In one corner of the ring is cost-per-mille or thousand (CPT) – considerably an old advertising model – and in the opposite corner of the ring is its opponent: cost-per-click (CPC). They are battling it out to emerge the ideal advertising pricing model. As online advertising is at its peak, the battle between CPC and CPM has come to the forefront. So, who’s the winner? Let’s take a look at some of the key differences between the two.
Cost per Mille or thousand (CPM)
This is purely a number-based advertising model. The cost is calculated every 1000 impressions that your website gets. The impression denotes the number of people that have viewed your banner ad or have received an impression for the ad. So, each CPM equals 1000 impressions. That means, if you get 20,000 impressions on your website, it means you’ve got 200 CPM’s. It has to be noted that only websites that have more impressions can publish CPM based ads. Once you start posting CPM based ads on your website, you’ll start getting a steady of income for the ads that feature on your site.
Typically, direct CPM ads on websites work much better than Facebook-recommended CPM bids. If you want to get some attractive bid rates through Facebook recommended ads then the best option is to run CPM based ads on the site. Ideally, the CPM bid rate has nothing to do with how well your site is performing. Say for example, you bid $2 for 1000 impressions. If the click-through rate is really high then you might end up getting a CPM of $0.20 for your ads though your bid was $2. There are chances that your ads might also outflank Facebook recommended bid rates.
Cost per Click (CPC)
This advertising model is purely based on the number of clicks that your ads get. The website owner will be paid each time an ad is clicked by visitors. The payout for CPC ads depends on what the advertiser and publisher agree. It may range from a few cents to tens of dollars. If the CPC is $2 per click, it means your ads will generate $2000 for 1000 clicks. One main difference between the CPC and CPM model is that, if you bid with CPM based ads you will never be paid less than your original bidding price.
CPM or CPC – Which is the right advertising model for your website?
If you have a website with regular visitors, then there are chances that your ads may not get more clicks. In that case, the CPM advertising model would be the right model to monetize your website. But then, if your website gets more traffic by featuring on the top search engine results, then your ads may probably get more clicks. In that case, the CPC based advertising model would be the right choice for your website. If your website is a mix of both the aforementioned probabilities then you may consider both the advertising models to monetize your website.
As most blogs derive traffic from the search engines, it makes sense to consider the CPC based model for your blogs. However, if you find that your blog site is getting most of its traffic from regular visitors then you may consider the CPM based advertising model.
CPM or CPC – Which advertising model gets more revenue?
It depends, the CPC model gets more revenue for a small scale blog or website whereas the CPM based advertising model helps generate more revenue for a large scale blog or website.
So, it all boils down to the type of visitors (regular or generic), search engine traffic, and the popularity of your website.