What is CPM, CPC, CPA, CTR, CPV, CPI, CPE, CPL and PPC
MR JIM : If you've ever worked in marketing, advertising or online business, you've probably come across these acronyms – CPM, CPC, CPA, CTR, CPV, CPI, CPE, CPL, and PPC. They're commonly used in digital advertising, and having a solid understanding of each term can help you determine which metrics and campaigns to focus on.
In this article, we're going to delve into each term, explain what they mean, and how they relate to digital advertising.
CPM – Cost per thousand (M is the Roman numeral for thousand) impressions
CPM is a term that originated in traditional advertising but also applies to digital advertising. It refers to the cost per thousand impressions or views of an advertisement. For example, if a publisher charges $5 CPM, that means that the advertiser will pay $5 for every thousand times the ad is displayed.
CPC – Cost per click
CPC stands for cost per click. It's the amount an advertiser pays for every click on their advertisement. CPC ads are commonly used in search engine marketing and social media advertising. This type of advertising is considered effective because it only charges advertisers when users actually click on their ads.
CPA – Cost per acquisition or cost per action
CPA advertising is a type of advertising where the advertiser only pays when a specific action is taken. This could be a click, a sale, a download, or any other desired action. CPA advertising is generally considered more effective than CPM because the advertiser only pays for desired actions.
CTR – Click-through rate
CTR measures the number of clicks an ad receives divided by the number of impressions it receives. It is expressed as a percentage. For example, if an advertisement receives 1,000 impressions and 10 clicks, the CTR is 1%. CTR is a key metric in determining the effectiveness of an ad campaign.
CPV – Cost per view
CPV refers to the cost per view of a video advertisement. It's used primarily in video advertising, and advertisers are charged when their videos are viewed by a user. CPV is calculated by dividing the total cost of the campaign by the number of views.
CPI – Cost per install
CPI, or cost per install, is a type of CPA advertising that is primarily used in mobile app advertising. It refers to the cost an advertiser pays for every install of their app. CPI is a popular model for app developers who are looking to drive downloads.
CPE – Cost per engagement
CPE measures the cost an advertiser pays for each user interaction with their advertisement. This could be a like, share, comment, or any other engagement. CPE is often used in social media advertising.
CPL – Cost per lead
CPL is a type of CPA advertising that measures the cost an advertiser pays for each lead generated by their advertisement. A lead could be a user filling out a form or providing contact information. CPL is used primarily in lead generation campaigns.
PPC – Pay per click
PPC advertising is a type of advertising where the advertiser only pays when a user clicks on their advertisement. It's used primarily in search engine marketing and social media advertising. PPC is considered effective because advertisers only pay for desired actions.
In conclusion, understanding these terms is critical in making informed decisions in digital advertising. Different campaigns and goals require different metrics, and understanding the relationship between these terms can help you maximize your advertising budget and increase ROI.
