Internet Advertising Price Types

Online campaigns can be divided into two main groups - branding and sale-oriented, in practice very often both of these types are combined.

In the internet where everything can be measured you need to keep in mind and understand several variants of advertisement pricing before starting negotiations, let’s describe them briefly.

  1. Cost per time
  This is the worst variant, because you pay for a certain period of time and don’t

  get anything guaranteed like clicks or views, or leads.

  2. Cost per view
  It’s also called CPM or cost per thousand views. This is better
  then paying for time, because you know at least how many people
  will theoretically notice you ad.

  3. Cost per click
  Getting even better, with this one you are sure that you pay for
  visits to your website or landing page, that the user not only
  ”could have noticed” but indeed noticed, got interested and
  clicked.

  4. Cost per sale
  This one is near impossible to negotiate, usually no one will
  agree to work on such basis, but it’s the ideal variant, you
  know how much your product costs, you know how much you will pay
  to a website for a sale, one minus the other and you get
  guaranteed ROI. This is usually the model of affiliate programs
  where the vendor pays commission to affiliates from each sale.

  Small tip, in any of these types of payments, knowing such things as traffic on the page you are advertising on, CTR of the ad and CTRs on your landing pages and shopping cart, you can make a simple mathematical model to estimate the cost per sale even if you are doing a cost per time campaign, you have to note though that going up from point 4. to point 1. the accuracy of the model drops, because you can never know for sure the figures in the model, but at least you can make a decision of whether it’s worth the try or not.