While the two terms appear to be similar, they mean two very different things. CPM stands for “Cost Per Thousand Impressions” (or Cost Per Mille) and is the cost that advertisers must pay for every 1,000 impressions purchased. With these ads, an impression is counted each time it shows on your website. A reader does not have to interact with the ad for an impression to be counted, it just has to load on the page! As long as an ad fills in the ad zone, you have just made money!
CPC ads function a little differently. CPC stands for “Cost Per Click” and is the amount an advertiser pays you, the publisher, every time one of your readers clicks on an ad. This requires interaction with the ad itself. One metric to pay attention to with this type of ad is CTR, or “Click Through Rate”. This is determined by taking the number of times your ad was clicked on and dividing that by the number of impressions, or the number of times the ad was seen. With CPC, you do not receive any revenue unless a reader clicks on the ad displayed on your site.
Depending on industry trends, individual site metrics, and the engagement and behavior of your audience, one type of ad may be better than the other. You may even have a mixture of both ads within your site that together make up a customized and truly profitable ad strategy!
At Monumetric, we allow a combination of both in all programs (Apollo, Stratos, Ascend, and Propel) with a limit of 2 CPC ads for our Propel publishers. If having high user engagement has made running CPC ads successful for a website, Monumetric will allow those profitable CPC ads to remain on the site as a complement to our CPM ads. For publishers whose readers are primarily on their sites to read content without as much site interaction, having an ad strategy with CPM ads on the site is a more profitable option.
If you are wondering if your site might be one of the few that benefits from running both CPM and CPC ads, we’re happy to run an evaluation of your CPC reports to help you make the decision.