Difference Between CPC and CPM in Online Advertising

Cost Per Click (CPC) and Cost Per Mille (CPM) are two common pricing models used in online advertising:

Cost Per Click (CPC):

In CPC advertising, advertisers pay for each click on their ad. This means that the cost is based on the number of clicks the ad receives.

Cost Per Mille (CPM):

In CPM advertising, advertisers pay for every 1,000 impressions of their ad. The cost is based on the number of times the ad is displayed, regardless of whether it is clicked on or not.

Differences:

• CPC is performance-based, as advertisers only pay when the ad is clicked, while CPM is exposure-based, as advertisers pay for ad impressions.
• CPC can be more cost-effective for direct response campaigns, as advertisers only pay for actual clicks, while CPM is better for brand awareness campaigns, as it focuses on ad impressions.
• CPC allows advertisers to track the effectiveness of their campaign based on click-through rates, while CPM may not directly reflect performance since it is based on impressions.