Complete Guide to CPM Vs CPC Vs CPA Vs CPI Vs CPV 2024

Starting a new business or any partnership with another business might be difficult in this world where you will see huge companies running outclass-level ad campaigns. Even for new advertisers or publishers, running an ad campaign might be a daunting task as there are many things that they have to consider while running an ad campaign. Also just running an ad campaign is not enough, you have to be on the top of the digital marketing glossary if you want to gain more profit, and that is the most difficult task to do.

To be the top advertiser or publisher you have to take strong actions toward your ad campaign. if you measure the success of your ad campaign you will get the idea about how well your ad’s performance is. The person who is old folk of this market will only understand the true meaning or importance of the pricing model that is used in ads.

These are the pricing models that will also tell you the performance of your ad campaign. If you look around you will variety of pricing models in the digital market that are being used in ad campaigns for example CPA, CPI, CVC, and many more. Today in this article we are going to distinguish between all of these pricing models and will guide publishers or advertisers that which pricing model is worth using and which is not.

So without wasting any further time let’s get started.

PRICING MODEL – WHAT IS IT?

Before jumping to the definition of the pricing model. First, we have to know how the prices of the ad are determined. each ad campaign has a different pricing model and each model has specific metrics. These metrics are impressions, clicks, install, sales, etc. This means that some ads will give you profit on each impression on the other hand some ads will give you profit on each install or click.

And for metrics, you have to choose metrics according to the goals of the advertising campaign.

Now, let’s discuss what is pricing model?. this is the exact amount of money that will be paid by the advertiser and received by a publisher for the specific goal of an ad campaign. Both parties, buyer and seller will decide on the most beneficial pricing model that will give ease to both parties.

BACK-STORY OF PRICING MODEL

If we look in depth at digital marketing, in the 21st century you will get over ten variations of pricing models. In the beginning, it was just CPM, we went from CPM to CPC, CPI, CPL, and many more. But even after the launching of many new pricing models, the whole industry still depends on the forefathers of pricing models which are CPM, CPC, and CPA.

The first time pricing models were used in the era of analog modem and Mortal Kombat 3, people realized that it could be used for advertising. Then they started a fee for a month or week to run your banner on a specific website.

Originally CPM was launched in 1995, but in 1996 it came into use when double check was formed and the complete online system was established.

In 2002, they launched another pricing model that was CPC and until now it has become the most famous pricing model of all.

After that growth of internet users started increasing and due to this action tracking flourished and the launch of many other performance-based pricing models evolved like CPE, CPL, CPI, CPV, and many more.

PRICING MODELS

1. COST PER MILLE (CPM):

As its name indicates, cost per thousand impressions. Mille is the Latin word that means “thousands”. CPM is the first launched pricing model and the oldest among all but it does not mean that it has lost its importance or value, no, until now all marketers prefer CPM over any other pricing model.

This pricing model is mostly suitable for marketers who are at the top of marketing funnels and they only want to attract clients and build awareness of their brand or company.

If we talk about the effectiveness of a CPM ad campaign, it is more effective in targeting a large amount of audience. Through this pricing model, you can easily reach out to as many people as you want at the lowest cost.

FORMULA & PRINCIPLE OF CPM

The formula that is used in the CPM pricing model is

CPM = campaign cost/impressions * 1000

This is the formula with the help of which CPM ad campaigns are running in the market.

The principle of the CPM pricing model is:

Whatever the results are, the advertiser has to pay for impressions, and on the other hand publisher will receive revenue for each ad view.  Let’s take an example for every 1000 ads seen by users, the website will earn $10 but only if it charges a CPM of $10.

BENEFITS OF CPM:

The following are the benefits of the CPM pricing model:

1. It is the most affordable pricing model of all.
2. Many inventories all available for the CPM model.
3. It is the most predictable for publishers in terms of revenues.
4. Hurdle-free pricing model.

DOWNFALLS OF CPM:

1. the ad campaigns running with CPM do not have any guarantee of engagement or conversion on ads.
2. the impressions we were talking about sometimes can be fraud.

The formats that are used in CPM are banners and video ads. CPM is most suitable for new product launches, awareness campaigns, and any big businesses. In the CPM pricing model the more target you set the more cost per thousand impressions you will have.

eCPM is the effective CPM which is a metric used to estimate how much revenue a publisher can expect from every thousand impressions of their ads. On the other hand, CPM only calculates the cost per thousand impressions and eCPM calculates revenue for the publisher.

AD NETWORK OF CPM PRICING MODEL:

1. Criteo:

France-based header bidding ad network, Criteo is a well-known advertising company that was made back in 2005 with an amazingly developed advertising platform. Criteo is famous for boosting in-store app and website conversion rates. Criteo has a high conversion rate just like Amazon and they generate large amounts of revenues for both mobile advertisers and web advertisers. With the amazing features they provide, website conversion, and in-store conversion, they are included in the top list of best header bidding ad networks in the whole market.

One of the most lovable features of Criteo that attracts more publishers is it allows you to contact directly the person who is buying your services and in this process, there won’t be any third-party involvement.

2. AdMaven:

This is another ad network that not only offers pop-under ads but also push notification ads. They serve their clients with almost 2.5 million impressions daily with good quality. AdMaven has been in the market for around 10 years now. They have the quality to work with both advertisers and publishers. They also had a success story when they offered sweepstakes and casinos.

While using AdMaven you will get a lot of pop-under formats, you can choose any size and resolution to convert your content into a more appealing form.

They have good customer support service, they offer managed services along with assistance. It is one of the top 10 traffic exchange sites, they offer high-quality traffic exchange in certain niches.

AdMaven does pricing models in CPC, CPM, and CPA, and this platform can also be used by beginners who want to expand their business. You can say this is one of the best CPA networks for beginners.

2. COST PER CLICK (CPC):

CPC is a performance-based pricing model similar to CPM where the advertiser pays and the publisher receives revenue but it’s different from CPM in the way the pricing will be done when a user clicks on an ad it does no matter how many times the ad has shown to the user. Advertiser has to pay an amount of money based on each click, this model is used for campaigns that are focused on generating leads.

The cost of each click is determined by several factors that are:

1. Competition
2. Ad Quality
3. Relevance
4. Target audience
5. Bidding strategy

In a CPC campaign, to engage more audience on an ad, a campaign is most likely to appear at the center of the marketing funnel where everyone knows about the product. If an advertiser wants to get more insight into the performance of an ad, he can adjust his campaign more effectively.

FORMULA AND PRINCIPLE OF CPC

The formula that is used in the CPC pricing model is the following

CPC = campaign cost/clicks

CPC = (CPM / 1000) / (CTR / 100) = (0.1 * CPM) / CTR

These two are the formula for the CPC pricing model.

CPC PRINCIPLE IS AS FOLLOW

Publishers will only get money whenever visitors click on their ad. The cost of each click varies from industry to industry but they are high in more competitive markets like dating, and finance.

Let’s take an example if you have 20 clicks at $0.2. 15 clicks at $0.5 and 5 clicks at $0.7 then the whole CPC will be

(20 * 0.2) + (15 *0.5)+ (5 * 0.7) / 50 = $ 0.3

BENEFITS OF CPC PRICING MODEL

The following are the benefits of the CPC pricing model:

1. It is more measurable than any other pricing model
2. More cost-effective
3. High viewability rate
4. Performance tracking
5. Targeted traffic
6. Low barrier to entry

LIMITATIONS OF CPC PRICING MODEL

While it has a lot of benefits, it also has some limitations that are:

1. Calls for high optimization skills
2. Time investment
3. Click fraud
4. Incomplete view of bottom-line performance
5. Competitive bidding
6. Limited brand exposure

The formats used in the CPC pricing model are push ads, pop-ups, and native banners. The pricing model of CPC is best for ad campaigns that need more interaction, affiliate marketing programs, and also sponsored social media posts.

Online advertising varies from industry to industry just like this, the cost of it also varies from industry to industry.

AD NETWORK OF CPC PRICING MODEL:

1. BitMedia:

As the anonymous ad network is the oldest one, BitMedia is the newest Bitcoin network in the market. This network particularly works on the Pay Per Click (PPC) system. If you have tried CoinURL and loved it, then it will also be easy for you to use due to its major similarities with CoinURL. BitMedia was first time introduced in London back in 2014. this ad network was manufactured with the help of modern technologies and professionals. If you have seen ads on BitMedia, you will see the simple banners with “BM” written on the right-hand top corner of the manner, just like done by Google AdSense. BitMedia provides both CPC AND CPM campaigns. You will get the amount for every click but for an impression, the ad needs to have at least 1000 impressions to earn.

The least amount you can withdraw from BitMedia is 0.001 BTC. Their major priority is the quality of ads and they also develop the smart algorithm with the help of which only relevant ads will be shown to relevant people. Their customer support service is fast and more reliable.

BitMedia is very selective in allowing sites to join them.

2. Taboola:

Taboola is considered one of the best ad networks for publishers that operate the CPC pricing model, which means the person will get paid for every click of the visitor. They don’t have to particularly sign up or buy any product through ads to get you paid. It’s an ad network that will help your site monetize and appear after your site’s content. This monetization is not a normal one, famous online magazines and publishers on a big level do this kind of monetization.

Taboola is a site that is working with over one million visitors per month. Having a huge number of traffic on their site does not mean they will compromise on their quality. Taboola is considered a high-quality website in terms of ad networks for publishers.

If you want to get a partnership or registration with Taboola, you have to get at least 500,000 visitors on your site per month, only that way you will be able to work with Taboola. Thigh is the high demand requirement of Taboola.

3. COST PER ACTION (CPA):

Cost-per-action CPA is the most favorite pricing model of the advertiser and also the most used one. But this pricing model is the favorite of advertisers but not of the publisher, among publishers this is the least used one. It is one of the most effective pricing methods in terms of generating more user actions. The ads that are specific CPA used will only charged when the user completes a specific action, that action isn’t only a click or purchase it can be any action. Common actions are :

1. Conversion
2. Subscription
3. Install

Although these actions are measured separately still they are viewed as actions in a broad way.

It happens that viewers do not take action in first time when they view the ad. But the bottom of the funnel is reached after running campaigns for other targets for example CPM and CPC. In this way, it helps to gather historical data and thus it will make more effective targeting and re-targeting for action.

Two factors impact CPA which are CPC and conversion rate. Different brands can use their average order value, AOV, and also customer lifetime value CLV to determine the exact CPA for their campaign. Advertisers can only run CPA ad campaigns but without historical data.

This pricing model is one of the most fraud-free digital advertising models. The traffic on this pricing model is more protected from bot farms. Among all the pricing models, CPA is the most expensive one due to its high value and demand.

CPA FORMULA AND PRINCIPLE

The formula that is used in the CPA pricing model is

CPA = campaign cost/conversion

On the other hand, the principle that is used in the CPA pricing model is as follows

Advertisers will only pay the publisher when the user takes action like subscription, sales, etc. Publishers will only get money if conversion occurs otherwise ho won’t get any profit.

For example, the average CPA for 3 conversions of $3 and $ 5 will be

(3+5) / 2=  $4.

BENEFITS OF THE CPA PRICING MODEL

The following are the plus points of the CPA pricing model:

1. There will be less financial risk as compared to other pricing models.
2. CPA campaigns deliver greater returns on investment.
3. These campaigns are mostly highly targeted.
4. CPA is a risk-free pricing model
5. The CPA pricing model attracts more advertisers.

DOWNFALLS OF THE CPA PRICING MODEL

1. The CPA pricing model is much less predictable as compared to other pricing models as it requires extensive optimization.
2. It has complex or difficult management.
3. The brand exposure of the CPA pricing model is less as compared to other pricing models.
4. Rates of CPCs are higher as compared to CPC and CPM.

The formats that are being used in the CPA pricing model are social bars, push bars, interstitial ads, native ads, and playable ads. It is most suitable for motivating immediate action and also for affiliate marketing.

The rates of CPA are different from industry to industry or they can vary by months or seasons. In summer it will be slower or Q4 is much more like an action time but competitive.

For investment always consider the low seasons and then get the profit in high seasons.

AD NETWORK OF CPA PRICING MODEL

1. Mylead:

Mylead ad network offers innovative tools and solutions for an advanced level of marketing. This is one of the famous affiliate marketing networks that is used by different advertisers or publishers. Also for commission, publishers or even ad networks will get amazingly fair commission on each sale.

Mylead mainly focuses on developing a large circle of clients, advertisers, or publishers so that everyone within that circle will get equal or more benefits. On Mylead you will get many opportunities through which you will be able to advertise your ad or product through many social media platforms that are more related to your content interest.

The minimum payout you can get from this network is about $20.

2. Adsterra:

Adsterra is very unique from other ad networks because of its no minimum traffic requirement. it serves almost 1.7 billion impressions per week. right now working with about 28,000 publishers and 13,000 advertisers. This platform is mostly used by rich advertisers as they have high rates which is favorable to publishers.

It is estimated that for about 2 months experts can easily make $1200 with this network. The signup process of this site is very simple and easy to do, but after signing up you have to wait for the approval from the network which does not take much of your time. After approval, you will be the part of Adsterra ad network.

Adsterra is a CPI (Cost Per Impression) affiliate network and not just CPI, it also operates on CPM, CPC, CPL, and CPA. You should know that they all are pricing models. According to this statement, it means that Adsterra is not specific in terms of paying publishers as they will have different pricing models with different people.

Different ad formats can be used on Adsterra, as they offer different formats that include:

1. native ads
2. In-page push notification
3. pop-under

The minimum payout from Adsterra can be $5. and users will find 6 different payment options in Adsterra.

4. COST PER INSTALL CPI:

It is not very common just like CPM or CPA but still it is an effective pricing model in digital marketing. This pricing model is most commonly used by mobile marketers who are looking to enhance their mobile app installs. For mobile acquisition, it is one of the most widely used pricing models. This pricing model will generate more active users or will focus more on driving installs.

It is a pricing model in which an amount of money is given to the publisher by the advertiser whenever a user clicks on any paid advertisement for the advertiser’s mobile app and installs it.

The formula that is used in CPI is as follows

CPI = total ad spend/ total app install

BENEFITS OF THE CPI PRICING MODEL

The following are the benefits of the CPI pricing model:

1. While using the CPI pricing model, you can easily monitor your ad campaign
2. Optimization toward your post-install CPE goal can be done
3. Through CPI conversion, one can easily analyze their retention rates.

DISADVANTAGES OF THE CPI PRICING MODEL

The disadvantages of the CPI pricing model are as follows:

1. There is a risk of click fraud
2. Ghost traffic
3. There is a huge chance of bidding wars
4. It can be costly compared to others.

AD NETWORK WORKING WITH CPI PRICING MODEL

1. PropellerAds:

Right now PropellerAds has more than 150,000 publishers working with them. About 70,000 ad campaigns run on this site every month. Along with this PropellerAds is also a self-service platform which means you can refine your settings at any time to monetize or optimize your ad campaign.

PropellerAds doesn’t have any high demand like many other ad networks. They also geared the blogs that even have less traffic with them. All the other ad networks require a minimum withdrawal amount of more than $10 but this is the only ad network that allows the user to even withdraw $5.

If we talk about the formats of ads, they have:

1. traditional display ads
2. on-click ads
3. Interstitials
4. browser push notifications
5. smart links.

This ad network which was founded in 2011, allows its users to get their payout every week through different payment options. They have a variety of payment options, you can choose anyone with your choice.

2. Mylead:

Mylead ad network offers innovative tools and solutions for an advanced level of marketing. This is one of the famous affiliate marketing networks that is used by different advertisers or publishers. Also for commission, advertisers or even ad networks will get amazingly fair commission on each sale.

Mylead mainly focuses on developing a large circle of clients, advertisers, or publishers so that everyone within that circle will get equal or more benefits. On Mylead you will get many opportunities through which you will be able to advertise your ad or product through many social media platforms that are more related to your content interest.

The minimum payout you can get from this network is about $20.

5. COST PER VIEW CPV:

This is the pricing model that is most commonly used in mobile user acquisition and also for brand awareness campaigns. In this pricing mode, advertisers always pay for each mobile video ad view. Whenever a user views that ad, it will be profitable for the publisher. This model is only specific for video ads like reward ads and interstitial videos.

The worldview varies from source to source. For example, the view or Google is counted as 30 seconds which is the duration of the ad, it means you have to watch Google ads for 30 seconds only then it will pay money to publishers. On the other hand, the view time of Twitter is much shorter than Google’s. It says “ two seconds of playtime with at least 50 % of video on screen”

The formula that is used by the CPV pricing model is

CPV = advertising cost/ video views

BENEFITS OF THE CPV PRICING MODEL

The following are the benefits of the CPV pricing model:

1. This pricing model is a more specific approach to estimating success as compared to others.
2. You can target demographics in ways that will not be possible with CPM.

DISADVANTAGES OF THE CPV PRICING MODEL

1. In the CPV pricing model, there is a limited profit potential.
2. In most cases, while using the CPV  pricing model the customer values are ignored.

AD NETWORK USING CPV PRICING MODEL

1. EZmob:

This is also one of the self-service platforms that have famous five formats for running a campaign including:

1. Pop-under
2. Display ads
3. Push notification ads
4. Native ads
5. Calendar

In terms of campaign targeting, EZmob is very specific they always take good care of clients’ terms and always try to reach the campaign’s targeted audience. Many ad formats are being used in EZmob but their focus is mainly on pop-under ads and this is its specialty.

Running a campaign on EZmob means your ad will get about 1+ billion ad impressions daily with the GEO coverage in about 220 countries.

The minimum deposit required in EZmob is $50 and the minimum payout is about $0.1.

EZmob works with different payment methods like bank cards, Paypal, WebMoney, Paxum, Payoneer, and many more.

2. PopAds:

You must have read about pop-under ads, the reviews most of the time about pop-under ads are not good. But PopAds is one of the high-quality pop-under ad networks with a good reputation. Different benefits are given to publishers from this ad network for example immediate payment, they don’t have any minimum traffic criteria, and most importantly with PopAds, you can easily control minimum bids for pop-under ads.

They have 2 methods of payment: PayOneer and Paypal. The average income of a thousand visitors is about $4 which will be paid in either 30 or 60 days.

CONCLUSION

These are all the most commonly used pricing models but this is not a complete list of pricing models, many more pricing models in the market are less commonly used by companies and ad campaigns. All of these pricing models have their profits and downfalls. You can’t say that one is good and the other one is not. If you are confused about which pricing model you should choose for your ad campaign then this article will guide you completely about your decision.

FAQs

1. What are the other less commonly used pricing models?

CPI, CPS, CPL, CPE, and many more.

2. For the branding campaign, which pricing model is the best one?

For any campaign, the CPM pricing model is the best one and it will attract more audience. Minimum payment is $50.