PurpleBlack Blog: Nothing but Native Advertising

How to Estimate the Ad Spend for Native Advertising

What Will Ad Campaigns on Outbrain, Taboola, or Yahoo Gemini Cost?

Before trying any new advertising strategy, the first concern on your mind is likely the cost. You’ll want to know the estimated ad spend and the expected ROI you can expect. In terms of the traffic and conversions, your business can get. The same thing applies when you’re exploring native advertising as a marketing option. You’ll work out the approximate charges for publishing ads on platforms like Taboola, Yahoo Gemini, Outbrain, RevContent, and many more.

Rely on the Professionals for Accurate Estimates and Profitable Campaigns

So, let’s take a closer look at the costs you might have to incur and how much you’ll pay to advertise on native advertising channels. Relying on professionals to guide you through the process is always advisable. You’ll rest assured that the campaign will be profitable, and you’ll get attractive returns on your investment. You’ll also get assistance with drawing up a budget and guidance on investing a few hundred bucks or more.

Native Advertising is Entirely Different from Social Media Marketing

Before getting started, understand that native advertising works in an entirely different way than other channels like social media marketing. For instance, on Facebook, TikTok, YouTube, or Twitter. Since most businesses start marketing on economical channels like Facebook, let’s take that example. When you start with a new Facebook campaign or create a new account from scratch, you’ll need data. Thankfully, Facebook welcomes new advertisers with an attractive Cost Per Lead or Cost Per Acquisition. That’s how you can initiate a campaign with just a few bucks a day. The platform also offers you a selection of settings to help you target the appropriate audience.

CPAs on Facebook Are Initially Low

Once the campaign is underway, you will likely see great results and a promising start to your digital advertising efforts. When you start to taste success, the next obvious step is allocating a higher ad spend or advertising budget. As you invest more, the CPA is also likely to rise. At some point, when you start investing between $8,000 to $10,000 per day, you’ll note that the CPA is exploding. Now, this is a stark contrast from when you first signed up for a new account. As long as your ad spend is low, like, say, a few hundred to $1K or $3K to $5K per day, you’re good. But, once the CPA starts rising, you might note that the campaign is no longer profitable.

Rising CPAs May Not be Viable for Startups

This situation can pose a huge problem for businesses since they have already set up and organized their infrastructure. Most entrepreneurs estimate that the low CPAs will carry them through the next three to five years. But, eventually, they reach the stage when they’re ready to scale the business, but the exploding CPA is no longer viable. Facebook, as a marketing channel, is popular among startups. But, the fact remains that its costs are not sustainable in the long run. Especially for businesses that are fragile and not yet established. 

Mature companies that have been around for a decade or two may have the resources and ability to invest more. That’s because they are at the stage when they can allocate a part of their profits toward advertising. Newer startups, in the early stages, typically deal with more significant challenges. Figuring out marketing strategies isn’t likely high up on their list of priorities. So, what happens next?

How About Switching to Native Advertising

Although native advertising is the ideal solution for businesses looking to scale, it also has a very high barrier. And this barrier involves high costs, and significant ad spend. That’s because native ads need an initial setup. If you’re running an eCommerce business on Shopify, using the Facebook algorithm to acquire traffic is easy to execute. You’ll also see impressive conversions by using the settings. But, native advertising does not have these algorithms or settings. This is why, you’ll need to devise other funnels using a new advertising strategy. These funnels are editorials or advertorials, as digital marketing experts call them. 

An editorial resembles a landing page, but is essentially editorial text or legit copywriting text with a specific objective. The page displays a Call to Action button at the bottom, enticing readers to finalize their purchase by placing orders. But to make that happen, you’ll hire a specialist agency. They’ll assist you with creating this ad and setting up the native advertising campaign.

The Ad Spend Can be a Barrier

When your business is struggling to stay afloat, adopting a new and expensive strategy might not make sense. Especially since you don’t have much of an advertising budget. Not only is the cost high, but you’ll also deal with very high CPAs. You can’t really initiate native advertising with an ad spend of $20 or $30. That’s because, you’ll segregate campaigns using several criteria, such as the location of your targeted audience and their device types. 

For instance, you might want to start by targeting US users that are browsing on their desktops. Then again, you’ll create a fresh campaign for US users browsing on their cell phones and tablets. At the end of the day, you’ll run two different campaigns, spending a minimum of $80 per day on each. As a result, you’ll double your ad spend to compile adequate data. This means that you’ll spend at least $160 per day, which is the bare minimum to run the setup. And that’s just for the structure. Don’t forget to factor in the high CPA. If your CPA goal is $25, the initial ad spend is around $75. But, once you continue to compile data week after week, you’ll note that the CPA starts to drop dramatically.

Data Helps You Determine Which Campaigns Are Performing Well

The data you compile helps you determine which campaigns are performing and getting you traffic. You might consider this a testing period when you’re identifying successful and profit-generating campaigns. At the end of it, your CPAs start dropping quickly till you meet your targeted CPAs. After this point, the CPA stabilizes and remains steady for any further campaigns you run. So, you see, native advertising is a stark contrast to social media marketing channels like Facebook. Here the CPA is very low at the start of the campaign, but grows as you attempt to scale the business. This is why, it makes more sense to go with native advertising.

Native Advertising Needs Investments of Money and Time

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Native ads need you to invest not just more money, but also time. So, when you hire a native advertising agency like Purple Black, they’ll require a three-month testing interval. You’ll accept that they’ll test the campaign for performance and profitability before they attempt to scale further. For instance, if you’re aiming for higher traffic during Q4, you must start with the native ad campaign at the beginning of Q3. That’s when the agency creates and publishes editorials and experiments with different approaches to determine the ones that will work. 

You might get results faster if you’re willing to allocate a larger advertising budget. That’s because the agency can run multiple campaigns simultaneously. Further, at times, the advertorials generate data within six to eight weeks. In that case, you won’t wait for the three-month deadline for traffic or data. But, you must be mindful that a significant part of your ad spend is for creating compelling media.

Be Prepared to Allocate a Higher Marketing Budget to Native Ads

It is not unusual for business owners to want to start native advertising with a low initial investment. For instance, you may want to experiment with, say, $500 or $1,000 to see if you can get measurable results. However, if you have a low marketing budget, it is advisable to hold off on trying native ads. This traffic-generating solution requires a higher initial investment because it needs extensive testing. Once the agency determines the winning combination, your ad spend will drop. Remember that, unlike Facebook ads, you can’t play around with $500 and reinvest when it starts working.

Let’s Talk About the Actual Ad Spend You Need

In a nutshell, you should expect to spend between $8,000 and $10,000 per month in the initial three months. While you’ll start to generate data and earn some profits, this is essentially the testing period. Even if you see measurable results in 3 weeks, you’ll continue with the ad spend to gather more data. Typically, marketers note that month 1 does not see results, but they break even by month 2. By the end of month 3, the campaign starts to yield profits. That’s when you’re all set to scale up your efforts. 

Ultimately, it’s all about the data the campaign generates, and predicting with precision is not really possible. Several campaigns start to demonstrate results like traffic and conversions in the second month. In that case, you can scale it up to a higher daily ad spend. Your agency will recommend that you ensure you have the cash flow and liquidity to pump into the campaigns. That’s how you can be sure of getting consistent data.

Experimenting with Native Ads on Your Own is Never Advisable

Yet another thing to keep in mind is that native advertising needs professional expertise to get right. Experimenting with this marketing channel is never advisable if you’re a newbie. You’ll risk a high ad spend, but without any concrete results to show for it. That’s because designing the advertorials is a complex task, unlike social media ads, which are super easy to create. It’s not just about signing up on platforms like Taboola, Outbrain, Yahoo Gemini, or RevContent. Or, with other smaller traffic sources. 

You’ll also need legit copywriting skills to compile the editorials and know how to present them. Further, you’ll need to learn about blacklists and whitelists and pick out the appropriate websites to post your content. Other variables include bot traffic on the targeted site, ranking keywords, and a bunch of other technical details. You’ll also need the expertise to understand how funnels work and analyze their performance. Adding images, videos, and other media, crafting attention-grabbing titles, and including the Call to Action are other skills you need.

Professional Expertise is the Key to Profitability

All the facets mentioned above need professional expertise. Without it, you could spend a whole lot of money without getting any accurate results to show for it. But, if you think native advertising is a good fit for you, get in touch with our reps at Purple Black. Schedule a free consultation call, https://purple-black.com/call-page, and we’ll determine whether your business is ready for this traffic source. 

We’ll also answer any questions you have about the estimated pricing. You can safely rely on us to find you the perfect market fit, advertorial approach, and appropriate target audience. Once you have a winning combination, scaling up your advertising efforts profitably will be super easy.