Mark E. Buckley

If you can't convince them, confuse them

If you are purchasing advertising on the web, you will be confronted with some unique verbiage. Here is a quick summary. You can research any of these terms on the web for a more complete explanation.

CPM means cost per thousand impressions. If you advertise on some sites they will charge you a price based on how many hits were recorded on that page. While this seems fair, the number of hits is not very accurate.

CPC means cost per click. If you advertise on a site that charges based on CPC then they will only charge you if someone clicks on your advertisement. This seems even more fair. However, it is easy enough to inflate the actual number of clicks. Also the number might be inaccurate if visitors are blocking scripts or cookies.

What you would ideally like to pay for is a flat amount per sale.

If your profit margin is 20% and your product costs $100 then you would be willing to pay $20 per sale towards advertising. If your conversion rate ( number of sales over total qualified leads ) is 20% then you would be willing to pay $4.00 per lead. If 20% of the clicks to your web site became qualified leads, then you would be willing to pay $.80 per click. If 2% of every one that visited the advertiser's web site, clicked on your link, then you would be willing to pay $.016 per impression or $16 CPM.

You can try to get actual numbers from the advertiser, but they generally will only know the numbers that they track, like number of impressions.