If you want to understand more about Digital Marketing and even more if you are starting a strategy and want to enjoy all the benefits it can offer you, you need to know the meaning of some specific terms and acronyms.
The fact is that, when it comes to Digital Marketing, there are several specific terminologies in the area that are essential for your strategy to be complete.
Generally, these terms are related to metrics, that is, their measurement of results, which, incidentally, is a differential for this type of Marketing and therefore deserves your attention even more.
But more than understanding the meaning, you also need to know exactly how to arrive at these metrics and how they impact your strategy.
So let's outline an overview.
Overview
The 3 acronyms — CPM, CPC, and CPA — are related to campaign costs for ads in digital media.
Regardless of whether you are making ads on a website, blog, portal, social network, or search engine, knowing these numbers is important as they relate to the pricing of the ad, that is, the way you will be charged for placing your campaign on air.
In all 3 cases, you usually add a value before the campaign starts running on the chosen platform. As goals are achieved, this amount will be debited.
What differs each of the 3 is basically the relationship between the user's action and the charge made by the company responsible for the ad to you.
So, right away, you can understand that online ad payments based on these 3 acronyms are more targeted. After all, there is an interaction, even if only viewing the ad, on the part of the public, which makes your investment more profitable and with greater chances of return.
Furthermore, because they are metrics, these 3 types of ad pricing prove the measurable character of your paid online campaigns. In other words, you'll know exactly what happens to your ad, what your results are, and what your success rate was.
Let's get to know each one of them.
CPM
The acronym CPM stands for Cost per Thousand Impressions.
Now, in order for your ad to have 1000 impressions — that is, it can be seen by a thousand people — the advertising sites need to have considerable traffic. Therefore, this campaign pricing format is generally used by major blogs and news portals.
You've possibly already accessed one of these channels and looked at the sidebars and also the top of the site, right. These are the spaces provided by the advertising websites for you to place your advertising banner, which can be static, dynamic, and in some cases, even with sound.
But as you can imagine, the more features, the larger and more visible the ad space, the higher the CPM for that campaign.
That's why it's important that, when choosing this ad format, you relate your budget to the time it takes your ad to generate 1000 views within your chosen channel.
The faster you reach that number of views, the more resources it will take for your campaign to run for a long time.
Remembering that this pricing is by views. Therefore, regardless of whether the portal visitor clicks on your campaign or not, you will be charged for it.
Thus, this strategy is mainly indicated for medium and large companies that already have a well-defined Marketing structure and a clear strategy. Otherwise, as much as the campaign generates results, its cost will be higher, compared to other pricing models, for example.
You can choose this ad format for specific promotions as well as campaigns to strengthen your brand or institutional.
But always remember to create an ad that is attractive enough for the visitor to the page to feel motivated to read and especially interact with the ad, if your goal is to generate conversions.
However, a tip I give is: if your goal is also to delight, remember to think about how your ad can interfere with the user experience.
To give you an idea, Adblock Plus, an application used to block pop-ups on websites, reached the mark of 500 million downloads. This shows how much users don't like to have their experiences with the site affected by brand ads.
CPC
The CPC is the Cost per Click.
In other words, in this case, you will only pay when your ad receives a user click.
It is the model used, for example, in Google Adwords — that is, when purchasing keywords in this search engine. But it has also become quite popular on other websites, portals, and blogs.
This format provides a great way to know exactly the result of your ads — the exact number of people who clicked on your campaign — and also the impact it has had on users. Just look at the total number of users who accessed that channel, how many clicked on your campaign.
Another nice thing about this format is that if you want to make an ad billed for via CPC, you can set a target for desired clicks and then calculate your campaign cost in advance, via the average CPC. This calculation is provided by several of the platforms that offer this ad model, such as in the case of Adwords.
Based on these factors, the ROI (Return on Investment) of this type of campaign is usually higher. After all, you are guaranteed to only pay for the users who interacted with your ad.
But also, not necessarily. It will depend on how attractive your ad's landing page was enough to generate the final conversion, in the case of sales and promotion ads, for example.
It is suitable for those who want to get more traffic on their website or blog and also for those who aim to reach a specific number of sales in a certain period of time.
But remember that advertising is only part of your strategy. To generate conversions, in addition to an attractive campaign, you must comply with what was promised by the ad if the user clicks on it. Only then will you have really effective results.
CPA
Finally, the CPA represents the Cost per Acquisition.
As you can imagine, this is the most expensive of the three types of pricing, after all, you will only pay for your ad when you reach the final objective of your campaign, which can be a sale, filling out a form, or Landing Page, a preview of a video, download of some material or application, or any other purpose established by you.
Therefore, in addition to being the most complex format, the pricing of this ad format can cost up to 50% of the value of this acquisition. Therefore, the format demands greater investment.
This is also a possible format for Google Adwords. However, in this case, the platform performs some pre-requirements based on your campaign history, such as the minimum number of pre-conversions.
And, furthermore, when opting for this format, in the case of Adwords, the advertiser will automatically choose to automate the ad, losing the chance to control some of its options, except ad location, for example.
In this case, your ad will be charged when the conversion you previously established is fully achieved.
For all these reasons, the format is more suitable for companies that have wide margins on their products or for long-lasting customers. It is necessary to consider the high value of the acquisition and compare it with other promotion models.
In addition, this format is only suitable for companies that have a high budget in relation to sales costs or the action chosen to collect the CPA.
With the exception of some specific services, your company will likely choose the CPC or CPM model.
Conclusion
Online ads have different ways of pricing. Choosing one of these formats will basically depend on your objective, the amount available to invest in a campaign.
But regardless of your choice, it's best to run tests before creating a large paid ad campaign to understand which format best suits your needs and also meets your expectations.
Also, choose a platform or channel that really makes sense for your persona to increase your chances of getting good results. After all, your biggest goal should be to reach your ideal customer with any of these actions.
Finally, remember to use all the data obtained through paid advertisements to your advantage. They will tell you a lot about your persona, your behavior and will also be able to guide your next ads so that you can achieve better results.
These metrics will also be a good chance to prove to you and everyone involved the direct and real effectiveness of a paid ad campaign for your business.
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