Online Advertisements

The three most common ways in which online advertising is purchased are CPM, CPC, and CPA.
Google Controls 69% of the online add markets after acquiring Double Click, Yahoo 11.54 % and Microsoft 9.86 %


CPM (Cost Per Impression) is where advertisers pay for exposure of their message to a specific audience. CPM costs are priced per thousand impressions. The M in the acronym is the Roman numeral for one thousand.

CPV (Cost Per Visitor) or (Cost per View in the case of Pop Ups and Unders) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers website.

CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay every time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.

CPA (Cost Per Action) or (Cost Per Acquisition) advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the amount of users who complete a transaction, such as a purchase or sign-up. This is the best type of rate to pay for banner advertisements and the worst type of rate to charge. Similarly,

CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale. Also common, CPO (Cost Per Order) advertising is based on each time an order is transacted.

Cost per conversion Describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase.

CPE (Cost Per Engagement) is a form of Cost Per Action pricing first introduced in March 2008. Differing from cost-per-impression or cost-per-click models, a CPE model means advertising impressions are free and advertisers pay only when a user engages with their specific ad unit. Engagement is defined as a user interacting with an ad in any number of ways.[1]


http://en.wikipedia.org/wiki/The_Million_Dollar_Homepage
http://en.wikipedia.org/wiki/Click_fraud
http://venturebeat.com/2006/11/14/clickfacts-a-new-company-countering-click-fraud/
http://www.clickfraud.com/



Cost per impression, often abbreviated to CPI, is a phrase often used in online advertising and marketing related to web traffic. It is used for measuring the worth and cost of a specific e-marketing campaign. This technique is applied with web banners, text links, e-mail spam, and opt-in e-mail advertising, although opt-in e-mail advertising is more commonly charged on a cost per action (CPA) basis.

An online advertisement impression is a single appearance of an advertisement on a web page. Each time an advertisement loads onto a users screen, the ad server may count that loading as one impression. However, the ad server may be programmed to exclude from the count certain nonqualifying activity such as a reload, internal user actions, and other events that the advertiser and ad serving company agreed to not count. For online advertising, the numbers of views can be a lot more precise. When a user requests a web page, the originating server creates a log entry. Also, a third party tracker can be placed in the web page to verify how many accesses that page had. There are other advertising pricing structures, which are generally referred to as Cost Per Action (CPA) :

CPC - Cost per click Through
CPL - Cost per lead (lead usually meaning a free registration)
CPS - Cost per sale
CPI and/or Flat rate advertising deals are sometimes preferred by the publisher/webmaster because they will receive a more consistent fee proportional to the amount of traffic.

Today, it is very common for large publishers to charge for most of their advertising inventory on a CPM or CPT basis. A related term, effective cost per mille (CPM), is used to measure the effectiveness of advertising inventory sold (by the publisher) via a CPC, CPA, or CPT basis.

This type of advertising arrangement closely resembles television and print advertising methods for speculating the cost of an advertisement. Often, industry agreed approximates are used. With television, the Nielsen Ratings are used; print is based on the circulation a publication has.

COST PER VISITOR
This metric measures the value (or quality) of your site visitors.
It also gives you an indication of the effectiveness of your advertising campaign and your keywords. The formula is simple:
• Cost per visitor = total website spend / total visitors
(expressed in dollars).

As much as we emphasize the importance of web conversion, it is difficult to succeed if you do not have sufficient qualified traffic coming to your site. A high cost per visitor is often a sign of an ineffective advertising program.

If you spend $1,000 a month and you attract 5,000 visitors, your cost per visitor is $0.02. But if you attract only 1,000 visitors with that same amount, your cost shoots up to $1 per visitor.

High cost-per-visitor figures often mean that you are using the wrong keywords, referral links or referral ad copy. It can also mean that your site is not well built and is not being properly indexed by the search engine spiders.


COST PER CLICK / PAY PER CLICK

Pay per click (PPC) is an Internet advertising model used on search engines, advertising networks, and content websites, such as blogs, where advertisers only pay when a user actually clicks on an advertisement to visit the advertisers' website. With search engines, advertisers typically bid on keyword phrases relevant to their target market. When a user types a keyword query matching an advertiser's keyword list, or views a webpage with relevant content, the advertisements may be displayed. Such advertisements are called sponsored links or sponsored ads, and appear adjacent to or above the "natural" or organic results on search engine results pages, or anywhere a webmaster or blogger chooses on a content page. Content websites commonly charge a fixed price for a click rather than use a bidding mechanism.

Although many PPC providers exist, Google AdWords, Yahoo! Search Marketing, and Microsoft adCenter are the largest network operators as of 2007. Minimum prices per click, often referred to as costs per click (CPC), vary depending on the search engine and the level of competition for a particular phrase or keyword list—with some CPCs as low as US$0.01. Very popular search terms can cost much more on popular search engines. The PPC advertising model is open to abuse through click fraud, although Google and other search engines have implemented automated systems to guard against abusive clicks by competitors or corrupt webmasters.

COST PER ACTION

Cost Per Action or CPA (sometimes known as Pay Per Action or PPA) is an online advertising pricing model, where the advertiser pays for each specified action (a purchase, a form submission, and so on) linked to the advertisement.

Direct response advertisers consider CPA the optimal way to buy online advertising, as an advertiser only pays for the ad when the desired action has occurred. An action can be a product being purchased, a form being filled, etc. (The desired action to be performed is determined by the advertiser.) Google incorporated this model into Google AdSense [1] but shut down the offering in June 2008[2]. eBay has recently announced a similar pricing called AdContext.

The CPA can be determined by different factors, depending where the online advertising inventory is being purchased.


COST PER CONVERSION ::

Cost per conversion is an advertising and marketing term, describing the cost of acquiring a customer, typically calculated by dividing the total cost of an advertising campaign by the number of conversions. The definition of "conversion" varies depending upon the situation[1]; it is sometimes considered to be a lead, a sale, or a purchase.


COST PER ENGAGEMENT ::
Cost Per Engagement (CPE) is an online advertising pricing structure introduced into the market in 2008.[1]

Differing from cost per impression or click through rate models, a Cost Per Engagement model means advertising impressions are free and advertisers pay only when a user engages with their ad unit. Engagement is defined as a user interacting with an ad in any number of ways, including playing a game, taking a poll, rolling over an ad unit for a specified amount of time or taking a product tour.[2]

Cost Per Engagement brings a measure of performance to online advertising. Ads are served for free, and advertisers pay only when a user engages with their brand content. The approach has given advertisers a choice between quantity and quality.[3]

This technique may be applied to ad formats including video and rich media, for example, in web banners as invitations to view longer-form branded content such as videos, games or other interactive experiences such as widgets. An ad unit offering Cost Per Engagement appears like standard display ads with a few seconds of preview video. Users mouse over the ads to display a Flash window that shows the full clip without forcing users to leave the page.