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Which Is Better: CPM or CPC Model Of Advertising?

There are two popular models of advertising on the internet: Cost-Per-Click (CPC) and Cost-Per-Mille (CPM) used by bloggers. Many webmaster make use of CPC and CPM ads to make money from their websites and blogs. But many have a doubt, whether CPM or CPC advertising is better for their blog. This post will examine this question that is asked by many bloggers.

The case with both these advertising models are that they might perform well for one person, but not that well for another. All ad publishers might not enjoy the same earning from CPC as others do. It is possible that some sites perform better for CPM.

What is Cost-Per-Click (CPC)?

Cost Per Click is the most popular advertising model that is used by webmasters today. CPC advertising is simply stated an advertising model where the ad publisher earn for each click on the advertisers ad. The most popular examples of a CPC ad is Google Adsense. Google Adsense is a very popular CPC program for ad publishers that displays contextual ads that are relevant to the keywords used in articles.

The cost-per-click of an ad may vary according to the advertisers. Some advertisers are ready to pay the publishers in two-digit dollar amounts for a single click on their ad. Whereas, there are many advertisers who pay only a few cents for each click on their ad. The advertisers who know that they will be earning almost 20-30 times more from the lead generated per click will be willing to pay a few dollars for each click on their ad. The other advertisers who do not earn that much from a lead will pay less to publishers. Of course, advertisers who pay more get to be listed on websites that use uncommon keywords. This is why it is important that a publisher needs to focus on the keywords he uses while advertising with the CPC model. Some keywords will pay a publisher a lot of money for each click whereas, some keywords will only pay a single cent.

Another important factor is that to make a decent amount of money from CPC ads, you need an above average traffic level to your site. There are so many bloggers who are frustrated from CPC ads due to the low earnings they register. Most sites can only generate a few cents of revenue in a month from ads.

Advantages of CPC ads

Before coming to CPM ads, here are some advantages of the Cost-Per-Click (CPC) ads:

  • It is easier to get approved for a publisher account of CPC ads.
  • CPC ads are keywords based, so you can earn a lot for targeted search engine traffic.
  • There is no limit to how much you earn in a month from CPC ads, you may earn only a few dollars in a month and earn in four figure the next month.

Disadvantages of CPC ads

There are always two sides of a coin, so along with the advantages of CPC ads there are also some disadvantages:

  • You need a good amount of traffic if you want to earn a decent amount from CPC.
  • Mostly effective on Search Engine Traffic.
  • Earnings are very dependent on the placement of ads.

What is CPM?

CPM is an acronym for Cost-Per-Mille. Quite simply, the definition of CPM ads can be explained as the cost an advertiser pay for a thousand views of his ad. This advertising model is impression based, so the advertisers is paid simply for displaying the advertisers ad whether they are clicked or not.

There are many CPM advertisers on the internet. The main advantage of putting up CPM ads on your site is that you do not have to worry about whether your ads are clicked or not. In fact, you have to focus on your website’s traffic aspect. Since you are paid for every thousand impression under the CPM ad model it is important for you to generate as much traffic as possible to your site as possible.

There will not be much difference whether your traffic comes for targeted search engine keywords or direct hits. CPM eliminates the risk involved i.e. whether your ad is clicked or not. You will be paid for every thousand impressions it has – which is why it is sought after by many bloggers who do not specialize in keywords.

Advantages of CPM

  • Great for publishers who do not have targeted keyword-based traffic.
  • Can be placed anywhere. The placement of CPM ads does not matter at all.
  • There is no risk involved since one only needs traffic and does not require the reader to click on the ads.

Disadvantages of CPM

  • It is difficult to get approved for a CPM publisher account as they ask for a minimum site traffic (10k+/month) requirement when you submit your application.
  • Since a site does not have huge traffic level fluctuations except in rare cases, your earnings are predictable and capped to an extent.

Bottomline

So it is easy to understand that the CPC and CPM ad models may not perform well for every publisher. Some advertisers who get a lot of targeted search engine traffic can earn more from CPC ads rather than CPM ads. And sometimes the earnings you get from every thousand impressions of your page may be more than the income from clicks made on your ads. It is important that you do a little bit of a experimenting and testing before you finally decide on your advertising model among these two.

About Vivek Krishnan

I am the Founder-editor of Collegefallout.com. I started this blog in 2009, while in college with a lousy internet connection. Today this blog receives over 30,000 page views per month. As a person, I am a wanderer, dreamer and part-time pessimist.

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