Differences between CPM, CPC and CPA.

Cost Per Click (CPC), Cost Per Thousand Impressions (CPM) and Cost Per Acquisition (CPA) are charging methods used by digital media platforms. CPC is calculated by the number of clicks on ads, CPM by impressions and CPA by the number of conversions.

When you monetize your website with any advertising/affiliate company, they can have several cost models for monetizing your traffic, so you should understand each of them well enough to know which one can better adapt to the type of content and objective of your website based on the behavior of the users. The most commonly used are CPM, CPC and CPA. There are others, but they are a bit more specific and are not used as much in the current market.

Let’s take a very clear example.
If your website is trying to attract users to make comparisons about products or brands, probably many users are looking for reviews or recommendations before making a decision, so it is likely that they will click on ads or links on your website to make a purchase, after having solved the search intent of that user. In this case the best option would be to work with CPC or CPA.

On the other hand, if your website tries to give guides on any particular topic such as: how to reach the maximum level in a video game.
Then we must understand that this person probably does not want to buy any item, what he wants is a guide to an item already purchased. Then most likely your best option would be CPM, since you would not get the same clicks.
Most users, when they solve their question or problem, will leave the site happy with the information provided.

With these examples in mind, let’s explain in a little more detail what each of these cost models means.

What is CPM?

CPM, or Cost Per Thousand Impressions, is a metric that represents the cost generated per thousand ad impressions. Obviously these are not literal impressions, but rather the number of times a given advertisement was displayed to the public on the Internet.

By choosing CPM as the payment method, the advertiser agrees to pay the publisher of the ad a pre-determined amount per thousand impressions. This means that the publisher is compensated for each ad shown, thus having more predictability of profit.

One of the advantages of advertising using CPM is that you earn money for each ad displayed, regardless of generating clicks, leads or other actions. Each visitor that enters the site makes the publisher money.

What is CPC?

It is very simple. The CPC is a model based entirely on the clicks that are made on the ad. The advertiser pays an amount ranging from a few cents to a few dollars only when the user clicks. Without a click, there is no payment, regardless of the number of impressions.

What is CPA?

The CPA, Cost Per Action or Cost Per Acquisition, goes beyond the simple click, since it also requires a certain action by the user when he/she arrives at the advertiser’s page, whether it is subscribing to a list, downloading software, purchasing a product, etc… In this model the advertiser only pays when this action occurs, although the CPA usually has a higher cost that can reach several tens of dollars.