There are three main ways to pay for online advertising in 2022, and it’s time to unravel what makes each pricing model tick. Keep reading as we check out the essentials of CPM, CPC, and CPA campaigns.
Rest assured, what seems like a bunch of obscure acronyms are the go-to pricing models for effective online advertising campaigns in 2022. Using CPM, CPC, and CPA and the right product/offer and optimization tactics is sure to play a vital role in maximizing your return on ad spend.
We’ll unpack these campaign payout models below and see how you can use them to save on ad spend, increase campaign traction and boost onsite revenue.
If you’ve just signed up and you’re looking to make the most of the Adcash Advertiser Platform, check out this guide to generating profitable ad campaigns in a few simple steps.
CPM Ad Campaign Definition
CPM is the fixed amount an online advertiser will need to pay per 1,000 impressions or views. A CPM model is purely impression-based, making it rather difficult to match the performance of the impressions back to a particular campaign.
That said, it’s also one of the least expensive campaign pricing models, which may be due to its lack of precision, among other factors. Advertisers often use CPM to increase and maintain brand awareness, alert traffic to new events, and market existing products or features.
Advantages of CPM Pricing
While less precise than CPA and CPC, the CPM pricing model has certain advantages. You’ll have access to a wide range of online advertising platforms and publishers, which can help you find your ideal target audience and generate awareness in real-time. Moreover, CPM pricing remains relatively low if your campaigns can produce consistently high CTR.
Disadvantages of CPM Pricing
Some of the disadvantages of running campaigns on a CPM pricing model include the added risk of fraudulent traffic. Ensure that you’re also working with a reputable online advertising platform to eliminate bots and generate rich, organic conversions across all of your campaigns.
CPC Ad Campaign Definition
CPC is the amount an advertiser will need to pay for one click. The CPC or Cost Per Click option is a forerunner in performance-based ad campaign models. These performance-based models give advertisers greater ability to oversee and monitor their budget, analyze their stats and optimize their campaigns according to data-driven decisions.
Advertisers can attribute a specific conversion to each click paid for, allowing them to see where it came from and how it ties in with overall user engagement. The drawback? You can’t account for multiple clicks from the same user, and the attribution becomes difficult if a generated click does not immediately follow the conversion.
Advantages of CPC Pricing
For starters, CPC campaigns are measurable. You’ll be able to gauge the effectiveness of a given campaign directly related to how many clicks and conversions are generated. You can also handpick your ideal audiences with advanced targeting and optimization protocols, including user interest, device type, and region.
Disadvantages of CPC Pricing
Some of the drawbacks that come with CPC Advertising are price spikes. If you’re not consistently monitoring your campaigns and optimizing them to full effect, your allocated budget can start to drain out very quickly.
Moreover, clicks will not always generate sales. You’ll still need to take your user through the sales funnel to generate any lasting conversions. You’ll also need to consistently revisit your campaigns and target them to create ongoing returns.
CPA Ad Campaign Definition
Finally, a CPA-based campaign is the amount you’ll need to pay for one action. What constitutes an action? Actions can be anything from completing a form online to registering an account, depositing funds, downloading a service or subscription, etc.
Whether you’re after registrations, installations, sales, or any other activity requiring a specific step, you can be sure that you’ll only pay for the impressions once a user has performed a particular task onsite.
Advantages of CPA Pricing
There are a few core benefits to running CPA campaigns. You’ll always be paying for rich traffic sources as cost per acquisition only charges for specific actions. As an affiliate, you’ll also gain lucrative commissions on products as product owners stand to get better results from targeted conversions.
Disadvantages of CPA Pricing
A primary drawback of the CPA pricing model is its higher price when compared to CPC and CPM costing models. Traffic also needs to move through the entire marketing funnel and complete a meaningful action to generate a conversion.
What is CPA Target Bidding?
This cutting-edge bidding software optimizes your campaign’s bids based on Target and CVR to maximize conversion volumes while minimizing costs. CPA Target can identify the best bids per traffic segment by adjusting to traffic performance changes.
Reach out to the Adcash team and see how you can use CPA Target to maximum effect on your next campaign. Or, learn more by checking out these CPA Target Facts and Stats for 2022.
Tips for Choosing the Right Pricing Model
Below are a few optimization tips and tactics that you can put into practice when choosing your preferred pricing model. Remember, your model will depend heavily on the product/offer you are promoting and the targeting protocols you’re putting in place.
Use Multiple Pricing Models Simultaneously
Try using CPA ad campaigns in unison with other costing models. Due to the level of commitment they require from the website owner, there is a chance they might not provide as much traffic. So a balanced, well-structured portfolio brings in conversions from multiple angles.
Attract Attention with CPM Ad Campaigns
CPM ad campaigns are the most effective and efficient pricing models for generating awareness for a specific product or service. These campaigns attract visitors and tell a story while bringing in leads that advertisers can convert into paid customers.
Optimize with CPC Ad Campaigns
Once you’re happy with your brand awareness and seeing a rise in website visits, you can start running CPC campaigns. These campaigns impact user engagement where every click can result in solid leads and potential conversions.
Pro Tip: effectively structuring your sales cycle will bring in the most engagement from CPC campaigns. Specifically, your ad should redirect to a landing page that either converts or sends them elsewhere. Track each stage in your buyer journey and identify where bottlenecks are popping up. CPC campaigns are not only an excellent way to target conversions; they’re also a good way to test your campaigns for future gains.
Feel free to reach out to us at any time right here for tailored tips, tricks, and trends. You can start advertising with Adcash and reach your target audience with results-driven performance advertising campaigns.
Leave a comment in the description below and let us know which payout model brings you consistent returns.