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What is the Difference Between CPC and CPM Ads?

Discussion in 'AdSense' started by bcdxer, Feb 3, 2008.

  1. #1
    What is the Difference Between CPC and CPM Ads

    Publishers sometimes confused with their AdSense stats. Sometimes they've found that their earning increase although there are no click at the Report Overview. How could it be? Maybe you should know that Google AdSense program have two advertisement methods for paying publishers. The 1st method is based on CPC (cost-per-click) advertisements, and the 2nd method is based on CPM (cost-per-million impressions) advertisements.

    What is the difference between CPC and CPM ads?
    CPC ad is displayed randomly as text/image unit. Publishers will be paid by Google when visitors generate valid click(s) at the CPC ad. CPC ad is based on advertiser's bid at AdWord, and they will pay if there are any user generates click at their ad. Most of advertisement in Google AdSense is based on CPC ads. Bidding price for each click in AdWord have various range. Advertisers usually make a bid $0.01 to $5 for each click at their ads.

    CPM ad is very different with CPC ads. CPM ads compete against pay-per-click ads in Google's ad auction system. With this situation, only the highest performing ads will be served to your pages. In CPM ads, you will get paid by Google whenever there are 1000 impressions for that CPM ad. Both image ads and text ads can be paid on CPM basis, and both of them are always site-targeted. In order to be displayed inside the ad block, advertisers need to give higher CPM bid for certain keywords than the existing CPC ads.
    While displayed, CPM text ads will expand and fill entire ad block. The most important things that you should always remember, your earnings for CPM ads are counted when your pages generate impression for those ads type. You won't be paid for any clicks being generated at CPM ads. Each time CPM ads displayed inside your page, you will be paid by Google for that impression although the sum is very low.

    Many webmaster assume that most of the AdSense image ads are based on CPM, and they will be paid for the impressions being made. But, there's several AdSense text ads are based on CPM too although the chance is very low.

    Great location of your CPM ads should be at top of your page since CPM ads is based on the number of impressions. It will affect your overall earnings because the ads will be loaded more early.

    If the CPM ads being clicked by your visitors, it won't display the click stats at your AdSense account. Sometimes, when you take a look at Report Overview inside your AdSense account, you may notice that even though you have receives impressions for CPM ads, your earnings are still at zero value. You don't need worrying too much. It can be happened because some advertisers maybe give a low bid for those CPM ads through Google AdWord. For example, if they pay as little as $0.10 for 1000 ad impressions, then your earnings will be at $0.0001 for each impression. Why those stats not displayed at your site? Google AdSense won't display earnings if it's lower than one cent. Although Google AdSense only show your earnings if it's greater than one cent, you should not worrying too much. All of your earning from impressions that is below one cent will be recorded and accumulated inside their system. Whenever your earnings from impressions already reaches one cent, the stats will shown up immediately.

    However, based on my experience, CPC ads will give better result rather than CPM ads on a normal site. CPM ads will have more advantage whenever it's being used at any site which based on community such as forum, groups, etc. This situation can be happened since visitors of those sites see the ads very often, thus the ads will have lower CTR.

    Full story - http://earning4life.blogspot.com/2007/09/what-is-difference-between-cpc-and-cpm.html
    bcdxer, Feb 3, 2008 IP
  2. vivekwig

    vivekwig Active Member

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    thanks for informative article.
    vivekwig, Feb 3, 2008 IP
  3. Abhik

    Abhik ..:: The ONE ::..

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    ahmm.. the tile is a bit misleading..
    Abhik, Feb 3, 2008 IP
  4. kashifmahmood

    kashifmahmood Active Member

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    Very nice !

    Although the title suggested that you were asking for clarification :D
    kashifmahmood, Feb 3, 2008 IP
  5. manoj sharma

    manoj sharma Peon

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    Nice article on ad words campaign:)
    manoj sharma, Feb 14, 2008 IP
  6. cheapez

    cheapez Active Member

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    Very informative article
    I'm sure many people will get somethings from it.
    cheapez, Feb 14, 2008 IP