Banner Advertising Payment Models

Different sites have different payment models. The most widely used ones are:

CPA: Cost-per-Action, also called CPL or Cost-Per-Lead. You usually pay for each sign up the banner generated.

CPM: Cost-per-Mille (thousand). You pay a set fee for every thousand impressions.

CPC: Cost-per-Click. You pay for every click on the banner.

Fixed Price: pay once and get your banner on the site for a set amount of time regardless of results.

Of these the CPM model is most common. Keeping a close eye on CVR (Conversion Rate) is needed to keep the cost under control. When doing a branding campaign this is less important as your main performance indicator is awareness in which case impressions and clicks are more important (but only on quality sites).

Considering the certainty that you only pay for results the CPA model is most favorable for direct selling campaigns. This model is most common among networks that have large inventory of mostly lower quality sites. An important consideration when researching these networks is to make sure your banners don’t end up on any inappropriate sites which might do harm to your reputation. Always ask for a site list and do a rough selection (don’t be too strict because you’re paying per lead anyway).

The CPC model is the least common of all and mostly known for its use in search advertising. This is kind of a synthesis of the CPA and CPM model in that you pay for interest and not so much awareness or acquisition. Due to click-fraud, irrelevant sites in networks and the fact that the other two models are more appropriate for the different campaign objectives we would recommend to generally not use this payment model (except for search marketing of course).

Fixed Price placements are most common for small buttons and/or small sites. While this has its obvious caveats you can often work out the economics of the deal by looking at the site’s statistics (or thru Alexa, Compete, Quantcast etc.) and figuring out what kind of results you need to get to break even.

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About Me

Thoughts on Direct and Online Marketing in the Financial Industry. By Bart Burggraaf. Bart is MD/Partner at MGL, a London based Financial Services Marketing Agency. The posts on this blog are the personal opinions of Bart Burggraaf and not the official view point of MGL or any of it's clients.