunity still in TV and radio advertising—without the same level of personalization, but there you can target based on programming to get your message in front of audiences with specific demographic characteristics based on what they’re viewing or listening to.

Digital ad costs are rising. But that doesn’t mean you can’t turn to other digital—and non-digital—marketing opportunities to support your local brands in relevant ways.