Introduction
Ever wonder what CPM, CPC, CPV, and CPA stand for? You’re in the right place. These are all acronyms for different media cost models. In this course, we’ll look at how they relate to your budget and help you figure out which one is right for your goals.
What you’ll learn:
What you pay for in the common media cost models (CPM, CPC, CPV, CPA)
Which cost model to use for your campaign goals
What would you do?
Imagine you own a boutique birdhouse business and are starting to build your online ad presence. You notice there are different ways you can be charged for running ads.
How to calculate media costs
As much as we hate to admit it, nothing in life is free - and that includes ad serving. Publishers charge advertisers to host an ad based on the inventory they have available, and the goals an advertiser is looking to achieve.
Media costs recap
As explained in the video, costs per interaction (impression, click, or conversion) can vary depending on which model is being used. So, how do you know which one is best for you?
Remember to ask yourself what you want the user to do after they’ve seen your ad. For example:
Do you want them to walk away simply being familiar with your brand?
Do you want them to click through to check out your website?
Do you want them to join your loyalty program and create an account?
Do you want them to purchase something?
With these answers and your goals in mind, you’ll be able to choose which cost model is right for you.
Checkpoint
Now that you know more about media cost models, let’s test your knowledge by having you pick the right cost model for your campaign goals.
CPM: Pay every time the publisher serves your ad. Most often used for raising awareness of your company or product, rather than persuading customers to buy right now.
vCPM: Pay every time your ad is displayed on screen. The “v” means the ad is viewable, which is defined as 50% of the ad being shown on the screen for over one second (not buried lower on the page, or displayed on a page where someone navigates away while the page is still loading).
CPC: Pay each time someone clicks on your ad, regardless of what happens after the click.This works well if you’re focused on increasing sales or website traffic.
CPV: Pay for people watching or interacting with your video ad, like clicking on a call-to-action overlay or companion banner ad. This is the default option for video ads.
CPA: Pay only if a user sees an ad on the publisher’s site and later makes a purchase or completes some other desired action on your website. Publishers take on more risk when using the CPA model, since there’s no guarantee that someone will click the ad. This can make CPA campaigns a bit pricier than other options, but with higher returns.
Recap
In this course, we covered how cost models provide advertisers a structured framework for buying online ad space. Understanding the pros and cons of each model can help you pick the combination most suitable for your goals and budget.
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