Pricing and bidding

Different types of pricing

To get the best value for your online spend, you need to know what  you’re paying for. The price you pay for display advertising is normally calculated in one of three different ways: CPM, CPC or CPA.

 

 

CPM
CPM is short for cost per thousand impressions. The amount paid per impression is calculated by dividing CPM by 1000 – so a $10 CPM would equal $.01 per impression. There are no ties between performance of the campaign and how ads are served or how they are paid for.

  • When to use it: Most marketers use CPM campaigns when their primary goal is building awareness.

CPC
CPC stands for cost per click. Using this price option, you only pay when your banner is clicked – regardless of how many times it’s shown. Networks use different types of data and technology to ensure CPC banners appear where they’re most likely to be clicked. 

  • When to use it: CPC banners are recommended if you’re looking to drive traffic to a specific place, like a website or landing page.

CPA
CPA means cost per action. Here, you only pay after the banner has driven the user to your site and completed some sort of action while there – filling out a form, say, or downloading a recipe. As with CPC, your ads will be served in places that are likely to produce more conversions.

When creating a CPA campaign, be sure to keep your end goals in mind. Since the network takes on additional risk with a CPA campaign, they are more expensive than CPM or CPC campaigns, and come with some restrictions. Under these circumstances, you should be absolutely certain of the results you’re after and take extra care in creating a campaign that can deliver them.

  • When to use it:  When a conversion is key, and you're willing to pay for it. A lead generation campaign is a great example of where CPA would be valuable. A good lead can often offset the cost of many conversions.

The Advertising.com take

  • Advertising.com sells against all metrics – including CPM, CPC and CPA.   
  • We’ve been leading the performance-based display advertising market for 10 years. 
  • The Advertising.com team always has an eye toward performance regardless of the metric sold. So even if your primary goal is building awareness, we’ll still do all we can to drive clicks and traffic.