This blog is an online advertising resource for small bloggers, which means we don’t discuss CMP much, but it’s still necessary to understand the different pricing models that advertisers may offer you for banner advertisements.
CPM (cost per mil / cost per 1,000 impressions)
CPM is “cost per thousand” ad impressions, an industry standard measure for selling ads on web sites. The “M” is from the Roman numeral which stands for 1,000. It’s one of the easiest to understand and pay, is typically free of fraudulent click activity and can be adjusted based on web site relevancy with the subject of the ad.
Measuring the cost per impressions also known as pageviews is a standard for online advertising. There are a few other measurements too, but CPM is used most.
Other Online Advertising Measurements
The advertiser is you, the person placing the ad on their site. The publisher is the creator of the ad and also the person paying you.
CPA (cost per action)
The action occurs when a visitor creates a transaction or purchase. These conversions are reported to the advertiser. It’s used often in affiliate sales. If a plane ticket is purchased from your site, you earn $10. The rate is often set by the creator of the ad (publisher) and it’s the best deal a publisher can make. It guarantees that the publisher will only have to pay when a product or service of theirs is purchased.
CPC (cost per click)
You earn money for each click on the advertisement. The price is often negotiated between to the two parties. Illegitime clicks are a concern for the advertiser or publisher.
Fixed Rate Pricing
Fixed rate pricing is most often used by small bloggers or bloggers producing less than 100,000 page impressions. Terms usually involved a fixed payment for a duration of time. This could include monthly payments or a single payment for a term of 1 year. Both the publisher and the blogger benefit from known income. You won’t have to guess what a CPM ad will yield this month and an advertiser will already know what they are paying the blogger. There are no campaign measurements or tracking required on the banner ad.
Fixed rate pricing for banner ads remains the best option for small bloggers and we will discuss those rates for different products and services in detail on BlogAdvertisingRates.com.