CPS (Cost Per Sale): The amount an advertiser pays per sale made by the affiliate's referral. CPA (Cost Per Action): The amount an advertiser pays for a specific action, which can be a sale, download, or any other predefined action. CPI (Cost Per Install): The cost an advertiser pays for each app installation that is generated by the affiliate's referral. CPL (Cost Per Lead): The amount an advertiser pays for each lead generated by the affiliate, where a lead is a potential customer who has shown interest by providing contact information. CPC (Cost Per Click): The cost an advertiser pays for each click on their advertisement. CPM (Cost Per Mille or Cost Per Thousand): The cost an advertiser pays for every thousand impressions their advertisement receives. CPV (Cost Per View): The cost an advertiser pays for each video view or ad view, typically used in video advertising or rich media ad campaigns.
Essential 'Advertising Cost/Advertising Bidding Metrics' internet marketing jargon for cross-border e-commerce affiliate marketing: CPS, CPA, CPI, CPL, CPC, CPM, CPV. Do you understand these? If not, please make sure to read this article in its entirety.
In the early stages of digital advertising development, although giants like Google and Yahoo! had introduced keyword advertising services, the dominant force in the market was still display advertising (Display Ads). During this period, Yahoo!'s homepage, with its huge traffic, became an important battleground for display advertising, and its advertising pricing model was mainly based on the duration of ad display and the number of exposures.
With the rapid advancement of internet technology, the field of digital advertising ushered in a new era, with Facebook and Google's advertising platforms rising rapidly to become the dominant forces in the market. To cater to diverse marketing needs, these two major platforms deeply optimized the precision and effectiveness of ad delivery, allowing brands to target and reach their desired consumer groups in cyberspace with unprecedented efficiency and accuracy.
Under this new digital advertising market structure, if we want to make money online, we must deeply understand the bidding mechanisms of various advertising platforms and the jargon behind them. It is a compulsory course for every participant. Mastering this key information is of great significance for formulating effective advertising strategies, optimizing the cost-effectiveness of advertising, and enhancing the brand's competitiveness in cyberspace.
1. CPS Cost Per Sale
CPS is the advertising cost incurred when a consumer purchases a product. Since the advertising cost is only generated after the product is sold, the burden on advertisers is relatively small. It is most commonly used in affiliate marketing. When promoters help advertisers bring in purchases, they pay CPS advertising costs based on product sales.
2. CPA Cost Per Action
CPA is the advertising cost incurred when a consumer completes a specific action that we have set as our target. For e-commerce websites, the action goal is usually the completion of the checkout process, but it can also be membership registration or other actions, depending on the business and marketing objectives.
Since the "Action" in CPA (Cost Per Action) can be defined in many ways, there are also CPL and CPS within the CPA series, which I will introduce below.
3. CPI Cost Per Install
CPI is the advertising cost required each time a user installs an app on their mobile phone. Ever since the boom of smartphones, companies have launched a variety of apps on mobile devices, hoping that customers will install and use them. When promoting app installations, the cost is calculated based on each CPI as the advertising expense.
4. CPL Cost Per Lead
CPL is the cost that needs to be paid each time a lead is acquired. There are various purposes for online marketing, and collecting consumer or customer leads is one of them. For instance, credit card applications from banks and online teaching courses often use this type of marketing advertising method.
5. CPC Cost Per Click
CPC is the advertising cost that needs to be paid each time an ad is clicked, regardless of the number of ad impressions. If customers do not click on the ad, no advertising costs are incurred. You can optimize the quality of the ads to reduce the CPC for each click, thus achieving the maximum benefit within the same budget.
6. CPM Cost Per Mille (Cost Per Thousand)
CPM is the advertising cost that needs to be paid for every 1,000 impressions of an ad. Even if consumers do not click on the ad or make any purchases after seeing it, the related advertising fees must still be paid.
7. CPV Cost Per View
CPV is the cost required for each viewing of audiovisual advertisements, and each platform has a different definition for successfully playing audiovisual advertisements. For example, YouTube requires a 30 second video playback time, Before placing video ads on Facebook, it is necessary to understand the standards of various advertising platforms in order to play videos for 3 seconds.
Ad bidding/cost proprietary terms
According to the cost calculation method of these advertising bids, advertisers can participate in the purchase and bidding of advertisements, and those who bid high can receive higher advertising exposure.
And through the quality of good advertising materials, attract high CTR click through rates and high traffic to enter the website. If the website UI design is good and the UX user experience is great, the final conversion target ratio can be increased, reducing the bidding cost of advertising.
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