There are 3 basic metrics of online advertising:
- Impressions: It is the most basic metric. Part of the number of users that visualize your ad, amount that establishes the necessary investment. And it is usually expressed in thousands. Which means that the cost is calculated according to each thousand impressions. This metric is usually the most numerous.
- Clicks: This is the number of times a link is clicked. Whether in newsletters or digital ads, a good click rate is often synonymous with success. Whenever this traffic is directed to the appropriate spaces.
- Conversions: A conversion can be any type of action that a company decides that is the one that interests them: a download, fill out a form with the user’s data or, even, a sale. The most logical thing is that, in the conversion funnel, this metric is the one with the least number. However, it is the most important.
CPM, CPC, CPA AND CPL: WHAT IS THE DIFFERENCES?
What is CPM?
CPM stands for cost per thousand Impressions (the M is the Roman numeral abbreviation for 1,000.) CPM is one of the most common media buying models. You essentially pay for every time your ad loads on a page or in an app. It’s a simple way to buy, but is coming under increasing scrutiny because the client is charged for the impression whether or not a consumer actually sees it.
What is CPC?
CPC stands for cost per click advertising. Here the advertiser pays when a click is made on an ad. Some advertisers prefer to buy CPC versus CPM because they believe they only pay when someone is interested enough in the message to want more info. Some CPC media buying model programs are very effective, but there is a potential for fraud if a company deliberately uses bots or some other technique to drive clicks not initiated by a real person.
What is CPA?
CPA stands for cost per acquisition. Here the advertiser pays only if a purchase is made. This is relatively low-risk media buying model because the advertiser only pays when revenue is driven. But many media companies won’t sell media this way because they must assume all of the risk in the ad buy. If no one buys, they make no money.
What is CPL?
CPL is short for cost per lead, meaning that the advertiser pays when a lead form is completed and submitted. CPL is a common media buying model in B2B marketing, where it is unlikely that someone will make a purchase immediately. It can be a very effective way to buy, though there is some risk of fraud if bots are programmed to fill in leads automatically.
As media and the hardware people use to access it change, the revenue options available to publishers continue to grow. RIGHTNative can align your business with the right online ad model.
Meta description: There are three main ways of pricing online media – CPC, CPM, CPA and CPL. Here are brief definitions for each.