17. What is meant by CPM, CPC and CPL?
When it comes to internet marketing you will come across a lot of new terms. Mostly these will feel like jargon, as the abbreviations are more popular than the long words. Here are some common abbreviations you must know when starting your journey into internet marketing.
CPM is the popular short form of Cost per Milli, where M or Milli is the roman symbol for Thousand. Therefore CPM represents cost per 1000. On the internet, this term is used when running a display advertising campaign, where cost is negotiated based on the number of ad impressions which will be shown on a site. The cost of the ad is determined for 1000 page impressions (An impression = each time the ad is shown on the page). For example, a Rs. 150 CPM means you pay Rs.150 every time 1000 ads are displayed on the advertising site. Hence if you decide to by 10,000 impressions you pay 10,000/1000 x 150 = 1500
CPC is the abbreviated form of Cost per Click. A simple term that means what it is. It is a cost payable per click by the advertiser to the publisher. This is a step ahead of impressions based deals. This means that whetever the number of impressions the publisher serves the advertiser will only pay when a visitor clicks on his ad.
The CPC largely depends on the campaign objectives, the advertisers business category, the offer etc. CPC is also very popular because of Search Engine Marketing campaigns on Google and Yahoo which operate on CPC.
CPL is short for Cost per lead. This is one more step forward in the internet marketing performance chain. This means that whatever the number of ads served and whatever the number of clicks generated, the client will only pay when these clicks convert into a leads. So what is a lead? A lead can be defined differently for different clients and campaigns. It could be an e-mail address, or a form to be filled or a survey that needs to be completely filled or an online application for services etc. CPL rates vary greatly depending on the campaign objectives, product/services and the client's volume requirements.
Many experienced internet marketers also take up CPL campaigns which are driven by all the available marketing options like SEO , SEM, Social Media and Display Banners. This approach allows them to average the high CPL's of one medium by the other, thereby resulting in lower cost and higher profits .
A step ahead in the performance chain is CPA or Cost per Acquisition. This is almost like CPL but in this case the lead generated has to translate into discernible action for the advertiser. Which means, post filling up a form the visitor has to perform an action which could be to buy a product or service, download a file etc. Hence the payment received by the Marketer here is only after the action is completed by the visitor. This is one of the most profitable and fast money making avenues on the internet if you know the medium well and can innovate. All affiliate marketers follow this technique. Clients love this model.