The vehicle with the lowest CPM, cost per thousand, is thought to be the best because it reaches the greatest number of people for the money. But this confuses activity with results. What does it matter how much you throw if none of it sticks? It’s not enough to place ads or have them seen be lots of people. What happens as a result? Did anyone buy the advertised product?
There are two metrics in advertising: reach and frequency. Reach is how many people see your ad and frequency is how many times it is seen. No single ad, no matter how well produced, is ever enough to sell you product. You need frequency to earn trust and you need trust to sell. With larger reach, the percentage of ideal customers that are interested in your product will be very small. A lot of money is wasted on people who are not in the market for your product.
The more people you reach the more likely it is that you’re reaching the wrong people.
Christ Anderson explains the importance of targeting:
Sure, the traffic today is still mostly going to Facebook and MySpace. But as they struggle to target ads based on the faint signals of consumer behavior in a generic social network, the smart money is going to the niche sites, where laser-focused content and community makes targeting easy.