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CPM (cost per mille) vs PPC (pay per click) vs CPA (cost per acquisition) Advertisements

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Compare CPM (cost per mille) vs PPC (pay per click) vs CPA (cost per acquisition)

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CPM (cost per mille)PPC (pay per click)CPA (cost per acquisition)
DescriptionCPM (cost per mille) is the price of mille banners impressions in dollar currency. Payment depends on the number of impressions solely.PPC (pay per click) is also known as cost per click (CPC). The advertiser pays for each click made on a banner impression. Payment depends on the number of clicks solely. The CTR (click through rate) measures the success of this kind of online advertising campaign. It is the number of clicks divided by the number of impressions.CPA (cost per acquisition or cost per action) is also known as cost per conversion, cost per lead or cost per sale. It is is an online advertising pricing model, where the advertiser pays for each specified action (a purchase, a form submission, and so on) linked to the advertisement. Payment depends either on the cost of lead, cost of sale or a percentage of the sale's revenue.
Publisher
Publisher Advantages
  • The publisher knows the expected revenue per impression.
  • No concern about CTR
  • The publisher can block some advertisers into a filter list.
  • Potentially highest payout.
Publisher Disadvantages
  • High traffic required.
  • Clicks pay nothing.
  • High CTR required.
  • Unpredictable revenue
  • Not all clicks are counted.
  • Risk to have an account closed due to invalid clicks ratio.
  • Unpredictable revenue
  • Clicks pay nothing.
  • Some advertisers create banners that do not convert in order to get free advertising...
  • Potentially frauds from advertisers...
Advertiser
Advertiser Advantages
  • The advertiser knows the expected daily impressions and costs.
  • Indicator for banner quality.
  • Must bid at the going rate for exposure
  • The advertiser can block some websites to display the campaign.
  • The advertiser pays according to results, performance only.
  • Receives exposure even without clicks
  • Low vulnerability to frauds.
  • High correlation between ads and sales or leads
  • Indicator of campaign and banner quality.
Advertiser Disadvantages
  • Weak correlation between ads and sales or leads.
  • Poor conversion and performance advertising.
  • Weak correlation between ads and sales or leads.
  • Vulnerable to click frauds.
  • It can imply higher cost, but also higher ROI.
Ad networks
Best ads networksTribal Fusion...Google Adsense, AdBrite...Commission Junction, Linkshare, Share-a-sale...
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Compare CPM (cost per mille) vs PPC (pay per click) vs CPA (cost per acquisition)
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Apr. 29th 2011 11:00:43 PM
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User reviews and comments

  • vaas44 on Nov. 7th 2011 12:03:02 PM

    For a technology blogger with 1,000,000 page views monthly and 30% US visitors, which model(CPM,CPC,CPA) would be best? Thanks Vishal