Sunday, April 6, 2008

How are advertisements purchased online?

How are advertisements purchased online? There are many way that advertisements are purchased but CPM, CPV, CPC (PPC), and CPA are the most common methods of purchasing online advertising or internet advertising. The others include CPL, and CPO. These methods are found at any major and small advertising service providers such as Google,Yahoo,MSN and many other providers such as Performics, Hydra Network, Motive Interactive, Commission Junction/BeFree, LinkShare, Primeq or Azoogle.

The other uncommon methods are such things like Sony's famous "All I want for Christmas is a PlayStation Portable.". a fake advertising campaign via a fake weblog. Although Sony got caught, and apologized, it bring the brand name forward.

Then there is pages like The Million Dollar Homepage that only require a one time payment ($1 per pixel of advertising space) and the advertisement is run as long as the website is alive. But the pitfall of these type of advertising is that after the initial torrent of people coming to the site, interest wanes and the site might disappear all together. Then again there will be million more pages like that, copycats or not.

Back again to acronyms;

  • CPM (Cost Per M, thousand Impressions (The M in the acronym is the Roman numeral for one thousand.)) is where advertisers pay for exposure of their message to a specific audiences in usually targeted websites.. CPM costs are priced per thousand impressions.
  • CPV (Cost Per Visitor) is where every visit to the advertisers site via the advertisement is accounted and charged for.
  • CPC (Cost Per Click) is also known as Pay per click (PPC) and is widely used and known in the online advertising arena. Advertisers pay every time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words also known as ADWORDS that direct relevant traffic to their website. CPC( PPC) is different from CPV in that in the former, each click is paid for regardless of whether the user makes it to the advertisers site.
  • CPA (Cost Per Action) advertising is performance based and commonly used in the affiliate marketing sector of online advertising. In CPA, the blog owner or site owner takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. The advertiser at the same time get exposure and search keywords to be used in next round of advertising, which could be any of the above such as CPM, CPV, CPC (PPC). This is the best type of rate advertisers and the worst type of rate to publishers. The other two which falls under CPA is CPL (Cost Per Lead) and CPO (Cost Per Order). CPL is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale or genarates loyalty. CPO (Cost Per Order) advertising pay based on each time an order is transacted which could be a percentage of the profit!.

So now you know a bit about some online advertising acronyms, put them to use and make some money online either as a publisher or an advertiser..


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4 comments:

keen said...

Right? Many advertising techniques are there over the internet. The popular is Pay-per-click which is known as online advertising arena. Presently pay per call is also under observation...

Luke said...

In terms of saying "best or worst" I like to think of "RISK".Deciding how to buy/sell ads depends on the RISK you as the publisher or Advertiser are willing to take. As a publisher you assume the most risk with a CPA advertisement and as an Advertiser you assume to must risk paying on the CPM or CPC.

Luke
Motive Interactive
luke@motiveinteractive.com
AIM: lukemotive

ravenII said...

Thank you Luke,
Still in learning mode ;). Will be visiting you to learn more!

Luke said...

At Motive Interactive we work with many people new to Affiliate marketing as well as experienced super affiliates and we are always willing to pass on any helpful hints. Any one wishing to learn more can also contact me directly at my site www.lukejeffery.com where I have lots of information and my bookmarks and I can be followed on Twitter at http://twitter.com/lukejsmith .