Payment Model (Description of Payment Models in Digital Advertising)
Digital advertising platforms use various pricing models to charge advertisers based on specific user actions. These models align campaign goals with advertiser budgets and desired outcomes. Below are the key types:
CPC - Cost Per Click
This model charges advertisers only when a user clicks on their ad, regardless of how many times the ad is shown.
- Goal: Drive traffic to a website.
- Best for: Advertisers focused on brand visibility and visits.
- Platforms: Google Ads, Facebook Ads.
Example: An ad with a CPC of $0.50 gets 300 clicks. Total cost = $150.
CPL - Cost Per Lead
Advertisers pay when a user submits contact details or shows interest, becoming a potential customer.
- Goal: Generate leads for sales teams.
- Best for: B2B companies, services, real estate.
- Conversion: Signup forms, free trial registration.
Example: $15 per lead × 40 leads = $600.
CPD - Cost Per Day
Advertisers pay a flat daily rate for ad placement, typically on premium platforms or homepage takeovers.
- Goal: Maximize exposure over a fixed period.
- Best for: Brand awareness campaigns.
- Platforms: News websites, social networks.
Example: $1,000 per day for 5 days = $5,000.
CPA - Cost Per Acquisition
Advertisers pay only when a defined action (conversion) is completed, such as a purchase or signup.
- Goal: Pay only for results.
- Best for: E-commerce, subscription services.
- Measurement: Final conversions tracked via pixel or API.
Example: 30 acquisitions × $25 CPA = $750.
CPI - Cost Per Install
Used in mobile marketing where advertisers pay only when their app is installed by a user.
- Goal: Grow mobile app user base.
- Best for: App developers and startups.
- Tracking: SDKs or tracking URLs.
Example: 2,000 installs × $1.20 = $2,400.
CPS - Cost Per Sale
Advertisers only pay when an actual sale is made due to ad interaction, often used in affiliate marketing.
- Goal: Revenue-focused advertising.
- Best for: Retailers and online stores.
- Model: Common in affiliate and influencer marketing.
Example: 100 sales × $8 CPS = $800.
CPR - Cost Per Registration
Advertisers pay when a user registers or signs up on a website after clicking an ad.
- Goal: Increase user database or community size.
- Best for: SaaS platforms, webinars, newsletters.
- Outcome: Verified registration tracked via analytics.
Example: 500 registrations × $4 CPR = $2,000.
CPM - Cost Per Mille (Thousand Impressions)
This model charges for every 1,000 views (impressions) of the ad, regardless of user interaction.
- Goal: Maximize brand visibility.
- Best for: Large scale awareness campaigns.
- Standard: $1–$20 per thousand impressions depending on platform.
Example: 200,000 impressions × $3 CPM = $600.
CPE - Cost Per Engagement
Advertisers pay when a user engages with the ad, such as clicks, shares, likes, or comments.
- Goal: Encourage interaction and engagement.
- Best for: Social media and interactive content.
- Examples: Poll responses, video likes, retweets.
Example: 1,000 engagements × $0.50 = $500.
CPCV - Cost Per Completed View
This model charges only when a video ad is watched entirely.
- Goal: Ensure full message delivery through video.
- Best for: Video marketing and storytelling.
- Completion: Typically 100% watch time required.
Example: 10,000 full views × $0.40 CPCV = $4,000.
CPV - Cost Per View
Advertisers pay when a user starts watching a video ad, even if it's not completed.
- Goal: Spread video content to a wide audience.
- Best for: Short-term promotions and teasers.
- View: Usually charged after 5 or 30 seconds of play.
Example: 50,000 views × $0.05 CPV = $2,500.
Ready to Boost Your Business?
Start leveraging Pivotstring's powerful tracking software today and take your business to the next level.
Get Started Now