What are CPM, CPC, CPA, CPS and CTR in Advertising

What is CPM, CPC, CPA, CPS, and CTR

What Is The Difference Between CPM, CPC, CPA, CPS, and CTR in Online Advertising? | Online Media

One of my friends asked me what are CPM, CPC, CTR, and CPS, etc. I explained to him with the best of my knowledge. I thought there are lots of new people creating their blog daily so lots of people have similar questions; so I have created this article to explain these terms to all of you.

What is CPM

CPM stands for ‘Cost Per Thousand’ (M is a symbol of 1000 in Roman Number). In the fields of online advertising, you can charge based on the number of impressions of particular banner/link ads. Normally your CPM can be anything from $5 to $1. Lots of advertising networks provide you the client for CPM based on the niche of your blog. Mostly network put the condition of minimum impression per month before you join their network i.e. your blog/website must have at least 50000 pages view per month.

What is CPC

CPC stands for ‘Cost per Click’. You have to pay (if you are putting ads on someone else blog/website) or you will earn (if somebody putting his ads on your blog) whenever someone clicks on the ads. Google Adsense is a famous example of it. Google charged to their clients for every click they get on their ads and Google pays you whenever someone clicks on the ads (Google Adsense ads) running on your blog/ads.

What is CPA

CPA stands for ‘Cost per Action’. Action can be of any type, it may be filling out a form on destination website or joining e-mail list at destination websites, etc.

What is CPS

CPS stands for ‘Cost per Sale’. This is one of the most famous online marketing methods nowadays. It is beneficial for both publishers and advertisers. You get a commission per sale.

Most of the affiliate plan is based on the ‘Cost per sale’ model.

What is CTR

CTR Stands for ‘Click-through Rate’. CTR is calculated on a percentage basis. Let me explain it in more detail. Suppose you have put one ad on your blog and it appears to your visitor 100 times a day and 3 people click on it then your CTR will be 3% or 0.03.

If 10 people out of 10000 impressions of ads are clicking on ads then your CTR will be 0.1% or 0.001

CTR Calculation formula

(Number of Clicks / Number of impressions) x 100

So if the number of impressions is 100000 and the number of clicks is 1000 then CTR will be

CTR = (1000/100000) * 100 = 1%

In my next article, I’ll explain how to choose which is best for your blog CPM or CPC or CPA or CPS.

Author: seositelists

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