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CPM Cost Per Thousand Miles Vs CPC Cost Per Click Vs Cpa'how To Sell Display Ads - Webmasters - Nairaland

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CPM Cost Per Thousand Miles Vs CPC Cost Per Click Vs Cpa'how To Sell Display Ads by akinbimatt: 2:54am On Aug 18, 2014


Publishers looking to start selling display ads directly will be forced to make a number of decisions in their attempt to monetize this traffic. If you’re fortunate enough to gain traction and start getting some RFPs from potential advertisers, you’ll likely need to decide which pricing methodology you’ll use to sell your display ads.

Because digital display ads can be tracked and analyzed in ways that don’t apply to more traditional advertising media, they can also be priced in different ways. Advertisers are able to track when their ads are clicked and what actions are completed once an ad is clicked, opening up the options for compensating publishers based on different criteria. (By the way, if you’re enjoying this article, you may want to subscribe to our free newsletter; we’ll send monetization tips straight to your inbox each day.)

There are three primary ways to price display advertising:

Cost Per Thousand (CPM)
Cost Per Click (CPC)
Cost Per Action (CPA)

This post will take a look at the specifics of these options, including the pros and cons of each.
Cost Per Thousand (CPM)

Under a CPM arrangement, the advertiser agrees to pay the publisher a predetermined amount for every 1,000 ad impressions served. This effectively means that the publisher is compensated for every ad shown.

Here are a few things to know about CPM pricing arrangements:

Commonly used in direct ad sales
Commonly used for “branding campaigns” where primary objective is to increase awareness of a company or product
Results in most predictable income stream for publisher
Gives publisher nearly full visibility on value delivered to advertiser

For example, an advertiser may agree to run a campaign on a site under the following terms:

100,000 impressions in 728 x 90 leaderboard at $5 CPM
100,000 impressions in 300 x 600 large skyscraper at $7 CPM

Under such an arrangement, the publisher would make a total of $1,200: $5 for every 1,000 leaderboard impress...............


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