Thursday, September 5, 2013

Online advertising : CPM or PPC ?

Let's get to the facts. The goal of this article on online advertisement or online advertising (there is a big difference between both) is to get you to understand when to use one (PPC advertising) and when to use the other (CPM advertising).

In this lens we will see when to use CPM Advertising and when to use PPC Advertising, there are many factors that come into play and that you should take into consideration before choosing either one or the other.

But why online advertising you might ask ?

A big concern for bloggers and webmasters of today is content monetization.

The easiest way to do it is online advertising, where programs like Google Adsense have really made what could of been a major problem in the eighties no less than a detail for today's world.

Online all online advertising doesn't work the same way, amongst other things, there are several remuneration type. In this article, we will only talk about two monetization types, CPM Advertising (pay per impression) and PPC Advertising (pay per click). There are other forms of online advertisement, including CPA and CPV, but these are more complex and will be in other articles.

When to use PPC Advertising

Generally, if your site has less than 1,000 daily unique visitors, I would recommend you stick with PPC advertising, as you wont win more than four dollars per day.

Now traffic isn't the only factor to a successful PPC advertising experience, content size and quality matters a lot too. With good content, you will get paid higher per click (from a cent to 70 dollars on Google Adsense).

The content size has a big matter of importance because it directly affects the CTR. For instance, short blog posts as a blog does surely get less clicks than Ubergizmo's posts, or Wikipedia's articles (if they had a PPC Advertisement going on).

Not to mention that with more content, you have a better chance that Advertising robots offer you relevant adverts.

When to use CPM Advertising

As seen just above, the first key to a successful CPM online advertising campaign is traffic.

I like to say that CPM Advertising works only where PPC Advertising fails., either primarely non-textual content or quick browsing pages ( as a prior example).

For non-textual content, a good example is the website Grooveshark. I don't know what type of advertisement they are using, I believe it's a rotating combination of CPA, PPC and CPM Advertisement.

Well I believe that in this case of low-quantity textual content, CPM Advertising is more appropriate. There are two kinds of PPC adverts, the ones that are relevant and the ones that aren't. The ones that are relevant are both paying better AND getting more clicks.

But on a website that as very few textual content, how could an advertising robot or advertising script know what is relevant and what is not ?

Another case where CPM Advertising becomes a pretty interesting possibility is for forum. You are not as free concerning advertisement placement than on a blog or a website, moreover the CTR is usually lower (except for big forums with much traffic).

Mixing CPM and PPC Advertising

Many a tried this, and a lot have failed.

I'm not saying it's a bad idea, just that it's extremely hard to produce some effective solution by the combination of both CPM and PPC Advertising.

Maybe your are thinking that a blend of CPM and PPC Advertising would work like this :

- The users that get interested the PPC Adverts will click on those
- The users that don't still get monetized by the CPM Advertising
- Conclusion : Twice as much money !

Well that's not exactly how it works...

In fact, CTR is at it's highest on CPM Adverts, which is pointless for us publishers since we don't get paid by clicks but by impressions. That is because the advertisers don't care if the clicks are quality or not, since they pay for the impression, in fact they are trying to get as many clicks as they can. Whereas PPC Advertisers are trying to get clicks, obviously, but high quality clicks, since they actually pay for those.

It's kind of like if you're trying to get yourself a meal. Going to charity free-foods and stuff like that is sort of like CPM Advertising, you're going to take what you can get because you won't pay for that directly, and going to a five star restaurant is more of PPC Advertising, you're going to be picky because you pay for the food you get.

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