If you’re trying to understand online advertising, it can feel like your feet are stuck in quicksand and you’re getting sucked down a rabbit hole. But no matter how far you’ve gone down that hole, two ad-related abbreviations that will undoubtedly keep showing up are PPC and CPM.
If you’re still trying to pull your feet out of the muck and get a grip on these terms, then read on, because we’ve broken them down for you.
PPC is an acronym for the term pay-per-click. Pay-per-click advertising is a form of online advertising in which you pay a fee every time someone clicks on one of your ads.
PPC advertising is typically done through search engines, and the biggest platform for PPC is Google AdWords.
Basically, you’re in a bidding war with other advertisers who also want their ads to appear when relevant keywords are searched for on a search engine. Instead of earning visitors organically, you’re essentially buying visitors to your site by targeting people who are searching for keywords that are related to your business.
CPM stands for cost per thousand. The M refers to the Roman numeral for 1,000, or the Latin term, per mille, which means ‘in each thousand’. Cost per thousand refers to how much an online ad will cost for every 1,000 impressions and is the most common format for display advertising.
Impression is a term referring to an ad being displayed on a website. Ideally, it’s when someone using a browser loads a web page where the ad is shown.
The price of these ads is determined by things like the platform and location where the ad’s being shown, what time(s) of day the ad will appear, and how much time is spent on the website by the average visitor.
It can be tricky to know which of these forms of advertising to use, but it all depends on what you’re trying to accomplish. Are you a lawyer in Toronto and you want your ad to pop up whenever someone in Toronto searches for the phrase ‘personal injury attorney’ on Google? Or, are you the owner of a new restaurant trying to create awareness about your great new place?
Pay-per-click advertising would be better for the Toronto lawyer, because they’re trying to target people who are searching for their services in Toronto. It makes more sense to use this form of advertising if your ad campaign is highly targeted, since you’re only going to be charged when someone clicks on your ad. PPC is also better for campaigns focused on conversions, because unless their hand slipped, people who aren’t interested wouldn’t have clicked on your ad anyway.
For those trying to gain exposure and create brand awareness, like the restaurant owner, then CPM is the way to go. CPM allows you to get your ad in front of your target audience, paying based on the number of impressions. Along with targeting demographics and behaviours, you can also choose specific websites where you want your ads to appear.
In most cases, you are better off using both CPM and PPC strategies to help grow your business. The paid search advertising can be used to target those that are asking specific questions and the CPM can be used to create awareness and drive general traffic to the site. The two work best when they complement each other, targeting people in all stages of the purchasing cycle.