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CPC, CPM, CPA: Which online payment model do you choose?

SEMrush Blog
CPC, CPM, CPA: Which online payment model do you choose?

Think of your Web site as an additional store location, one that is open and serving your customers 24/7. Just like any brick and mortar store, you need to attract target customers to visit your location. Search Engine Optimization or SEO is essential for keeping your content relevant to Google, Bing and other search engines. But SEO alone is not enough to keep your online shop top of mind with your target market.

Don’t put all your digital marketing eggs in one basket. Search engines change their algorithm all the time, and they aren’t going to tell you how to best optimize your site to rank #1 organically in Search Engine Results Pages (SERP). A smart advertising model incorporates a blend of SEO style and Search Engine Marketing or SEM planning.

SEM advertising generally falls into three categories. Which advertising model you choose largely depends on your overall goal. There are no hard and fast rules, but keep your desired results in mind when you are developing a plan for digital display advertising or pay-per-click campaigns.

CPM: Used in display network advertising, cost per impression advertising is based on the cost per thousand impressions. (M is the Roman numeral for 1,000.) CPM campaigns are helpful if you want to generate brand awareness and need to get your company out there in front of as many potential customers as possible. A cost per impression advertising model can help ensure that customers see your message. CPM prices vary throughout the day and adjust to meet current demand. You can set a maximum CPM bid to control the cost per thousand impressions that you are willing to pay. A CPM campaign can have wide-reaching impact. The Google CPM display network includes heavily trafficked sites like YouTube and Gmail. However, one drawback to CPM campaigns is that you may be paying for impressions that may never turn into sales.

CPC: If driving traffic to your site is your primary goal, a cost per click PPC advertising model is often best for generating leads and tracking engagement. You will be charged up to your maximum bid every time your ad is clicked on by a member of your target market. While overall impressions may be lower than with a CPM campaign, cost per click models allow for more customization of keywords andy typically result in better conversion rates. With cost per click, you can link to specialized landing pages on your site for a better overall user experience.

CPA: If you have very specific conversion requirements, a cost per action or cost per acquisition campaign can help you maximize your return on investment. Cost per action advertising campaigns are most effective if you have prior knowledge of the potential yield of an acquisition. For example, if you know that the average order value on your site for new customers is $100, you can work backwards from there to determine how much you are willing to spend on each new customer acquisition. Affiliate marketing programs are a great example of how you can work with Web publishers to generate sales and enjoy detailed conversion metrics for cost per action advertising.

SEM planning doesn’t have to be a confusing process. As long as you’re clear on your goals and have done your research ahead of time for the best keywords and competitive analysis, you can easily minimize your financial risk and see a clear return on investment. Display and PPC advertising campaigns are a quick and easy way to ensure that your company has a continuously strong presence on the Web.

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