What is CPM, CPC & CPA? Their Differences in Advertising & Publishing

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CPM, CPC & CPA

CPM, CPC & CPA

Most advertisers find it difficult to choose which advert system they should use to get best results. Also, publishers go through the same difficulty in choosing the monetization method they will choose. This difficulty is as a result of not knowing the difference between CPM, CPC & CPA. These three are the most common advertising and monetization methods online.

In these post I’ll explain the meanings of all and from there you’ll get to know the differences. I’ll also narrate my experience with each.

CPM

CPM means Cost per Mile (Cost per 1000 impressions). It is also called eCPM (Effective Cost per Mile) or RPM (Revenue Per 1000 impressions) in some places

  • To Advertisers: CPM is the amount you pay for each 1000 impressions on your advert. As long as your advert is visible, you will be charged based if you’re using CPM.
  • To Publishers: CPM is the amount you earn for each 1000 impressions you receive on your ad unit.

How it is calculated

CPM depends mainly on the location an impression is coming from. It can also depend on ad clicks, device it is viewed on, or the niche the advert is being showed on.

At the end of the day CPM is (estimated earnings/total impressions * 1000)

CPC

CPC means Cost Per Click. It is also known as PPC (Pay Per Click).

  • To Advertisers: CPC is the amount you pay for each click on your advert. You will only be charged when it is clicked.
  • To Publishers: CPC is the amount you earn for each click on your ad unit.

How it is calculated

As an advertiser, when you choose CPC/PPC advertising, you have to set how much you will pay for a single click. But usually, the higher CPC you set, the more your advert will show in the ad unit of publishers.

As a publisher, your CPC depends on what the advertiser has set. You also have an assurance that the ad network will try to show the adverts with the highest CPC in your site.

CPA

CPA means Cost Per Action. CPS (Cost Per Sale), CPI (Cost Per Install) and CPL (Cost Per Lead) are also forms of CPA.

  • To Advertisers: CPA is the amount you pay for each sign up, email subscriber or install through you advert.
  • To Publishers: CPA is the amount you earn when a user sign up, subscribe to email updates or install an app or game through your ad unit or link.

How it is calculated

Like CPC, an advertiser will choose how much he is willing to pay for an action on his advert. The advertiser also sets prices for actions from different locations.

The publisher will get what the advertiser has set after an action but depends on the users location as set by the advertiser.

I know the meaning of CPM, CPC and CPA but which one should I choose

  • As An Advertiser: It all depends on what you want to advertise. If you want to advertise an app, or you want subscribers/sign ups, you should choose CPA. If you want to advertise a site, you should choose CPM because CPC, to me, is a little expensive. But it all depends on you and the results you want.
  • As A Publisher:  I can’t really say which one you should use as a publisher. But I think CPM is better in most cases. CPA is good if you have a good converting traffic.

By the end of this post, you may be thinking which ad network you may use as advertiser/publisher. I’ll try and post the best networks in the near future.

 

Abdullahi Wada

About Abdullahi Wada

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A computer engineering student. For the future is computerized...

4 Comments on this post

  1. Great job @ wadaskid

    Balamd / Reply
  2. Any adsense web ? ,but not google

    Balamd / Reply
  3. […] Network Type: CPM, CPC, CPA […]

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