Average Cost Per Order of Online Advertising Channels

2 comments

I just finished reading a great article in Multichannel Merchant (October 2007 issue) titled, “E-conundrum” written by Ken Magill. In the article, Shop.org’s State of Retailing Online 2007 report was referenced providing the average cost per order for varying online advertising channels. I wasn’t surprised by the results…

The study stated the following:

  • Email: avg. cost per order less than $7.
  • Banner ads: $71.89
  • Paid Search: $26.75
  • Affiliate marketing: $17.47

The article went on to explain how most merchants are not using email to market to their customers even the cost is ridiculously low compared to the other listed channels. I absolutely agree simply based on the results my company generates from using email marketing with our clients’ web businesses.

Interestingly though, the study did not provide the cost per order for search engine optimization which I imagine has be lower than affiliate marketing even if it is outsourced to a third party versus in-house. What surprises me is the expense associated with banner advertising and how it seems like more merchants spend their budgets on banner ads than email marketing to their house lists.

About the Author

Kevin Gold is Director of Internet Marketing at iNET Interactive, a social media company operating prominent online communities for technology professionals and technology enthusiasts. Kevin is a frequent contributing author to multiple publications including Search Marketing Standard, Practical eCommerce, DIRECT, Entrepreneur.com, ConversionChronicles.com, About.com, and On Target (Yahoo! Search Marketing newsletter).

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2 Comments

  1. Now that you mentioned SEO in this article, I will tell you... The cost for SEO which I do it myself is $0. I am doing better promoting affiliate programs through SEO than other method of course this method takes time and is not instant like the list mentioned above.

  2. Joe Kert

    These numbers can be interpreted differently. It just tell me that majority of advertisers/marketers are not good at managing their campaigns. Also, these numbers are the function of inexperience advertisers just jumping into the fray. Good marketers always find they way, they learn, they change, they adopt. No matter what, online advertising proofed to be the best business model. No fear, it is hear to stay in one form or another. Just wait for the tsunami of advertising for mobile devices. Be ready a lot for money to be made - change or die