Online advertising pricing models

Many people ask how can Facebook or Twitter or any other website live, even Google.

For many of us the answer is obvious, a large part of their income comes from advertising.

Modelos de negocio publicitario | Maria en la red

We can distinguish four main types of online advertising, regardless banners in websites -costs will depend on agreement with the website-, sponsorships with influencers, etc.:

  • Cost per thousand (CPM) – PPT (Pay per Thousand)
  • Cost per click (CPC) – PPC (Pay per Click) 
  • Cost per lead (CPL) – PPL (Pay per Lead)
  • Cost per acquisition (CPA) – PPA (Pay per Action)

CPM: Cost per thousand (PPT)

CPM advertising is a model that charges its costs according to the impresions that the add has. That means how many times it is shown to the users.
It reaches a large number of users, but they are poor quality users as segmentation is not as specific. Moreover, as the aim is only the appearance, not going further and no visits or bond sales are guaranteed.
Still, it is a good option to optimize the positioning and do some branding

CPC: Cost per click (PPC)

The Cost per Click model is the one used by Google AdWords.  The goal of these adds is to obtain the user click on the link, with the aim of generating traffic, usually to our website.
It is an advertising model that cleaves more to a determinated target audience, so it reaches fewer users but they are of greater value.
Number of clicks and visits are guaranteed, but not impressions, timing, media, etc.

CPL: Cost per lead (PPL)

Cost per lead advertising seeks to gather some more information from the user, which  we should not forget is a potential costumer. These type of publicity seek the click plus an action, which can be a registration, a like, a RT
It guarantees a number of registered users, and although these adds are displayed to fewer users than previous models, they are more valuable, since the objective is to make something for us and we can get more information about them, such an email we can give some utility to.
The inconvenient is that no impressons are guaranteed.

CPA: Cost por acquisition (PPA)

The Cost per Acquisition model is much more precise and segments its target audience. It has a high conversion rate. So high that it is 100%.
Its aim is to ensure ecommerce sales, and the few users it gets are of high value.

A great example of this kind of advertisements is the retargeting pixel – I promise I will talk about it in another post.
Explained with an easy example, I’m sure you have realized that if you are looking for information of a hotel in Pisa because you want to make a trip – nice place, by the way – later on, when you are browsing other pages you will find lots of advertisements of hotel booking websites showing offers to Pisa.
Well, this is all about.

Modelos de negocio publicitario online | Maria en la red

Did you find this usefull? Don’t forget to let me a like!


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s