CPM vs. CPC,
does it matter?
If you have a choice of ad pricing models, you might as well pick the most cost-effective one! And either of these could be the best for you, depending on the situation.
So which is better,
CPM or CPC?
If you can fetch an above-average click-through rate, CPM could be cheaper. CPC limits your risk of having an unexpectedly high CPC, but it could limit your volume.
First, know the terms.
CPM = cost per thousand impressions
CPC = cost per click
CTR = click-through rate
Effective CPM = “CPM” in a non-CPM deal.
Effective CPC = “CPC” in a non-CPC deal.
CPC is straightforward. You estimate how much each click will be worth to your business, and bid some % of that.
CPM lets you bid based on units of 1,000 ad impressions. From there you likely wan to estimate the click-through rate, then the expected number of clicks.
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