What are CPM, CPC and CPA? Find out what these acronyms mean – WAU
If you have doubts about the meaning of some Marketing acronyms, in this post you will learn what CPM, CPC and CPA are. Access NOW and read our post!
If you want to understand more about Digital Marketing and even more if you are just starting a strategy and want to enjoy all the benefits that it can offer you, you need to know the meaning of some specific terms and acronyms.
It is that, when it comes to Digital Marketing, there are several terminologies specific to the area and which are fundamental for your strategy to be complete.
These terms are generally related to metrics, that is, its measurement of results, which is, in fact, a differential for this type of Marketing and therefore deserves your attention even more.
But, more than understanding the meaning, you also need to know exactly how to get to these metrics and how they interfere with your strategy.
So, let’s draw an overview.
The 3 acronyms – CPM, CPC AND CPA – are related to campaign costs for ads in the digital environment.
Regardless of whether you are advertising on a website, blog, portal, social network or search engine, knowing these numbers is important as they relate to the pricing of the ad, that is, the way you will be charged for placing your campaign on the air.
In all 3 cases, you usually add a value before the campaign starts running on the chosen platform. As the objectives are reached, this value is debited.
What differs each of the 3 is basically what is the relationship between the user’s action and the charge made by the company responsible for the advertisement to you.
So, right away, you can understand that online ad payments based on these 3 acronyms are more targeted. After all, there is an interaction, even if only by viewing the ad, from the public, which makes your investment more profitable and with greater chances of return.
In addition, as they are metrics, these 3 types of ad pricing prove the character measurable of your paid campaigns online. That is, you will know exactly what happens to your ad, what your results are and what your success rate was.
Let’s get to know each one.
The acronym CPM stands for Cost Per Thousand Impressions.
Now, for your ad to have 1000 impressions – that is, it can be viewed by a thousand people – the advertiser sites must have considerable traffic. For this reason, this campaign pricing format is generally used by large blogs and news portals.
You may have already accessed one of these channels and looked at the sidebars and also the top of the site, right. These are the spaces made available by the advertising sites for you to place your advertising banner, which can be static, dynamic and, in some cases, even with sound.
But, as you might imagine, the more features, the bigger and more visible the ad space, the higher the CPM for that campaign.
That is why it is important that, when opting for this ad format, you relate your budget to the time your ad takes to generate 1000 views within the chosen channel.
The faster you reach that number of views, the more resources are needed to keep your campaign running for a long time.
Remembering that this pricing is for views. Therefore, regardless of whether the portal visitor clicks on your campaign or not, you will be charged for it.
Thus, this strategy is indicated mainly for medium and large companies that already have a well-defined Marketing structure and a clear strategy. Otherwise, however much the campaign generates results, the cost of it will be higher, in relation to, for example, other pricing models.
You can choose this ad format for specific promotions as well as campaigns to strengthen your brand or institutional.
But always remember to create an ad that is attractive enough for the page visitor to feel motivated to read and mainly interact with the ad, if your goal is to generate conversions.
However, a tip we give is: if your goal is also to delight, remember to think about how your ad can interfere with the user experience.
To give you an idea, the Adblock Plus, an application used to block pop ups on websites, has reached the 500 million downloads. This shows how much users don’t like having their experiences with the site affected by brand ads.
CPC is the Cost Per Click.
That is, in this case, you will only pay when your ad receives a user click.
It is the model used, for example, in Google Adwords – that is, in the purchase of keywords in this search engine. But it has also become quite popular on other sites, portals and blogs.
This format provides a great way to know exactly the results of your ads – the exact number of people who clicked on your campaign – and also the impact it has had on users. Just look at the total number of users who accessed that channel, how many clicked on your campaign.
Another interesting factor about this format is that, if you want to make an ad charged through CPC, you can set a target of clicks you want and then calculate your campaign cost in advance, using the average CPC. This calculation is provided by several of the platforms that offer this ad template, as in the case of Adwords.
Based on these factors, the ROI (Return on Investment) of this type of campaign is usually greater. After all, you have the guarantee that you will only pay for users who interacted with your ad.
But also, not necessarily. It will depend on how attractive the landing page of your ad was to generate the final conversion, in the case of promotion and sale ads, for example.
It is indicated for those who want to get more traffic on their website or blog and also for those who aim to achieve a specific number of sales within a certain period of time.
But remember that the ad is only part of your strategy. In order to generate conversions, in addition to an attractive campaign, you must comply with what was promised by the ad if the user clicks on it. Only then will you have truly effective results.
You may also be interested in this other content:
Finance applied to Marketing: understand this relationship
Finally, the CPA represents the Cost per Acquisition.
As you can imagine, this is the most expensive of the three types of pricing, after all, you will only pay for your ad when you reach the final goal of your campaign, which can be a sale, filling out a form or Landing Page, viewing a video, downloading any material or application, or any other purpose established by you.
Therefore, in addition to being the most complex format, pricing for this ad format can cost up to 50% of the value of this acquisition. Therefore, the format demands greater investment.
This is also a possible format for Google Adwords. However, in this case, the platform performs some pre-requirements based on your campaign history, such as the minimum number of previous conversions.
And, in addition, when choosing this format, in the case of Adwords, the advertiser will automatically choose to automate the ad, losing the chance to control some of its options, except location of the ad, for example.
In that case, your ad will be charged when the conversion you previously established is fully achieved.
For all these reasons, the format is more suitable for companies that have wide margins in their products or else customers with a long useful life. It is necessary to consider the high value of the acquisition and compare it with the other promotion models.
In addition, this format is only suitable for companies that have a budget high in relation to the costs of sale or the action chosen to charge the CPA.
With the exception of some specific services, your company is likely to choose the CPC or CPM model.
Online ads have several ways of pricing. The choice for one of these formats will depend, basically, on your goal, of amount available for investment in a campaign.
But, regardless of the choice, the ideal is to run tests before creating a large paid ad campaign to understand which of the formats best suits your needs and also meets your expectations.
Also, choose a platform or channel that really makes sense for your persona, to increase your chances of getting good results. After all, your biggest goal should be to reach your ideal customer with any of these actions.
Finally, remember to use to your advantage all the data obtained through paid advertisements. They will say a lot about your persona, your behavior and they will also be able to guide your next ads so that you get better and better results.
These metrics will also be a good chance to prove to you and everyone involved the direct and real effectiveness of a paid ad campaign for your business.
Do you want to learn how to make amazing ads on Google AdWords that will really bring results to your strategy? Download the free ebook!