IntroductionPeople spend about half of their daily time on the internet, visiting websites, social media, Emails and so on. Therefore, we are more likely to come across advertisements which can either be in form of text, video or image. Online ads aim at driving profits through posting ads in the social media or websites.
Before you chose the perfect marketing strategy that you’ll use in your business, you have to fist understand your options. There’re 2 important ways, that advertisers can utilize to drive visibility or traffic to their site, that is, CPC (Cost/Click) and CPI (Cost/Impression). The advertising route that you’ll take greatly depends on audience, advertising budget and platform. Every strategy will provide exposure to your product. Although CPI and CPC are 2 different methods of online advertising, they essentially have one thing in common; to display your advertising to potential clients/customers. Nevertheless, one strategy might work better for your business and help you save more money as compared to the other.
Cost/Click (CPC) is an advertising strategy that involves the advertisers only paying when users click on their advertising, although display of the advert itself does not cost them anything. On the other hand, CPI is a strategy that charges the advertiser every time the advertising is displayed, whether the advertising is clicked or not.
Let us learn about both of them using examples.
CPC (Cost/Click)CPC is a reasonably safe marketing strategy for the advertisers since they only make payments when the adverts are clicked. This ensures that some of their pay results to sales or even exposure. Paying for the impressions does not guarantee that the advertisings being displayed will increase sales or people are giving them any attention at all. Nevertheless, Cost/Click can be risky to the publishers since they can be displaying several adverts at no cost and giving expensive exposure away.
It’s possible that users can pass the adverts over without clicking on them, although they might be interested and probably visiting the site of the advertiser directly during another time. During such a situation, the publisher offer away free marketing to the product without getting any returns.
However, this isn’t always true. If the audience if the publisher is perfectly suited for advertising space, they might be missing chances of higher revenues since they are not getting payments for all actions that are being performed, which can be significant amounts.
It is also referred to as PPC (Pay/Click). It’s an effective form of internet advertising. In this method, advertisers pay money depending on click numbers on the advertising. There are some things that you should put into consideration before selecting this strategy since the clicks indicate interaction between the company and potential customers. Since you’re paying for the clicks, you should consider the following:
• How much you’re paying
• The value you’re receiving
• The king of attention you’re going after.
Advertisers pay money to the publishers based on the bidding process or formula. Publishers search for 3rd party matches so as to find certain publishers such as Bing Ads or Google AdWords. They enter into a contract with the firms which tends to have complicated algorithms of calculating the kind of traffic and where it’s coming from. If the product of the advertiser matches the kind of traffic/audience, then there is a match.
After the advertisings are posted, they will stay on the site depending on the amount of money the advertisers have stated they’ll pay on the bid. For instance, if the CPC rate of a website is $1, 100 clicks will mean $100 (100 X 1). Advertisers have to pay based on the amount they bid.
CPI (Cost/Impression)This strategy is also referred to as CPM (Cost/1000 Impressions). M represents 1000 Roman numeral. It refers to the rate that the advertisers have agreed they’ll pay after the advertising is viewed for every 1000 times. Basically, each time the advertising appears to the user is considered as an impression. The cost is therefore set depending on every one thousand views. In this strategy, it is only the views that matters and not the clicks.
The advertising servers monitor these impressions and modify the rate so that it can match the spending of the advertisers. The pricing representation of CPI resembles the one of printed advertisings. For instance, if the publisher charges USD10 CPM, then the advertiser will pay $10 when the advertising is viewed for a thousand times. That simple! Usually, large sites use the CPM strategy so that they can sustain stable product’s visibility. Most publishers prefer this method since they get paid based on the views but not the click.
Which Strategy Should You Prefer?Well, this greatly depends on the sales. For instance, if you have good sales and the advertising is not effective, then Cost/Click (CPC) strategy is the best option. These clicks match the advertiser with the potential clients or customers. However, if the advertisings are good bet the sales are not, CPM will assist you to get viewers and probably some clicks. For instance, you might get 100 clicks in every 1000 impressions. This can work amazingly since the views can get you customers.
Therefore, CPM and CPC are 2 sides of a single coin. They both have drawbacks and promising results. It is greatly dependent on your schemes of marketing. Additionally, optimizing advertisings based on the performance can be perfect, like you can change image parts, ad texts, ad positions and so on. These things tend to have a powerful impact on viewers.