How To Make Money Online, Understanding CPM Vs CPC

If you have ever tried to earn some revenue from your blog or websites then chances are that you have already come across the words like CPC,CPM andCPA. Online Advertising is growing very fast and every one is after a share of this advertisement revenue pie.To make sure that you get the best out of your investment it’s quite necessary that you are well aware of various forms of online advertisements.

What are CPM Ads ?

The Cost-per-thousand-impressions or Cost-per-Mile (CPM) is the amount an advertiser pays for every 1000 times a user views his/her ad and an impression is recorded.Since both Cost-Per-Click(CPC) and CPM Ads compete with each other in a bid advertisers will need to bid a higher CPM than the existing CPC ads in order to show.

to understand it better say you get 5ooo visitors daily on your blog, if you display two CPM Ad-units and lets say each has a bid for $1 and 2$ per 1000 impressions then your daily earnings will be a total of  $15 per day $5 from the first advertiser(at $1/1000 impression) and $10 from the second(at $2/1000 impression).

What are CPC Ads ?

CPC stands for Cost Per Click.CPC is also known as Pay per click (PPC) In this Advertisement module you get paid for each click an affiliate ad receives. Google Adsense serves CPC ads for most of the time.Advertisers have to bid for keywords and depending on that is decided the Cost Per Click, thus an advertiser may pay a few cents to may be few dollars for each click.

What are CPA Ads ?

CPA or Cost Per Action/Acquisition is an advertising module in which the publisher takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. Google affiliate network, eBay,Amazon fall under this category.

So which one gives the maximum revenue ?

CPC is nowadays the most popular Revenue model these days and the reason is quite clear that it shares the risk between the publisher and the advertiser.The one problem with cost-per-click type ads is that they’re subject to click fraud.And that is the reason why Google Adsense and Yahoo have laid down very strict rules regarding accepting publishers account. However you must decide the kind of revenue model based on the content and visitors of your website or blog.

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