Effective Cost Per Mille or eCPM (as it is often initialized to) is a phrase often used in online advertising and online marketing circles. It means the cost of every 1,000 ad impressions shown.

CPM is considered the optimal form of selling online advertising from the publisher’s point of view. A publisher gets paid every time an ad is shown.

eCPM is used to measure the effectiveness of a publisher’s inventory being sold (by the publisher) via a CPA, CPC, or CPT basis. In other words, the eCPM tells the publisher what they would have received if they sold the advertising inventory on a CPM basis (instead of a CPA, CPC, or CPT basis).

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Cost Per Impression is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners, text links, e-mail spam, and opt-in e-mail advertising. (Although opt-in e-mail advertising is more commonly charged on a CPA basis.)

The Cost Per Impression is often measured using the CPM (Cost Per Mille) metric. (A CPM is the cost of one thousand (1,000) impressions.)

CPM is considered the optimal form of selling online advertising from the publisher’s point of view. A publisher gets paid for each ad that is shown.

This type of advertising arrangement closely resembles Television and Print Advertising Methods for speculating the cost of an Advertisement. With Television the Nielsen Ratings are used and Print is based on how many readers a publication has. For a Website the numbers are a bit more exact due to the TCP/IP nature of the Internet.

CPM and/or Flat rate advertising deals are preferred by the Publisher/Webmaster because they will get paid regardless of any action taken.

For Advertisers a Performance Based system is preferred. There are two methods for Paying for Performance: 1) CPA – Cost per Action/Acquisition and 2) CPC – Cost per Click Through.

Today, it is very common for large publishers to charge for most of their advertising inventory on a CPM or CPT basis.

A related term, eCPM or effective Cost Per Mille, is used to measure the effectiveness of advertising inventory sold (by the publisher) via a CPC, CPA, or CPT basis.

Cost Per Mille

The initialization CPM comes from print world (and is a latin word), and stands for Cost Per Mille in the US or, more correctly, in the UK Cost Per M, with M representing the Roman numeral for thousand. When online advertising started gaining momentum, those in the industry used this term (rather than something like CPI) as a metric for describing the Cost Per Impression largely because advertisers were already familiar with the term CPM.

It is important to remember that when someone says something like, “our CPM is $5″. That this means that the Cost Per Impressions is $0.005 — half a cent.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Because of the ability to track results of online advertising at a more granular level than what is available through traditional advertising, varying ways have developed for the advertisers and publishers to do business. The three most common ways in which online advertising is purchased are CPA, CPC, and CPM.

CPA (Cost Per Action) 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 only pays for the media on the basis of the number of users who complete a transaction, such as a purchase or sign-up.

CPC (Cost Per Click) advertising is also performance based and is common in search marketing, where it is often known as Pay per click (PPC). In this scheme, an advertisement may be displayed (and assumedly viewed) many times, but the advertiser only pays based on the number of user clicks. This system provides an incentive for publishers to target ads correctly (often by keyword), as the payment depends upon the ad not only being seen, but the viewer responding and following the hyperlink.

CPM (Cost per Thousand) advertising is the most common basis in the business and is used for most display advertising and rich media. This scheme most closely resembles offline advertising, wherein the advertiser is paying for exposure of their message to a specific audience. CPM costs are priced per thousand, so that a $1 CPM, means that the advertiser pays $1 for every thousand impressions.

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Pay per click, or PPC, is an advertising technique used on websites, advertising networks, and search engines.

With search engines, pay per click advertisements are usually text ads placed near search results; when a site visitor clicks on the advertisement, the advertiser is charged a small amount. Variants include pay for placement and pay for ranking. Pay per click is also sometimes known as Cost Per Click (CPC).

While many companies exist in this space, Google Adwords and Yahoo! Search Marketing, which was formerly Overture, are the largest network operators as of 2006. MSN has started beta testing with their own PPC services MSN adCenter. Depending on the search engine, minimum prices per click start at US$0.01 (up to US$0.50). Very popular search terms can cost much more on popular engines. Abuse of the pay per click model can result in click fraud. Click fraud is usually not detected very well by smaller PPC engines.

Categories

PPC engines can be categorized in “Keyword”, “Product”, “Service” engines. However, a number of companies may fall in two or more categories. More models are continually being developed.

Keyword PPCs

Advertisers using these bid on “keywords”, which can be words or phrases, and can include product model numbers. When a user searches for a particular word or phrase, the list of advertiser links appears in order of bidding.

As of 2005, notable PPC Keyword search engines include: Google AdWords, Yahoo! Search Marketing, GaZabo.com, Miva, which was formerly FindWhat, SearchFeed, Enhance (formerly Ah-Ha), GoClick, 7Search, Kanoodle, ePilot, Search123, Kazazz, Pricethat, Search FAST and others.

An industry of professional services firms that can assist advertisers in marketing their products and services on search engines has also developed. Many of these firms will be members of various trade bodies such as IABUK, SMA-UK and SEMPO, while other reputable firms have chosen to avoid these bodies, as many of them remain heavily biased toward the firms that first got together and founded them.

Product PPCs

“Product” engines let advertisers provide “feeds” of their product databases and when users search for a product, the links to the different advertisers for that particular product appear, giving more prominence to advertisers who pay more, but letting the user sort by price to see the lowest priced product and then click on it to buy. These engines are also called Product comparison engines or Price comparison engines.

Some of the PPC Product search engines are: BizRate, NexTag, PriceGrabber, Pricescan, Pricethat, Pricewatch, PriceLeap, Shopping.com

Service PPCs

“Service” engines let advertisers provide feeds of their service databases and when users search for a service offering links to advertisers for that particular service appear, giving prominence to advertisers who pay more, but letting users sort their results by price or other methods. Some Product PPCs have expanded into the service space while other service engines operate in specific verticals.

Examples of PPC services include NexTag, Pricethat SideStep, and TripAdvisor.

Pay per Call

Similar to pay per click, pay per call is a business model for ad listings in search engines and directories that allows publishers to charge local advertisers on a per-call basis for each lead (call) they generate. The term “pay per call” is sometimes confused with “click to call”[1]. Click-to-call, along with call tracking, is a technology that enables the “pay-per-call” business model.

According to the Kelsey Group, the pay-per-phone-call market is expected to reach US$3.7 billion by 2010.

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Cost Per Click or CPC (as it is often initialized to) is a phrase often used in online advertising and online marketing circles.

With many advertising networks and websites, the advertiser is charged for advertising their ad (on the advertising network or website) only when a user clicks on their ad. How much they pay (for that click) is called their Cost Per Click or CPC.

The CPC can be determined by different factors, depending on which advertising network or website the advertiser is advertising on.

Other common forms, of charging for advertising, include:

• CPM
• CPA
• CPT

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Effective Cost Per Action (often abbreviated to eCPA) is a phrase often used in online advertising and online marketing circles.

CPA is considered the optimal form of buying online advertising from the advertiser’s point of view, as they only pay for an advert when an action has occurred. An action can be a product being purchased, a form being filled, etc. (The desired action to be performed is determined by the advertiser.)

eCPA is used to measure the effectiveness of advertising inventory purchased (by the advertiser) via a CPC, CPM, or CPT basis. In other words, the eCPA tells the advertiser what they would have paid if they purchased the advertising inventory on a CPA basis (instead of a CPC, CPM, or CPT basis).

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

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Cost Per Action or CPA (as it is often initialized to) is a phrase often used in online advertising and online marketing circles.

CPA is considered the optimal form of buying online advertising from the advertiser’s point of view. An advertiser only pays for the ad when an action has occurred. An action can be a product being purchased, a form being filled, etc. (The desired action to be preformed is determined by the advertiser.)

A related term, eCPA or effective Cost Per Action, is used to measure the effectiveness of advertising inventory purchased (by the advertiser) via a CPC, CPM, or CPT basis.

The CPA can be determined by different factors, depending where the online advertising inventory is being purchased.

Other common forms, of charging for advertising, include:

• CPC
• CPM
• CPT

This guide is licensed under the GNU Free Documentation License. It uses material from the Wikipedia.

Need an webmaster? Click HERE