SEO (5) Internet advertising pricing models

Internet advertising pricing models

At the lowest level, internet marketing can be classified into three pricing models.

They are CPM – Cost per milli, CPC – Cost per click, and CPA – Cost per acquisition.

These models are behaviors exhibited by visitors on the publisher’s website.

1. CPM or Cost per milli is the cost per 1000 impressions of advertisement displayed on the publisher’s website

2. CPC or Cost per click is the cost paid by the advertiser when a visitor to the publisher’s website clicks on the advertisement and arrives at the advertiser’s website irrespective of the impressions displayed. The psychology being that the visitor is interested in visiting the advertiser’s website and hence the act of clicking on the advertisement. These visitors are targeted visitors.

3. CPA or Cost per acquisition is generally a commission paid by the advertiser for behavior on the advertiser’s website by a targeted visitor resulting in an action desired by the advertiser. This is a direct marketing model and takes different forms, most popular of which are:

• i. CPL or Cost per lead pays a flat fee for obtaining a consumer lead, such as signing up for a newsletter program

• ii. CPS or Cost per sale pays a commission based on a transaction made by the consumer, such as a purchase

source:SEARCH ENGINE OPTIMIZATION AND MARKETING by Binoy Varghese page 5-7

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