A lot of managements and marketers pay attention to ROI when doing their marketing campaigns. The most significant element of choosing a media is cost less and offers more in return. Therefore, it is important to calculate advertising ROI accurately.
The Right Way to Calculate CPM in Traditional Media
We conducted a simple exercise to roughly compare the cost-effectiveness of a well-known newspaper in Hong Kong and mobile advertising. For the discounted price of that newspaper, it costs HK$3,000 per day for 1/6 page ads with around 400,000 circulations. Therefore, the CPM (cost per thousand impressions) is approximately HK$7.5. Some people may claim the reader may share the newspaper to others. However, it is more important to think of how many people is the target audience of this ad among the readership. For example, there are 40,000 readers who are your target audience within 400,000 circulations. The CPM will dramatically increase 10 times to reach your target customer. Unfortunately, the difficulty is that we cannot even find out how many target audience has read your ad from that newspaper.
Better performance on Mobile Advertising ROI
In contrast, using mobile advertising is much more easier to calculate ROI. All the major factors can be controlled, such as number of impression, maximum of CPM and selection of audience. Generally, the CPM of mobile advertising is around HK$15 to HK$20 and you can select your target audience to receive your ads instead of displaying advertisements to a wide variety of people. Comparing to traditional advertising, mobile marketing ROI performs better because a lot of wastage can be eliminated in the highly personalized nature.