The 3 acronyms — CPM, CPC AND CPA — are related to campaign costs for ads in the digital environment.
Regardless of whether you are advertising on a website, blog, portal, social network or search engine, knowing these numbers is important as they relate to the pricing of the ad, that is, the way you will be charged to place your campaign on air.
In all 3 cases, you usually add a value before the campaign starts running on the chosen platform. As the objectives are achieved, this amount is debited.
What differs each of the 3 is basically the relationship between the user’s action and the charge made by the company responsible for the ad to you.
So, right away, you can understand that online ad payments based on these 3 acronyms are more targeted. After all, there is an interaction, even if just viewing the ad, on the part of the public, which makes your investment more profitable and with greater chances of return.
In addition, as they are metrics, these 3 types of ad pricing prove the measurability of your online paid campaigns. In other words: you will know exactly what happens to your ad, what your results were and what your success rate was.
Let’s get to know each one of them.
The acronym CPM stands for Cost per Thousand Impressions .
Now, for your ad to have 1000 impressions — that is, to be seen by a thousand people — the advertising sites need to have considerable traffic. Therefore, this campaign pricing format is generally used by large blogs and news portals.
You have possibly already accessed one of these channels and looked at the sidebars and also at the top of the site, right. These are the spaces provided by the advertising sites for you to place your advertising banner, which can be static, dynamic and, in some cases, even with sound.
But, as you can imagine, the more resources, the bigger and more visible the ad slot, the higher the CPM for that campaign.
That’s why it’s important that, when opting for this ad format, you relate your budget to the time it takes your ad to generate 1000 views within the chosen channel.
The faster you reach that number of views, the more resources you need to make your campaign run for a long time.
Remembering that this pricing is per views . Therefore, regardless of whether the portal visitor clicks on your campaign or not, you will be charged for it.
Thus, this strategy is mainly indicated for medium and large companies that already have a well-defined Marketing structure and a clear strategy. Otherwise, as much as the campaign generates results, its cost will be higher, compared to other pricing models, for example.
You can opt for this ad format for specific promotions or campaigns to strengthen your brand or institutional.
But always remember to create an ad that is attractive enough for the page visitor to feel motivated to read and especially interact with the ad, if your goal is to generate conversions.
However, a tip we give is: if your goal is also to delight, remember to think about how your ad can interfere with the user experience.
To give you an idea, Adblock Plus, an application used to block pop ups on websites, reached the mark of 500 million downloads . This shows how much users dislike having their website experiences affected by brand ads.
CPC is cost per click.
That is, in this case, you will only pay when your ad receives a click from the user.
It is the model used, for example, in Google Adwords — that is, in the purchase of keywords in this search engine. But it has also become quite popular on other websites, portals and blogs.
This format provides a great way to know exactly what your ads are doing — the exact number of people who clicked on your campaign — as well as the impact it has on users. Just look at the total number of users who accessed that channel, how many clicked on your campaign.
Another interesting factor about this format is that, if you want to make an ad charged through CPC, you can establish a target of desired clicks and then calculate your campaign cost in advance, through the average CPC. This calculation is provided by several of the platforms that offer this ad model, as in the case of Adwords .
Based on these factors, the ROI (Return on Investment) of this type of campaign is usually higher. After all, you are guaranteed that you will only pay for users who interacted with your ad.
But also, not necessarily. It will depend on how attractive your ad’s landing page was to generate the final conversion, in the case of promotion and sale ads, for example.
It is suitable for those who want to get more traffic on their website or blog and also for those who aim to achieve a specific number of sales in a certain period of time.
But remember that advertising is only part of your strategy. To generate conversions, in addition to an attractive campaign, you must fulfill what was promised by the ad if the user clicks on it. Only then will you get really effective results.
Finally, CPA represents the Cost per Acquisition.
As you can imagine, this is the most expensive of the three types of pricing, after all, you will only pay for your ad when you reach the end goal of your campaign, which can be a sale, filling out a form or Landing Page , viewing of a video, download of any material or application, or any other purpose established by you.
Therefore, in addition to being the most complex format, pricing this ad format can cost up to 50% of the value of this acquisition. Therefore, the format demands greater investment.
This is also a possible format for Google Adwords. However, in this case, the platform makes some prior requirements based on your campaign history, such as the minimum number of previous conversions.
And, in addition, when opting for this format, in the case of Adwords, the advertiser will automatically choose to automate the ad, losing the chance to control some of its options, except ad location, for example.
In this case, your ad will be charged when the conversion you previously established is fully reached.
For all these reasons, the format is best suited for companies that have wide margins on their products or long-life customers. It is necessary to consider the high value of the acquisition and compare with the other promotion models.
In addition, this format is only suitable for companies that have a high budget in terms of selling costs or the action chosen for charging the CPA.
With the exception of a few specific services, your company is likely to choose the CPC or CPM model.