Pricing model in Ad.
Cost per click (CPC) and Cost per mille (CPM) dominate the advertising models.
| Pricing model | Emphasis | For sites oriented | Risk |
|---|---|---|---|
| CPC | response | contextual ad, user profiling such as search site with text-oriented ads | for publisher |
| CPM | branding | for sites oriented to content with image-oriented banner/display ads. | for advertiser |
| Cost by day (CPD) | branding | the unit of impression are not by mille but by day | for advertiser |
| CPA (Cost Per Action) or (Cost Per Acquisition) | 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. |
All advertising strives for some combination of:
To split the risk more evenly between the publisher and the advertiser, the advertiser may pay:
Depending on the Click Through Rate (CTR), you can decide which works better.
A compensation leads to a revenue.