Online Advertising CPC vs. CPM

Online ad spend around the world continues to grow at an alarming rate.  In fact, a recent study by Neilson found that Internet display ads had the highest year-over-year growth of any advertising medium.

Are you considering online advertising for your business?

Online advertising offers great opportunity to hone in on your exact target market and target exact phrases that people are searching for.  But, before you jump in, it’s important that you fully understand how to purchase and run effective campaigns.

Should I use PPC or CPM?

Whether you don’t know what these acronyms mean or just unsure which to choose, he’s a bit of advice on each:

  • CPC
    Cost per click means that you only pay for an ad, if someone clicks on it.  You are essentially paying for performance and return.  This means that if you ad is displayed 1000 times, and no one clicks on it, your end cost is $0.00.   The majority of small business online campaigns are in fact PPC campaigns.  Business owners like knowing that they are only paying is someone clicks on an ad.
  • CPM
    In this model, instead of paying for clicks, you pay a flat fee based on impressions.   Your ad may show 1000 times and you pay the same price regardless of how many clicks your ad receives.  You could receive no clicks or 500 clicks, you’ll still pay that same fee.

So let’s get back to the original question, which is right for you?

It really depends on your product/service, your goals, your sales cycle, etc.  Here are some general suggestions through:

  • CPC makes sense when there isn’t a lot of competition for the keywords you’re targeting.  In other words, if you have a relatively low CPC cost, it might make sense to purchase that way.
  • You may want to start all campaigns on the CPC model and run this for a few weeks.  Look at your ads and how they are performing to determine which model is more cost effective for you.
  • If you find that every one in five is leading to a click, then a CPM buy would most likely be more cost effective.  For example, if each click is $1.25 and you’re getting 5 clicks on every 1,000 visitors.  A CPM of $6.00 or under is more cost effective–and more CPM’s are much lower than that!  Look at your ad spend, impressions and clicks, and do the math!

Still not sure about online advertising?

We can help!  At SilverRank, we offer online advertising for small businesses in Buffalo and beyond.  Whether you’re looking to directly sell your products or services, or grow your brand recognition, we can help!

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