CPM, PPC, CPC, CPA, CPL, WTF?

November 20, 2012 in Digital Marketing

When advertising online there are three main schools of thought: pay for people viewing the ad, pay for people clicking on the ad, or pay commission on resulting purchases.

Whether you are hosting ads on your own site, or want to advertise your product online, you need to consider the kind of ads that fit with your purpose.

CPM = Clicks Per Mille (mille is french for thousand, because – you know – the french totally invented online advertising, apparently…)

CPM is the price per thousand impressions (views). This works well for general brand recognition campaigns.

For example the Specsavers ad is promoting their tagline “Should have gone to Specsavers”. They know that glasses is not something purchased flippantly, so they focus on getting you to associate the brand with glasses so that in they will spring to mind when you next think of buying a new pair.

specsavers ad

CPC/PPC = Cost Per Click/Price Per Click

CPC is the amount paid every time the ad is clicked on.

This works well if you just want people to go to your site.

For example, if you are relaunching your site, or just want people to see what you are.

CPA/CPL = Cost Per Acquisition/Cost Per Lead

CPA pays every time someone buys a product from the advertisers, similar to commission.

This would be perfect if you have a promotion on a product you want people to buy. This model also applies to non monetary transactions such as signing up to a mailing list or other similar.