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The Costs of Internet Marketing and Advertising


The Internet reaches millions of users which presents a prime opportunity for advertisers, and the costs of internet marketing and advertising are unlimited. The costs of reaching such a wide audience vary quite a bit--from absolutely nothing to millions depending on one's chosen method.

Methods of Internet Advertising

The most cost effective way to advertise online would be to use the content itself and submit it to search engines hoping the popularity of the content will advertise the product. Although it is cheap, it is also rather slow. Perhaps the method most readily identifiable by most users is banner ads. One can also make use of opt-in e-mail ads, an electronic form of direct mail. Another popular method of advertising is through Google's Adwords, an auction based system in which the advertiser pays per click.

Revenue Models

Just as there are many methods of getting your ads out there online, there are also many revenue models. The revenue model of the system that you choose will determine the cost of your advertising investment. The most commonly used models are CPM--cost per mille, CPC--cost per click, and CPA--cost per action.

  • In a CPM model, the advertiser pays for the number of people served by the ad.
  • In a CPC model, the advertiser pays for only the number of people who click on the ad.
  • In a CPA model, the advertiser pays for the number of people who complete a transaction.


As you might be able to tell by now, the amount of money needed to advertise online is largely dependent on budget. With Google AdWords, for example, the advertiser decides how much to pay for a keyword (the price depends on the popularity of the word - ranging from cents per click to $5 per click). The position of the ad depends on how high the bid is. The advertiser even sets a limit on how much they want to spend--if the budget is $500 and you purchase a keyword for $5, the ad will display until 100 people click on it. The cost of banner ads very much depends on where you place them.

The CPM can vary from as little as $10 to $100 per impression depending on how much traffic the website receives and how targeted the website is. E-mail ads work on a similar model--one pays for the number of e-mails delivered which can vary from less than $1.00 to $10.00. One should also figure in the costs of producing the advertisement--the company may want to use flash, audio or video. These elements can require anywhere from a few thousand to $20,000 dollars to produce.

No matter which method you choose, you should take away from this article that the amount of money spent depends largely on how much you are willing to spend. So, set your budget and get your message out there.

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