If in your online marketing plan you have decided that one of the actions to be carried out is internet advertising (either display or search), you will be interested in knowing the payment models that you can find.
Nothing will have served all the work of creating your plan if at the time of truth you do not understand the way in which you will have to remunerate the media.CPC, CPM, CPA, ... What do these acronyms mean? Click To Tweet
Read carefully, because below I detail the different payment models of online advertising.
Cost per thousand impressions. The advertiser pays depending on the number of impressions your ads receive, regardless of whether the user clicks on it or not. You will pay for every thousand impressions your ads receive.
Usually it is the model preferred by the media, since they ensure a revenue only by showing the advertisement, since no response is expected by the user.
Advertisers are interested in this model if the goal of their campaign is to make branding, as they will achieve great impact and visibility.
The CPM that the advertiser ends up paying will depend on different factors, such as the advertising medium or the maximum CPM set by the advertiser.
CPM is referred to as the “Cost Per 1,000 impressions”. Experts depicts that the lower the CPM, the higher your ROAS (Return On Advertising Spend). Generally, a high CPM is indicating as the weak symptom of the campaign. So, if you want to calculate CPM for your advertising, try this online CPM calculator that helps you to find the cost per 1,000 (CPM), advertising costs along with the number of exposures (Ad impressions).
Cost per click. Unlike the previous model, the advertiser pays based on the clicks his ad receives, regardless of the impressions shown on the ad. It is usually used in media such as Google Adwords or Facebook Ads.
In this type of payment model, the advertiser establishes a daily budget and a maximum cost per click. Your ads will run until that stated budget is reached. This is why it is the model preferred by the advertisers, since when paying for a concrete action of the user make sure that it is interested by his product or service, unlike the CPM, model in which is paid regardless of whether the User sees, or does not, or interacts with the ad or not. And, above all, they will choose it if what they are looking for is to bring quality traffic to the web.
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The CPC paid by the advertiser will depend on the advertiser depending on whether or not the user advertises the same advertisement. Of different factors such as the maximum cost per click established by the advertiser or the offer of the competition.
Cost per Lead. The advertiser pays based on the leads he gets with the advertising, regardless of the impressions or clicks he receives.
Because of their characteristics, they are often used primarily in affiliate networks.
Cost per acquisition. The advertiser pays based on the sales he gets by advertising. Obviously, it is the model that has less risk to the advertiser, since it always ensures a benefit linked to that advertising.
It is also used, like the CPL model, in affiliate networks. The only difference is that in this model is paid for a sale and not a lead.
Cost per day or time. The advertiser pays to leave a specific period in a fixed area of the medium. Impressions, clicks, leads or sales received are not influenced by this model.
These are the most common online marketing payment models, although mixed strategies with two or more models can also be used. Its use will depend on the objective of the campaign. For example, if the advertiser seeks to generate brand visibility, they will probably choose a CPM model; While if you want to get traffic to the web, the model that will fit the most will be the CPC.