Choosing Between CPM and CPA: Which Model is Best for Business?

Website’ owners face the choice of the most profitable monetization scheme every day, the same as advertisers have to choose the most accurate low-cost ways to present their products. Different online advertising pricing models offer a wide variety of options — so which ones are the most profitable for monetization?

We offer to consider the advantages and disadvantages of the most common pricing models for traffic sale and purchase: CPM, CPA, and varieties of the latter.

CPM (cost per mille), or cost per thousand impressions, is more suitable for brand promotions, maintaining brand awareness and delivering information to a wide range of users, rather than for immediate sales growth.

Pros of the model:

• Low cost for advertisers;
• Low requirements for the advertisement itself;
• Effective revenue estimation;
• The maximum audience coverage with the correct choice of the advertising platform;
• Easy ad effectiveness tracking for publishers.

The disadvantages of CPM marketing are as follows:

• Difficulty in tracking campaign performance for advertisers;
• The need for an accurate selection of the target audience by publishers.

CPA model (cost per action) has several types that vary depending on the required result: CPI (cost per install), CPL (cost per lead), CPD (cost per download), etc. This model is ideal for those who wish for sales growth and acquiring interested, highly motivated users, even though in lesser numbers.

Pros of CPA marketing:

• High efficiency and conversion;
• Rational use of the campaign budget;
• Low risks for both advertisers and publishers.

Minuses:

• High cost and, accordingly, a high level of possible fraud, which automatically entails the need to check the results for validity;
• Income instability within a single campaign;
• The need to quickly respond to the campaign results.

Working with CPA and CPM networks has its advantages and disadvantages, which are considered best in the context of each campaign and its goals. We can say that in general CPA is more beneficial to advertisers, while CPM is better-suited for publishers. Earnings on CPA for publishers mean a thorough check of CPA traffic for quality, which is not so important when paying for impressions. Even if the financial issue is not taken into account, the CPA requires large investments from both sides — first of all, investments of an intellectual sort.

Each of these models has its own features, and the best way to fully understand them is to try them out for yourself. Tapgerine offers advertising traffic monetization on the basis of both CPA and CPM. Individual approach and rich experience in both directions guarantee excellent results for the partners. Webmasters themselves can make sure of this by registering on our Tapgerine CPA and Tapgerine CPI platforms, which offer direct, effective interaction between advertisers and publishers with maximum benefit for both parties. Also, our managers will answer your questions about the CPM monetization (cpm@tapgerine.com). Start today and find out for yourself — which will rock for your campaign.