KNOW YOUR ONLINE BUSINESS

CPC

CPC stands for Cost Per Click advertisement. whenever the visitors of your site click on the advertisement banners, then you will be paid for the visitor's action. The rate would be fixed rate and may vary ad to ad.

CPM

CPM stands for Cost Per Thousand Impressions. The advertisers will pay the publisher a fixed rate for every 1000 unique impressions of the advertisement banners. In this model (CPM) The advantage for the publisher is getting paid a fixed amount irrespective of whether the users clicks the advertisement banner or not. Who will be successful in making profit? The site which has more traffic, would benefit out of it, because each and every unique impression counts.

CPA

CPA stands for the Cost Per Action. I feel this in CPA model the publishers normally get frustrated . Even after having a very huge traffic to your site and colorful banners in place and thousands of click on the banners, the result of your earning may go unfavourable or sometimes ZERO too. Because without any user action (purchase/buying service from that banner) the publisher will not get paid from the advertisers.

CASE STUDY

For example: XYZ company is selling a beauty product, say "abc beauty cream". you are placing the advertisement banner of a product of XYZ Compny, "abc beauty cream".

Case 1: A visitor of your site see the advertisement of "abc beauty cream" and click the banner for more details. It will take her/him to the "XYZ Company" website. After viewing the site & details of the product the visitor come out of that site.
(i) Number of click: 1
(ii) Number of unique impression : 1
(iii)Sales: 0
(iv) your income: 0

Case 2: A visitor of your site see the advertisement of "abc beauty cream" and click the banner for more details. It will take her/him to the "XYZ Company" website. After viewing the site & details of the product the visitor BUY the product "abc beauty cream" or any other product(s) of the same company "XYZ company" and come out of that site.

(i) Number of click: 1
(ii) Number of unique impression : 1
(iii)Sales: 1
(iv) your income: $$$
Note: commissions (fixed or % basis) may vary company to company.

This is all about the online business models... See you in next Lens.