Today, businesses are aware that online advertising is an effective method of driving sales and increasing profits. Cost-per-click and Cost-per-Mile are two of the most popular advertising cost models ad networks offer advertisers. So, how does your business decide which one works best for an effective digital marketing budget?
Understanding the CPC and CPM is crucial to determining which of the two advertising cost models aligns with your company’s budget. So, let’s understand what CPC and CPM are.
What is CPC?
CPC or Cost per Click is an advertising cost model offered by ad networks to online advertisers. In this model, advertisers pay the ad network every time a user clicks on your advertisement. For example, you set a budget of 25 cents every time a user clicks your advertisements. So, if you get 1000 clicks in a day, you will pay the ad network $2500.
Again, the 25c budget is a bid you place with your ad network to appear on highly visible websites against your competitor’s ad placements. So, if your ad bid exceeds your competitor’s bid then your ad will be better placed than your competition.
What is CPM?
On the other hand, in the CPM or Cost Per Mile model, the ad network charges the advertiser for every 1,000 impressions on Google Ads or Meta Ads. Whether the viewers click or engage with the advertisement is irrelevant and does not influence the cost.
CPC and CPM- which one is a better choice for your company’s budget?
One of the first key decisions in effective digital marketing budgeting is choosing between Cost Per Click (CPC) and Cost Per Mile (CPM). Understanding the differences between the two advertising cost models allows you to plan your budget for online campaigns.
Differences between Cost Per Click and Cost Per Mile
Brand awareness
One of the key differences between the two advertising models is that CPC advertisements target a more niche audience. Ad networks monitor the performance of CPC ads, deciding when and where to display them. This results in brand awareness amongst a more targeted audience. Further CPC Google ads drive website traffic and improve leads.
On the other hand, CPM maximizes brand awareness by reaching out to a broader audience. The goal of CPM ads is to reach a broad audience irrespective if the users engage with the brand or not.
Returns on investments
The primary goal of Google or Meta ads is to create brand awareness, drive website traffic, and also increase sales and profits. When you understand how CPC works, you clearly see that it creates a greater return on investment. These ads target audiences interested in your product or service and more likely to convert.
CPM advertisements, although targeting a larger audience, should not be disregarded because they generate valuable returns. These advertisements are also capable of driving website traffic and improving sales.
Deciding between the two advertising cost models
When it comes to effective digital marketing budgeting, deciding between CPC and CPM is crucial. Again, deciding which advertising cost model suits your business depends on your advertising goals. If you are looking for more brand awareness for your company’s products then opt for Cost Per Mile campaigns. On the other hand, if you are launching a new product and want to drive more traffic to the landing page in the hope of driving sales, then CPC advertising is the preferred choice.
Contact Webtree Software Solutions for Google Ads and Meta Ad campaigns through CPC and CPM advertising cost models. We create the most effective ad campaigns tailored to suit your company’s budget and goals.
