Is CPM or CPC a Viable Option for Your Business?
Today, many businesses want to know if CPM is a viable option for them. What is CPM? CPM or Cost per Thousand is the cost of thousand ad impressions on a single webpage. If you use CPM advertising for your business, you’ll have to pay $2 for every 1000 impressions of your Ad if the website publisher charges a CPM of $2. The display of an ad to a user while he or she uses a web page is known as an impression.
CPM is the most common method for pricing web ads. According to PWC, the total spending on CPM in 2014 was approximately 16.5 billion. Additionally, the average spending in the same year on CPM was $8.81.To check its viability, CPM is often compared with CPC. CPC or cost-per-click is the amount you earn each time a user clicks on your Ad. Basically, if the CPC is $1.00 and you get 10 clicks then you have to pay $10.00. Compared to the $8.81 on CPM, the average spending on CPC in 2014 was $1.02.
Businesses that blog prefer affiliate marketing over CPM and CPC as they can earn more using the affiliate model. Affiliate marketing helps bloggers to earn commissions of up to 75%.If you know how to build content rich sites or niche then making money from affiliate marketing is easy for you. Even though CPC and affiliate marketing have their benefits, most businesses prefer using CPM. This is because CPM guarantees the delivery of ads.
By using CPM, businesses agree with the publisher a fixed price i.e. $4 CPM, fixed placement, fixed timings (how long the ad campaign will last) and fixed delivery (the amount of impressions).All this is not possible with CPC or affiliate marketing. In simple terms, Businesses choose CPM because it is a fixed campaign unlike CPC and affiliate marketing which are performance based campaigns.
The amount of businesses can earn from CPM totally depends on the traffic they generate to their blog or website. However, businesses can expect an average of $1 to $1.5 per 1000 impressions. This means that you can earn between $40 and $60 in a day and approximately $22,000 in a year. On the other hand, 400 Clicks a day at $0.25 CPC can help make $100 in a day which means an annual earnings of $36000.
Finally ,affiliate marketing is effective in converting blogs as earn between $40 and $ 80 in a day from affiliate marketing which means annual earnings of $29000.These are the lowest earning that you achieve from CPM,CPC and affiliate marketing. Going by these stats, we can easily say that CPC is the most profitable of the three.
Another form of advertising that is growing in popularity day by day is Native Advertising. Native advertising is a form of paid content advertising where an advertiser pays an online publication to promote its products. Native advertising looks to place the advertiser’s products in front of the customers without intruding on them. Recent stats have revealed that native advertising has better response rates than banner advertising and averages engagement levels of 45 seconds per interaction.
The needs of your business determine whether CPM is a viable advertising option for you. Consider the aforementioned facts and stats to make a decision on CPM.
April Salsbury, MBA is a strategist, an analyst, an operational guru, a recognized leader and C-suite global healthcare executive with drive and focus for competitive markets. Co-host of The Business Forum Show and regular contributor to various business journals, she possess multi-functional and multi-national competencies with more than 15 years experience in business and healthcare. Her expertise is in invigorating revenue growth and infusing value of lean practices in growing companies through improvements to cash flow and operations management.
Fueling revenue, growth and profit, Salsbury & Co. is a consultancy firm focused on helping businesses and healthcare organizations achieve excellency. Our specialists have executive experience combined with deep functional expertise to provide our clients with services that drive real impact and results.
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