One of my friends asked me what are CPM, CPC, CTR and CPS etc. I explained him with best of my knowledge. I thought there are lots of new people creating their blog daily so lots of people have similar questions; so I have created this article to explain these terms to all of you.
What is CPM
CMP stands for ‘Cost per Thousand’ (M is symbol of 1000 in Roman Number). In the fields of online advertising, you can charge on the basis of number of impression of particular banner/link ads. Normally your CPM can be anything from $5 to $1. Lots of advertising network provide you client for CPM based on your blogs niche. Mostly network put condition of minimum impression per month before you join their network i.e. your blog/website must have at least 50000 pages view per month.
What is CPC
CPC stands for ‘Cost per Click’. You have to pay (if you are putting ads on someone else blog/website) or you will earn (if somebody putting his ads on your blog) whenever someone click on the ads. Google adsense is famous example of it. Google charged to their clients for every click they get on their ads and Google pay you whenever someone click on the ads (Google Adsense ads) running on your blog/ads.
What is CPA
CPA stands for ‘Cost per Action’. Action can be of any type, it may be filling out a form on destination website or joining e-mail list at destination websites etc.
What is CPS
CPS stands for ‘Cost per Sale’. This is one of the most famous online marketing methods now a days. It is beneficial for both publisher and advertiser. You get a commission per sale.
Most of the affiliate plan is based on ‘Cost per sale’ model.
What is CTR
CTR Stands for ‘Click through Rate’. CTR is calculated on percentage basis. Let me explain you it in more details. Suppose you have put one ads on your blog and it appears to your visitor 100 times a day and 3 people click on it then your CTR will be 3% or 0.03
If 10 people out of 10000 impression of ads are clicking on ads then your CTR will be 0.1% or 0.001
CTR Calculation formula
(Number of Clicks / Number of impressions) x 100
So if number of impression is 100000 and number of click is 1000 then CTR will be
CTR = (1000/100000) * 100 = 1%
In my next article I’ll explain how to choose which is best for you blog CPM or CPC or CPA or CPS.
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