I’ve recently been asked –
is a Cost-Per-Mille (aka CPM, or paying for every 1,000 ad impressions across Display networks) campaign better than a Cost-Per-Click (aka CPC, or paying for an ad click/visitor) or Cost-Per-Acquisition (CPA, or paying a cut of a conversion, such as affiliate) campaign?
The short answer is of course “it depends and you might want to test it”.
The longer answer is that usually: “CPA > CPC > CPM”
The simple reason is control:
- CPA is post-sale, so you get what you pay for
- CPC is pre-sale, but you can control your bids and landing pages
- CPM is pre-sale, and you cannot control where and when it shows, nor really gauge how it moved the needle with the exception of traffic coming from this source
For example, a CPM of $12, would require at least a 1% Click Through Rate (CTR) to compare well with a CPC of $1.20, assuming conversion rates are the same… And a 1% CTR in a CPM Display Campaign – while possible, is somewhat presumptuous…
In other words – if you are a growing company with limited resources, better to start with ROI, and while CPM campaigns can be super useful for certain objectives, they are typically not designed for ROI.
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