The Power Of CPM and CPC Ads

Although cost-per-click, or CPC, advertising is enjoying great popularity, CPM

(cost per thousand impressions) advertising is still an effective way of reaching

potential customers on the Web. Instead of paying per click, in a CPM campaign

you purchase a set amount of impressions. An impression is a single instance of

an ad appearing on a Web site.

CPM-based advertising can be a cost-effective alternative to CPC deals. To

illustrate this point, let's compare the overall expense of two similar

campaigns.

In CPC-based advertising, you pay for each click your ad receives. Let us say

that you are spending $1 for each click; 10 clicks costs you $10.

In a CPM-based campaign, you may pay $3 for 1,000 impressions. If your ad

receives a click-through ratio of just 1 percent, you're paying $3 for the same

10 clicks.

Current results have shown that text-based CPM ads often receive more attention

that traditional banner ads. In fact, the average view time for a text based ad

averaged 7 seconds, while a graphical ad only averaged 1.6 seconds. Text CPM ads

are starting to become more popular and may be a viable alternative to CPC-based

advertising.

CPM-based advertising may be more suited for your company if your desired

keywords are very popular and expensive. Instead of paying $5 for a single click,

you could but 1,000 ad impressions. This can add up over time.

Although click-through ratios for CPM-based advertising are low, click-throughs

aren't everything. Even an unclicked (but viewed) ad can play an important role

in promoting your company. A well-designed ad will catch a viewer?s eye and may

promote brand recognition, even if the viewer doesn't click.

Targeted CPM-based advertising is also beginning to catch on, which may even the

playing field for advertisers looking for a CPC alternative. If you can display

your ad to a targeted audience, your click-through ratios will improve.

Many sites offer targeted CPM-based advertising options, and you should be able

to find a service that will mesh well with your company?s offerings. Targeted

advertising greatly increases overall effectiveness of your ads, and the addition

of CPM-based targeted advertising may be a great benefit to many small companies.

The downside to CPM-based advertising is that the minimum purchase of impressions

could be more than your company requires. While $5 per thousand impressions is

very appealing, a minimum purchase of one million impressions can quickly scare

off many businesses.

However, there are companies that offer low minimums, and it pays to do your

homework before selecting a company that requires the advance purchase of a large

amount of impressions.

If your budget allows for it, test several different methods of advertising at

the same time and track the results. This way you can see which method is best

suited for your particular company and gives you the best value for your

advertising dollar.