How does digital advertising work, cost wise. It can get confusing. We know this so here we are to help (hopefully). I am not saying I will make it any better because acronym are an acronym and until you know what they mean things can look more confusing. It might be a bit of a slow process (I’ve been learning this stuff for a while). Once you read or see these terms over and over you will recognize the ones you use. know Digital Advertising Revenue models]
Lingo To Know
Clicks- # of times someone clicks on your ad.
Impressions Total # of people who see your ad- Think driving by a billboard
CTR Click through rate. This the clicks divided by impressions.
Max CPC- the amount you’re willing to pay for each click
Average CPC- see below.
Average Position a # from 1-10 that indicates where your ad is in the SERP (Search Engine Results Page).
Quality Score – a number from 1-10 that indicates the quality of your word for your camping.
Search Volume – How many people are googling these things.
Know our Digital Advertising Revenue, 3 Models
The most common ways in which online advertising is purchased are CPM, CPC, and CPA.
CPM (Cost Per Mille) or CPT (Cost Per Thousand Impressions): Wen advertisers pay for exposure of their message to a specific audience. “Per mille” means per thousand impressions or loads of an advertisement. (However, some impressions may not be counted, such as a reload or internal user action).
CPV (Cost Per Visitor); When advertisers pay for the delivery of a Targeted Visitor to the advertiser’s website.
CPV (Cost Per View); When advertisers pay for each unique user view of an advertisement or website (usually used with pop-ups, pop-unders, and interstitial ads).
CPC (Cost Per Click) or PPC (Pay per click); When advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.
CPA (Cost Per Action or Cost Per Acquisition) or PPF (Pay Per Performance) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the number of users who complete a transaction, such as a purchase or sign-up. This model ignores any inefficiency in the seller’s website conversion funnel. The following are common variants of CPA:
CPL (Cost Per Lead) advertising; Is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale.
CPS (Cost Per Sale), PPS (Pay Per Sale), or CPO (Cost Per Order) advertising; Is based on each time a sale is made.
eCPM: Effective CPM or eCPM calculated through other conversion events such as Cost per Clicks, Cost per Downloads, Cost per Leads etc. for example when an advertiser getting $2 per download and for 100,000 impressions you received 10 downloads worth $20, in this case, your effective CPM or eCPM will be 2*20*1000/100,000= $0.4
Fixed Cost: Advertiser paying fixed cost for delivery frame by campaign flight dates without any relevance to performance
Cost per conversion Describes; The cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of “Conversion” varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase.
And That’s mouthful Right! Want to know more or deal with Less? Talk to Us