Gone are the days for display advertising that can be seen in periodicals since performance ad network and performance advertising are now available. In performance advertising, other means of electronic media aside from the Internet is used. Regardless of what kind, let us share with you the different pricing models used for performance advertising.
- CPM (Cost Per Mile, or Cost Per Thousand)
This is a kind of pricing model wherein performance advertising is charged for impressions. An example is how many times a person or a group of people have viewed the advertisement.
On the other hand, the glitch of CPM advertising in the world of performance advertising is that the advertisers are still charged. It applies whether or not the target audience has clicked on the advertisement.
- CPC (Cost-Per-Click)
This is the exact opposite of CPM. This is because CPC advertising only charges advertisers once the end-user clicks the advertisement. Since the competition has become tougher, the search keywords used can be very expensive.
According to a 2007 Doubleclick Performic Search, the report shows that there are almost six times as many keywords on every cost per click (CPC). As of January 2007, it is more than $1 compared to the previous year. As a matter of fact, there is an increase in the cost per keyword by 33%. On the other hand, the cost per click also got bigger by 55%.
- CPL (Cost per Lead)
In this kind of performance advertising, the advertisers only pay for the qualified leads. This means that regardless of the clicks or impressions that are generated by the lead, they still get compensated for their work. CPL advertising is also known as online lead generation.
In performance advertising, the pricing model is the most advertisers friendly. According to the latest research done by IBM, it shows that two-thirds of the senior marketers are anticipating 20 percent of ad revenue.