Wednesday, August 31, 2011

What is CPM, CPC, CPA , and CTR ?

What is CPM?
CPM means Cost Per Thousand. ( M is the Roman numeral for thousand – and so Cost Per Thousand ). This is the amount you will pay the ad-network or website publisher to show your ad a thousand times on their website or across their ad-network. Whether your ad is shown only once to each visitor (Unique Impressions) or any number of times – is something that you will have to work out with the nad-network or the website.

CPM rates were once ( pre yr 2000 bubble-burst era ) as much as $75, but have now dropped to as little as $1 CPM. For example, I adervise CPM ad on Facebook is in the range of $0.5~$5.

What is CPC?
CPC means Cost Per Click. This is how much you would pay the ad-network or website every time a visitor clicks on your banner. CPC rates can be as high as $3 per click or as little as 5 cents per click. It depends on your product and your market – amongst other factors, the more competition there is – the higher you will probably end up paying as you compete with competitors.

What is CPA?
CPA means Cost Per Action. The Action could be any of the following types of actions – A visitor clicking on your banner coming to your site and filling up a simple enquiry form (CPR – Cost Per Registration) , or if the visitor makes a purchase (CPS – Cost Per sale). It could be a flat fee or a percentage commission of the sale made. Affiliate-Networks like commissionjunction , linkshare and clickbank have very good software systems in place to track all this and provide statistics to online merchants and publishers on their network of websites.

What is CTR
CTR is Click Through Rate. This is the percentage rate at which people click on your ad banner. If your banner ad is seen by 100 people but clicked by one person – then it’s CTR is 1% or .01.

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