What Is the Difference between CPM, CPC, CPL and CPA

The online markets over the internet have increased a lot and are increasing. CPM, CPC, CPL and CPA are the most commonly practiced terms in online marketing. These methods differ on the basis of calculation of costs of the ads and are related with promoting the ads on the websites.

CPM stands for Cost per Mille or Cost Per thousand. It is the cost an advertiser pays a publisher every time an ad received on thousand impressions i.e. on thousands times it has been displayed. For example – If the CPM is of $10, then the advertiser pays the publisher $10 every time the ad is seen a thousand times. The CPM deals helps in increasing the ad revenue. This is because sites which receive a lot of traffic have the advertisers attracted towards them as the advertisers are also having great chances of increasing their business through these sites.

CPC stands for Cost per Click. The ad provider gets paid a certain amount of money when the displayed ad is being clicked by the user. For example – If the CPC is of $1, then the advertiser has to pay $1 to the publisher every time the ad is being clicked. These rates vary according to products and companies which are to be advertised. Many companies have system of tracking the IP addresses from which the ad is being clicked so that the companies can keep a check on their cost by preventing fake clicks.

CPL stands for Cost per Lead. The ad provider is get paid by the advertiser if a user signs up through the ad being published. For example – If the CPL is of $2, then the advertiser has to pay $2 to the publisher every time a user signs up by clicking that particular ad. This method allows the user to pay for user action only.

CPA stands for Cost per Action or Cost per Acquisition. The ad provider is get paid by the advertiser if a user performs certain action after clicking the advertisement. It is similar to CPL, but CPL is only limited to sign up. Actions such as credit card transactions, downloading any software or filling a form etc… come under CPA. The rates are dependent upon the actions. In CPA the publisher has his or her own rights to place the advertisement anywhere while in CPL the advertiser decides.

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