B1 Intermediate UK 2515 Folder Collection
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Nothing in life is free - and this is particularly true of online advertising. Ad space is sold
by website publishers - including newsites, blogs, weather sites, sports sites, you get the picture.
Publishers charge different rates for their ad space. How they calculate costs depends
on their clients' goals.
If an agency wants to boost brand awareness by wallpapering the internet with their client's
advertisements. For example, they'll probably use the CPM model. CPM stands for Cost Per Thousand Impressions...
the Thousand is silent ;). An example CPM might be $10.00 to secure top space on a popular
website's homepage.
If the client is more focused on response rate - like driving traffic to a new part
of their website - the agency may use the CPC (Cost Per Click) model. An example CPC
might be ten cents per click.
Advertisers may use what's called the CPA model when they want more bang for their buck.
This might be a desire to drive sales, increase email sign-ups, or get people to request a
quote online. All of these events are valuable, depending on what the client's goals are. We call these
valuable events *Conversions*.
For example, the publisher gets paid when the visitor sees the ad on their site and
makes a purchase.
There's no guarantee that someone is going to click an ad, let alone buy something on
the advertiser's site. Because of this, publishers take on more risk when using the CPC or CPA
This is why CPC and CPA rates are typically more expensive than CPM rates.
CPM, CPC, and CPA - these three little acronyms make a big difference in how publishers get
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Online Ads 101: Cost models for online media

2515 Folder Collection
oresta kapinga published on April 28, 2017
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