Web page advertising includes cost per click (CPC), cost per action (CPA), and cost per thousand (CPM). CPM is the least expensive, while CPA is the most expensive as it is associated with a positive effect for the advertiser. Different types of ads can be associated with different compensation methods.
The three main types of advertising on web pages are cost per click (CPC), cost per action (CPA), and cost per thousand (CPM). Both CPC and CPA require someone to actually click on an ad or link before the advertiser has to pay. Cost per thousand, also known as pay per impression (PPI), requires the advertiser to pay a certain rate for 1,000 views. Any of these methods can be associated with contextual text-based ads, graphical banners, in-text links, and other types of web page advertising.
Cost per thousand is typically the least expensive type of web page advertising, as the act of displaying an ad does not guarantee any positive effect for the advertiser. Impression-based advertising like this can allow a website owner to get paid whether or not their visitors actually click on any of the ads placed on the site. This can be contrasted with cost-per-click advertising, where the advertiser only pays when a visitor clicks from an advert to his site. Cost-per-click is typically higher than cost-per-thousand, although individual campaigns can vary significantly.
The most expensive type of web page advertising is usually cost per action, as it is associated with an event that has a positive effect on the advertiser. In some cases, the advertiser will only pay if an actual sale is generated from a visitor who clicks on an ad. These payments are typically very high compared to cost per click or cost per mille, as they directly represent a sale made due to advertising. Another form is cost per lead (CPL), where the advertiser pays a commission when a visitor clicks on an ad and fills out an inquiry.
Each of the types of advertisements on web pages can be associated with a variety of delivery methods. Contextual text ads are typically small, unobtrusive ads that are targeted based on the content on a page. A similar concept is in-text ads, which are services that can turn words within a web page into contextually matched links. If a visitor clicks on one of the links, the webpage owner will usually get paid based on CPC or CPA. Banner ads are graphical in nature, often incorporating various animated elements, and can be associated with CPM or any other compensation method.
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