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Describing Different Online Payment Models |
If you are going to monetize your website it is important to know how you are going to earn money from the online payment model you are using to display advertisement on your website.
When you see abbreviations including PPC, CPC, CPM and so on, it can get rather confusing to know what each one stands for, and if you are advertising your own site elsewhere to help attract visitors then you certainly need to know what each one means.
PPC advertising stands for pay per click advertising , and it is pretty much what it says – you don’t pay for the advertisement itself, you only pay when someone actually clicks on your advert. Let’s suppose for example that a hundred people saw your advert and only two of them actually clicked on it. You would only pay for the two people who clicked on it, performing the action that you are paying for in the PPC advertising model.
So surely cost per click (or CPC advertising for short) is the same thing? Actually no – cost per click defines the actual amount you pay for each of those clicks that are performed by people clicking on your ad and visiting your website. The price you pay will depend on how popular the search term you are using is and how much competition there is among other advertisers. So for example, if your advertisement is promoting credit cards (a very popular and competitive topic online) you will no doubt pay a lot more than if you were promoting tropical fish. It all depends on how big the audience you are promoting to is, and how many other advertisers are trying to get their attention as well.
CPM is a very different animal altogether. CPM stands for cost per thousand, and this payment model is very different from the PPC advertising that most people know about. It means that instead of paying only when someone clicks on your ad, you will pay for every one thousand impressions of your ad that appear, regardless of the results you get.
Needless to say this means you could pay for the advertising and not get any results, whereas at least the cost per click advertising wouldn’t cost you a dime if you didn’t get any clicks.
This is why you need to evaluate your advertising before deciding on which method is right for you, and adjust your budget accordingly.
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