Cost Vs. Value: Rethinking Advertising Efficiency

The Benchmark Series research challenges traditional thinking about advertising efficiency, revealing that cost metrics alone can mask crucial differences in actual value delivery.

The True Cost of Impact

The research provides revealing comparisons:

• Facebook needs to be 1/3 of TV’s CPM to match effectiveness
• YouTube requires 2/3 of TV’s CPM for comparable impact
• TV delivers 1.5x more sales per dollar than Facebook
• TV generates 2x more sales per dollar than YouTube

Beyond CPM

Three key factors influence true value:

1. Initial Impact
   • First impression effectiveness varies by platform
   • Quality of exposure affects value
   • Platform characteristics determine impact
2. Duration of Effect
   • Long-term impact affects total value
   • Memory decay rates influence ROI
   • Platform persistence varies significantly
3. Compound Impact
   • Sustained presence builds value
   • Platform quality affects compound growth
   • Time amplifies platform differences

The Efficiency Trap

Common efficiency metrics can be misleading:

• Low CPM doesn’t equal high effectiveness
• Frequency can’t overcome poor visibility
• Platform quality affects total return

Strategic Value Assessment

For marketers evaluating platform value:

1. Cost Analysis
   • Consider total impact, not just CPM
   • Account for duration of effect
   • Calculate compound value
2. Platform Evaluation
   • Assess quality metrics
   • Consider attention factors
   • Measure sustained impact
3. Budget Optimization
   • Invest in quality platforms
   • Balance cost and impact
   • Plan for long-term value

The research demonstrates that true advertising efficiency isn’t about finding the lowest cost – it’s about maximizing return on investment through quality exposures and sustained impact.

Get in touch today with Dorrington Media to discuss advertising solutions for your business.