When is it best to use each model?
CPM makes the most sense for a campaign focused on heightening brand awareness or delivering a specific message.
In this case, the CTR (that’s click through rate) matters less, since the exposure from having an ad prominently placed on a high-traffic website helps promote a company’s brand name or message – even if visitors do not actually click on the ad.
Companies focused less on mass appeal and more on promoting a specific product to a niche audience gravitate toward CPC or CPA advertising, since they only have to pay when visitors click through to their site or purchase the products being advertised.
Website publishers like CPM advertising because they get paid for simply displaying the ads. However, because CPM rates tend to be very low – the £2.00 rate mentioned above is fairly standard – a website needs robust traffic to make decent money from CPM ads.
Even more important than understanding the payment models, is understanding where to use them.