Online Marketing - Differences between CPM, CPC, CPA and CPL

We will give a simple definition, and applied to online marketing that can help us understand the existing payment models for advertising campaigns.

The usual models are:

CPM (Cost per thousand page impressions)

Normally it is the best for us because it pays for page views, and the responsibility for the contracted space to succeed is the advertiser and his ability to attract clicks or actions.

For the website I understand that it is the most fair because in the end it offers its space, and that should not be free, and the result of the campaign depends on the attractiveness of the advertiser. On the other hand, it is usually the worst paid for obvious reasons, since the advertiser does not value the space on our website as we do. Advertisers do not usually like it because they are not a guarantee of results, and less with modern browsers and expert visitors who block advertising.

CPC - Cost per click

It is the one that they usually use in Google for their search engine, where they usually pay for keywords.

In the case of a web page it can be done mainly through banners in which we are paid for each click that the ad receives. This system alone (referred to banners) is, in my view, weak for the website because it would only charge if the advertiser manages to attract the click, and in addition you have to have a click management system so as not to depend entirely on the advertiser’s control systems. In the case of sponsored links it is somewhat different because the “bid” for the keywords is prior to the placement of the ad or link, and sometimes a flat rate plus an effective amount per click is paid, such as a mix of CPC and CPM.

CPA and CPL - Cost per Activity or Action

This is the panacea for the advertiser because it entails the fact that the visitor not only clicks on your ad but also must involve some action in your product, be it an order, fill out a form, user registration (also called CPL - from English "Cost per lead"), etc. It is the least supportive system (when done alone) with the website, because it depends on the advertiser's ability to "fall in love" with his offer the fact of getting those actions. In return, it is usually the best paid system. It is normally used by online store referral systems, etc., alone or in combination with other systems.

Combined Systems

It is usually the most common when negotiating campaigns. In my opinion, we must try to get mixed agreements, in which the web page gets a CPM, a CPC and a CPA. In this way there is a global commitment between the advertiser - to place good ads - and the website - to place the ads well.

As you can almost guess, the best system "for all" is, in my opinion, a mixed one in which a campaign agreement is made with CPM, CPC and CPA (or CPL). In this way the website obtains a reward for assigning its valuable space on the page regardless of the final advertiser result, but if the advertiser achieves good results, the benefits are also shared. A “win + win” relationship is generated that helps future collaborations.

Now we just need to apply this model and start offering the virtues of the website.