Definitions of CPM, CPV & CPC
Many webmasters and bloggers sign up with online advertising networks to place advertisements on their sites and generate revenue. Advertisers pay the ad network each time a website or blog visitor views or clicks on the ad, and the advertising network pays a portion of this fee to the webmaster or blogger who displayed the ad. Online advertising networks such as Google AdSense, Chitika and AdBrite charge advertisers for ads in different ways, including cost per click (CPC); cost per view (CPV), and cost per thousand views (CPM).
CPC, Cost Per Click
Many advertisers choose CPC ads because they only pay when a website visitor clicks on the ad for further information or to buy a product. CPC ad rates vary, depending on the popularity of the website or blog and competition between advertisers for the ad spot. For example, the CPC rate for a competitive financial services ad on a major site attracting thousands of visitors a day will be far higher than an ad for a niche product on a personal blog.
CPV, Cost Per View
Online advertising networks sometimes offer customers the option of paying for the ad each time the ad is displayed on a website. An advertiser may choose this option if it doesn’t need the visitor to click on an ad to buy a product or view further information. CPV ads might be a realistic option for a company that just wants to increase general brand awareness through widespread online advertising. CPV rates tend to be much lower than for CPC ads.
CPM, Cost Per Thousand Views
CPM is a form of cost per view advertising, but the advertiser pays a fee for every 1,000 ad impressions, or views, rather than for each individual view. A company might choose this option if it wants to advertise a product or service on large, popular websites that attract thousands of visitors each day. Again, CPM advertising is a realistic option if an advertiser doesn’t necessarily require the website visitor to click on the ad to purchase a product.
Small businesses and large corporations often choose online advertising because it allows them to target ads to a relevant audience; for example, a loan company can choose to display ads only on personal finance blogs and websites. Before advertising online, decide what you want to achieve. If you want website visitors to click on a link to order a brochure, CPC advertising might be the most appropriate option. If your advertising message is designed to raise general awareness of your brand, or if it is part of a consumer information campaign, CPV or CPM ads might be more effective.