Online Media Buying Calculator and Guide

by Ratko Vidakovic on June 24, 2011 · 2 comments

When doing any type of media buying, it’s always prudent to run the numbers and understand your performance metrics before kicking off a new campaign.

The following tool is a great way to help you run the numbers and project the feasibility of your campaigns.

Some of these numbers might need some explaining, so here is a run-down of each field and why they matter.

Campaign Duration (days): If you are doing traditional media buying using an IO (Insertion Order) and you have fixed flight dates for your media buy, this is where you would enter the duration, in days, of your campaign.

For media buys via demand side platforms like the SiteScout RTB, this can be any arbitrary number you choose. 30 days. 7 days. 1 day. However long you plan to run your test.

Daily Impressions: This is where you enter the estimated amount of impressions you project to buy on a daily basis.

Average CPM ($): On a traditional media buy, this is where you enter your agreed upon CPM rate. For self-serve systems, this would essentially be the eCPM of your campaign. Playing around with this number has a major impact on the performance of your campaign. This would be one of your key performance indicators (KPIs).

Average CTR (%): Along with your CPM, your CTR is another major metric. It is very closely linked with CPM in determining the performance of your campaign. According to industry reports, the average benchmark for display CTR is 0.1%. Play with this number and see how much of a different it makes to the projected performance of your campaign.

It’s realistic to achieve CTRs of 0.3-0.5% with proper targeting and good banners. With some good creativity and research (and the right site placement, of course) it’s quite possible to get as high as even 2.0-3.0%! For the sake of projection though, I wouldn’t recommend setting your sights that high. It’s best to be conservative and try CTRs in the 0.1-0.4% range.

Average LP CTR (%): Assuming you are using a landing page, this is where you would enter your landing page’s estimated average CTR. In other words, what percentage of visitors are you reasonably expecting to click through to the offer from your landing page?

If you have LP CTR data from previous campaigns, that’s a great place to start. Naturally, every traffic source performs differently, but if you have previous data, then at least you have a benchmark from which to make estimates. LP CTRs can vary greatly, so it’s very hard to give an average range.

If you don’t use a landing page and are linking directly to an offer, enter 100 for this value.

Avg. Conversion Rate (%): Average [offer] conversion rate is a percentage that can be gleaned either from previous campaigns or from affiliate network stats. If you’re an affiliate, talk to your affiliate manager to get their network-level conversion rates for your offer, and use it as a baseline for your projections.

Offer Payout ($): This would be the value or payout of a conversion. If you are an affiliate, you have the power to negotiate payouts with your networks or merchants. As you will see from experimenting with this value, a payout increase of $1 or $2 can sometimes make the difference between profit and loss.

Ultimately, you don’t want to be flying blind when doing media buys. It’s good to have target metrics, or key performance indicators (KPIs) that you want your campaigns to meet.

Hopefully this calculator will give you some insight in to the relationship of each KPI and how a relatively insignificant change in one metric can mean the difference between profit and loss.

{ 2 comments… read them below or add one }

Angry Russian August 31, 2011 at 5:31 pm

Awesome calculator, I had something like this in Excel to help me figure out if a media buy will back out.

Just one note, numbers are one thing, but quality is another. If you find a placement where costs seems to high to back out, keep in mind the users might be great for your offer and you should see higher CTRs and CRs.

Just use SiteScout to do a quick test and then go direct if its worth your time.

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Bronson Laureiro September 5, 2011 at 2:06 pm

Awesome tool, def bookmarking this one!

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