Online Advertising Costs in 2022

online advertising costs

Online Advertising

As a brand or a company advertising is the key to your success, but the myriad ad options available in the market can easily make you feel confused and indecisive.

And, if you are an SME or a small business the ad budget also becomes a big concern.

For such businesses in particular, online advertising can be a great option to reach your target audience, get engagement, create awareness and gain traffic. 

However, there are a number of online advertising platforms available all of which have different pricing models and can be quite overwhelming for newcomers.

In the past few years, The Media Ant has worked with several SMEs and startups and had clients who have asked us to evaluate the advertising solutions for both offline and online.

This request has put us in an interesting position as it provides us visible access to the online advertising costs and results of various advertising and marketing mediums for different industry verticals.

This has also given us the opportunity and access to find something quite interesting, that online advertising is pretty cost effective in comparison to offline ads. 

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Every online advertising platform has its own strengths and weaknesses, as every digital ad platform has a dozen ad formats, campaign types, as well as performance metrics for the advertisers to take into consideration.

All of this can be a little intimidating for newcomers, with their one and only question being ‘How much will online advertising cost?’ 

In this article we will be taking into account the average cost of online advertising on Facebook, Instagram, LinkedIn, Twitter and Google.

These are one of the most popular and highly used social networks and advertising in these platforms can give an advertiser and their brand the required reach, awareness and engagement.

most cost effective online advertising

Offline Advertising vs Online Advertising

Before we delve into online advertising costs, it is important to understand how online advertising differs from offline advertising and how these factors have a direct relation with average cost of online advertising.

Following are three most significant differences between offline advertising and online advertising:

1. Most offline media except a few nontraditional media like kiosk activities, pamphlet distribution etc. are mass communication platforms. This means that an offline advertisement is usually played once and sent out to hundreds or thousands of audiences.

For example, a single TV ad playing on a channel during a show, a hoarding, an ad in a newspaper. In case of online advertising (mostly) ads are delivered to the audience through personal devices like mobile phone/laptop.

This plays a major role in determining online advertising costs because unlike offline advertising where the brand needs to pay the offline advertising rates upfront, in case of online advertising, they have to pay as and when the ads get delivered.

2. There is no real time method to measure the delivery of offline advertising. However, with digital advertising, one can not only get a real time report of the ad performance but also can control the delivery in terms of filtering out the unwanted audience through targeting.

Sometimes, this factor is the cause of the average cost of online advertising to be higher in terms of cost per reach as these ads are more accurate and work harder than offline ads to reach out to the intended customer.

3. Offline advertising includes every traditional and nontraditional media like television, print, outdoor, radio, and cinema whereas online advertising involves usage of Internet. 

This difference did not come into picture until the pandemic disrupted the world and led to a surge in usage of online media. The reason behind it was the complexity of delivering content through the offline media while for online media, sometimes the least infrastructure one needs to deliver content is a laptop/phone with Internet connection. 

This not only makes online advertising easy to understand but also accessible to new advertisers.

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online advertising costs

Online Advertising in India 2022

The year 2021 was a good one in terms of online advertising costs. According to the latest Media & Entertainment Report by EY and FICCI, online advertising in 2021 reached a revenue of ~363 billion INR (including the estimated online advertising 2021 spent by SMEs and long-tail advertisers).

This massive growth in online advertising in India 2022 can be attributed to the following factors:

1. Increase in Internet Penetration in India in 2021: 834 million subscribers

o   Smartphone users in India in 2021: 503 million

o   Connected TVs in India in 2021: 10 million

o   Online video viewers in India in 2021: 497 million

o   Online news audience in India in 2021: 467 million

o   Social media users in India in 2021: 467 million

2. Increase in Internet Consumption in India in 2021

o   Daily hours spent online on phone by Indians: 4.7

o   Weekly hours spent in streaming music online by Indians: 10.4

3. Online advertising costs in 2021 for India increased for the premium online advertising options. However, due to the growth in online advertising inventories, average cost of online advertising in 2021 decreased.

Types of Online Advertising Platforms

Now that we have understood how online advertising differ from offline advertising and looking at the statistics in the section above, we know that digital advertising is the future of advertising.

The next step to understand the online advertising costs is to dive into the various types of online advertising. This is really important to understand which form of online advertising would be best for your brand.

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Also, understanding the basis of segregating the online ads would help you to comprehend the online advertising costs for the same. We would segregate online advertising on the basis of 3 criteria:

A. On the basis of platforms

a. Non-programmatic and Programmatic online advertising platforms

Non-programmatic online advertising platforms refer to those platforms also known as direct ad service platforms follow traditional marketing process where the advertiser share their requirements and purchase order with the publisher who use their ad manager to setup the online advertising campaigns.

Most of the time, the online advertising costs in these types of platforms are fixed or negotiated between the two parties.

Programmatic online advertising platforms come with a supply and demand side and use automated algorithms and real time bidding to display ads to the targeted customers.

The online advertising costs here are managed by the ad servers in this case.

b. Managed Service and Self-Service online advertising platforms

Managed service online advertising platforms are those advertising platforms where the responsibility of uploading creatives, setting up the campaign, running and optimizing the campaign lies with the publishers.

The advantage of such online advertising is that it doesn’t require the advertisers to hire a team of in-house media strategists. The disadvantage is that the advertisers are apprised of the campaign performance only at the reporting stage and hence are not directly involved.

In terms of online advertising costs, the level of transparency in case of managed service online advertising platforms is less.

c. Self-service online advertising platforms

Self-service online advertising platforms are platforms that let the advertiser’s setup, run and optimize campaigns from their end through client dashboard. Google ads and Facebook ads are the best examples of self-service online advertising platforms.

Advertising through self-service ad platforms gives a complete control of the campaign to the advertisers and they also have a complete visibility of the online advertising costs.

The only disadvantage here is the expertise and resource required to run advertisements on self-service online advertising platforms.

B. On the basis of channels

When we talk about online advertising, the most popular online ad types that come to our mind are social media advertising, search engine ads and display ads.

However, there are several channels through which online advertising happens. We know of all these online advertising platforms but have not realized that they too are part of the digital marketing.

a. Search Engine Marketing: Search engine marketing involves promotion of websites on the search engine result page through text-based ads triggered by usage of relevant keywords by the audience in the search query.

b. Display Marketing: Display advertising is promotion of rich media advertising content on websites, apps and social media platforms through banner ads or other formats targeted towards the site visitors.

c. Email Marketing: Email marketing usually involves sending out promotional emails in bulk to the customer/potential customer database.

d. OTT Advertising: Over the Top refers to digital websites/apps that stream video/audio content on demand. Advertising on these OTT platforms is known as OTT advertising. It can be in the form of banner, audio or video ads.

e. Social Media Marketing: Any kind of promotion on social media platforms via sponsored post, paid display ads, paid partnership posts, video ads or direct messages etc.

f. Paid Content Marketing: When content creators are paid for generating content for brands or when paid channels are used to distribute the content to the target groups, it is known as paid content marketing.

g. Influencer Marketing: With the rise of social media platforms, many users who have been consistent and creative with their content have gained a celebrity status in the social media world validated by very high number of followers.

These users are known as influencers and a number of brands depend on them to reach out to their target audience using their authentic and relevant content.

h. Affiliate Marketing: Affiliate marketing is an arrangement under which a retailer pays commission to websites or influencers who successfully refer them to their audience.

C. On the basis of ad-formats

a. Image/banner online ads: Banner ads are graphic ads embedded in a website. The online advertising costs for banner ads can be calculated as CPM or CPC. The best example of such ads is Google Display Ads.

b. Text based online ads: The best example of text ads is Google Search Ads. These ads get triggered by the usage of targeted keywords by the audience in their search query. The online advertising costs for text based online ads are usually calculated in CPC.

c. Video based online ads: The most trending ad format of current times is the video online ads. Whether it’s the long format video ads played on AVOD OTT platforms or short format videos played on social media platforms, video ads have gained popularity over the last few years. Most video ads are charged on CPM/CPV basis except a few platforms that offer videos on CPC basis.

d. Audio based online ads: Audio ads were popular until recent times as radio jingles only. However, with the growing popularity of audio OTT apps, audio online ads are in demand. These ads are mostly CPM ads unless accompanied with a clickable banner.

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how much does it cost to advertise online

Types of Online Advertising Costs

For a first-time advertiser, understanding online advertising costs can be difficult. This is because there are a large number of advertising options and before sharing the average cost, it would be better for the readers to understand how these online advertising costs are calculated.

There are two criteria based on which the online advertising rates are determined:

Fixed online ads costs: Fixed online advertising costs refer to advertising options where the ad rates are fixed irrespective of the performance of the ad.

Following are two examples of fixed online advertising costs:

o   YouTube Masthead: YouTube masthead is the horizontal banner appearing in the first fold the moment someone visits the YouTube Homepage. It is visible to everyone who log on to YouTube despite of time and location. Hence, the YouTube advertising costs of masthead is determined on a per day basis.

o   Influencer Marketing Posts: Most influencers charge brands on the basis of number of posts instead of impressions or clicks.

Performance-based online advertising costs: The biggest advantage of digital advertising is that it can be tracked and controlled on a real-time basis and each interaction with the audience is recorded.

This also means that brands have to pay for online advertising only when it performs in their favor. Based on objective, there can be several online advertising pricing models:

o   CPM: Cost Per Mille or cost per thousand impressions, CPM refers to online advertising costs for 1000 times exposure of your ads.

o   CPC: Cost Per Click, the advertiser has to pay an amount equivalent to the CPC every time a user clicks on their ads.

o   CPV: Cost Per View, it is similar to cost per impression but is applicable to videos. Every time a user views a video, advertiser has to pay the cost per view ad rates.

o   CPI: Cost Per Install, applicable for app install campaigns.

o   CPL: Cost Per Lead, used for lead generation campaigns.

Youtube advertising costs

Average Cost of Online Advertising in 2022

Measuring the average cost of online advertising and its efficiency can happen in various ways. One of the methods is to combine a quantitative measurement, like Cost Per Thousand (CPM), along with a qualitative measurement, like how qualified the prospect is.

This will help to determine the complete impact of the impression. For instance, one thousand impressions from your target audience will always be much more valuable than one thousand impressions from some random audience who might not really be interested in your service, product or idea. 

How Much Do Online Advertising Cost in India?

Like the traditional offline advertising, online advertising also has various different mediums in order to engage with prospective customers.

According to industry research and marketing experts, the average cost of online advertising in order to get the cost per thousand impressions can be divided into two possible parts, that is, Banner ads and video ads.

The average cost for online banner ads can range from Rs 50 to Rs 150, while the average cost for online video ads can range anywhere from Rs 100 – Rs 400. 

The Media Ant has researched the average industry costs for every single major online advertising platform which we have broken down as per CPM (Cost per Impression) and CPC (Cost per Click):

Online Advertising Costs in 2022

PlatformAverage CPCAverage CPM
Google Search AdsRs 20Rs 50
Google Display AdsRs 5Rs 50
Facebook AdsRs 5Rs 50
Instagram AdsRs 10Rs 65
Twitter AdsRs 10Rs 7
LinkedIn AdsRs 60Rs 165

One of the biggest factors that can affect the cost of online advertising is the media industry we are in. Some online advertising platforms are much more competitive than others.

The average CPC or cost per click  for most of the verticals or platforms is Rs 5 – Rs 10, The CPM or CPC for different platforms will generally vary depending on the requirement of the advertiser. 

Google Advertising Costs in 2022

Google Advertising Costs for search advertising has the average benchmark CPC of Rs 20. The cost of advertising on keywords for the exact kind of service that your business provides can perform significantly well.

Advertisements on search results are nothing but advertising to audiences at the exact time when they are looking for information regarding the service or product that your business offers. 

If your search ads or keywords work well then not only you can be seen by your audience but you may also get them to visit your website and even turn them into sales or leads. 

Google Advertising Costs for Display Ads

Advertising on Google display is one of the most cost effective online advertising if you view it within the parameters of CPM. One may find that the average cost of Google display ads range from Rs 5 – Rs 10.

Google display ads sets a more general goal and requires less targeting, because of which the cost per impression can be driven to an incredibly low cost. The average CPC on Google display ad campaigns is Rs 5.

Youtube Advertising Costs in 2022

Before understanding the YouTube ads cost, let’s understand how are YouTube advertising costs calculated. When talking about YouTube ads cost, there are three pricing models being followed by the YouTube- Cost Per View (CPV), Cost Per Click (CPC) and Cost Per Day (CPD).

(a)  Cost Per View (CPV): Cost per view is usually valid for YouTube video ads. It means every time someone watches a video on YouTube, the YouTube ads cost is applied and the advertisers has to pay an amount equal to the cost per view (CPV).

(b)  Cost Per Click (CPC): Cost per click applies mostly on YouTube banner ads. Every time someone clicks on the banner ads, YouTube advertising costs is paid by the advertiser.

(c)   Cost Per Day (CPD): Cost per day is applicable for YouTube masthead which is charged on per day basis.

While CPV and CPC is applicable to YouTube advertising options that are delivered to individual devices/accounts, CPD is applicable on YouTube advertising options that is constant among all audience i.e. everyone visiting YouTube would be able to see the YouTube masthead. It’s a fixed YouTube ads cost

YouTube advertising through Google Ads is mostly done on a CPV or Cost per view basis, therefore it can be a little difficult to compare on the CPM model. At the average CPV of Rs 0.25, you can get about per thousand ad views.

The CPM or cost per impressions for the first 5 seconds of the advertisement can be Rs 50 CPM or even less, this depends on how good (or average) your ad is. The average CPV for YouTube ads is Rs 0.25.

Social Media Advertising Costs in 2022

Facebook Advertising Costs In 2022

The best part of advertising on Facebook is that the platform allows you to select a lifetime budget or a daily budget for advertising. Being said, the minimum budget for advertising on Facebook is Rs 40.

Using the advertising platform of Facebook will allow you to advertise on not just Facebook but also Messenger, Instagram and even the Facebook audience network. 

On average, Facebook advertising costs can range from Rs 40 and can go upto Rs 20,000 per day, which depends on how wide the target audience of your brand is.

Advertising costs of Facebook can be pretty flexible, hence Facebook ads have become one of the most popular choices for online advertising.

The advertising platform even offers some exceptional targeting options that will enable your ads to go even further by reaching the correct audience. 

Instagram Advertising Costs 2022

Advertisements on Instagram are managed via the ad platform by Facebook and it offers a quite impressive way to reach out to your target audience. The average cost per click for Instagram ads is Rs 8 and the average cost for impressions is Rs 50. 

But keep in mind that, Facebook ads generally perform better for ad campaigns that focus on clicks and traffic, while Instagram ads perform better for ad campaigns that focus on reach and impressions.

However, both the advertising platforms are great options to advertise on and should be considered as a major part of your online marketing strategy. 

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Twitter Advertising Costs In 2022

Ad rates for Twitter are mostly dependent on the type of ad campaign you choose to run. It could range from Rs 7 per engagement on a per day basis for promoted trends. 

Promoted trends on Twitter can provide awareness and a huge exposure in a very short amount of time, but it can be a bit costly. However, the price is worth it as it guarantees placement in the Twitter trends section for one day. 

For those advertisers who do not have the Rs 500 per day budget, there can be two other options:

  • Promoted Tweets: The cost for promoted tweets can range from Rs 7 per click. You must however keep in mind that this price will be dependent on your targeting.  The average CPM for promoted tweets is Rs 7.
  • Promoted Accounts: The cost for promoted accounts can range from Rs 300 approx. on the basis of every new follower.

Linkedin Advertising Costs In 2022

LinkedIn advertising allows both CPM and CPC advertising, but advertising on LinkedIn is much more costly than other online advertising platforms and it requires a larger budget per day in order to be effective.

The pricing depends on the competition and targeting criteria on LinkedIn, the cost per click may start anywhere from Rs 60 to Rs 80 which is a bit on the higher side. This amount is pretty high if compared to other social media advertising platforms. The average CPC for LinkedIn ads is Rs 60.

Offline/traditional Advertising Costs In 2022

The Media Ant has found that the basic cost of offline ads can vary depending on the ad format and the outdoor medium you are looking to advertise in.

The cost per thousand impressions may also vary depending on the location you choose to advertise in, at the same time the medium you are using.

The following table has some approximate costs for outdoor and offline advertising as per the industry standards. This might give you a better insight into the costs for offline advertising:

PlatformAverage Costs Per Unit
BillboardRs 10k
RadioRs 2k
MagazineRs 30k
NewspaperRs 30k
TVRs 30k
HoardingRs 20k

Do keep in mind that you will have to add the qualitative measure of effectiveness to your average cost.

A billboard or hoarding will reach a number of people who will give it 1/4 second of attention, while an ad on radio will have better attention span as radio has loyal customers and the ads in FM channels are more attractive. 

While direct mail allows advertisers to reach a more specific audience, there are other forms of advertising like TV commercials which are intended where you can reach a more large audience. 

digital agency rate card

CONCLUSION: How much does it cost to advertise online in 2022?

We are sure this article has been helpful in giving you an idea of online advertising costs. We can conclude by saying that online advertising is much more inexpensive than offline advertising. At the same time, online advertising has a lot of benefits:

  • You can customize your creative options.
  • Several options to pay for actions like calls, downloads or clicks.
  • Flexible daily budget and minimum ad spend budget control.
  • Better targeting options, where you can target specific audiences. 
  • In-depth measurement and analysis of performance.

For advertisers who have a small budget or SMEs, we would recommend you to start with online advertising. While digital advertising is a great option, you may even try offline ads as they are effective and worth the high cost, if you use the right strategy. 

We discussed the advertising costs on the four major platforms: TikTok, Google, Youtube, Facebook, Instagram, and LinkedIn. Since many factors influence ad costs, there is no fixed price for advertising on the platforms. 

All of the above advertising platforms have their relevance score, and ad quality, you may choose your preferred advertising platform on the basis of your niche industry, ad spend budget and target audience, etc. However, the online advertising platform you choose, the number of audiences you want to target and your objective will determine the cost for your ads. 

However, the good news is that there are various ways to reduce the advertising costs, like increasing the relevance and quality of the ads, usage of the correct ad format and bidding the right strategy, targeting the right audience, and trying different advertising creatives.

You must also use the correct tools which will help you to optimize your ads which will ultimately help in reduction of your ad costs. 

Digital Agency Rate Card – The Media Ant

As part of the advertising sector, it is important to ensure that your online advertising platform must provide the scalability, speed and infrastructure that you need for the customers for experiencing better advertising services.

The Media Ant has 10 years of experience in advertising in a vast array of platforms, like print, digital, TV, radio, magazine, cinema and outdoor.

We can help you in planning and execution of your ad campaigns in your preferred digital platform. Most importantly, we can provide you with the best rates and complete transparency regarding your online advertising campaign.

You can visit The Media Ant Digital Segment or Contact Us for our digital agency rate card. Our digital agency rate card covers more than a 1000 digital advertising media. You can get our digital agency rate card for free of cost.

We hope this article will be helpful to you, in case of any queries you may Contact Us or mail us at help@TheMediaAnt.com

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