Cost Per Click (CPC) vs. Cost Per Thousand Impressions (CPM)

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It seems simple enough. When you place a print ad, television ad, or radio ad, or even direct mail lists, they tell you how many people they can reach and then you "pay per impression." Or actually, most will quote you per thousand impressions, so they aren't quoting fractions of pennies, but you get the point. Then you as a marketer figure if you reach a certain percentage of that thousand, whatever is acceptable to you based on your past experience, you have a pretty reliable system in place. You can tell your boss, well we just spent $25,000 on ads in the local magazines at $50 CPM (cost per thousand impressions), so we anticipate that we will reach 500,000 people and based on our experience, about 1%, or 5,000 will actually visit the website in the ad. If we can covert 50 of those people (1%) into students at around $3,000 per student, well then we would consider this a successful campaign. Sound familiar? This was common before the Internet and is probably still the dominant model. In fact, even some of the online advertising firms will quote in CPM because they moved online from a different medium and that is what their systems are all based on. When someone says CPM, this is what they are talking about, whether it is number of viewers expected on television, listeners on the radio, readers of a magazine, and so on.

So what is the problem? Well, that 1% is not guaranteed. What if the magazine you've used for the past 10 years is fallen on hard times and has a whole new subscriber base. How will that affect your conversion numbers. And most importantly, how will you be able to link the spending all the way through to the student enrollment to know for certain what your ROI is for those ad placements? You can't really. Sure there are a bunch of tricks that we all use to get a general sense of this, many very time-consuming, but even the more expensive solutions are far from perfect.

And that is where Cost-Per-Click (CPC), some times called Pay-Per-Click (PPC), comes in. On the Internet, you CAN track everything, and with relatively inexpensive technology. But the most important aspect is that YOU ONLY PAY WHEN SOMEONE CLICKS THE AD!!! Think about that for a moment. In the example above, if your ad is on page 156 stuck down in the corner between editor notes, how many of those 500,000 in the circulation are REALLY going to see your ad and take action? Well, with CPC, you are guaranteed that if they don't take action, even if they see the ad, you don't have to pay a cent. Imagine that, ONLY having to pay when the ad placement actually gives you value. It is revolutionary and it is the reason Google is such a Wall Street darling. There are still a lot of people out there not utilizing this medium, or any other online advertising, even people with online programs. This is despite the basic fact that the vast majority of people in all age groups, all demographics, all economic situations, all use the Internet and search engines as a primary tool in researching their degree options.

Look, I understand, sometimes it is difficult to move into something that seems so new. But the time has come for you to take the plunge. If you don't, you are costing your institution a wealth of opportunity and you may be hurting your potential student population by not being as informative as you should and easily could be.

Online advertising isn't free, but the return will be undeniable if you run your campaign correctly. I recently came across an institution that was closing its online program and the students that are stuck with half a degree are actually suing them saying that they didn't properly market their programs. Meanwhile I talk to other schools that are doing this right and the demand is still off the charts, even after years of double, and sometimes triple, digit % growth. So it really does come down to you. Don't let your school down and don't let your current and future students down, go online today!