CPM, CPC, CPL, and CPA are all online marketing methods with related costs for displaying ads on websites. CPM is cost per 1,000 page impressions, CPC is cost per click, CPL is cost per lead, and CPA is cost per acquisition/action. Rates for each method vary depending on the advertiser’s willingness to pay.
CPM, CPC, CPL and CPA are all acronyms used to describe online marketing methods. All methods are related, as are the costs of displaying ads on websites. The difference is in how the cost of ads is calculated.
The acronym CPM stands for “cost per mille,” with “mille” meaning 1,000. This type of ad campaign is purely numbers driven, with the cost of the ad determined per 1,000 page impressions (each time the ad is shown). An advertiser using such ads will be quoted a guaranteed number of page impressions for the ad, then set the cost based on that number. For example, if an ad site has a CPM rate of $10 US dollars (USD) and guarantees 100,000 page impressions for the ad, the cost to the advertiser would be $1,000 USD ($10 x 100). Publishers receive a share of the revenue generated by the site selling the ads, which is usually around 45% or $450 USD per 100,000 page impressions from our previous example.
CPC stands for “cost per click” and in this case, the publisher is paid each time a visitor clicks on the displayed ad, directing the visitor to the advertiser’s website. Regardless of the action taken on the advertiser’s website, all that matters with this pricing model is that the ad was clicked. Companies that sell this type of ad also track how many clicks the ad gets, preventing the publisher from artificially inflating the number to try to generate revenue. The rate for CPC ads ranges from a few cents to a few dollars, depending on how much the advertiser paid to view the ad.
Cost per lead (CPL) is often used by businesses that want visitors to sign up for something, called a lead. Ads can be banners, hyperlinks leading to the advertiser’s website, or both. When a user enters their email address to sign up for the offer, the publisher receives a certain dollar amount. Rates for CPL ads also range from a few cents to several dollars, but are usually much higher than CPC ads. The fee is determined by the company and how much the advertiser is willing to pay.
CPA, or “cost per acquisition/action,” is similar to CPL in that the advertiser pays when a visitor performs a certain action upon landing on the advertiser’s site. Again, these ads can be banners or hyperlinks that lead directly to the website. The advertiser decides what action to pay for, which could include downloading a game or program, buying an ebook, enrolling in a course, or something else. Payout is determined by what is involved in the payable action and how much effort is required of the advertiser to make a profit, with rates ranging from pennies to tens of dollars.
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