CPM, CPC, CPL, and CPA are
all acronyms that are used to describe online marketing methods. All
the methods are related, as they are the costs of having ads display on
websites. How they differ is in how the cost of the ads is calculated.
The
acronym CPM stands for "cost per mille", with "mille" meaning 1,000.
This type of ad campaign is purely based on numbers, with the cost of
the ad determined for 1,000 page impressions (each time the ad is
shown). An advertiser using such ads will be quoted a guaranteed number
of page impressions for the ad, and then the cost will be set based on
the number. For example, if an ad site has a CPM rate of $10 US Dollars
(USD) and guarantees 100,000 page impressions for the ad, the cost to
the advertiser will be $1,000 USD ($10 x 100). Publishers are paid a
share of the revenue generated by the site selling the ads, which is
usually around 45% or $450 USD for 100,000 page impressions from our
previous
PC stands for "cost per
click" and, in this case, the publisher is paid each time a visitor
clicks the ad being displayed, delivering the visitor to the
advertiser’s website. No matter what action is taken at the advertiser’s
website, all that matters with this cost model is that the ad was
clicked. The companies that sell this type of ad also monitor the number
of clicks the ad gets, preventing the publisher from artificially
inflating the number to try to generate revenue. The pay rate for CPC
ads ranges from a few cents to a few dollars, depending on what the
advertiser has paid to have the ad displayed.
Cost per lead (CPL) is
often used by companies that want to have visitors sign up for
something, called a lead. The ads can be banners, hyperlinks leading to
the advertiser’s website, or both. When a user enters his or her e-mail
address to sign up for the offer, the publisher is paid a certain dollar
amount. Pay rates for CPL ads also range from a few cents to several
dollars, but are usually much higher than CPC ads. The rate is
determined by the business and what the advertiser is willing to pay.
CPA, or "cost per
acquisition/action," is similar to CPL in that the advertiser pays when a
visitor takes a particular action upon arrival at the advertiser’s
site. Again, these ads can be banners or hyperlinks leading directly to
the website. The advertiser decides on the payable action, which might
include downloading a game or program, purchasing an ebook, joining a
course, or something else. The payout is determined by what is involved
in the payable action and how much effort is required for the advertiser
to make a profit, with rates ranging from cents to tens of dollars.
