Ad - Compensation (Pricing Model)


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:

  • a base CPM at a discount to the rate card,
  • plus a CPC.

Depending on the Click Through Rate (CTR), you can decide which works better.




A compensation leads to a revenue.

Documentation / Reference

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