6 January 2011
The standard metric for advertisers is CPM, or cost per thousand impressions. An impression is counted as when a web page is displayed – so the beauty of CPM is you’ll get exactly what you pay for. Pay for your ad to appear 3,000 times – it’ll appear 3,000 times. Compare this to advertising in a magazine or exhibiting at a trade show where there’s no guarantee people will see your ad or booth.
Use CPM as a way to compare which sites offer you the best value – but don’t forget to factor in waste. If 50% of the traffic is outside your target market, then in real terms the CPM is double the stated CPM.
Of course, the lowest CPM site is not necessarily the best value. Sites with higher CPMs usually have earned their rates by attracting high-quality traffic. Only you can judge whether a higher CPM is worth it.
Other pricing models
Beyond CPM, some sites give the impressions free and charge by:
CPA or CPE cost-per acquisition or engagement – an acquisition would be a sale, an engagement would be an action, like playing a game, answering a poll, or taking a product tour
CPL cost-per-lead – a lead being defined as (for example) a free registration for something like an e-newsletter
CPC or cost-per-click – paying for every time your advert is clicked on
These can be good ways to buy, but buying impressions by the thousand is still the most common way to advertise.
(Article taken from “The 10 Essentials of Online Advertising in Shipping”, a ShipServ eBook)
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